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Auction or private treaty?

I love fields

Hi all,

Family farm for sale (105 acres), no farmers in family. Half of it is great land, other half hilly but still decent. It's been leased out to a local farmer for a good few years but people now want to sell.

What is the best option for a sale, auction or private treaty? What are the pro and cons? Preference is to sell all at once rather than lots.

Grateful for any opinions or advice.

Thanks

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Markcheese

I'd be inclined to get a good estate agent ... (Not just some lad who's local ) price around as well.. If your going for auction you could sell in lots or the entire ,which ever makes more ? Are there any sites? Old cottages ? An old yard ? Plots of Forrest ? Farmhouse? , depending on where the farm is, any of the above in a lot could seriously increase the value..
Was at an auction where farm bungalow went seperate to a stone yard.. And land went in plots .. Farmers took the land , local bought the house.(yard went for more than house) . Family got most for their asset...

naughto

I love fields wrote: »

Hi all,

Family farm for sale (105 acres), no farmers in family. Half of it is great land, other half hilly but still decent. It's been leased out to a local farmer for a good few years but people now want to sell.

What is the best option for a sale, auction or private treaty? What are the pro and cons? Preference is to sell all at once rather than lots.

Grateful for any opinions or advice.

Thanks

Would the man that's renting it not get 1st refusal to buy it?

keep going

naughto wrote: »

Would the man that's renting it not get 1st refusal to buy it?

Those times are gone im afraid.in reality you are a good bit from an auction/private treaty decision, first put it on the market and then you see how the level of interest is stacking up .inevitably these things always come down to a type of auction anyway

royalmeath

naughto wrote: »

Would the man that's renting it not get 1st refusal to buy it?

That is the madest statement on here in a while. If you desire to sell go to an auctioneer and discuss the matter. Some auctioneers are mad to go straight to auction while others prefer to go private treaty first and then. when there are several parties involved private treaty is probably the best route as otherwise there could be a row on the day of the auction. When you sell an asset you should feel no obligation to any tenants no matter how long the have been in situ, afterall relative to the value of the property the have been paying a pittance for the use of the land.
Best of luck to all involved hopefully you will get on well

Deepsouthwest

royalmeath wrote: »

That is the madest statement on here in a while. If you desire to sell go to an auctioneer and discuss the matter. Some auctioneers are mad to go straight to auction while others prefer to go private treaty first and then. when there are several parties involved private treaty is probably the best route as otherwise there could be a row on the day of the auction. When you sell an asset you should feel no obligation to any tenants no matter how long the have been in situ, afterall relative to the value of the property the have been paying a pittance for the use of the land.
Best of luck to all involved hopefully you will get on well

That's a fairly sweeping statement, some people on here paying around €300/acre, and some even more. Pittance it ain't

Green farmer

A lot of variables there, but I'd talk to a decent auctioneer. Find out the market value of the land. If I had a good relationship with the man renting it, and if he was decent, I'd see if he had an interest in buying it. Let auctioneer do the negotiating on your behalf but with you in the loop. If you wanted it to go public then consider an auction. Land might or might not sell. You might get more then you originally thought. However you might end up dealing with a messer also. Also make sure the title is in order. There's a lot to be said in dealing with someone you trust and won't mess you about. At the end of the day make sure your properly advised.

Muckit

An estate agent should be your first port of call. This is his area of expertise. Ie selling property. He will advise you on what would be the best method of selling for you to achieve the best price.

He will also be able to value the property and give you a realistic guide price. You need to have your own mind while at the same time trust his/her judgement. They know the market and will be able to advise you of what other parcels in the atra have gone for.

As others have said, if the land is in different parcels already, it may be best to sell thesr separately. Also if there is a dwelling, however dilapidated this could be sold on just it's own site or with option of a small parcel 5-10acres.

There are many immigrants returning from England looking for small parcels like this and ad said may make significantly more per acre than a larger parcel with no dwelling. Likewise a neighbouring farmer with interest in increasing his holding may have little or no interest in or put much value on a dwelling.

Ad l said, we can only offer some suggestions on here with limited info and expertise. But an auctioneer will be able to give you more specific advice regarding your circumstances.

