Farmland Sales: Some Absentee Owners Selling Too Cheap?

Absentee landowners in some cases aren't keeping up with land values and are evidently selling significantly below the market, according to Lee Vermeer, vice president of real estate operations at Farmers National Company, which handles farm real estate sales in a number of states.

Nearly 20% of private treaty sales transactions are considered to be sales by non-farming owners. He says the numbers keep increasing and the gap widening as values in the open market are rising.

“Our appraisers come across numerous sales in almost all states and counties that have sold well below the current market,” said Vermeer. “Examples of farms that have sold at $500 to $1,000 per acre below the market are common and instances of $2,000 below the market have been found. If a landowner sells 160 acres at $1,000 below what they could have received if offered to the open market, they will lose $160,000. This scenario happens often in this rapidly changing market.”

Vermeer advises absentee landowners to keep current on market trends and sales data, even if they are not currently looking to sell. He says it’s vital to seek regular advice from a professional land real estate company, and track state and county sales online at a website such as his company's site, www.FarmersNational.com.

“You never know when an opportunity to sell could arise, and knowing the market puts a landowner in an optimum position, and knowledge is always valuable,” said Vermeer.