The Best Time to Sell your Farm or RanchNovember 3, 2021
The decision to sell a long-held family-owned farm or ranch requires careful planning and consideration of the many ramifications brought about by the sale. This article will cover some of those issues and provide potential sellers ideas and tools to make good decisions while moving forward with the sale process. It’s important to plan ahead to enable putting all the necessary pieces in place before the property actually goes on the market.
First, when is the best time to begin the conversation about selling a farm or ranch property? Many ag properties have been owned and operated by the same family for multiple generations. The owner that sells the farm or ranch after such a long term of family ownership can find themselves in a stressful and uncomfortable position. Nobody wants to be the one that breaks that long chain of family ownership but ultimately a decision must be made that best serves the current owners. Regardless, it’s important to consider every opportunity and ramification created by a potential sale. For example, what kind of capital gains tax consequences will arise from the sale? Typically, a long-held farm or ranch will have a very low cost basis and with the rapid rise in Montana ag land prices over the last twenty years most current land sales will create a significant capital gains tax event. Early planning can help mitigate the impact of that tax by arranging a 1031 exchange into another property as a possible option. At the very least, there should be a strategy formulated of how the proceeds of the sale will be divided or reinvested. An experienced accountant and attorney are the best resources for a potential seller to access for help to navigate this portion of the decision-making process. A seller should begin these discussions during the year leading up to a planned property listing to allow plenty of time to discuss all the options with family members and advisors.
Once the decision to sell has been made it’s important to find the right real estate brokerage to represent the property. This brokerage should have the necessary resources to place the property in front of as many potential buyers as possible by using all of the marketing power at its disposal. This would include electronic media, print media, radio, reputation and experience. A quality brokerage should have a modern and functional website that presents the property and its attributes in a professional and attractive way. The brokerage should have access to high quality professional photographers and videographers and be able to use photos and videos to describe and illustrate the property on its website, through social media and in print advertising as well. Most importantly, the brokerage should have a team of people that understand the local area and have first-hand experience in agriculture operations and in farm and ranch sales and are able to find solutions when the sales process becomes difficult. A seller should search for a brokerage that will only represent one side at a time in a transaction and never attempt dual agency. This guarantees the brokerage has only the sellers’ interests at heart and avoids conflicts of interest.
Finally, when is the best time of year to place a farm or ranch property on the market? Typically, in southwest Montana, winter is a slow season for the farm and ranch real estate market. Fewer interested buyers are visiting the area and often deep snow makes accessing and viewing some ranches very difficult. Although winter in many ways is a beautiful season in Montana, spring, summer and fall are most local’s favorites. Therefore, it’s always wise to try to focus the marketing of a property around those three seasons. Typically, the brokerage will want to create much of the written material and maps that will represent the property during winter so they’re ready to develop the listing and place the property on the market as soon as it can be shown in the spring. Often, a brokerage will want to get a set of temporary photos as soon as possible so there is at least minimal photo representation. As soon as the grass greens up and some pretty days can be found, a full package of professional photos can be taken as well as professional video. This is a great time to make a strong marketing push on the website, social media and through print advertising. Once the full marketing effort is in place, the bulk of the summer and fall will be available to show and hopefully sell the property.
If you’re considering selling your farm or ranch and looking for a place to find the help and advice necessary to navigate your way through the selling process, please contact us at 18 Land Company. We have an experienced team of realtors and advisors that have worked through countless real estate transactions during our many years living and working in Southwest Montana. If you list your property with us you will benefit from our significant marketing investment in branding, website and strategy and will feel secure knowing we will be representing only you and your interests during the sale of your farm or ranch. To see how we can help you achieve your goals please visit us at 18landco.com or stop by our office at 102 State Street in Dillon, Montana.
If you have questions or would like to talk to one of us about the best time to sell your property, we welcome you to contact us.
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