Selling your farmland is a significant decision and often a once in a lifetime event. Many landowners find themselves in this position after inheriting their family’s land. Statistics show that farmland is commonly sold within the first 12 months after inheritance. Naturally, this raises the question: Is there a “best time of the year” to sell farmland?
Seasonal Trends in Real Estate
Unlike residential real estate, which often experiences seasonal cycles in buyer demand, farmland sales do not follow the same seasonal trends. The majority of farmland buyers are expansion farmers who are consistently on the lookout for opportunities to grow their operations. Owning land provides farmers with stability and eliminates the uncertainties of renting, which include annual lease negotiations and competition from other operators. As a result, these expansion farmers are ready to purchase whenever attractive land becomes available.
Additionally, investors and those utilizing 1031 exchanges, also contribute to year-round demand for farmland. Their financial needs and timelines can occur at anytime, regardless of the season.
What if my farm is already rented for the growing season?
Concerns about farms that are already leased can be addressed through proration. For example, leased farms are sold subject to existing leases, with income and taxes prorated to the closing date. This provides the buyer with income to carry the farm to the next crop year while allowing the seller to sell when the time is right for them. Whether the buyer is an investor or expansion farmer, they simply take over the lease and receive their prorate share of income and expenses.
Strategic Timing for Sale by Auction
When selling by auction, we avoid selecting dates during active planting and harvest periods, if possible. Farm producers are deeply focused on their operations during these times. Scheduling an auction when farmers are less occupied ensures their full participation and interest, which benefits the seller by maximizing market engagement and potentially leading to higher sale prices.
Ultimately, the best time to sell farmland depends on the unique circumstances of the seller and the market. With the right strategy and guidance, sellers can successfully navigate the process and achieve favorable results throughout the calendar year.
To have a discussion regarding your family’s specific objectives give Wingert Land Services a call at 507-248-LAND (5263). We’re here to provide you clarity, guidance, and peace of mind as your plan for your land transaction.