Iowa farmland remains one of the most valuable agricultural assets across the country. So, if you’re considering selling farmland in Iowa but don’t live in the state or you live and farm your own land, this guide showcases the benefits and challenges to your three main selling options:
1. Iowa Farm Auctions
Auctions are one of the most popular ways to sell farmland in Iowa.
Auction Advantages
- Sense of competition and urgency for buyers
- Established and structured process with defined timeline
- Can produce higher selling prices in strong markets
- Transparent process
Although some may feel like they have less control during an auction vs selling the farm yourself or working with a broker, the opposite is true. Farmland auctions can be attractive to farm landowners because of the structured nature and defined timeline.
When interested buyers gather in one place, the competitive atmosphere often drives prices upward, potentially resulting in a premium sale price. For example, once a bid has been made, no one can bid lower. They must bid higher.
The transparency of the auction process also helps establish fair market value, as all bidders can see competing offers in real-time.
Auction Disadvantages
- Spend on marketing
- Commission costs
- Low turnout potential
- Poor weather conditions
- Less control over buyer selection
Auctions come with commission and marketing costs. There is a risk of low attendance numbers, which could negatively impact the final sale price. Weather can also affect on-site auction success, potentially limiting buyer participation.
Once the auction begins, the seller loses control over who purchases the property, which might be a concern for those hoping to maintain good relationships with neighboring farmers.
More Auction Benefits & Challenges for Active Farmers
In addition to the benefits and challenges mentioned above, if you live and work on your own farm, you have a few additional advantages and unique challenges:
Auction Benefits
- You can showcase your well-maintained land and demonstrate operational success.
- You may have a strong, positive, local reputation that attracts buyers.
- Neighboring farms may want a chance to buy your land before anyone else to expand their own farms and be willing to pay you a premium price before an auction is held.
Auction Challenges
- You’ll need to maintain your farm’s operations during the sale process, which could have an impact on current farming needs.
- There can be an underlying emotional toll for a public sale, especially if your farm was passed down for generations and has a family legacy.
2. Private sale by owner
Private Sale Advantages
- More control over the selling process
- Lower selling costs
- Ability to personally negotiate terms
- More discretion and privacy over the sale
With the private sale method, you have maximum control over the selling process. This allows for careful buyer selection, flexible term negotiations, and maintaining privacy throughout the transaction. There’s a chance those leasing your farm may want the option to buy the land from you.
Private Sale Disadvantages
- Longer timeline
- Limited pool of buyers
- Hands-on process
- Pricing challenges
The process can be overwhelming. The success and responsibility of the sale rests on your shoulders. This is a hands-on process and because selling farmland is multi-layered and complex, you’ll need to know the market and what your farmland is worth, how to negotiate, and the paperwork that needs to be completed.
You are responsible for listing and marketing the farm yourself and could experience a limited buyer pool. You’ll have to determine appropriate pricing, which can be challenging without intimate knowledge of local market conditions. Private sales can also involve lower selling costs compared to auctions.
More Private Sale Benefits & Challenges for Active Farmers
Yes, doing a private sale can be daunting. But here are some additional things to think about if you own and work your own Iowa farmland:
Private Sale Benefits
- You have established relationships and can sell to local buyers you already know or who have purchased other farms in your area.
- It could be easier to be flexible with transition timing, which can benefit both you as the seller and the buyer.
- You have the option to sell farm sections separately if it makes sense to do so.
Private Sale Challenges
- You’re a part of your farm. You’ve made sacrifices, built memories, and have an emotional attachment that could affect pricing or timeline.
- A private sale means you have potential buyers coming to look at your land at different times, requiring you to balance farming operations with land showings.
- You have to consider your farm equipment and livestock in the sale, if applicable.
3. Work with a Farmland Real Estate Agent
Partnering with a knowledgeable, experienced real estate broker can make the process of selling your farmland smoother. They take a lot of the burden and responsibilities off your shoulders.
Real Estate Broker Advantages
- Professional marketing services
- Access to qualified buyers
- Market expertise
- Manager for showings
- Negotiator on your behalf
Professional farm real estate agents offer valuable local market expertise and access to qualified buyers. They handle property marketing, showings, and negotiations, making the farm selling process more manageable for distant owners. Brokers can also provide crucial insights into property valuation and improvement opportunities.
Review recent Iowa farm sale results with Stalcup’s Ag Service.
Real Estate Broker Disadvantages
- Commission costs
- Varying degree of broker knowledge
- Potentially longer timeline
The primary disadvantage is the commission cost, which can depend on location, the size of land, and other factors. Sometimes a broker will negotiate a flat fee. The quality of your broker can vary significantly, making it essential to carefully select an agent with strong farmland market experience in Iowa.
More Real Estate Agent Benefits & Challenges for Active Farmers
When considering working with a farmland real estate agent, here are some additional benefits and challenges to consider:
Real Estate Agent Benefits
- A broker can be a buffer for the emotional aspects of selling your farmland and move the deal forward. It can be hard to let go of property or livestock you’ve cared for over the years or that has been in your family for generations.
- The agent can negotiate the operational transition.
- A farmland real estate agent who specializes in selling an active farm has the experience to foresee roadblocks and troubleshoot delays or hurdles in the sale.
Real Estate Agent Challenges
- Selling an active farm is complex, which may mean higher commission fees for the real estate broker. However, the potential time and stress savings they’ll provide could be well worth the commission.
Special Considerations for Selling your Iowa Farmland
When deciding to sell your farmland, you must carefully evaluate tax implications with a professional, existing tenant relationships, and your property’s condition. You’ll need to have a property condition assessment and farm appraisal to ensure you can receive the most out of your sale and know your land’s worth.
If you don’t live on the farmland you are selling, consider how to manage property showings and inspections from a distance, and the impact it can have on current farming operations.
8 Decision-Making Factors for your Farmland Sale
- Timeline, transitions, and market conditions
- Equipment and livestock sales
- Employee or tenant considerations
- Future housing needs if you live on the farm
- Property characteristics and improvements
- Personal involvement in the sale process
- Financial goals and tax considerations
- Local market dynamics, buyer demographics, and community impact
The Iowa Farmland Market
According to Farm Credit Services of America, no-sale auctions for Iowa farms increased in 2023 & 2024. Based on their data, it’s not just auction sales alone that dropped. Total sales from private and realtor sales in Iowa dropped nearly 19% in 2024.
Predictions for the Iowa farmland market in 2025 show stable farmland prices, rising interest rates, environmental and sustainable conditions, and technology integration. And with the new presidential administration in office, there could be unexpected changes you’ll need to stay up-to-date with.
Regardless of how the market is trending or will trend in the future, seeking professional guidance from a reputable farm management company can help you sort through the complexities of selling your Iowa farmland.
Partner with Stalcup
You may be feeling overwhelmed, afraid of making the wrong decision. But don’t worry—you don’t have to do this alone.
At Stalcup, we understand the scope of selling your Iowa farmland. We know the complexities of the process, the emotions that may arise with such an epic decision, and we get the market.
We can walk beside you through the entire selling journey, explain your options in more detail based on your situation, answer questions or address concerns you have, and help ease the stress that can come with putting your farmland up for sale.
Let’s talk
Call us at 712-732-4811 or visit our contact page.
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