Also because it is a substantial holding, there could be merit in going with an estate agent that is part of a group ie property partners or dng etc. They can give you national exposure.

viztopia

if you dont want anyone to know what you get for the land the go private treaty. hard to know if your getting best price here though.
if you don't mind people knowing the go for a public auction. this is the route I would go down if I wanted to sell. however I don't think I would entertain an auctioneer who wanted a percentage of the sales price although some will disagree!

royalmeath

Deepsouthwest wrote: »

That's a fairly sweeping statement, some people on here paying around €300/acre, and some even more. Pittance it ain't

I think you should go back and read my post, I never said it was a pittance.
But even paying 300 quid an acre you would have to rent the land for 30 years to actually pay close to its market value. Therefore it is a pittance relative to the value of the land

Farmer Pudsey

You have got to factor in longterm leasing now to avoid CAT. Remember that with the chang in the finance that leasing to a young farmers may avoid CAT. CAT tax is 33% so it a substancial bill if relatives are not children of orginal owner. However it may not qualify or it may not be possible to reach agreement regarding same. I talk to an accountant before an estate agent.

In general it depends on locality, however these type/size of property's are seeing well at auction at present. Private treaty has it advantages however if there is serious interest auction's will usually reflect that interest. Lot of buyers perfer to see ''the whites of the eyes'' of the other bidders. On this type of property the right auctioneer is vital however remember a 2%+vat fee with advertising etc will cost 30+K. Make sure you know solicitor fees for all the inheritance tractions and some solicitors consider this type of work an open cheque book.

Deepsouthwest

royalmeath wrote: »

I think you should go back and read my post, I never said it was a pittance.
But even paying 300 quid an acre you would have to rent the land for 30 years to actually pay close to its market value. Therefore it is a pittance relative to the value of the land

Just re-read ur post, and u did say "pittance for the use of ur land"! I think ur mixing up renting land and trying to make a profit from that, and owning land and the asset value that goes with it, but that's an entirely different scenario. U may think €300/acre is to be sniffed at, but if I was offered that kind of money tax free, I'd grab it. Market value dictates the rental price in most places. What would u consider to be a fair price to rent an acre?

Nekarsulm

On a 100 acres, plus whatever buildings, you are looking at a price between 750 and a million, depending on demand etc. While an Auctioneer might quote you 1.5% fee, plus advertising, plus VAT, (I know of a crowd in Sligo who are asking 3%!) in reality for this size of sale, you will be able to strike a bargain of between .75% and 1%.
New regulations lay down strict conditions concerning which auctioneer gets paid, so be careful if you change Auctioneer partway throughout the process. If the first crowd had ANY contact with the eventual purchaser, and sale completes within 3 months with the second crowd, the first firm are due their fee. you could end up paying twice!

naughto

royalmeath wrote: »

That is the madest statement on here in a while. If you desire to sell go to an auctioneer and discuss the matter. Some auctioneers are mad to go straight to auction while others prefer to go private treaty first and then. when there are several parties involved private treaty is probably the best route as otherwise there could be a row on the day of the auction. When you sell an asset you should feel no obligation to any tenants no matter how long the have been in situ, afterall relative to the value of the property the have been paying a pittance for the use of the land.
Best of luck to all involved hopefully you will get on well

Who pissed in your cornflakes, Jesus I was only asking a question .
Around her if a man is renting for x number of yrs then its put up for sake the man renting it usually has 1st dipps on it
If he has no interest fair enough.
You must have got burned buying land to come out with such a harsh statement on people who rent land to and to say they pay pittance for the use ofcland .

royalmeath

naughto wrote: »

Who pissed in your cornflakes, Jesus I was only asking a question .
Around her if a man is renting for x number of yrs then its put up for sake the man renting it usually has 1st dipps on it
If he has no interest fair enough.
You must have got burned buying land to come out with such a harsh statement on people who rent land to and to say they pay pittance for the use ofcland .

To be honest I had frosties and luckily they were urine free. I just dont see why someone would feel obliged to give anyone first dibbs on anything, if you sell a property you can only sell it once and you have to maximise the return you get for it. Its Bull McCabe territory expecting fist refusal on anything and we all know how that turned out.

royalmeath

Deepsouthwest wrote: »

Just re-read ur post, and u did say "pittance for the use of ur land"! I think ur mixing up renting land and trying to make a profit from that, and owning land and the asset value that goes with it, but that's an entirely different scenario. U may think €300/acre is to be sniffed at, but if I was offered that kind of money tax free, I'd grab it. Market value dictates the rental price in most places. What would u consider to be a fair price to rent an acre?

The original post was regarding should the poster go to auction or private treaty. I merely said e should maximise his return without feeling any obligation to any tenant. It is irrelevant what rental rate the land could make as this was not the question asked.

frazzledhome

Ye're all missing the point and a very important one at that.

