In January of last year, prices for agricultural land were estimated to have fallen by 3%, and studies later in the year put the decline closer to 9%, with long-term outlook warning of the possibility of prices dropping even further.
This has some sellers concerned they will not be able to get a fair price on their land if they sell. But with a land auction managed by West Central Auction, competitive bidding can bring you a fair market price without the hassles and risks of a private sale.
Getting a Fair Price
When agricultural land is sold privately, buyers rarely pay the full asking price, and you can’t be sure when the property will be sold. Setting the asking price in a declining market can be risky as well. Setting the price too high will risk the property getting no offers, but a price that’s too low may end up losing you money on the initial investment.
An auction assembles qualified and well-informed buyers to give a good indicator of the market value of the property, and competition between bidders can even raise the buying price to above the current market value. Auctions also set a firm date of sale, so property sellers know when they will be getting the money for the land.
One advantage of agricultural land is that it can often be divided up into parcels and sold at a multi-parcel auction. In this type of auction, a larger piece of land is split into multiple parcels that are sold in the same auction, and bidders can bid on one parcel or combinations of two or more.
A multi-parcel auction can multiply the seller’s profits. You don’t have to rely on one “deep pocket” buyer who can afford a large tract of land. Bidders competing over the pieces can end up earning you a better profit than if you try to sell the land as one large auction lot.
Even in a declining market, a land auction enables you to get you a fair market price for your real estate. Contact West Central Auction today and we’ll help you determine the next steps to sell your farm land, recreational land, or commercial property.