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Mar 27, 2024
Comparable sales can be a valuable tool for farmers when deciding whether or not to purchase an appealing farmland parcel.
Download the free guide Before You Buy: 4 Farmland Factors to Consider from FBN® Finance to learn more about how to use comparable sales data when determining whether to make a land purchase, or keep reading below to learn about interpreting comparable sales information.
By analyzing recent comparable property sales, farmers may gain insights into the potential market value of similar land parcels in the local area. While land values are based on many different factors, this information offers farmers one way to help assess whether the asking price for the land they are interested in is reasonable and in alignment with market value.
Keep the following five important points in mind when interpreting comparable sale information.
Ensure that the comparable sales are in the same or similar area as the land you’re considering for purchase. Land values can be influenced by multiple location-related factors, including:
Proximity to markets
Local infrastructure
Nearby amenities
Look for comparable sales that have similar acreage and features to the land you are considering. This includes factors such as:
Soil quality
Topography
Access to water sources
Any improvements or structures on the land
RELATED: Rent vs. Buy Farm Land: Which Is Right for You?
Note the timeframe of the comparable sales. Recent sales within the past year or two are generally more relevant and reflective of current market conditions than older purchases.
Take into account any differences between the comparable sales and the land you are interested in. Adjustments may be necessary to account for variations in size, features, or other factors that could impact the value.
Comparable sales can provide a benchmark for price negotiations. If the asking price is significantly higher than the recent sales of similar properties, farmers may have room to negotiate a more favorable price.
It's important to note that comparable sales should not be the sole determining factor in the decision-making process. Other factors should also be considered, such as your own financial position and the land’s:
Agricultural potential
Soil quality
Access to water sources
Long-term investment value
Remember to independently verify the information and consult with professionals, such as appraisers or real estate agents, to ensure you make an informed decision regarding the land purchase.
To help farmers gain greater insight into the factors to assess when purchasing land, FBN Finance created the free guide Before You Buy: 4 Farmland Factors to Consider.
Whether you are looking into a farmland purchase for the first time or scaling your current ag operation, this short, downloadable guide will teach you how to determine property value.
If you’re looking for comparable sale information before making a farmland purchase, FBN’s innovative evaluation tool includes insights to help you make an informed buying decision.
AcreVision, which is available for free to FBN members, is an farmland evaluation system designed to assist farmers in making informed decisions about potential land purchases by providing vital insights into specific farmland parcels. This information includes soil types, comparable sales, terrain information and other details.
Try AcreVision for free today by clicking here.
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Mar 27, 2024