Best time of year to sell a farm estate at absolute auction?

Jim S. · #1 05/29/12, 01:46 PM

We have a 298-acre cattle farm in southern central Tennessee that has had corn on it in the past (late '80s, I think), so it does have croppable land.

The farm - land, equipment and household goods - is going to be sold at absolute auction in 2013 to settle an estate. The method of sale has been decided among the heirs, so I want to make it clear that the sales method is not what I am asking about.

We have heard all kinds of "advice" from various realty agents and auctioneers about when is the best time to sell it. Answers range from anytime to spring to fall. So far, it appears to me the answers tend to favor the agents' interests rather than the property.

So here is the question: What would you say is the best time of year to sell?

Those who have had extensive farm and land sales experience, please note that in your replies.

I am going to send the link to this thread to the heirs, so they can read the responses posted. Thanks.

FarmboyBill · #2 05/29/12, 02:07 PM

Sell between Mar 1st to June 1st for the best. Earlier towards Mar the better.

FarmboyBill · #3 05/29/12, 02:08 PM

Thats here in Okieland. Might move it forward a month where your at.

agmantoo · #4 05/29/12, 02:10 PM

The best time to sell is when you have a buyer willing to pay the asking price!

I would let people know through signs and limited advertising that the place will be sold to the highest bidder through a sealed bid with a reserve in place. If that does not generate a buyer then you can sell the farm at an auction at a later date, preferably Fall. Your potential best opportunity to sell is to a neighbor or the person that has been leasing the farm for ag purposes. If the farm has timber get the timber appraised. Offer the farm with or without the timber. If the farm has any alternate use then pursue that use and a buyer for that purpose. Do not hesitate to ask your maximum anticipated price based of comps for the farm's use. You can always come down but you cannot go up! I buy and sell land frequently. I worked as the executor for an estate selling a small farm of 50+ acres. The decedent asked me to be the executor prior to his passing as he wanted the farm to bring what it was worth. I knew the farm had alternate use based on its location and put it on the market accordingly. There were 25 heirs. It took some time to get it sold but the farm yielded more than 3 million dollars. That was worth waiting on. Just like when you buy a parcel you need to be an informed buyer, when selling you need to have an informed seller looking after your interest.

rambler · #5 05/29/12, 02:28 PM

Well if it was last farmed 20 years ago, doesn't sound like it's much for farm land! Likelwise the equipment is all outdated, rusted up, not running...

Aside from that, a grain farmer likes to plan for possessing the land by March 1st, and likes to plan for fert & seed purchases in November.

If you have a sale of land in April or June with possession in June or Juley, it is 'worthless' to the farmer until next March, so - sell it early enoyugh so closing can happen in early March.

Not so familiar with cattle areas, but would think likewise, calf crop comein in spring, so would want to be in position to know before spring, and have possession when the caves come in.

uncle Will in In. · #6 05/29/12, 04:10 PM

If the most likely buyer will be useing it for Ag purposes sell it from Jan until March. They know what they made the previous year and know what it might add to their opperation. They want to have it for their use as soon as they settle for it. That means first thing in the spring.
I've seen prices jump- on local farms about 25 percent since the fall harvest.

jwal10 · #7 05/29/12, 05:14 PM

Early spring here. Farm sales do best then, houshold, equipment and land. I worked with an auction company for many years....James

DebM · #8 05/29/12, 07:13 PM

By all means use an auctioneer who specializes in TN farm/ranches. He/She does not need to be local, but must be licensed in TN.

The one farm auction I went to in TN took all day to sell. It had originally been 4 parcels - each parcel was auctioned land only (no timber rights), each parcel was then auctioned with timber rights, then each parcel was auctioned timber rights only (I may be off on the exact order). THEN parcels were put together in twos, THEN the whole thing. Highest total won. If I remember right in this case, there was no bid on the whole package with or without timber rights, and bids on combined parcels did not top bids on individual parcels. It ended up being sold in the four separate parcels, and one parcel had the timber rights sold separately.

It was confusing and boring to some spectators, but that auctioneer worked darn hard for the heirs, let me tell ya! I believe it was around 350 acres. He aggressively advertised in multiple states, and to multiple markets such as the retirement market, land developers, week-enders, conservation groups (it had a cave on one parcel), etc. I am not sure how the auction for the logging rights was marketed - whether these were local people bidding or if the auctioneer actively courted logging companies.

Ramblin Wreck · #9 05/29/12, 07:26 PM

I think the "milder" months weather wise would be better than those with either extreme heat or cold. You should get bigger crowds. I've been to maybe 20-30 land auctions, and in almost every case, the property sold for more than I thought it would/should; however, the last couple of years have been exceptions to the rule. A lot of no sales due to low bid prices around here lately.

plowjockey · #10 05/29/12, 08:49 PM

There is no such thing, as a bad time, to have an auction around here.

There is an annual outdoor New years Day equipment/misc/guns consignment auction, (freezing, muddy, slick) that draws nearly 1000 bidders.

Much of the prices paid for anything at auctions year round, is jaw-dropping, to say the least.

The Auctioneers are loving it.

Warm, but not too warm is the most fun.

am1too · #11 05/29/12, 10:40 PM

I would say spring or early summer when people have big dreams. If it has a good crop on it the time could change and also affect the price.

bruce2288 · #12 05/29/12, 11:30 PM

Weather will have little effect on anyone who is seriously thinking of buying 300 acres. Excluding impossible travel conditions, hurricanes or blizzards. Buyers of ag land will want to buy to be able to utilize it for the 2013 growing season. I would suggest before March or rent it out and sell after harvest in the fall.

