Can I Sell my Farmland During the Spring and Summer Months?

A question we often get as a real estate company that specializes in the sale of land is, does selling my Iowa farm during spring and summer months produce good results? The answer is absolutely it can! In fact, we often see higher land prices in the spring and summer because so many people don’t think it’s possible to sell land during the growing season, therefore there is not a lot of land on the market which results in higher demand. However, not every farm should be sold in the spring and summer. Every farm is a little different, therefore each farm deserves its own answer to the question. Most of the answers to this question depend on current cash rent agreements in place. Below are a few examples of rental agreements and what to expect for each rental agreement when considering selling your farm while an agreement is in place.

1. (Cash Rent Agreement) Fair cash rent agreement is probably the cleanest way to sell farmland during the agricultural growing season in Iowa. When we handle a farm sale during this time of year with a cash rent agreement in place, we typically prorate the farm income based on what your lease dates read on your farm contract with your tenant. If you don’t have written cash rent agreement with your tenant, don’t sweat it. We then use a standard March 1 to day of closing time frame to prorate farm income. Keep in mind, this is not how every transaction goes with a cash rent agreement. Ultimately, at the end of the day, the dollar amount of income the buyer should receive is what the buyer and seller agree upon within negotiating.

2. (Share Crop Agreement) Crop share agreements are little more challenging when offering a farm for sale during the current growing season compared to a standard cash rent agreement because there is some uncertainty when walking into a crop share agreement. For example, most crop share agreements are in place because the current owner of the property has a good relationship with the tenant therefore resulting in a partnership. To read more about crop share agreements click here. Most buyers are willing to take on the adventure through the crop share agreement especially if it’s only a one-year contract. From our experience, a share crop agreement does not hold up a successful sale during the spring or summer months. Call one of our Land Brokers at Iowa Land Company to discuss in further detail about crop share agreements because they can be the most challenging to understand.

3. (Owner Operated) This is when the owner, in this case, yourself farms the farm. We see more and more of this everyday. Owner operators are wanting to pull the equity they have in their farm but still lease it back resulting in putting the farm up for sale. Most owners are willing to take under market value for the farm as long as they can put a long-term lease on the farm with buyer/investor. Yes, we also see farmers selling their farm with crops in the field that are looking to retire. If this is the case, typically what we do is credit the buyer a prorated amount of income based on the county average per acre cash rent. Again, at the end of the day the dollar amount of income the buyer should receive is what the buyer and seller agree upon within negotiating.

4. (Long Term Lease Agreement) If you have a long-term agreement in place on the farm you’re considering selling don’t sweat it, especially if the rent is a fair cash rent agreement. There are more and more investors buying farmland across the state everyday. They need a tenant so they enjoy seeing the same tenant on the farm while they take on the ownership of the property. The demand for farmland is so intense right now we are even seeing local operators buy farms with extended lease agreements in place because they know if they don’t jump on the opportunity of a farm being available close to them someone else in the neighborhood will that will ride out the lease agreement.

We need to hear from you to determine if your Iowa farm would sell best during the summer months. Our Land Brokers at Iowa Land Company have seen what we believe every situation there is to see when selling an Iowa farm. If you feel you don’t have any answers to your questions regarding selling your land, don’t hesitate to call one of our offices today; Indianola, Iowa (515) 962-5048, Fort Dodge, Iowa (515) 955-3817, or Vinton, Iowa  (319) 440-3176 we would be happy to help give you our professional opinion and assist you in any way we can.