Land Auctions - Brining the Market to You

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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 148
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