Timing and first impressions are critical to the sale of any farm, according to James Thompson of North East rural property consultants, YoungsRPS. As the farmland market tightens and becomes increasingly competitive, attention to detail can make all the difference in achieving market advantage. For a spring or early summer launch, now is the ideal moment to consider all of the issues which assist in achieving a quick and trouble free sale.
The following are crucial areas for vendors to consider, he suggests.
Sale Method - The most common method of sale of agricultural property is Private Treaty. However other options include Informal and Formal Tender and Auction. Each sale method has its benefits and risks, and it is important to select the best method for your property. This is an essential part of the pre-market discussions.
Lotting – This is a fundamental consideration of any sale. Care must be taken not to over split a property thereby risking not selling all of the lots and adding cost because of the need for individual sale contracts for each lot. Over lotting can also have a detrimental effect on the value of the whole. Expert local knowledge is key to achieving the correct balance.
Land Registry Title/Property Deeds – Inspection of the property’s Land Registry Title and Deeds at an early stage is crucial when planning a sale. Any restrictions on Title or Title defects can have a dramatic effect on market value. Title issues need to be addressed prior to the launch of any property, and either resolved or detailed openly to prospective purchasers. If defects are not disclosed until the legal stage of a sale, this can lead to purchasers withdrawing or renegotiating. If a property has to be re-launched, this can have a dramatic effect on market interest and a negative effect on value.
Development Clawback – If your property has long term hope for development then you may wish to consider including a development clawback within the sales contract. Careful consideration must be given as to the level and term of years of a development clawback as this can have a negative effect on a purchaser’s appetite for the property if set incorrectly.
Guide Price – Property values are becoming ever more localised and it is important that a guide price is set at the correct level to ensure maximum interest in the property and achieve the best result. Again local knowledge is key.
Tax – It is important to plan any disposal of property in the context of potential tax liabilities. In particular Capital Gains Tax (CGT) should be addressed early in the sale process, with special attention paid to possible available reliefs. Inheritance Tax (IHT) planning is also a vital consideration.
“At YoungsRPS we are currently preparing the spring launch of a number of properties including bare land and equipped farms in Durham and Northumberland,” says James Thompson. “We have an extensive list of buyers registered and looking to acquire agricultural property from which a number of off market sales have been concluded over the past 12 months. Whether a vendor chooses an open market or private sale, being well prepared is a big part of the key to success.”
YoungsRPS operate throughout Yorkshire, the North East and the Scottish Borders. If you are thinking of selling your farm or land this spring talk to your local YoungsRPS office for a no obligation discussion.
Durham & North Yorkshire - James Thompson / Ed Boon - 01740 622100
Tyne Valley and Cumbria - James Stephenson / Harry Morshead - 01434 609000
Northumberland and Borders - Tom Oates / Graeme Bruce - 01665 606800