Who Will Buy Your Family Farmland? Understanding Your Options When Selling Inherited Farmland
Deciding to sell inherited farmland can take time, especially when the land has been in the family for generations and the decision follows the loss of someone close to it.
The property may represent years of work, memories of a parent or grandparent, and a connection to a place that has been part of the family for decades. At the same time, landowners may find themselves managing the land from a distance or making decisions about leases, tenants, and ownership that they have never had to make before.
Eventually, many families arrive at another question: not just whether to sell the land, but who will own and farm the land next?
Start With Your Family’s Priorities
There is no right outcome when selling inherited farmland. For some families, receiving fair market value is the primary consideration. For others, timing, simplifying ownership among multiple owners, or knowing the land will continue to be farmed may also play an important role. Taking the time to identify those priorities can make the decisions that follow feel more manageable. It can also help families look beyond the sale price itself and consider what a successful sale means to them.Consider the Sale Process
How farmland is brought to market can influence the overall sale experience and the buyers it reaches. If who buys the land is important to your family, make that part of the conversation before choosing a sale method. For example, choosing a private sale may allow the seller and broker to focus marketing on a targeted group of potential buyers based on the seller’s goals. This can give the seller more influence over who has the opportunity to purchase the land. An auction takes a different approach by opening the property to a broader group of qualified buyers. The seller generally has less influence over who ultimately becomes the buyer because the successful buyer is determined through the bidding process, subject to the auction terms. Neither method guarantees a particular outcome, but understanding how each approach affects the buyer pool can help families choose a process that aligns with both their financial goals and their priorities for the land.What This Looked Like for One Family
We recently worked with a family facing a similar decision. A 160.00± acre farm in Wilmont Township, Nobles County, Minnesota, had been in their family for generations. Following the loss of a family member, the family made the decision to sell the property at auction. The farm, with a 94 CPI, sold for $12,750 per deeded acre and $13,173 per tillable acre. The successful bidder was a young farmer who attended the auction with his family, including his wife and two sons. He purchased the property to add to the farming operation he is building.For the family selling the property, the outcome represented more than the final sale price. The land would continue in production and become part of another family’s farming operation for years to come.
It was an outcome that reflected their priorities as they closed one chapter of their family’s connection to the land. The sale method did not guarantee who the buyer would be, but the final outcome aligned with what the family hoped to see for the property.