Top 50 Questions about Farmland
Can I Have a Reserve When I Sell My Farm?
Yes, you can set a reserve when selling your farm. A reserve is your bottom-dollar price—the minimum amount you’re willing to accept for the property. This option allows sellers to ensure their farm doesn’t sell below a certain value.
Types of Auctions
- Reserve Auction: The property only sells if bidding meets or exceeds your reserve price.
- Absolute Auction: The property sells to the highest bidder regardless of the final price.
How Reserves Work
- The reserve is typically set in consultation with your broker after a farm valuation or appraisal.
- Many sellers set the reserve 10% below the targeted sale price to encourage bidding while minimizing the risk of underselling.
- Reserves are a safeguard, not a price-setting tool. They aim to prevent financial loss, not dictate the final sale price.
Key Takeaways
- Reserves protect your minimum acceptable price during an auction.
- Absolute auctions ensure a sale but come with the risk of lower bids.
- A well-placed reserve balances seller protection with buyer interest to drive competitive bidding.
Want to explore whether a reserve or absolute auction is best for your farm? Contact David Whitaker – Iowa Land Guy for tailored advice and expert auction services!
David Whitaker | Iowa Land Guy
