Considering a Post-Harvest Minnesota Farmland Sale? Here’s What to Know
If you want to sell farmland after harvest and close before the end of the year, the planning often needs to begin before harvest starts. Ownership decisions, lease terms, property records, marketing, and closing requirements all affect the schedule.
Confirm Who Is Involved
Begin by identifying everyone involved in the decision. This may include individual owners, trustees, personal representatives, beneficiaries, or family members.
The owners should discuss whether they are ready to sell, what they want from the sale, and who has authority to make decisions and sign documents. Multiple tracts or different ownership interests can require additional coordination.
Review the Farmland Lease
The lease may determine when a buyer can take possession. Review its expiration date, renewal provisions, termination requirements, extensions, and any agreements that may continue into the next crop year.
Farmland can be sold with an existing lease, but buyers will want a clear understanding of the tenancy and the rights transferring with the property. Providing early notice is better if the lease does not have a termination clause.
Talk With Your Tax Advisor
A farmland sale can create significant tax consequences. Speaking with your accountant or tax advisor before setting the sale and closing dates gives you time to understand the potential tax impact and evaluate any planning options available to you.
These conversations may take additional time when the farmland has been owned for many years, is part of an estate, or may involve a 1031 exchange or another tax strategy.
Begin Gathering Property Information
Preparing the property information can begin before harvest. Depending on the farmland, this may include:
- FSA records and aerial maps
- Farmland leases
- Tile and drainage information
- Surveys and legal descriptions
- Easements
- CRP or other conservation contracts
Gathering these records early helps identify questions that should be resolved before the farmland is offered for sale.
Work Backward From the Closing Date
Our farmland transactions typically allow approximately 45 days between the signed purchase agreement and closing. A fully marketed sale also requires time to research the property, prepare the marketing materials, reach potential buyers, and complete the sale process.
If the goal is to close before December 31, the auction or offer deadline will need to be scheduled accordingly. Attorneys, title companies, lenders, and qualified intermediaries may also have heavier schedules toward the end of the year.
When Should Planning Begin?
Summer is a good time to begin planning a post-harvest sale. Starting early allows the owners to review their options while there is still flexibility in the schedule.
More preparation may be needed if there are multiple tracts, several owners, surveys required, drainage arrangements, or other special circumstances. The sale date may be after harvest, but much of the work can be completed beforehand.
If you are considering a post-harvest farmland sale, our team is available to help you review the property, understand the available methods of sale, and build a schedule around your goals.