The Process of Selling Land in Iowa

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The Process of Selling Land in Iowa

Bart Waldon

With over 30 million sprawling acres of rich farmlands, pristine prairies and woodlands, Iowa presents abundant real estate investment potential. Over 90% of the state’s land base falls into private hands highlighting lucrative prospects. Yet despite having some of America’s most fertile grounds, Iowa sees flatter land sales recently from declining farm revenues. For savvy landowners skilled at navigating the area’s ups and downs, deals happen faster by targeting the right buyers at optimal prices.

Let’s explore essential strategies for successfully marketing and closing land sales across Iowa - from pricing based on soil productivity data to creative deal terms and strategic buyer targeting catering to both developers and farmers.

Understanding Iowa’s Unique Farmland Real Estate Dynamics

Before listing land, grasp vital traits influencing Iowa’s agriculture-heavy property market:

Commodity Revenue Impacts 

Grain, soybean and hog pricing cycles largely steer land valuations given over 85% farms across the state. Sites with high crop yield history and futures options draw premiums during market ups.

Soil Productivity Variances 

The Iowa State University soil surveys mapping fertility, crop suitability and yield productivity metrics of lands acre-by-acre guide appraisal values. Properties with most arable soil types transact faster.

Tax Incentives 

Iowa offers 100% capital gains exemptions for selling land or assets used in agriculture or individual farming operations under certain ownership timelines. This entices some sellers.

Tenant Lease Considerations 

Much private land remains leased to farmers. Sales require proper termination notices before closing deals. Existing tenant relationships influence prices.

Conservation Reserve Lands 

Parts of Iowa terrain fall under conservation land protections limiting development. Wetland drainage permissions and impact studies apply before repurposing such lands.

Utilizing Technology to Identify Prime Sales Targets

Innovative data tools help identify the most valuable land parcels by productivity potential in Iowa:

Soil Survey Maps - Federal data ranks fertilities of all 64 Iowa soil types. Checking ratings of your acres predicts potential yields guiding pricing.

Farmland Value Survey - Iowa State University releases annual surveys tracking county-level values of high, medium and low grade croplands based on soil surveys.

Ag Decision Maker Tool - This digital tool lets you estimate net returns tailored by inputting actual yield history, crop prices and expenses for your land. Quantifies productivity to buyers.

GIS Region Sales Search - Online GEO-mapping visualization tools like Lands of America allow filtering recent area sales by land type, size and prices to reveal current buyer spending comfort and price expectations.

Key Steps to Sell Land Yourself in Iowa

Instead of hiring a listing broker who charges commission, Iowa landowners can market and sell properties themselves directly to buyers for maximum sale proceeds. Here are pro tips to accomplish FSBO (For Sale by Owner):

Handle Title Work Beforehand 

Confirm legal ownership, check for liens or easements, rectify minor issues, draft preliminary deeds to simplify closings later with a real estate attorney assisting.

Price Right Using Data 

Research actual area farmland sale records through online valuation tools. Seek multiple appraisals from licensed appraisers if pricing high.

Target Farmers and Investors 

Attract both groups by advertising in farming publications and online investor forums. Feature soil productivity details.

Offer Owner Financing 

Carry back mortgages allowing buyers longer tenures to pay carrying installments. Receiving all cash upfront remains rare in Iowa's conservative land market.

Incentivize Fast Closings 

Absorb closing fees for title registrations, deed preparation, county stamps to motivate buyers to transact faster.

Creative Ways to Boost Land Value Before Selling

Minor land improvements maximizing productivity potential enhance saleability in Iowa’s agriculture-focused economy:

Test Yield Enhancement Options - Trying drainage tiles, precision fertilizers, no-till methods etc. can improve crop yields for certain terrain. Share multi-year proof with buyers.

Ensure Clear Boundaries - Fresh surveys delineating plot corners and perimeter accuracy prevents buyer confusion over deeded acreage.

Improve Accessibility - Add interior farm roads, trail walkways etc. enabling equipment and labor access to fields.

Upgrade Outbuildings Condition - Renovate aging barns, storage sheds etc. beyond safety since disrepair is an eyesore diminishing perceived land potentials.

Lease Out Short Term - If already not leased, rent plots short-term to validate income potential proof until sales.

Such targeted renovation spends maximize ROI through higher sales valuations.

Mistakes Iowa Land Sellers Should Avoid

Despite good preparation, a few missteps can thwart your Iowa land sale success:

Using Limited Listing Mediums 

Simply sticking to yard signs or occasional online ads won’t move sales. Leverage both digital and print advertising in regional farming journals for maximal visibility.

Not Confirming Historic Title Details 

Failure to order title insurance reports early unearths ownership surprises later derailing advanced deals after time investments by all sides. Don’t take chances.

Overpricing Without Justification 

Seeking inflated windfall valuations needs substantiation from excellent crop yield histories, specialty buyer demand or million dollar views lacking otherwise.

Inflexibility on Closing Timelines 

Buyer contingencies tying sales to financing approvals, lease expirations etc. beyond their control need reasonable consideration.

Not Inspecting Tax Implications 

Failing to account for capital gains taxes, 1031 exchange eligibility etc. means surprise income reductions. Ensure tax advisors vet scenarios.

Final Thoughts

Selling land yourself in Iowa requires effort but pays by letting you earn the extra 1-2% agent commissions while leveraging flexible sales terms and selective buyer targeting. Attract both developers and farmers. Reasonable improvement spends combined with data-backed pricing also catalyze deals despite broader commodity cycle volatility. Mastering nuanced steps specific to the area while proactively boosting land productivity unlocks faster sales potential.

Frequently Asked Questions (FAQs)

What are current per acre farmland values across different Iowa regions?

Average Iowa farmland values range from $7,559 per acre in the Northwest region to $9,675 per acre in Central Iowa, while Southeast Iowa trails at $7,875 per acre, per the latest 2021 ISU land valuations survey. Evaluate your land's productivity potential against these area comps.

What preparation costs relate to selling Iowa farmland myself?

Allocate roughly 1-3% of your desired farmland valuation amount to cover expenses of securing preliminary title opinions, updated surveys, basic permits, short term lease or improvement spends, legal contract drafting fees etc. needed for DIY sales.

What are the best places to list my Iowa land for sale without an agent?

Popular self-listing sites like Lands of America, Lands of Iowa, and Iowa Land Sales attract active buyers statewide along with advertising in regional farming journals. Install signs prominently too if land is road-facing.

Should I offer owner financing when selling my Iowa farmland?

Iowa's risk-averse agricultural property market rewards sellers offering longer 3-5 year owner financing terms with higher sales traction rather than outright cash requirements. Carry back mortgages align best with typical farmer budgets.

How do I determine the right asking price for my Iowa farmland tract?

Research recent area per acre sales of grade A croplands using online land valuation tools, then adjust your request value according to comparative soil survey productivity ratings assigned specifically across your acreage by the USDA NRCS surveys.

What closing costs apply to selling farmland in Iowa to budget for?

Allocate about 0.1% to 0.3% of your Iowa farmland's valuation amount covering varying title registration, deed drafting, stamping charges plus applicable transfer taxes together. Pick those up to facilitate the land deal.

About The Author

Bart Waldon

Bart, co-founder of Land Boss with wife Dallas Waldon, boasts over half a decade in real estate. With 100+ successful land transactions nationwide, his expertise and hands-on approach solidify Land Boss as a leading player in land investment.


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