SELLING THE FAMILY FARM:
ONLINE & SIMULCAST or Live?
With today’s technology expanding at a faster and faster pace, your choices in how to sell farmland, the family farm or just land in general are “growing” just as fast!
Here are some tips, pointers and ideas that you want to explore with your auctioneer or land sales representative as you look into selling your land.
First, a LIVE AUCTION has traditionally been a very good way to sell farmland, the family farm or land in general. This option brings together a group of people willing to offer up cash for your land, and many enjoy the thrill of staring down their opponent as you watch the price go higher and higher.
Many people come to an auction thinking they will get a bargain, but if your auctioneer does his or her job properly, the fair market value of any given piece of land should be the highest bid offered…and many times is above what land may be selling for by a listing realtor.
While truly dedicated, knowledgeable real estate agents may know all the competitive prices recently paid for land similar to yours, no one can accurately state for a fact what land will sell for on any given day.
An out of towner may want to move onto the property and begin his or her lifelong dream of owning a farm – cost be damned! Or, a buyer may know of an unannounced real estate project approval that will dramatically drive up the price of land in the area, and they want to get into the game before prices explode.
A real estate listing will not take these things into account, and the land could sell for significantly less than the true value at that moment an auction would have watched the price go up, and up and up.
Unfortunately, a LIVE AUCTION typically will only draw bidders from a limited regional area and leaves out many who would like to be bidders but cannot attend in person. Their money will go to someone else, at another time.
ENTER THE ONLINE AUCTION
Using common and readily available technology, companies have created websites that overcome many, if not all, of the obstacles of a live auction. A bidder simply goes to the auction website, registers to bid (including some sort of payment guarantee, like entering a credit card number) and when the auction goes live, then the bidder is able to place their bid in one of two ways.
If a bidder is able to sit in front of a computer or their phone (is it really a phone, or just a computer that has a phone app?) during the entire auction, they will be able to enter a bid amount higher than the current bid and see what happens. If they do not get outbid, then they win that “lot” or item being auctioned. Could be land, a vehicle, an animal, a kitchen table or whatever!!
When it is impossible for them to be tied up that long, then they are able to enter a Proxy bid, or an amount that is equal to the highest amount they are willing to spend. The computer will only bid the next higher amount for the bidder if they are outbid, and once it reaches their proxy amount, then the bidding stops and that bidder has lost.
The beauty of this type of auction is many-fold. First, it allows people who are a significant distance away from the auction to be a part of the auction action. And believe me, online auctions are just as exciting as live! Especially when enjoyed with the company of a friend or family member.
Second, it allows bidders who cannot attend a live auction due to a conflict (like WORK!) to still be a part of the auction with the chance that their proxy bid or less will end up being the winning bidder. Anything that the auctioneer can do to increase the size of the bidding audience will have a positive impact on the final outcome of the auction.
Which is the third point. While basically anyone can host an online auction without a license (YIKES!), it takes the special skills, knowledge and training of a professional, licensed auctioneer to do all the hard work behind the scenes and in the weeks leading up to the auction to maximize the bidding audience. More bidders = higher SOLD prices, every time.
Finally, using an online auction platform in the hands of a licensed, professional auctioneer gives a seller the very highest possibility of selling their assets for the highest possible dollars. You see, the internet is an international platform. It knows no barriers or boundaries. A real estate speculator in Europe or South America, flush with cash, can just as easily bid on a 200 acre farm in Boise, IA as the neighbor Old McDonald next door to the farm! E-I-E-I-O!!
If you don’t know that video is the hottest thing driving every website, news show, business platform or auction on the internet today, you need to climb out from under that rock….
A simulcast auction is simply an online auction, with added video! Kind of like watching “Auction TV” and bidding at the same time. Every single day video on the internet gets better, faster, more clear and MORE FUN! While not as much fun as the “epic fail” videos showing idiots getting their brains knocked out (and rightly so…) streaming video of auctions is a very exciting next generation of auction action.
By offering videos, people are more engaged, more inclined to continue to bid if they had a plan to bid, and tend to stay with the auction longer even after their desired item has been sold.
ASK YOUR AUCTIONEER. WHAT? YOU DON’T HAVE ONE?
Auctions are timely, transparent, fast, fair, competitive and results oriented. If at any time, now or in the future, you need to sell personal property or real estate, I urge you to contact your local or state auctioneer association, the National Auctioneer Association (www.auctioneers.org) or friends that you know who have had a positive experience with a local auctioneer and invite them to meet with you to discuss all your options, not just a listing agent.
Find an auctioneer who is reputable, has standing in both the local and the auctioneer communities, preferably has some type of additional training in the specialty that applies to your situation (see below) and has a list of referrals who have enjoyed working with this professional auctioneer. I promise, if you follows these suggestions, you won’t be sorry!
National Auctioneer Association credentials include, but are not limited to:
- CAI – Certified Auctioneer Institute (3 yr program)
- AARE – Accredited Auctioneer of Real Estate
- AMM – Auction Marketing Management
- CAS – Contract Auctioneer Specialist
- BAS – Benefit Auctioneer Specialist
- CES – Certified Estate Specialist
- GPPA – Graduate Personal Property Appraiser
- MPPA – Master Personal Property Appraiser