Texas LAND•Spring 2017

From the expansive, rugged terrain of West Texas
to the lush, rolling estates of the Hill Country, to
working ranches and fertile farmground scattered
throughout the state, Texas is uniquely identified
across the United States and around the world by the diverse
terrain and iconic landscapes that have shaped its history.
For property owners, the unique character and diversity that
defines Texas and draws in visitors from around the world can
create difficulty when the time comes to consider selling.
As a landowner, where do you turn when it’s time to sell your
premium agricultural property?
Traditional real estate markets are very effective when selling a
home or other property with a lower price point. The success
of this approach often relies on market continuity and data
collected from comparable sales—both of which are often
unavailable for one-of-a-kind farm and ranch land.
As the complexity and value of a property increases, the pool
of potential buyers decreases. And in the case of premier farm
and ranch real estate, the higher
value of the property also limits
the number of buyers with the
financial means to purchase. The
result for owners of premium
agricultural land can be pricing
guesswork that may either
overvalue a property and result in
excessive days on the market or
undervalue a property and lead
to a quicker sale but a discounted
return. Even with the very best land agent, unique, high-value
rural properties with a limited pool of potential buyers may
linger on the market with little interest in a traditional listing.
Together, these factors may amount to planning uncertainty,
lost dollars, and indefinite carrying costs for landowners.
❝AUCTIONS PUT SELLERS BACK IN
THE DRIVER’S SEAT WHEN PUTTING A
PREMIUM AGRICULTURAL PROPERTY
ON THE MARKET❞
The National Auctioneers Association estimates that in 2010,
more than 24 percent of all auctions involved real estate
transactions. And beginning in 2003, residential, farm, and
ranch real estate represented the fastest growing segment of
auctions conducted nation-wide. In 2008, land and agricultural
real estate auctions represented an estimated $26 Billion in
sales volume.
There are a number of key benefits for sellers, brokers, and
buyers alike that can be achieved when offering a property at
auction—and together, the following advantages are making
auctions a more and more frequent choice for discerning
landowners.
Sellers are figuring out that auctions provide an accelerated
marketing alternative that puts them in the driver’s seat and
eliminates the hassle of a drawn-out listing and negotiation
process. An auction brings together a pool of potential buyers
at one time, creating excitement and competition that offers the
fastest way to reveal the true-market-value on any property.
An auction eliminates the
guesswork often required in
pricing high-value, premier
agricultural properties. On
auction day, the auction process,
in real-time, uncovers the market
value of your property.
A successful auction requires
multiple willing and able buyers
competing for a property. Both
through the multi-parcel auction process and a concentrated,
dynamic marketing campaign, the lead-up to auction day must
be thoughtfully executed to maximize the number of bidders
at the table and to enhance the urgency and excitement
generated by a property auction.
But this paradigm is shifting.
Unlike ever before, owners of hard-to-value, premium
agricultural properties are turning to auctions. For too long, the
marketplace has viewed auctions as a last-resort, fire-sale tool
for flawed properties. But thanks to success in the luxury home
market and in the sale of expansive ranches in the northern
tier of the U.S., this perception is changing. From small rural
homesteads to sprawling farmland holdings, customized
auction approaches can and are delivering premium sales
prices for property owners across all parts of Texas.
Multi-parcel (multi-par) auctions divide properties into multiple
tracts, expanding the number of purchasing options – which
in turn expands the pool of potential bidders. Bidders arrive
on auction day with full knowledge of the property and ready
to buy. With the multi-par process, bidders have control over
exactly which property they want with the option to bid on one
tract, bid on a few, or bid on them all!
To achieve a successful outcome on auction day, landowners
should look for a dynamic, professional marketing effort
leading up to sale day that showcases and intensively markets
a property to the audiences most likely to buy. A typical
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