Banks are notoriously slow to sanction loads ATM. A parcel that size will require a loan. When deal done the closing process has slowed considerably.

If it was mine I'd approach the tenant and let them know your intentions. I'd leave it up to them to register an interest. If they're interested with a good auctioneer will walk them into the market value.

Failing this I'd go private treaty purely to allow people to get their ducks in a row. If you have 2-3 interested you may then decide to go to public auction and let the best horse jump the ditch.

A health warning is that you need the title in 100% order and employ an experienced auctioneer and solicitor who are used to such dealings. Remember that if a public auction goes wrong and they sometimes do it is very hard to restart the process. People tend to stand back. With a public auction the buyer must have the deposit in the day and if people don't have enough notice this may not be in place.

It is vital to determine your tax position before you commit to any route

I wish you luck.

letterkenny man

frazzledhome wrote: »

Ye're all missing the point and a very important one at that.

Banks are notoriously slow to sanction loads ATM. A parcel that size will require a loan. When deal done the closing process has slowed considerably.

If it was mine I'd approach the tenant and let them know your intentions. I'd leave it up to them to register an interest. If they're interested with a good auctioneer will walk them into the market value.

Failing this I'd go private treaty purely to allow people to get their ducks in a row. If you have 2-3 interested you may then decide to go to public auction and let the best horse jump the ditch.

A health warning is that you need the title in 100% order and employ an experienced auctioneer and solicitor who are used to such dealings. Remember that if a public auction goes wrong and they sometimes do it is very hard to restart the process. People tend to stand back. With a public auction the buyer must have the deposit in the day and if people don't have enough notice this may not be in place.

It is vital to determine your tax position before you commit to any route

I wish you luck.

What is the deposit 10% or 20% if I was to buy let's say 20 arces what taxes do I have to pay on it

Farmer Pudsey

letterkenny man wrote: »

What is the deposit 10% or 20% if I was to buy let's say 20 arces what taxes do I have to pay on it

10% is the usual deposit.

frazzledhome

letterkenny man wrote: »

What is the deposit 10% or 20% if I was to buy let's say 20 arces what taxes do I have to pay on it

Public auction 10% non refundable
Private treaty negotiated booking deposit leaving buyer or seller free to walk away

Muckit

Don't really understand a booking deposit with private treaty as it counts for nothing as far as I can see. Neither party are committed to the sale legally until the contracts are signed.

It leaves the seller open the buyer walking away and the buyer is vulnerable to possibly being gazumped. Which personally I feel is the lowest of the low acts, even though it's perfectly legal.

onyerbikepat

naughto wrote: »

Would the man that's renting it not get 1st refusal to buy it?

I can never understand this.
I know of a relative whose Mother died and of course left the house to her, the only child. She rented it out for a while and then decided to sell. The tenant felt she had the right to 'first refusal' and even went as far as having architectural drawings done up for renovations. She got irrate when the relative said it was going to be sold on the open market.
She effectively wanted a cheap house.:(

paddysdream

Muckit wrote: »

Don't really understand a booking deposit with private treaty as it counts for nothing as far as I can see. Neither party are committed to the sale legally until the contracts are signed.

It leaves the seller open the buyer walking away and the buyer is vulnerable to possibly being gazumped. Which personally I feel is the lowest of the low acts, even though it's perfectly legal.

With a deposit though the seller can't really walk away as strictly speaking a deposit is usually non refundable.
It can be used to ensure that the selling process doesn't drag out and in a falling market let the prospective purchaser wait for months,sit on the deal and then throw it up and buy something cheaper.

Pretty certain re. the non refundable part of the deposit as my solicitor told me that its legally non refundable in most cases but the usual practice is to return it in cases where the sale does not go through

amacca

royalmeath wrote: »

To be honest I had frosties and luckily they were urine free. I just dont see why someone would feel obliged to give anyone first dibbs on anything, if you sell a property you can only sell it once and you have to maximise the return you get for it. Its Bull McCabe territory expecting fist refusal on anything and we all know how that turned out.

I agree with you…renting a plot should not give you any expectation that you have a right of first refusal

You agreed to rent it to use it, there was nothing in the agreement that you have any more rights than others to buy it ffs!

Thats not saying wouldn't see what a renter might be willing to pay, but they wouldn't be getting any special rights above anyone else….if he/she was genuine and willing to offer a be a fair price then maybe I might ask them
but it would still be available to higher bids etc

Farmer Pudsey

paddysdream wrote: »

With a deposit though the seller can't really walk away as strictly speaking a deposit is usually non refundable.
It can be used to ensure that the selling process doesn't drag out and in a falling market let the prospective purchaser wait for months,sit on the deal and then throw it up and buy something cheaper.

