Land auction question

SHALER · Nov 2, 2018

I would guess this is what you see 99% of the time when a farm is auctioned off: (1) The farm is offered in its entirety as one parcel, or (2) more commonly in my area, the farm is chopped up in to several parcels. The farm is offered in parcels, and once all the parcel bids are added up, its offered in its entirety, whatever brings the most to the seller.
So my question is this- why would a farm be offered in parcels only, and NOT in its entirety?

Bkpigs · Nov 2, 2018

Combining parcels during the sale is not common around here, So. ILL. Most don't like it because it can cut a lot of buyers out of the deal. Most people (and smaller Farmers) can't afford the whole farm and just want the tract or two that fits them.

Charlie M · Nov 2, 2018

Around here the way to make the most money from selling your land is to break it up and sell it as building lots. My neighbors place is a good example. He has a refurbished farm house, big old barn in good shape, some out buildings and 100 acres. He can get the same money for the buildings and 5 acres alone as he can for the whole farm. Sad to see in my opinion.

tomturkey · Nov 2, 2018

MONEY, the total price given for each parcel vs. the price offered for the entire farm. People searching for a home in the country, don't want a "farm" just a few acres. The adjoining farmer would like to add to his farm but does not want a home and buildings, just crop or pasture land. Adjoining land is "worth" more for obvious reasons. So the splitting into parcels will probably bring a higher total price, but someone may want the whole thing and be willing to bid higher than the total of the parts. the way I see it gobble

Bob Bancroft · Nov 2, 2018

This is only a guess. If, over time, it has become predominant that the smaller parcels bring more money, then auctioneers may well have decided not to waste their time.

gene bender · Nov 2, 2018

Owner has the right to sell anyway he wants its that simple

LAA · Nov 2, 2018

I would wager that the whole farm is for sale in one piece if someone walks in ready to pay whatever price they might ask.

John T · Nov 2, 2018

You ask a good question:

"So my question is this- why would a farm be offered in parcels only, and NOT in its entirety?"

However you already answered your own question:

"whatever brings the most to the seller."

Often the smaller parcels bring more dollars per acre so selling in small parcels brings the most for the Seller as well as the Auctioneer............?.Hey when I sold farms that's how I wanted it WHY NOT get as much as I could ?? I sure dont want big brother or the government or some other do gooders ordering me to how to sell MY land lol

John T Stands for the Flag kneels for the Lord

Crazy Horse · Nov 2, 2018

If it were to be sold in parcels, would it not have to be subdivided first? And if it were subdivided, how could it be sold as a whole farm? Seems confusing to me.

Mike M · Nov 2, 2018

I don't go to a lot of auctions. But in Ohio so far they seem to do the parcels and then offer in one package. IIRC the start the whole package off at so much over the parcels total.
I once heard about one guy thought he was doing a lot better selling his farm off in parcels but then in total did not do as well because he had to pay for all of the surveying to split it all up. This practice seems to me to promote splitting up of farms ? They should ask for more to sell it as parcels ?

paul · Nov 2, 2018

Most farms are composed of several small 20-80 acre parcels here. My very small corn/bean farm has 7 parcels now.

Often a neighbor can bid up a 20 or 40acre chunk next to him, but couldn?t afford buying the entire farm. You get 4 neighbors that can each bid for a small piece and a BTO wants to buy all the acres, and then you have an auction, with folks bidding.

It?s pretty rare any more that someone wants to but everything any more, always a piece with buildings on it, or mostly woods, that are enough different the bto isn?t interested in everything any more?

Paul

Loren in Iowa · Nov 2, 2018

Bob, believe me, an auctioneer is very glad to "waste his time", if he can make more money.

SHALER · Nov 2, 2018

Lots of decent replies but I dont think anyone has really answered my question. It goes without saying that BOTH seller and auctioneer want to get the most $$ from the sale. Just my experience: about 10-15% of the time, someone swoops in and buys the farm in its entirety (when its offered both ways in parcels and in its entirety). Lets say a farm is chopped up in to 3 parcels. Parcel A is bid to $10, PArcel B is bid to $20, PArcel C is bid to $30. Total bids on the table are $60. It takes the auctioneer about 5 minutes to say "ok, who will bid $61 for the whole farm?" and take bids. Hardly a time consuming effort for the possible payday. Seems like it may also be more desirable for the seller as they are only dealing with one buyer instead of several. There is an upcoming sale where they have parceled the farm up in to 6 parcels but ARE NOT offering it in its entirety once the parcel bids are tallied up. Its not like this place is 1,000 acres, its only 100. I just dont understand why. Guess I will ask the auctioneer and see if they will tell me.

