Getting the most bang for your buck in online auctions
Retirement in the farming community is an incredibly emotional time. For some farmers, they find elation, for others, sadness. Perhaps a mix of both. Not only is your entire lifestyle changing, but that hard-to-define attachment to the land and machinery that has supported you. Perhaps health issues forced your retirement, or the economy moved your hand. Whatever your situation, we all face the inevitable process of growing older and facing retirement.
I’m a farmer myself and have worked with and talked with hundreds of farmers who have gone through the same process. Let me tell you, life goes on after retirement — it just takes some paddling first, to reach the calm seas.
Fortunately, that same land and machinery that all farmers have a special bond with are also their greatest tool in setting themselves on the right path towards retirement.
Online auctions are becoming the popular route for offloading land and machinery in the industry, giving farmers the ability to reach thousands of buyers across the globe. Yet, finding a reputable and honest auction and real estate company or broker is just as important as how you decide to list your assets.
I’ve got a few tried and true tips regarding how to get the most value from your land and equipment as well as what to look for in an online auction company.
Planning is important
Start planning for your retirement as early as possible. If you’re planning on retiring next year, start the process now. Contact your bank and figure out your financial obligations, find a tax consultant to determine succession plans and inheritance; make sure you have a roadmap of how best to get there.
Apply this same logic towards liquidating your assets and finding a full-service auction provider as well as a real estate company or broker, one that will have your interests in mind.
Full-service company is important
Finding an online auction company that does it all is essential to getting the most out of your retirement planning. They should be able to take care of or find you experts in almost any field: equipment marketing, listing, collecting and distributing sales proceeds, cleaning equipment or repairs. All of that will allow you to focus on developing trustworthy relationships with buyers by making yourself available to answer questions and meeting with them to show off your equipment.
This creates an environment of trust and transparency like that of an in-person auction which can yield higher returns.
Clean your equipment
It is always in the seller’s best interest to clean and prepare equipment prior to the auction — this can increase the return on your equipment by four or five times the cost of cleaning the equipment.
Make sure the oil is changed, filters replaced, and that the major components of the equipment are in good working order. Power wash the engine, frame, and glass. Do a thorough sweep of the interior and detail the instrument panels so that they look good. Sellers can also see bigger returns if they replace worn seats, bad tires, lights, or any other amenities that are important to the buyer.
Visuals are everything as well, so make sure that wherever the equipment is being staged, the background is aesthetically pleasing. Grass should be cut, and unnecessary background items should be taken away. Again, choose an auction company that can recommend what to do in terms of repairs and cleaning and can best stage your equipment.
Once your equipment is listed, take it out of service. Small differentiations in mileage for test drives or equipment relocation is typically okay, but a general rule of thumb is that the equipment should be in the same or better condition than on the day it was listed when the equipment is being delivered to the buyer.
Doing all of these things will net you higher returns and provide you peace of mind.
Transparency is important
When looking into your auction company of choice, make sure they value transparency above almost all else. The trust that farmers have amongst one another is important, and an auction company that champions building trust often have a more confident buyer base who are willing to bid higher due to the trust of the parties involved. Things like bidding history on items post auction are also important to keep an eye out for. Transparency is a powerful virtue, and people gravitate toward legitimate and honest companies. Auctions are no exception.
It’s important that when you’re talking with an auction representative, that you’re also honest about your equipment. Be sure to mention any possible problems with your equipment.
If an auction company doesn’t ask for service records or conduct lien-checks, that is an immediate red flag and you should be wary. Equipment should be accurately listed and have supporting documentation to back it up. This is another layer of trust that can bring in higher bids and avoid legal troubles.
Retirement can be exhausting and stressful, but it also can be a smooth and exciting process. What should not be stressful is your dealings with an online auction site.
Honest, transparent auction and real estate companies are an invaluable addition to the process and finding the right one is a huge step in the right direction. Take your time, find professionals you trust and have a retirement plan that works for you.
Look for our next segment in this series where we walk through a typical auction day with a retiring farmer.