Selling farmland is a major financial decision, and preparing your property before putting it on the market can make a difference in the final sale price. Whether you own farmland in Iowa or elsewhere in the Midwest, taking the right steps before listing can help attract qualified buyers, avoid delays, and make the selling process easier.
From reviewing farm leases to understanding soil quality and choosing the right selling method, there are several things landowners should consider before selling their farmland.
1. Understand What Your Farmland Is Worth
Before listing your farmland for sale, one of the most important steps is determining its current market value.
Farmland values can vary significantly depending on location, soil quality, productivity, drainage, and buyer demand. Even farms located just a few miles apart can sell for different prices.
Some of the factors that influence farmland values include:
- Soil Quality: In Iowa, the Corn Suitability Rating 2 (CSR2) is commonly used to evaluate the productivity of farmland.
- Location: Farms located near active farming operations, grain elevators, or major highways may attract additional buyer interest.
- Drainage: Well-drained farmland, including properties with drainage tile, can be more desirable to buyers.
- Farmability: Field shape, access, topography, and obstacles can affect how efficiently a farm can be operated.
- Recent Sales: Comparable farmland sales in the surrounding area can provide valuable information about current market conditions.
Working with a farmland real estate broker who understands the local market can help you establish a realistic value for your property.
At Whitaker Marketing Group, we evaluate farmland using recent sales, property characteristics, and current buyer demand to help landowners understand what their farms may be worth.
2. Review Your Current Farm Lease
If your farmland is rented to a tenant, reviewing the existing farm lease should be a priority before listing the property.
In Iowa, farm leases can affect when a new buyer takes possession and whether the buyer can farm the property during the upcoming growing season.
Iowa generally requires written notice of termination by September 1 for qualifying farm tenancies, with termination taking effect the following March 1. However, exceptions and specific lease terms may apply.
Before selling, landowners should determine:
- Whether the farm is currently leased.
- Whether the agreement is written or verbal.
- When the current lease expires.
- Whether proper termination notice has been provided.
- Whether the buyer will receive rental income or farming possession.
You do not necessarily need to terminate a farm lease before selling the property. Farmland can be sold subject to an existing lease, but buyers should clearly understand the terms before purchasing.
Understanding the lease situation early can help prevent complications during the selling process.
3. Gather Important Property Information
Having accurate information available before listing your farmland makes it easier for potential buyers to evaluate the property.
Buyers often want to review soil maps, tillable acres, property boundaries, and other details before deciding how much they are willing to pay.
Important information to gather includes:
- Legal description of the property.
- Total acres and estimated tillable acres.
- CSR2 ratings and soil maps.
- FSA farm records and acreage information.
- Current farm lease agreements.
- Drainage tile information, if available.
- Easements and access agreements.
- Property tax information.
- Conservation Reserve Program (CRP) contracts, if applicable.
Not every landowner will have all these documents available. An experienced farmland broker can help locate much of the information needed to market the property.
Providing accurate property details allows buyers to make more informed decisions and can help reduce questions or delays later in the sale.
4. Identify Easements, Access Issues, and Other Property Restrictions
Before listing farmland, it is important to understand whether any easements, restrictions, or access issues could affect the property.
Some farms have shared driveways, drainage agreements, utility easements, or other arrangements that may not be immediately obvious.
Landowners should consider whether the property has:
- Legal access from a public road.
- Shared access agreements.
- Drainage or utility easements.
- Waterways or conservation restrictions.
- Boundary disputes or encroachments.
- Existing agreements with neighboring landowners.
These issues do not necessarily prevent farmland from being sold. However, identifying them before marketing begins can help buyers better understand the property and reduce the possibility of unexpected problems before closing.
5. Decide Whether to Sell the Farm as One Tract or Multiple Tracts
One decision that can influence the outcome of a farmland sale is how the property is divided and offered to buyers.
For larger farms, selling the property in multiple tracts may attract a wider range of buyers.
For example, a 240-acre farm could potentially be offered as one property or divided into three 80-acre tracts, depending on access, property boundaries, and other considerations.
