I have been asked several times in the last couple of weeks about land auctions and what might make an owner consider to go this route in selling his or her land. It is important to note that I have been responsible for selling thousands of acres of land by the auction method and have a very close working relationship with two of what I consider to be the best auction houses in the state of Missouri.
Land auctions main attraction is that it is a fast way to liquidate you holdings and sometimes you can maximize your profit. There are internet and live auctions, there are reserves; where the owner sets a base and no reserves where the land sells regardless of price. With land auctions the buyer or bidder comes prepared to own the land; there are no contingincies for inspections or financing. The buyer is expected to have done all is homework.
I am very partial to the live auction method which means that everyone is gathered in one room and sometimes there is bidding from the phone and the auctioneer chants the prices. Most large parcels of land will be divided up into smaller pieces which will ultimately enable more buyers to purchase. Sometimes this will bring a higher price for the whole farm. The live auction will bring a competitive spark to the bidding and a good auctioneer will be able to see and feel the emotions and get an even higher price from the bidders. With the internet auctions I have never felt the need or competition to drive a higher price and there is just to much that goes on behind the scene. I also like the no reserve auctions as this will bring out the real buyers knowing that this land will sell today. They will travel and they will show up to bid and prepared to buy. With a reserve price if you no sale a farm then you are stuck with an auction appraised value of the farm. People dont forget what the last offer was. Also, another problem I have is that with auctions no matter how big the turn out is there are usually just two bidders and there is always the chance that one might be in the restroom and not bidding.
As I previously mentined I have been responsible for large land and machinery auctions for estates, banks, trust companies, attorneys and families all with the need to settle and cash in the land quickly. Many financial institutions do not want land in their portfolio as it is much harder to manage than cash. Whether you decide to list or auction my recommendation is to talk with someone you trust that has had experience with all forms of land sales and let them outline for you both ways. Both auctions and listings have a place. With over 30 years of selling country property I would be happy to work with you in helping you get to your ultimate goal either by auction or listing process.