Pretty certain re. the non refundable part of the deposit as my solicitor told me that its legally non refundable in most cases but the usual practice is to return it in cases where the sale does not go through

It is very hard if not impossible to retain a deposit on a private treaty sale. Have never heard of one being retained.

Farrell

amacca wrote: »

I agree with you…renting a plot should not give you any expectation that you have a right of first refusal

You agreed to rent it to use it, there was nothing in the agreement that you have any more rights than others to buy it ffs!

Thats not saying wouldn't see what a renter might be willing to pay, but they wouldn't be getting any special rights above anyone else….if he/she was genuine and willing to offer a be a fair price then maybe I might ask them
but it would still be available to higher bids etc

That can lead to a situation where greed can spoil.
Heard of guy renting ground, owner wanted to sell & advised tenant, who asked for 1 month to see if he could raise funds. He went to banks & got agreement for a loan & then gave owner the bid to which owner was happy but had to consult others. Long story short sale went public where tenant pulled out, sale price was supposed to be allot less than tenant offer

frazzledhome

Farrell wrote: »

That can lead to a situation where greed can spoil.
Heard of guy renting ground, owner wanted to sell & advised tenant, who asked for 1 month to see if he could raise funds. He went to banks & got agreement for a loan & then gave owner the bid to which owner was happy but had to consult others. Long story short sale went public where tenant pulled out, sale price was supposed to be allot less than tenant offer

That exact thing happened me. Was renting, asked to buy I made offer. Owner went to market as was his right and I had no prob. I withdrew my bid and bid in private treaty. Bought at 1000 an acre less:):)

paddysdream

Farmer Pudsey wrote: »

It is very hard if not impossible to retain a deposit on a private treaty sale. Have never heard of one being retained.

Not common practice and frowned upon but strictly speaking if you have a buyer who goes through up to contract signing and then waits for an unreasonable lenght of time before pulling out would you not be entitled to hang on to it?

Many deposits(unsure re. property sales) are advertised as non refundable.
Have sold machinery and other things here and never looked for a deposit in most cases.
Odd person will ring,come to look and agree price(maybe hay) and tell you they will be back in a week etc.Sometimes you never see them again and you after putting of 2 or 3 people in the meantime by assuming the produce is sold.
Well entitled to look for and keep deposit in this case.Messers usually run a mile if deposit is mentioned.Esp. if they think they won't be getting it back.

On the other hand sold (gave away!) hay this year(100 bales) and wouldn't take a deposit .It was all up front or pay on collection as was afraid he would draw it over the winter rather than empty the shed before November as I needed it empty now at this stage.

frazzledhome

paddysdream wrote: »

Not common practice and frowned upon but strictly speaking if you have a buyer who goes through up to contract signing and then waits for an unreasonable lenght of time before pulling out would you not be entitled to hang on to it?

Many deposits(unsure re. property sales) are advertised as non refundable.
Have sold machinery and other things here and never looked for a deposit in most cases.
Odd person will ring,come to look and agree price(maybe hay) and tell you they will be back in a week etc.Sometimes you never see them again and you after putting of 2 or 3 people in the meantime by assuming the produce is sold.
Well entitled to look for and keep deposit in this case.Messers usually run a mile if deposit is mentioned.Esp. if they think they won't be getting it back.

On the other hand sold (gave away!) hay this year(100 bales) and wouldn't take a deposit .It was all up front or pay on collection as was afraid he would draw it over the winter rather than empty the shed before November as I needed it empty now at this stage.

Once contract is signed either party can get what's called a "28 day notice" forcing closure, rarely needed

paddysdream

frazzledhome wrote: »

Once contract is signed either party can get what's called a "28 day notice" forcing closure, rarely needed

Like I said ,no idea about property deposits etc and this I suppose is what the OP is interested in,well the sale part anyways

Nekarsulm

In property sales, the payment of a booking deposit is supposed to remove the property from the open market. This is always regundable.Auctioneer should NOT accept furter bids at this stage. This deposit is held by the auctioneer, and is usually 4 or 5% of sales price. The balance of deposit to bring up to 10% usually paid on first stage of signing. Deposits are treated differently to many other fixed or current asdets. If the auctioneer were to die , and the firm be insolvent, you might find it imposdible to recoup your deposit.