Overcoming Common Obstacles When Selling Your Farm

Overcoming Common Obstacles People Face when Selling Farmland

In a recent chat with Hayden Outdoors Director of Sales John Herrity, the biggest challenges to selling farmland aren’t necessarily the land itself. Bountiful yields mean a healthy sale when it comes to selling farmland, right? Not necessarily.

“Crop yields are really only one piece of the puzzle,” said John. “And they’re not necessarily the most important. Yields change from producer to producer. A savvy farmer will come in and look at the soil’s rating and compare it to what’s currently being produced to assess the viability of the land. You can have a great farm, but if the farmer doesn’t care for the land, then it won’t produce great yields. The next farmer could double production.”

So if crop yields aren’t the biggest obstacle to selling your farmland, what is? Well, it’s really all of the things we don’t think about when we think of farming. These are some very common setbacks when it comes time to put your acres up for sale.

Long-term leases and other agreements.

This is a biggie. If you decide to sell your farmland, but you have a long-term lease on the land, this can be problematic for buyers. People buying farmland are typically looking to work the land themselves. If you think you might be selling your farmland in the near future, avoid establishing any long-term leases. Alternatively, if you have a long-term lease on the land and feel it’s time to sell regardless, consider buying out the lease or reworking the terms.

Helpful Tip: Put all of your updated lease documents in one place and also make digital copies made by the real estate agent for potential buyers.

Farmland ownership models.

Sometimes a farm is a single-family entity. There’s one name on the title. If this is the case for your farmland, your sale will most likely be straightforward. If not, things could get a little sticky. Farms with multiple ownership stakes require a stakeholder consensus to sell. If everyone is on the same page, this will be easy to establish. If not, putting the land up for sale will need to wait until all owners agree to the sale terms. 

Helpful Tip: Meet with a trust attorney if you think that multiple entities could cause issues at the closing table.

Conservation Easements

Farms are big, expansive swaths of land that often require easements to allow for property access in otherwise inaccessible parts of the acreage. Easements are typically established with neighboring property owners or other entities, such as the Bureau of Land Management or the United States Forest Service. Buyers will want to clearly understand these easements, their permanence, and how they affect the use of the land. 

Helpful Tip: Our real estate agents are experienced with conservation easements, water and mineral rights, and more. Write down your questions and give one of our team members a call to go over your inquiries.

Liens and encroachments

If the farm is the rose, consider liens and encroachments the thorns. Liens are placed on property, buildings, or equipment that have outstanding debt until the debt is paid off. Encroachments are just that – any unauthorized intrusion onto the property, either above or below the land. This can be an old fence that wanders away from its property line, an aging tree that bows from one property onto another, or a neighbor’s rusty old tractor that he or she refuses to fetch from your land. It’s best to clear your farmland of all liens and encroachments as much as possible before you sell it.

Helpful Tip: It’s also wise to have your real estate professional work with the title company to pull an ownership and encumbrances report (O&E Report), which will show any liens or judgments against the property.

Of course, don’t let these challenges deter you if you feel you’ve tilled your last acre. The experienced real estate professionals at Hayden Outdoors have been doing this for a long time – 45 years to be exact. They know the ins and outs of large farmland sales. They’re happy to help and explain as they go, ensuring you get the most out of your sale, and your farm land in good hands. Contact Hayden Outdoors today to learn more about selling your farm.