Can I Have a Reserve When I Sell My Farm?

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 farm will not sell unless bidding meets or exceeds the reserve price.
• Absolute Auction: The farm will sell to the highest bidder, regardless of the final price.

How Reserves Work

• The reserve is typically set in consultation with your brokerage after a farm valuation or appraisal.
• Many sellers set the reserve 10% below the expected sale price to encourage bidding while avoiding a sale below market value.
• Reserves are a safeguard, not a price-setting tool. They aim to prevent financial loss, not dictate the final sale price.

Key Takeaways

1. Reserves allow you to protect your minimum acceptable price during an auction.
2. Absolute auctions guarantee a sale but come with the risk of lower bids.
3. A reserve is typically set slightly below the expected sale value to balance protection and buyer interest.

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