Smaller tracts may appeal to neighboring farmers looking to expand their operations, while larger tracts may attract investors or buyers interested in purchasing the entire farm.
However, dividing a farm is not always the best option. Factors such as access, field layout, drainage, and local demand should be considered.
A farmland broker can help evaluate whether offering the property as one tract or multiple tracts could produce the strongest results.
6. Choose the Right Method for Selling Your Farmland
There are several ways to sell farmland, and the best method depends on the property, market conditions, and the seller’s goals.
Public Farmland Auction
A public auction creates a competitive bidding environment where interested buyers have the opportunity to compete for the property. Auctions also establish a specific sale date, which can be beneficial for landowners looking for a defined timeline.
Traditional Farmland Listing
A traditional listing allows the property to be marketed at an asking price while buyers submit offers. This method can provide flexibility in negotiations and the timing of the sale.
Sealed-Bid Sale
A sealed-bid sale allows interested buyers to submit confidential offers by a specified deadline. The seller then reviews the offers and determines how to proceed.
Each method has advantages, and no single approach is right for every property.
At Whitaker Marketing Group, we work with landowners to determine which selling method best fits their property and objectives.
7. Consider the Tax Implications of Selling Farmland
Selling farmland can have significant tax consequences, particularly for properties that have been owned for many years.
Depending on the circumstances, sellers may need to consider capital gains taxes, depreciation recapture, and other potential tax obligations.
Some landowners may also qualify for a 1031 exchange, which can allow eligible investment or business real estate to be exchanged for other qualifying real estate while deferring certain capital gains taxes.
If you are considering selling farmland, it is important to speak with a qualified accountant or tax professional before completing the sale.
Understanding the potential tax implications ahead of time can help you make better financial decisions.
8. Work With a Broker Who Specializes in Farmland
Selling farmland is different from selling a residential property.
Farmland buyers evaluate properties based on soil productivity, rental income, farming efficiency, location, and long-term investment potential.
Working with a broker who specializes in agricultural real estate can help ensure your property is marketed to the right audience.
An experienced farmland broker can assist with determining market value, preparing property information, developing a marketing strategy, and managing the selling process through closing.
At Whitaker Marketing Group, we specialize in farmland auctions, traditional listings, and sealed-bid sales throughout Iowa and the Midwest. Our goal is to help landowners make informed decisions while working to achieve the strongest possible results for their property.
Frequently Asked Questions About Preparing Farmland for Sale
Do I need to have my farmland surveyed before selling it?
Not every farmland sale requires a new survey. However, a survey may be beneficial if property boundaries are unclear, the farm is being divided into smaller tracts, or there are questions about access or acreage.
Can I sell farmland while someone else is farming it?
Yes. Farmland can be sold while it is rented to a tenant. However, the existing lease and possession terms should be reviewed before listing so potential buyers understand their rights and responsibilities.
When is the best time to list farmland for sale in Iowa?
Farmland can be sold throughout the year. The best time depends on market conditions, the current lease, possession dates, and the seller’s goals. Many landowners consider selling after harvest, but successful farmland sales can take place during any season.
How long does it take to sell farmland?
The timeline depends on the selling method, property characteristics, and buyer demand. Auctions typically establish a specific sale date, while traditional listings may require more time to identify a buyer and negotiate an agreement.
Should I get a farmland valuation before listing?
Yes. Understanding your property’s current market value can help you establish realistic expectations and determine the most appropriate selling strategy. A farmland valuation can consider recent comparable sales, soil quality, location, and other property characteristics.
Thinking About Selling Your Farmland in Iowa?
Preparing your farmland before listing can help make the selling process more efficient and give potential buyers the information they need to make competitive offers.
Whether you are considering selling inherited farmland, retiring from farming, or simply exploring your options, understanding your property’s value and choosing the right selling strategy are important first steps.
Whitaker Marketing Group specializes in farmland auctions, traditional listings, and sealed-bid sales throughout Iowa and the Midwest. Our team can help evaluate your property, explain your selling options, and develop a marketing plan designed to reach qualified farmland buyers.
If you are considering selling your farmland, contact Whitaker Marketing Group to discuss your property and request a farmland valuation.