Crazy Horse · Nov 2, 2018

Shaler ..... you asked for YT'ers opinions on why a sale would go the way it was going, and you got several replies. A lot of them made sense to me and I've never been involved with anything like this. Not sure what more you want. With all due respect, it sound to me that you have an answer to your own question buried away somewhere in your mind but nobody has replied yet with the exact answer that you want (and already know). No offence but I now categorize your original question into the "strange" category.

ditchwitch · Nov 2, 2018

Like you say probably to make more money ,get more bids.

paul · Nov 2, 2018

If bidders know the whole farm will be offered after the parcel bids, those wanting the whole farm hold back, no point bidding on any parcels. So they likely go a little cheap, as less interested people are bidding right off.

If there is no whole farm bids, then the folks that want as much land or all the land have to go head to head bidding on each parcel.

So you might be getting parcel bids of 14, 21, and 32 because if you want you can?t hold back, you need to bid now..... making a total of 67 instead of your 61.

I think a good auctioneer with experience can figure out the best options for a location, and which setup wil likely bring the most in a certain area.

My sis was interested in a parcel with a shed on it, a lawyer with not much sales experience set it up. Everyone submitted a bid, they were opened, then there was a second round of bidding everyone submitted a new bid, and the high was accepted. It was very odd, everyone felt they were in the dark, I don?t think that went well. Of the 6 bidders, I think 3 just submitted ?no bid? the second time around.

Paul

Bruce from Can. · Nov 2, 2018

There are a lot more people with a bit of money, willing to buy a small farm , than there are people with a lot of cash wanting to buy a large farm. So more competition for the smaller parcels, drives the price higher.

Traditional Farmer · Nov 2, 2018

Auctioneer sells things the way the owner wants them sold.

farmersamm · Nov 2, 2018

They "split" tractors with loaders here sometimes. Loader sells, then tractor sells, then they "combine" the tractor and loader, and it usually starts off with higher bids. Can't recall ever seeing one not sell as a complete package once it's "combined" again.

Doesn't matter either way, you're usually bidding against a family member, or the owner if alive. Some people don't like this, but I feel it's just fine. Gotta right to protect your goods, and I've got the right to keep my hands in my pockets if the bid goes higher than I want to pay.

"Yabut, this is supposed to be an absolute no-reserve auction!!"

It is my friend. If you are the absolutely highest bidder, you get the "win". Didn't say anything about somebody protecting their own property, just said that there wasn't any pre-auction reserve.

My favorite is when the auctioneer looks somewhere towards the back of the crowd, and accepts a bid from somewhere out in the cornfield :lol:

Or says...…."put that on my bill". Then you're not sure whether there's a "reserve" or not. They ain't gonna tell.

Either way, it's a good way to kill a day, and the food is usually pretty good.

DoubleO7 · Nov 2, 2018

(quoted from post at 09:29:05 11/02/18) This is only a guess. If, over time, it has become predominant that the smaller parcels bring more money, then auctioneers may well have decided not to waste their time.

If the auctioneer does not want to auction the property as various parcels and then as a whole, GET A DIFFERENT AUCTIONEER.
He/she is just be lazy as well as possibly less commission.
Twenty minutes of auctioneering right then might be worth more than the parceled out bids.
But no one will ever know if not offered as one.

DoubleO7 · Nov 2, 2018

(quoted from post at 09:03:07 11/02/18) I would guess this is what you see 99% of the time when a farm is auctioned off: (1) The farm is offered in its entirety as one parcel, or (2) more commonly in my area, the farm is chopped up in to several parcels. The farm is offered in parcels, and once all the parcel bids are added up, its offered in its entirety, whatever brings the most to the seller.
So my question is this- why would a farm be offered in parcels only, and NOT in its entirety?

Because not all of the farm is to be auctioned off.
Perhaps just the vacant lands.

DoubleO7 · Nov 2, 2018

(quoted from post at 14:09:35 11/02/18) If bidders know the whole farm will be offered after the parcel bids, those wanting the whole farm hold back, no point bidding on any parcels. [b:068e6a9699]So they likely go a little cheap, as less interested people are bidding right off.[/b:068e6a9699]

If there is no whole farm bids, then the folks that want as much land or all the land have to go head to head bidding on each parcel.

I think the opposite is true for most locations not out in the middle of no where.

[/b]

Bob Bancroft · Nov 2, 2018

He's not wasting his time if he makes more money.

The good auctioneers I've seen are very shrewd, and know just how much time to give an item, or project. So in this case, if the customer didn't dictate how it was done, I say again, the auctioneer knew just how to go about it to make the most for his time.

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