Jim S. · #13 05/30/12, 03:26 PM

Thanks for the replies so far, and especially to DebM for the thought-provoking reply.

It's a good working cattle farm that has grown corn and beans as well in the past. This property last sold in 1968. Big farmhouse set a half-mile from the road, smoke house, shop, shed, great view across bottomland from a quintessential broad Southern front porch, never hunted, loaded with wildlife. It has an old family cemetary that goes back to the very early 1800s, with a former state legislator buried there. Great potential as a horse farm, and for the right buyer, it could become a beautiful showplace. I will hate to see it go, but go it must.

Yvonne's hubby · #14 05/30/12, 03:43 PM

If the heirs are willing.... clean up the farm between now and sale time, (bushhogging, fences mended, trash piles removed, etc.) allow a minimum of six weeks advertising time. I would also highly recommend selling in smaller parcels, then offer in combinations as described above. Very early spring is your opportune time for the sale. You want maximum eye appeal... trees leaving out, grass greening up but dont wait too long. People like to be able to arrange finances and make plans for the upcoming crop season prior to sale date. I would plan the auction to be held in mid april if it were mine.

DebM · #15 05/30/12, 06:11 PM

Quote:

Originally Posted by Jim S.

I will hate to see it go, but go it must.

I can only imagine - Mom is in the process of selling the family farm (to the guy who has been farming it since Dad retired). We owned 10 acres with plans to buy half when the nasty economy altered our life. Dad went to the nursing home last month (refused estate planning - said the farm was his "insurance".) It's hard.

haypoint · #16 05/30/12, 06:31 PM

Up north, January is bad because everyone is spending money on heat and plowing the driveway
February is no better weather-wise, but some are planning on buying seed and fertilizer for spring.
March is when all thoughts turn to crop planting and buying hay if you are short or selling the excess before pastures green up, rendering the hay near worthless.
Income taxes are due in April, so no one wants to take on more debt this month.
May is an expensive month. Getting crops in, hard use of machinery generally results in costly repairs. Credit lines for seed and fuel have many tapped out.
June is the beginning of hay season and as far from income as you can get. Since everyone down state has enough hay, prices will be low, again. Not a good month to buy.
July and August are bad times to buy land as it will be a year and a half before you can get a crop harvested.
September is a time to prepare for winter, finish projects: roofs, fences, farm trucks, etc. Getting kids back to school.
In October property taxes come due, so no one has down payment money.
November and December are snow covered. Start out deer hunting and end up with Christmas. Land sales are rare in those months.
So, as you can see, there are no good months to sell.
In the early 1980s, I cut good crops of hay on ground that now has 10 foot tall spruce and willow and tag alder too thick to bush hog. So, just because it had corn on it 20 some years ago, you can’t count it as crop land.

wogglebug · #17 05/31/12, 03:59 AM

You may be better off working the cropland up, and planting it to a grain crop. You could then offer it "as is, in cereal crop or hay or grazing.". That takes the time pressure off people to get a crop in. If they want it for livestock, they could elect to graze the crop off. They could take a good big cut of cereal hay first, if they wished. You just have to decide if the cost to work it up and plant it would be recouped. You definitely don't want to have to spend heaps on spray.

Jim S. · #18 06/01/12, 04:17 PM

Quote:

Originally Posted by DebM

I can only imagine - Mom is in the process of selling the family farm (to the guy who has been farming it since Dad retired). We owned 10 acres with plans to buy half when the nasty economy altered our life. Dad went to the nursing home last month (refused estate planning - said the farm was his "insurance".) It's hard.

Yes, it is, Deb. To love the place so for so many years and then see it soon to go is hard on all of us in different ways, but you cannot stop change. Like in your case, unwillingness to estate plan played a role.

On the other land/condition, etc., etc. comments, I appreciate your knowledge but I am not a newb and neither are any of the heirs, one of which is my wife. I have been farming 25 years myself, helped farm this place a little too awhile before getting my own. The heirs all grew up farming. The cleanup, etc., has been underway awhile now.

Thanks to those who replied to the question. It may help the heirs, and I have emailed the link to them.

**Ross** · #19 06/01/12, 10:32 PM

Dec to March but not much later. Farmers have crop to sell in the bin but by the end of March its sold and spoken for. Land is a bit different in that its likely financed but a farmer with money in their pocket is better than one a bit over extended. I include December in case some are trying to find a tax benefit

uncle Will in In. · #20 06/02/12, 03:18 AM

Almost every farm property sold around Indina or the ajoining states is listed with a large land auction service. The farm sales company will divide the farm into usable parts and advertise it in farm typ-e papers everywhere within a 100 miles or farther. The large ads will include an arial map showing the possibl;e divisions. The sales are held in a nearby public indoor room, with folding chairs, coffee, and doughnuts. They show the numbered plots on a big board up front. There will be four or more people taking bids as the plots are offered one at a time. Then they go back and take bibs on different combinations. A bid has to top the prices already taken earlier on the plots involved. At the windup, they offer the entire place. The higest total they have arrived at on the earlier bids must be topped to buy it all.
The small opperators can really put the prices up for the bigger opperators to top, if they are serious.
They will get you way more than anyone would bid at a sealed bid or from a standup auction by an auctioneer.