A Guide for Active and Absentee Owners
Deciding to sell farmland is a major milestone, whether you’ve been farming it yourself for decades or inherited the land from family. But what many landowners underestimate is just how complex the sale process can be.
From pricing strategy to documentation to tax implications, there’s a lot more involved than simply listing a property and waiting for offers.
At Stalcup Ag Service, we’ve guided Iowa landowners through hundreds of successful farm sales. Over the years, we’ve seen common mistakes that can delay a sale, reduce its value, or create unexpected legal and financial headaches.
Here’s what to avoid and how to prepare so you can approach your farmland sale with confidence and clarity.
Critical Mistakes to Avoid
1. Inadequate Property Preparation
Too often, sellers rush to market before the property is truly ready. Failing to prepare the land and documentation can lead to lower offers or buyer hesitation.
Key oversights include:
- Not compiling recent yield data, soil tests, or tile maps
- Allowing visible maintenance issues (like erosion or fence damage) to linger
- Leaving equipment graveyards or debris on the property
- Overlooking the value of documenting improvements like terraces, conservation practices, or drainage upgrades
Buyers aren’t just purchasing acres. They’re buying performance potential and clarity. First impressions matter.
2. Incorrect Pricing Strategy
Overpricing due to emotion or underpricing due to lack of data can significantly affect sale results.
Mistakes to avoid:
- Relying solely on county average values instead of factoring in specific features (soil type, location, improvements)
- Ignoring the impact of existing lease agreements or tenant relationships
- Overlooking irrigation systems, water rights, or specialty improvements
- Pricing based on sentimental value rather than current market dynamics
3. Poor Timing Decisions
Farmland buyers are often active only during specific times of year, and market conditions can change quickly.
Common pitfalls:
- Listing during a slow buying season without urgent need
- Overlooking the seasonal nature of land interest (spring and post-harvest are peak times)
- Not factoring in capital gains tax timing for sale proceeds
- Waiting too long to plan succession or retirement transitions
Capital gains planning and timing are critical considerations for landowners, particularly when markets are shifting or policy changes are anticipated. (USDA ERS)
4. Inadequate Professional Support
Land sales come with complex legal, tax, and negotiation elements. Trying to handle it all alone can be risky.
Frequent mistakes include:
- Not consulting a tax professional to plan for capital gains or installment sales
- Skipping legal review of easements, lease rights, or mineral ownership
- Using residential agents without agricultural sales experience
- Underestimating the value of a farm manager’s insight on tenant relationships and land performance
Top Recommendations for a Successful Farmland Sale
For All Sellers
1. Get Your Documentation in Order
- Collect 5+ years of yield history and fertility records
- Gather tile maps, aerials, and soil data (CSR2 scores)
- Document all conservation and infrastructure improvements
- Include current and past lease agreements, and identify tenant contact info
- Create or update a detailed property map with boundaries and access points
2. Build the Right Team
You’ll need more than a real estate agent:
- Agricultural land broker who knows the local market
- CPA or tax advisor familiar with ag transactions
- Ag attorney to review contracts, easements, or trusts
- Farm manager for operational insight, especially with tenants
- Environmental or drainage consultant, if applicable
3. Prepare the Property Itself
- Tidy up fence lines, remove unused equipment, fix erosion
- Make sure access roads are clear and boundary lines are visible
- Showcase improvements like terraces, wells, storage, or prairie strips
- Include before/after documentation for conservation or renovation work
Tips for Active Farmers Selling Their Operation
1. Plan for the Transition
- Develop a strategy for equipment liquidation or auction
- Communicate with employees, neighbors, and co-owners
- Plan for a livestock wind-down, if applicable
- Think through your timeline for retirement or relocation
2. Prepare Emotionally
- Set clear financial and personal goals for the sale
- Understand the difference between market and sentimental value
- Consider phased or gradual transition options
- Identify your “what’s next”—a post-sale plan reduces stress and uncertainty
Tips for Absentee Owners
1. Information Gathering Is Key
- Review lease terms, including duration, rent, and termination clauses
- Understand local market conditions and sale trends
- Retrieve historical records: deeds, tax assessments, tenant performance
- Research local zoning, development, or conservation easements
2. Prepare Emotionally
- Schedule a site visit or inspection through a local agent
- Coordinate showing access with your current tenant
- Ensure property boundaries and access easements are clearly documented
- Consider working with a farm manager to oversee the process if you’re not local
Strategic Recommendations for Maximum Value
1. Research the Market
- Review comparable sales in your county and neighboring ones
- Analyze local development plans or conservation initiatives
- Know your buyer pool: investors, neighbors, beginning farmers?
2. Choose the Right Sale Method
- Compare auctions vs. private listings—each has pros and cons
- Consider hybrid strategies like “list then auction” or sealed bids
- Factor in marketing budget, timeline, and desired confidentiality
3. Financial Planning
- Discuss options for installment sales or tax-deferred exchanges (like 1031s)
- Review your estate plan to ensure proceeds are distributed properly
- Clarify closing cost responsibilities and transaction fees in advance
4. Develop a Marketing Strategy
- Use high-quality photos, drone imagery, and detailed brochures
- Consider digital marketing to reach regional and national buyers
- Build a data room or packet of supporting documentation for buyers
- Promote conservation or production value if the land is top-tier
Plan Carefully, Sell Confidently
A successful farmland sale isn’t just about acres and asking price. It’s about preparation, strategy, and partnering with the right professionals. Whether you’re preparing to retire from farming or managing land from hundreds of miles away, taking time to:
- Understand your land’s value
- Assemble the right team
- Time your sale with intention
- Plan for tax and legal considerations
…can add both peace of mind and real dollars to your final outcome.
We help landowners navigate every step of the sale process, from valuation and documentation to marketing and closing, with a focus on protecting your land, your legacy, and your bottom line.
Thinking about selling? Reach out today for a confidential consultation.