The decision to sell a property can be a difficult one, but once the decision is made, whats next? If you are thinking about selling your property, here are 5 tips to help you start the process.
1. Figure out how you own the property
Surprisingly, there are more than a few land owners that are not aware of how the property is owned. This is especially true if the farm had been passed down through the generations. A life estate can be especially confusing and may not allow to you sell the property or to keep the proceeds if you do. Land owned jointly will need the blessing of all owning parties no matter what percentage they may own.
2. Figure out what you own
Seems simple. Usually it is, however, there may be a few unexpected issues that can affect the value of your land. The real estate tax acres don’t always tell the true story and can often be incorrect. We have found that there may be an opportunity to increase the total acreage by obtaining a survey of the land. The addition of just one acre over the tax acres will more than pay for the survey and then some. Also, mineral rights are often overlooked and undervalued.
3. Know your basis
Land has gone up 3 to 4 times in value over the past fifteen years. That’s a lot of value for the government to tax. 15% to the federal government alone. 3.8% goes to Medicare over $500,000 in gain. The state of Illinois will want an additional 3.75%. That’s at least $130,000 in taxes from an 80-acre farm bought just 15 to 20 years ago. That’s $1,625 per acre!!
4. Figure out how to sell
Auction vs. private listing. FSBO vs. broker. Maybe just sell the farmland to the current tenant. There are several options for selling farmland depending on the situation. It is important to analyze all your options to maximize your sale price.
It is essential to have an effective marketing plan in place to maximize the value when offering farmland for sale. Evaluating the subject for sale, market conditions, and likely participants is necessary to providing a successful result for you as a seller.
5. Consult a professional
You saw this one coming, right? As a full service farmland brokerage firm, First Illinois Ag Group can help you make the decisions that are best for your situation. From private listings to auctions, we can handle all aspects of farmland sales from the planning to closing. We provide free consultations to anyone thinking about selling now or in the future.
In addition to the common brokerage services, we will help with the behind the scenes items such as Ordering title work, purchase contract, deed and closing documents; Working with seller’s attorney; Securing earnest money; Reviewing all documents; Setting a closing date; reviewing closing statements; obtaining necessary signatures; and attending closing. Our most valuable services is providing peace of mind throughout the sale process.
