We Sell Farm & Ranch Real Estate...Differently

Why Sell Land By Auction?

Selling farm & ranch real estate … differently.
Reck Agri Realty & Auction sells farm and ranch real estate throughout Colorado, Nebraska and Kansas by auction or private treaty…that said, our specialty is selling by auction.

A seller-landowner typically wants to obtain the highest price or solve a specific real estate challenge (see Why Reck Agri Realty & Auction). Buyers, on the other hand, seek to purchase property as reasonably as they can (e.g., never pay more than they have to, and never pay more than the last property sold)… and there is a minimum and maximum they are willing to pay. With our bidding format, a buyer can leverage all these goals while the seller is receiving the highest value.

With a private treaty sale, buyers seldom pay full asking price and the seller doesn’t know when the property will sell, or if the property will sell in 30 days or a year. If the asking price is too high, the property will become stale; if the asking price is too low and multiple offers exist, or if we receive an offer right away, you may question whether the property was properly valued. In other words, a private treaty sale can be awkward and cumbersome. An auction, on the other hand, is an accelerated marketing process that employs competitive bidding to achieve a fair market price by a specific date.
 

Recently, a buyer asked me why a particular property wasn’t being sold at auction. I responded by asking whether he’d prefer to buy at auction…and if so, why? He replied that he would rather buy at auction because he didn’t think the property we were offering for sale was worth the asking price – but, if he had to pay the same price at auction, he would have the confidence to do so.

Selling land at auction is straightforward. A committed seller and qualified bidders gather together in one room (and online), and a facilitated auction process ensures competitive bidding. Additionally, sellers and buyers know and accept the terms and conditions prior to the auction; as well, buyers have inspected the property and accepted its condition prior to the auction. The open and transparent bidding format allows all interested buyers to participate, and everyone knows if /when the property sells. Of the 960+ parcels sold at auction, every parcel has closed.  

“What do I need to know about auctions?”

First, auctions are simple – The seller negotiates only one contract with the broker to determine the auction format, terms and conditions, and to agree to sell to the highest bidder. The next time the seller signs a contract is with the highest bidder at the auction, followed by closing documents. For this reason alone, properties with multiple owners, estates with multiple heirs, or dissolutions, auctions work well to eliminate stress and conflicts between the parties.

Efficient and timely method to sell in one day
– Unlike private treaty, buyers with varying purchasing power gather in one room and compete for the property of their choice.

Competitive bidding determines current market value and allows for spikes in the market
– There is no better indicator of market value and price discovery than by assembling qualified, well-informed and motivated buyers to compete to purchase property by auction. Additionally, the auction format and atmosphere often facilitate competitive bidding to purchase property above market value.

Opportunity for all bidders to equally participate – Our auction format allows every bidder (including those who may never have had the opportunity to purchase before) to equally participate and compete, which ensures positive public sentiment and results in the highest value to the seller.

Exposure to all types of bidders – If it’s determined that the property could be split into multiple parcels and offered as a single unit, our marketing plan and auction format will expose to and assemble buyers of different levels of purchasing power to allow broad-based competition.

Realistic in sales price, marketing time, marketing expectations and results – Each auction requires understanding of associated risks and responsibilities. Our experienced and realistic “lay of the land” enables you to make informed decisions.

Seller dictates terms and conditions of sale – In order for bidders to participate, they must abide by the seller's terms and conditions, which eliminates confusion and maintains control of the auction.

Definitive date for property to sell – The seller knows whether the property has sold as of a certain date, ensuring informed decision-making and risk management. 

Financing arrangements prior to auction – By obtaining financing arrangements prior to auction, unqualified buyers are eliminated…a distinct advantage over a private treaty sale. The terms and conditions of the auction require a cash sale with no financing contingencies and 15% of the purchase price as an earnest money deposit paid upon signing of the contract immediately following the auction.

Because every seller deserves market value and every qualified buyer deserves the opportunity to purchase, we at Reck Agri Realty & Auction appreciate the flexibility, transparency and price discovery that the auction process provides. Let us, help you, get the best price for your land.