Selling a farm or ranch land is slightly different from a single-family house on a smaller lot in town. There are different ways to market the ranch, unique ways of marketing and listing it and different taxations of the farm or ranch assets.
Various tax rates and treatments apply to various types of assets when we are talking about the sale of a farm or a ranch. How you allocate the sales price of such property will determine the tax you pay. There are four ways investors may be taxed on the sale of a farm or ranch: federal ordinary income tax, depreciation, federal capital gains, state taxes or new Medicare surtax, which is the health care and education reconciliation act of 2010 adding a new 3.8% Medicare surtax on net investment income. (Talk to your real estate agent about the details on this specific tax. A ranch or farmland can be comprised of multiple separately deeded parcels. These can vary in cost, especially if the property was expanded over time. If the ownership of the ranch is inside an entity, it can have an impact on the planning options and tax treatments.
Selling ranch or farmland in Texas is not unique. Throughout the Texas Hill country, there are numerous farms with hundreds of acres of farmland or cattle land. Pricing the property can range on so many different variables, such as location, size, access or improvements. Finding a real estate agent that is proficient in selling a ranch or farmland is essential to getting the right price and marketing to the right buyer.
Know your property. You have to know your property before you can sell it. You’ll need to verify boundaries, crop or hay production, cattle production, water features, size and depth of any ponds or lakes and information on flooding or different zones. Gathering information on fences, hunting and fishing amenities licenses and all income production on the property is key to getting the right price and facilitating the transaction accordingly.
Should you have an open house? This would more fall under an “Open Ranch” situation, but it’s important to invite your network of farm and ranch brokers and families so that you have a successful marketing opportunity.
Not only do need to stage the house but the barn and any outbuildings as well. Most properties will need to have all deferred maintenance completed, and you want it in its best possible condition to get the most from the sale.
Good photography is essential. Just as with a single-family home, getting great photo shots is key to appealing to all types of buyers. Drones work really well for open ranchland and farmlands as a gives an overall snapshot of the property.
As with any major real estate sale is crucial to get the right real estate agent or broker to handle and facilitate the deal. As a proficient real estate professional in Texas Hill country, I have bought and sold dozens of ranches and farmlands over my years. Give me a call today for answers to your questions on marketing and selling your ranch, pricing it correctly and marketing it to the right buyer.