The Auction That Almost Didn’t Happen

A few years ago, two sisters contacted us about selling a farm they owned together. Before they reached out, their neighbor had already approached them with an offer of $12,000 per acre.

It was a serious offer, and they wanted a professional opinion before deciding what to do.

Evaluating the Farm’s Value

We completed a full evaluation of the property, looking at several important factors:

• Soil productivity

• Location and access

• Farm layout

• Recent comparable sales in the area

After reviewing the data, our estimate placed the farm’s likely market value at around $14,000 per acre in the current market.

The neighbor’s offer wasn’t unreasonable. In fact, it was respectable.

But it was still roughly a quarter of a million dollars below our estimated value.

With that information, the sisters went back to their neighbor. They shared the evaluation and asked whether he would consider increasing his offer.

He listened carefully, but in the end he simply said he couldn’t get there. The most he was comfortable paying was still $12,000 per acre, and even at that price he felt he might be stretching.

At that point, the sisters faced a decision many landowners encounter:

• Take the offer in front of them

• Or test the open market

They decided to move forward with an auction.

Auction Day

When auction day arrived, we had a strong group of bidders registered. Farmers, investors, and neighboring landowners were all ready to compete.

Still, auctions always carry some uncertainty. You can prepare thoroughly, but no one can fully predict what will happen once the bidding begins.

The farm was offered in two separate tracts, since the parcels were located miles apart.

Tract One

On the first tract, the bidding climbed steadily and eventually leveled off right around where we expected it to.

That’s actually the most common outcome. In many auctions, the final price lands very close to the valuation range we estimate ahead of time.

Tract Two

But the second tract told a completely different story.

The bidding didn’t slow down.

It crossed $15,000 per acre.

Then $16,000.

Then $17,000.

And it kept going.

Soon it was $18,000… $19,000… $20,000 per acre.

The auction was held on our online bidding platform, but we stayed in constant communication with the sellers. We had a group text set up between our team and the sisters so they could follow along with the progress in real time.

At one point during the bidding, one of them sent a message that said:

“Oh my… we almost took the $12,000 and skipped the auction.”

But the bidding still wasn’t finished.

It climbed higher and higher until it finally stopped just short of $30,000 per acre.

The Final Result

When everything was totaled, the auction produced $1,786,400 more than the original offer the sisters had been considering.

The Real Lesson

Stories like this are exciting, but it’s important to be realistic.

Not every auction doubles the value of a farm. In most cases, the final price lands very close to the expected market value.

However, this story highlights something important about farmland sales:

There is no reliable way to measure the upside of competition until buyers are allowed to compete.

An appraisal can estimate value.
A broker can analyze the market.

But neither can fully calculate what buyer competition might add on a given day.

Auctions are not a magic process or a silver bullet.

What they do provide is something extremely powerful:

A transparent environment where the true market value can reveal itself — including the possibility of value that no one could have predicted ahead of time.

Thinking About Selling Farmland?

If you’re considering selling farmland and want to understand your options — including whether an auction or listing strategy makes the most sense — we’re always happy to have a conversation.

Jason Smith
Broker & Auctioneer
515-537-6633
Jason@dreamdirt.com

Land Value Resources:

Farmland values across the country are tracked annually by the USDA National Agricultural Statistics Service, which reports on national and state-level trends in agricultural land prices.

Each year, the Iowa State University Extension and Outreach Land Value Survey provides a snapshot of farmland price trends across Iowa.

Our past auction results can be found here.