Selling some of the farm...

I believe the time has come to sell some of the farm, if anyone has any suggestions in this sort of thing please chime in. It's all pretty new to me and I am still working my plan out for the future of what ground we plan to keep.

My father is getting up there in age and does not have the interest or drive like he used to. I am starting a family of my own now which cuts back on my own time I have to give to the farm. Both Dad and I work outside the farm which makes it pretty hard to get all the things done we need to.

We run about 40 head of cattle and we are thinking we might cut it down to around 10 cows. This would be less hay to put up and would be easier to maintain. We have land in several small tracts and want to keep the original home place where we both live. The cattle will help maintain the pasture around our homes.

We plan to sell most of the farm ground which we have rented out for nearly 15 years now. We will keep enough for the hay. We plan to sell some equiptment, what we don't need for hay. I hate to see it go but it's just to much to do on my own and I worry about the farmers who rent it out. If they were to give it up there would not be much else for me to do with it since I don't have the time, equiptment or help.

I feel beaten at this point but have high hopes for the future. Over the last 15 years we have been just able to maintain the place. Everything we make goes back into it to keep it afloat. After we get some plan to place to cut back hopefully we can get it down to a managable size so we can enjoy it instead of working ourselves to death. Our home place is about 90 acres all together and I look forward to only having it to worry about.

We currently put in a lot of sudan grass for hay. I think I will also get away from this. Our ground grows alot of bluegrass and timothy on it's own so I think we need to stop fighting mother nature and just let it grow. It will be more than enouph to feed what cows we plan to keep and it will be nice not to have to work up ground every year.

Always a sad process. My only suggestions are to attempt to sell it to adjacent farmers, or the renters, rather than developers. The other thing is to keep all hostility out of the negotiations with family. JimN

Things change.........and for most of us, it's traumatic. Every situation is different, but FWIW, I wouldn't recommend what you're proposing with the cattle. For a long time, I ran almost 300 head of mama cows in a cow/calf operation, in addition to about 1000 acres of row crop. When I quit row-cropping, I sold most of the cows; kept about 85 head.......thinking I could handle them by myself........part-time. Obviously, it took less hay/time spent clipping pastures & feeding/fencing, etc, but it still took a lot of time. After 3 or 4 years, I sold the rest of 'em. If I had it to do over, I'd sell them all at the same time. Of course, you may just like having some cows around and need them to 'maintain' the small acreage around the house.

I agree with janicholson. Also your plan will probably depend at least somewhat on where you live in our big world. Can you set the plan up so your offspring will have the land when they are of age? Even if they don't farm it, they may like to have a country place (home) to enjoy. I grew up on a farm, went away to college, worked as an electrical engineer in my working days, now in retirement I enjoy our country home on 3.5 acres.

My only comment is to never sell it and hold back a mortgage. A mortgage could take years to re-claim if defaulted, and a real mess. Let some one else do the mortgage work and you get clear out of it. You can however, sell with part down and they get the title ONLY after the final payment is made.

Where are you located??? My personal opinion would be to sell it at an auction. That is about the only fair way to sell anything if there are siblings involved. No one can whine about selling it too cheap or anything like that. The drawback to this is that you have no choice over who gets it. It could be your friend, neighbor, developer, or a "Land Baron" (someone who has too much money and thinks they have to own every piece of God's creation)

JinN has a good suggestion, I would have to say, it all deponds on what State your in and what Your Location is compair to what"s around you, how far from any City, and what the Law says about homestead acreage, these have to be known for any suggestion.

(quoted from post at 11:04:36 09/14/09) My only comment is to never sell it and hold back a mortgage. A mortgage could take years to re-claim if defaulted, and a real mess. Let some one else do the mortgage work and you get clear out of it. You can however, sell with part down and they get the title ONLY after the final payment is made.

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ig second on that! Been fighting that since 1996. What a pain! Let a bank have that interest and all the hassle that comes with it!

You might have to pay income tax on those 30 head of cows. that is if you live in Iowa.

Think long and hard about it , if ya sell it you wont ever get it back .

If you even realisticly dream that you can start farming again the DO NOT SELL the ground. You will NEVER get it back ro at least not a a price you can afford.
Cut down the herd and fence off what you can work then rent the remaining ground to surrounding farmers. The rent should more then pay the cost of owning the ground and the renting farmer/s will appriciate the increased income from working the ground.
If your just looking at the money, and it is attractive, then quit farming. Sell everything but the home places, put the money into interest bearing vehicles or take a cruise.

I know a guy,,, who sold his farm over and over again,,,, got it back if the buyers didn't make the payments on the Land Contract, don't tell me you can't get it back,,, who are you kidding,

Moreover,,,,, IF I sold some thing, do you think I would want it back ???????? that's why I sold it,, to get rid of it,,, easy as that,,,,,

Three ways to sell,,,, Cash<<<<,,,, Land CONTRACT, AND BANK Loan Mortgage...

Hi Kenny,

I don't know if Colorado still allows this method or not. If they do, there was a standard realestate form to write up the transaction.

The Basics:

The buyer has 30 days of default grace. Upon the 31st day of default, a neutral third party is instructed to file the quiet claim deed that the buyer signed at the original closing date, property is then automatically transferred back to the seller, seller then files for a 3-day eviction, seller gets sheriff to enforce the eviction judgment.

