Question 1

How do farmland auctions work, and how do I finance an auction purchase?

Accepted Answer

Most farmland auctions require 10% down the day of the sale and full payment in 30–45 days, with no financing contingency. That timeline kills bank loans, which is why auction buyers use cash or bridge financing. Turnrow issues a term sheet in 24–48 hours and closes in 2–4 weeks.

Question 2

What is a seller carry-back, and when does it make sense?

Accepted Answer

A seller carry-back means the seller finances part of the price themselves: you deed the property at closing and sign a note back to the seller, typically 10–50% of the price. It makes sense when the seller wants installment-sale tax treatment and the buyer wants to shrink the cash gap.

Question 3

How do off-market land deals between neighbors actually happen?

Accepted Answer

Most neighbor-to-neighbor sales start with a conversation, not a listing — often triggered by retirement, an estate settling, or a health event. The mechanics that make them close: a written offer, an independent appraisal both sides accept, and a title company running a normal escrow.

Question 4

How much earnest money is typical on a land purchase?

Accepted Answer

On negotiated farmland sales, earnest money typically runs 1–5% of the purchase price — often a flat $10,000–$50,000 on mid-six-figure deals. Auctions are the exception: expect a hard 10% deposit on sale day, usually non-refundable.

Question 5

What contingencies belong in a land purchase contract?

Accepted Answer

Five contingencies cover most land deals: clear title, financing, water rights verification, access confirmation, and an inspection or environmental review period. Each needs a specific deadline and a specific remedy — usually the return of earnest money — or it protects nothing.

Question 6

How do I make a competitive offer on farmland?

Accepted Answer

Speed and certainty beat small price differences on farmland. A clean offer — proof of financing attached, 30-day close, minimal contingencies, 3–5% earnest money — routinely wins against a higher bid dragging a 90-day bank approval. Sellers of land have usually been burned by financing before.

Question 7

Should I buy the neighboring farm when it comes up, even if the timing is bad?

Accepted Answer

Usually yes, if you can do it without endangering the ground you already own. Adjacent land trades roughly once a generation — the average parcel changes hands every 30-plus years — and it is worth more to you than to any other bidder because of what it does to your existing operation.

Question 8

What is a land contract (contract for deed), and what are the risks?

Accepted Answer

A land contract is an installment sale where the seller keeps the deed until you finish paying — you get possession now, title later. Its main risk mirrors its main appeal: because no deed transfers, buyer protections are thinner than a mortgage, and default can forfeit everything paid.

Question 9

How do I value standing crops when buying farmland?

Accepted Answer

Standing crops are valued as expected gross revenue minus remaining costs to harvest and haul, discounted for yield and price risk — then handled in the contract as either included, excluded, or prorated. The default rule in most states: unharvested crops pass with the land unless the contract says otherwise.

Question 10

What happens to existing cash-rent tenants when farmland sells?

Accepted Answer

The lease survives the sale — a buyer takes farmland subject to existing tenant rights, written or oral. In many farm states an oral year-to-year lease continues automatically unless terminated by a statutory deadline, often September 1 for the following crop year. You buy the tenant with the land.

Question 11

What are the pitfalls and best structures for buying land from family?

Accepted Answer

The two classic failures in family land sales are pricing without an appraisal and paperwork done by handshake. The fix is the same in every structure: an independent appraisal, a written contract, a real closing with title insurance, and tax advice before — not after — the price is set.

Question 12

How long does farmland stay on the market?

Accepted Answer

Quality tillable ground in strong farm regions often sells in 30–90 days — or in one afternoon at auction. Specialty properties, recreational tracts, and anything with water, access, or title complications routinely sit 6–18 months. Days-on-market says more about the property than the market.

Question 13

Is it smart to buy farmland at the top of the market?

Accepted Answer

Nobody reliably calls the top — farmland has hit "unsustainable" record prices repeatedly for forty years and kept compounding. The honest question is not timing but structure: can you hold through a 20–30% drawdown? Farmland punishes leverage and rewards holding power, in every cycle.

Question 14

What due diligence should I do before buying land?

Accepted Answer

Six things fail land deals: water, access, soils, title, environmental history, and boundaries. Verify each with documents, not the seller's word — a state database check on the water right, a recorded easement for access, a title commitment, and a survey. Budget 2–4 weeks and low four figures to do it properly.

Buying & Selling Land