Land Auctions - Brining the Market to You

TEXAS LAND / Roundup Issue
LAND
AUCTIONS
BRINGING THE MARKET TO YOU
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?
WRITTEN BY JENNI WINEGARNER
LEGACY LAND AUCTIONS

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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TEXAS LAND / Roundup Issue
window between the date an auction contract is signed and
sale day often ranges from 30 to 60 days. Working within a
seller-preapproved marketing budget, auction companies
utilize traditional print and radio channels along with online
advertising, direct mail marketing and one-on-one outreach to
make sure there is enthusiasm about a property and energy and
excitement with the broadest pool of potential buyers possible.
Another important tool in a successful land auction is
participation from area land brokers. Incorporating the client
networks of multiple brokers throughout a region not only
multiplies the reach of an auction’s marketing effort but also
brings more interested, qualified bidders to an auction. For
brokers, participating in auctions with their clients can provide
another important tool in their client services portfolio. As a
landowner looks for an auction company, it is important to
find a firm that actively works to engage outside brokers and
agents, and is willing to back that up with a competitive broker
commission.
Auctions put sellers back in the driver’s seat when putting a
premium agricultural property on the market. Giving careful
consideration to external factors such as hunting and growing
seasons, commodity markets, economic factors, and even the
weather, sellers work with their auction company to schedule
a sale date and target closing date designed to maximize a
property’s potential value and best suit the needs of the seller.
As a landowner, this gives you the planning certainty to make
future arrangements—no more waiting on the market to bring
you reasonable offers.
Sellers should also discuss their needs and goals when
determining whether to conduct an absolute auction, giving
buyers the guarantee that the property will sell, or an auction
with reserve, which provides some protection for a seller but
can detract from the excitement and enthusiasm inherent to
an absolute auction. Most importantly, with an auction, there’s
no more waiting weeks, months, or even years to receive a
reasonable offer. You force the market to bring the offers to
you! Bidders come to your auction prepared to buy, with no
contingencies.
commission is typically covered by a buyer’s premium added to
the high bid price to arrive at a final sales contract price. Sellers
can anticipate gross proceeds that are roughly equal to the high
bid price on the property being sold.
Whether simply looking for renewed energy on a property that
has been listed for some time or seeking the planning certainty
that comes from a definite sale and closing date, an auction is
the smart choice to market and sell your property. But not all
auction companies are created equal.
Would you hire an appliance salesman to sell your home or
a landscaper to remodel your kitchen? Why then would you
consider using a real estate salesperson who specializes in
marketing homes or commercial properties or an auction
company who focuses on equipment auctions to sell your
premium farm, ranch, or agribusiness? When the time comes to
consider selling a premium farm or ranch property, it’s critical to
find a broker and auction company with experience in farm and
ranch land. An agent or broker with expertise in selling luxury
resorts or commercial properties may not have the experience
to showcase your unique farm or ranch land. The approach to
marketing premier agricultural properties should be as unique
as the land itself. And if you’re looking for a premium result,
why trust anything less than a premium marketing effort by an
auction company with hands-on agricultural experience?
Focused on people, partnerships, and results, Legacy
Land Auctions is committed to being the leading
provider of marketing solutions for premier
agricultural properties. Contact us today to
find out why an auction may be the perfect
choice for selling your property!
www.LegacyLandAuctions.com
To eliminate the out-of-pocket
expenses for a seller, in many
auction circumstances, buyers
are responsible for the bulk
of the property closing
costs, including title policy
expenses and necessary
surveying. And the auction
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