The neutral 3rd party was $100 cost plus county recorder fees, in the 70's that is. Esscrow companys were the usual 3rd party holders.

The 3rd party collects all monies from the buyer then re-distributes the monies as the contract calls for.

Great way too sell but a terrible way too buy as the buyer agreed at the time of sale closing to give up so many of there rights.

T_Bone

I would hold on to it at all cost if possible before you make a hasty decision. You mentioned that you are starting your family. I would consider holding on to it for some of your offspring some day. I have seen many people with regrets of getting rid of the farm too soon and not passing on the tradition to their own kids. This was the case with my grand parents farm. It was sold off when I was about 12 years old. I ran tractors all day long there in my early years and would give anything to have it back. It is now covered in houses.

Real dumb at this time to sell land as its a buyers market. Land prices have taken a real nose dive, just wait a while and you will almost double what you get for it.
Walt

Do what you need to do, when you need to do it. Land is the only real investment. Money markets, stocks and such are paper instruments with paper value. Buildings, cars, cattle, and stuff can burn or die. Land itself is a consistant investment that serves as a hedge against inflation. When we had inflation in the 70s land appreciated in value. When we had deflation in the 80s land values dropped. Same scenario today. The key is that value never went to 0. Rent it out for enough to pay the taxes and interest if you owe anything on it and let it accrue the capital gains instead of banking the money and earning taxable interest or spending the money and having nothing to show for it.

Also, look at management changes. I calved in the winter, 60 day season, 75 momma cows when I was teaching school. Started calving at what was typically the first day of Christmas break and ended at the end of January (lots of snow days). Weaned my heifers and sold my steers off the cows. Kept the best heifers out to replace whatever cows didnt calve on time. Heifers calved in May, I weaned and sold all their calves in mid November so they would breed back with the cows. Hay, I did in June mostly. I designed what I did around when I had more time to do it. As far as maint of barns and fences, mowing, etc, I hired that done. Feeding was self fed round bales. I had enough hay rings that every Sat I could put out a weeks worth of hay. Once a month I had to scrape the manure pad.

I understand that this particular schedule may not fit what you need. Too many people arent willing to turn management on its head to accomodate time. We have a mentallity in agriculture about money, frugality, self reliance, etc. With off farm work time becomes the resource thats typically most limiting.

I'd suggest breaking it down. What do you like to do on the farm, what would you miss if it were gone, what do you dislike doing, when are your busiest times at work and your least busy. Then you can start breaking things down.

They ARE still printing "money"!! HOWERER!! They can"t print any more land!!! Hang on to whatever you can !! You won"t be sorry!! Just my 2...charles

Think I have the best of all worlds. Dad bought the place in 1946, died in 1984, mom in 1998 - been in family trust. Two siblings already passed on, the rest from 51 to 66 years old. None of us farm, only 120 acres. My little brother bought the house and ten acres surrounding. We can still "go home" - we go visit him and can walk around the acreage, new owner lets me cut firewood.

Unless the parcels are miles away from the piece you intend to keep, you need to think about how much you want a dirt bike track, subdivision, warehouse, shopping center, etc. next to where you live. Once the land is sold the new owner can to whatever he darn pleases with it, you'll have no voice.

Unless you or pops needs cash in hand right away, I would think long and hard about it. Don't know how much ground you are talking about or how close to the house it is, but if it is very close at all think long and hard about renting or putting in to some gov. program. Some of the programs out there are a pretty good deal, I just signed up 10 acres worth of soggy/shady creek banks for $187/acre for 10 years. Look at cash renting, you pick who gets it and just cash your check twice a year for the next 3-5 years. If you rent you will know who your neigbors are, if you sell you never know what you get, what you will have to look at and smell next door forever.

Dave

I agree! Once you sell it's gone forever, and as for the money you get for it, soon it's gone too.

My father told me several times "If you decide to sell your land, you only get to chose your neighbors once."

Years ago in my <s>failed</s> first marriage, I owned a rent house across the block.

Sold it to an elderly man, Mr. Autry, that I worked with at the steel mill.

He was a very good neighbor, until he became ill and moved to a nursing home.

You guessed it - the sorriest one of his children moved in so he (son) would not have any housing expense.

There went the neighborhood.

What does your banker advise.

I suggest visiting with a your tax person, accountant and a lawyer. Maybe all the same person. Visit with them and learn implications of a land sale from them. For instance, capital gains? Loss of depreciation? Change in liability exposure? How many acres does a building site have to be to remain agricultural? (20 acres in my state).

The "look-back" in my state is 7 years. Arms length sale probably not an issue. Sale to relative below market value might be an issue someday.


Maybe make a list of all the impacts of the land sale you can think of (good and bad) to show the folks above? They may add to the list or your list triggers thoughts/comments from them.

My guess is your dad owns the property but I don't know. How does the sale impact your dad's (mom's?)retirement? After the sale of the land, how much money will be left to invest after all the expenses of the land sale have been paid? How does the present land rent compare to income from new investment after all expenses have been paid?

It is almost is as much work to keep 10 cows as 40.

If the rent will pay the ownership expenses of the land maybe just keep it awhile longer until future plans become more clear. Is hiring part of what you do now custom farmed an option? It is far out in the future but will any of your children potentially want any of the land someday?