Selling Agricultural Land – You are planning to sell an agricultural land, arable land, meadows and pastures of a farm business. Common reasons for the sale are old age, the abandonment of the farm or financial pressure, as through current financing, here or in another business. Sometimes company constructs would have to be slimmed down, sometimes it is “just” a matter of inheritance. The first question: How does the sale work? What do you have to consider when selling an agricultural area?
You may have already read our great guide on selling land, or perhaps you have read more specific guides, for example on selling woodland land.
For those who are dealing with the matter of land sale for the first time, the question surely arises:
How do I sell my agricultural land?
Which step do I start with?
Who advises me, prepares expert opinions & Co.
Here are a few pointers for selling farmland, agricultural land and other, more specific land. You can also read more about the process, mistakes and risks, as well as taxes when selling land.
Sell privately or with a professional?
The question is answered relatively quickly. There are various parameters that influence the selling price. These include, for example, the property valuation, as well as a solid and capital-strong buyer network, but also negotiating skills. After all, it is not “only” about a condominium, but about more complex, agricultural usable areas, with all the addition around soil expertise, forecasts and development possibilities.
Minimize effort, maximize profit
Selling agricultural land privately, for example through real estate portals, not the best idea.
What do you do with all the requests?
What documents, papers and expert opinions do you need?
Who sends info and makes phone calls for questions?
Who really has the credit rating and willingness to buy?
How many surveys do you want / need to do?
Who prepares and conducts the negotiations?
…
From credit rating (creditworthiness) to viewing appointments and negotiations: Time is money. Therefore, in this country 70% + sell with the help of professionals, such as an estate agent.
Time is of the essence. If you are not under pressure to sell, excellent. Then you may be able to make a mistake or two. But who wants to do that? Here is a recent example of a client who wanted to sell his property in Berlin. Private.
Example of agricultural land in the Berlin hinterland
Here is an example of a client who approached us, a typical case. It was an area in the Berlin area that was to be sold. The mistake in brief: private sale without sufficient credit check or financing confirmation from a bank. The result: months of delay and abandonment.
The seller has advertised privately on a known portal. Promptly came many messages, but almost all conversations ran into the void. Weeks passed.
Error: Insufficient creditworthiness and verification
After months, finally found a person who had the will and the credit rating – supposedly. So after the site visit talk about checking the financing, by the buyer’s bank and wait. Again, a few weeks pass.
Then you get after further weeks a feedback from the buyer and/or prospective customer that the financing was rejected with the first bank, therefore now with a second house bank one inquires. You wait.
After another few weeks passed, he still had no confirmation of financing from a bank, no preliminary purchase agreement, and no notary appointment.
Conclusion – pressure and frustration:
Suddenly there is more and more pressure to sell, and at the same time frustration rises.
You wouldn’t believe how many private sellers have this exact story happen to them.
That’s why over 2/3 of the properties are sold with professionals on the side (brokers and the like).
Professional land trading for agricultural land
Preparation is the key so that you do not lose months in the sale of A and B locations, and even years in C locations.
Preparation is the key: even with agricultural land
However, the work starts much earlier, which is another reason why working with a broker is advantageous.
Tip on the broker’s commission! Privately, the law currently provides that 50/50 is shared (buyer, seller). In commercial trade you can also put 100% on the buyer.
So, in principle, in the commercial trade it does not even cost you money. For this you get the network when it comes to a reputable real estate dealer.
What documents and papers do you need?
Which groups of buyers are you addressing with this particular property?
Do you want everyone to know you want to sell your farmland?
Should everyone know the value (your asset growth)?
Discretion: neighbours, envy and competition
In addition to the time factor (= money), for many sellers of agricultural land is also important that your property is made discreet, anonymous. From competition in the region to family, the neighbors or even receiving large sums of money. There are several reasons why a majority of sellers want to sell anonymously and discreetly.
Personal network: buyers and investors
Professional property trading looks quite different, of course. Here it is not about marketing in real estate portals, personal buyers are addressed, investors, funds but also foreign investors groups.
Investors from abroad: Profitable business
Foreign investors for a farmland? Yes! Many are looking for good returns and capital investment in this country. Due to the attractive returns in this country, but also the good soil quality and water quality (groundwater and water sources) in general, there are also very many investors from near and far abroad looking for land.
The big advantage for you as a seller, here the money sits a little looser than in the country – simply said.
Central for this is of course again a renowned real estate agency.
Exclusive is fast: supply and demand
Another strong advantage for you on the seller side:
Deals are being closed much faster.
Why? The properties are traded exclusively and the offers are made only to individuals. This exclusivity ensures the scarcity of supply and thus increases the demand on the customer side.
Time is money! Especially wealthy customers do not want to waste time
Wasting time, in which, for example, several interested parties are at one property. Business should be done quickly.
Find a real estate agent: Renowned office or from the region?
Therefore, consider working with a regional real estate agent who does what everyone does: Posting your farmland widely on all real estate portals. After that, hundreds of people will write, there will be many conversations, emails, plus phone calls. Very much time passes, few really have the creditworthiness, the will, as described before.
The process of finding a farmland takes months, sometimes even years.
Time is money! Addressing investors
Here is another psychological aspect that gives you advantages in off market trading:
When professional investors or their employees see that properties are listed on real estate portals, the question immediately arises: Why? Why has the property not found a buyer? No one would even continue to deal with this object. After all, there are thousands of advertisements. Who is supposed to see through all of them?
Family offices, real estate funds, etc.
Family offices, real estate funds and others therefore speak directly with renowned real estate offices and have only exclusive properties presented to them. Then everything goes very quickly.
In the off-market area, you will find the big family names, i.e. family offices, real estate funds, other institutions, which are approached individually and specifically, depending on the purchase profile.
Would you like to learn more about selling agricultural land? Then take a look at our detailed guide on the subject of selling land. Here we talk about the concrete procedure, in all the individual phases of the sales process. You will learn more about the typical mistakes that are made when selling and of course everything about taxes when selling land.
Selling a water well – appraisals, brokers, negotiations, process and taxes, there are also many questions when selling a water well. Is now the right time for you to sell? And if so, what is the most effective way to sell? Water is a scarce resource. Even though over 71% of our planet’s surface is water, there are fewer and fewer productive, clean water sources. Low supply, high demand: don’t just think regional buyers, think mutual funds and yes, food companies too. For that, you need a broker with an exclusive network. Whether a sole proprietor or a water cooperative, learn about the matter of selling here.
