We all wondered if the run on real estate might be over! Very few saw the current market conditions coming: multiple offers, prices over asking, increasing quota values, cash deals, etc. This pandemic has provided many sellers with the perfect window to maximize their farm sale and set themselves up for a bright and comfortable future.
Below are two tips to get the most out of this hot market.
Preparing your farm for sale:
No matter the market conditions, certain principles always remain true: one of them being that first impressions matter! One might think that with such a hot market, all one needs to do is bang a sign in the ground – and the farm is sold! Such an assumption may be right, but at what cost? Is the goal simply to sell, or is it to sell for the highest- possible price with the best conditions?
Buyers will often act on first impressions. If their first impressions of your farm are not positive, then their offer will reflect that – in both price and conditions. Our experience has shown us that investing a little time into tidying up can pay handsomely! In fact, on one occasion, we calculated that a seller time spent cleaning up their farm, in preparation for its sale, was likely worth over $3000 per hour. Two days spent cleaning, or hiring a crew, could result in an increase in value of $60,000! Now that’s a return on your investment!
Our approach with sellers is to take a walk around their property, look at anything a buyer might take issue with, and select the issues that are easiest to remedy. For example, old steel lying around? Order a bin and fill it up. Weeds, long grass or saplings growing up around buildings? A few hours with a trimmer or bush hog does wonders. Steel on the shed flapping in the wind? A few minutes with the drill is all it takes. Mission accomplished. Such remedies are often less work and investment than our clients expected, and the returns are often greater!
Exposing the farm:
I always use the line, “It’s business 101.” This refers to the business principles that I was taught in my first-year university business courses. Principles like: supply and demand determine price. What this means for your farm is that you have a supply of one – you have one farm to sell (perhaps you have more, but let’s just stick with this for now). In order to drive the price up for that one item, you need to increase demand, or in real estate terms, you need to increase the number of buyers. If you have one seller and one buyer, you can sell, however, if you want top value and the best terms you want 10 buyers interested in your farm, not just one.
The more buyers you have, the greater the competition for your farm. Competition for your farm usually results in a higher selling price and better terms for you. This is exactly why you hear about those properties that sell for well over the asking price. What seller wouldn’t want that?!
How do you accomplish this? A mixture of preparation, targeted marketing and timing. We already talked about the preparation, next, you want to target that marketing. Who are the buyers and where are they coming from? Often, it's a mixture of local interest and regional interest, and sometimes buyers are from out of province or even out of the country. Determine who your buyers are and then design your marketing efforts around them. Then give time for that marketing to reach them. We usually give our marketing a minimum of 10 days before we open the table to offers. This increases the chances that we have the right buyers at your farm ready to make offers.
In closing, getting the most out of the sale of your farm requires a great game plan. The results can be astounding when you take the right steps in the right order. It is likely your largest asset. You only sell once, so make the most of it – the current market will reward you for it!
Phil Spoelstra - Broker
The Farm Ontario Team | Bus: 519-667-1800 Cell: 519-870-7325
Re/Max Centre City Phil Spoelstra Realty Inc. Brokerage, Independently Owned and Operated