4 Tips for Selling Ranch and Farm Land
When the harvest season winds down, many ranch and farm owners may consider selling some land. Some will try to sell independently, and others will work with firms like Ranch Marketing Associates. Regardless of which strategy a landowner chooses, they can follow these tips for a smooth transaction.
Gather Information to Make an Informed Decision
The most important information pertains to ownership. Who is listed as the property owner? Can the holder legally sell the property? Many times, an heir may try to sell a piece of land, only to discover that the deed is in the deceased’s name. While some ownership issues can easily be corrected, others are more complex.
Discuss the Sale With a CPA
A CPA (certified public accountant) can help clients understand the tax consequences of a land sale. In some instances, a person can exchange one piece of property for another (a practice known as a 1031 exchange) to avoid the capital gains taxes that come with structure and land sales.
Research Comparables to Determine a Fair Asking Price
Working with a broker can help a landowner set the appropriate asking price. Sellers can also hire an appraiser from the American Society of Farm Managers and Rural Appraisers. However, setting a price based on an appraisal can be problematic in a volatile market.
Compare the Ranch’s Characteristics to Recent Sales
The physical characteristics of land can vary, affecting the potential sale price. Landowners should know total and cultivatable acres, pasture and pond acreage and irrigation capability. A potential buyer may want to know how old the well is, how big the pump is, and how fast it can pump water. Other relevant issues may include knowing the quality, type and value of the timber on a piece of land.
When selling a ranch or farm, the owner may have to consider other factors such as fertility, yield history, drainage, future uses, mineral and air rights, property taxes and easements. Those without the experience and time to handle all of these tasks can hire a brokerage firm to expedite the process of selling ranch and farm land.