Tips for Buying Farmland at An Auction
September 30, 2022

Tips for Buying Farmland at An Auction

If you are looking to purchase farmland, you may want to consider an auction. The key benefit of purchasing land is a lower price and buying for a true market price.

Buying property at an auction is a sure way to secure land at a fair price while giving you other benefits like speed. Once the bid is accepted, contracts are exchanged on the same day, protecting you from gazumping; the seller cannot withdraw from the sale as they cannot accept a higher offer from another buyer.

While buying property at an auction comes with all the mentioned benefits, they can sometimes be unpredictable, especially if you have not prepared adequately. Here is information that will guide you to have an easy experience.

1. Identify Land Auctions Near You

Private auction houses and the government conduct multiple land auctions. You can find information on available land auctions on tax collection and county treasurer websites. Public land auctions often take place at the property site.

Some local newspapers list upcoming auctions too. You could also visit private auction houses in your area for information on upcoming auctions. Some auction houses may provide the services online; check with them to confirm if they are available.

2. Track Properties Listed for Upcoming Auctions

After getting information on upcoming auctions, keep track of the properties and get more information on them. Often, the auction house of the county treasurer will upload brochures on their websites with information about the property.

The critical information to pay attention to includes the parcel number, the size of land available, restrictions, access points, the location of the land, and where to find the survey.

3. Contact an Attorney or Real Estate Agent

You need legal and professional advice to purchase land through an auction efficiently. A professional will ensure you have everything set ahead of the auction date. Moreover, they will guide you to value the property at a reasonable price, so you don't overbid.

They will also facilitate the preparation of the documents and support the transfer of property ownership.

The sale will feature a legal pack consisting of legal documents to help them decide on the purchase. It may comprise title deeds and plans, sale conditions, applicable leases, local authority searches, and other relevant documents.

When purchasing at an auction, you are expected to read and understand all the relevant documents. Having an attorney or real estate agent by your side will help if you are inexperienced. Due diligence before the purchase is vital.

If you are working with an agent, look for one that offers land auction services.

4. Read the Terms and Conditions of the Auction

As much as you will leverage the support of your attorney or real estate agents with the documents, it is important that you also understand the conditions of the auction. From this point, you can seek clarity and consult your attorney if you have concerns.

The terms and conditions essentially lay out the expectations from purchasing the properties. Some information to look out for includes the type of property on auction, the minimum bid prices for the property, the title type the buyer will get, property taxes due date, and the conditions of the sale.

You can also get information on how the bid will take place. For instance, if you are required to fill out an online written bid form or attend a live auction.

5. Inspect the Land on Auction

Buyers are encouraged to inspect the land being auctioned before submitting their bid. However, this does not mean failure to do so will lead to the cancellation of your bid.

While there is flexibility, the tour is recommended. Once you identify land that interests you, schedule a visit before submitting your link or attending an auction. You can give the private auction company that has listed the property a visit and request a tour.

You can walk around the property and assess it. Note that if you are buying a property on a forced sale, for instance, for foreclosure or delinquent taxes, it may be impossible to gain access to the land. However, you can still view the property from a public space.

6. Comparison Shopping

You can still do comparison shopping for a property at auction. You could use a property's minimum bid price to compare it with the costs of nearby lands.

You could also compare to get a clue of how much the land on auction will be worth. Getting the appraised value of the nearby property will help you determine the maximum amount you would be willing to bid and the financing you will need for the auction.

7. Get Financing

Once you have assessed the property and appraised it, you can start working on the financing if you have decided to move ahead with the auction. Some private auction houses allow you to finance the property through the.

However, most of them will need the payment in full when the auction is won. It is, therefore, best to prepare for financing ahead of the auction.

Consider your financing options, whether it is a mortgage or cash. If you have confirmed the financing policy of the property allows a mortgage, visit a bank, and get a pre-approved mortgage with the promise of financing your property if you are the highest bidder in the auction.

If not allowed, you will need cash at the time of the auction. Some auction houses will even ask for a down payment; ensure you have enough funds to cover the financing policy of the auction house.

Consult a Land Auction Specialist

If you are considering purchasing farmland through an auction, consider working with farm real estate experts for a successful property purchase.

At Cotton Grave, we understand the requirements and demands of purchasing farmland through an auction and can support you from start to finish to buy land in a timely and effortless way.

Read Our Other Articles

Copyright 2013 Cotton Grave Farm Management - All Rights Reserved - Site Design By: Emagine