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Tips for online auction planning

Mark Stock for Progressive Dairy Published on 06 August 2019
Online auction

As farmers, it’s inevitable we will all one day retire. With that comes the emotional aspect of leaving the lifestyle, people, equipment and community that have supported you.

The land and equipment you own are assets that can put you on the track to a comfortable retirement. With online auctions becoming increasingly popular among retiring farmers, you can take advantage of exposing your equipment to sellers in a global marketplace. Yet many people don’t know what happens during an online auction, specifically the day of the sale and how to best choose a reputable and honest auction company.

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Retiring farmers can get good returns if they follow a few tried-and-true tips to help get the most value back for their equipment.

It takes time

When you’re ready for retirement, make sure you have a plan in place. If you’re planning on retiring next year, start the process now. Whether this means working with your bank to settle debt, your family members to determine succession plans and inheritance or with a tax consultant to understand how best to structure your retirement, make sure you have a road map of how best to get there.

This same principle applies to liquidating your assets and choosing a full-service auction provider and real estate company or broker that will serve you well and has your best interests in mind.

Full-service auctions

When you’re planning for retirement, find an online auction company that does it all for you. Online auction companies run like your average in-person auction company but at a more global and technologically advanced scale. Companies today can list your equipment with pictures and videos to reach a global marketplace and provide an instant platform for buyers and sellers to get in touch with one another.

Additionally, online auction companies can provide marketing and advertising on your behalf, getting more eyes on your equipment than at a traditional auction. Think of an online auction company as your agent, promoting your equipment to buyers while helping ensure the buying and selling process is done in a streamlined and honest way.

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Modern-day full-service online auction companies do exist and can deliver many services traditional auction companies cannot. For example, if you don’t have the time or ability to clean your equipment before an auction, choose an auction company that can provide those options. Additionally, they should be able to recommend local specialists if repairs are needed.

The process of an auction can be overwhelming, so be sure to choose a company that will take care of all aspects of the auction, allowing you to focus on developing relationships with your buyers. This means answering the phone, talking with buyers and being available when buyers want to see the equipment. This creates an environment of trust and transparency like that of an in-person auction, which can yield higher returns.

Farmers trust other farmers, and loyalty and respect runs our industry. Many buyers will ask us who the equipment comes from because it matters. Auction companies that make sellers accessible to buyers to ask questions and facilitate in-person visits have a more confident buyer base who are willing to bid higher. Additionally, your chosen company should show you the bidding history on your item post-auction so you have full confidence in the proceedings.

Be up-front and clean your equipment

The value of honesty means buyers and sellers know what to expect. To do this, it’s important that when you’re talking with an auction representative you are completely honest about your equipment. If you know something is wrong with your equipment, be sure to disclose it. Reputable auction companies will ask for service records and conduct lien checks to establish trust with the buying community. Equipment that is accurately listed and supported by documentation can help bring in higher bids and avoid legal troubles down the road. Additionally, buyers who work with an auction provider who conducts lien checks know that they truly own the equipment, which can help bring in higher bids.

Make sure the oil is changed, filters are replaced, and 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 they look good. Sellers can also see higher returns if they replace worn seats, bad tires, lights or any other amenities important to the buyer.

Real estate is another asset

Along with liquidating equipment assets, many farmers also must determine what to do with their property. Some may choose to stay in their homes and sell or lease their land to other farmers; others may simply choose to sell or lease all their property. Be sure to understand what works best for you.

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Land is still one of the safest long-term investments for growth. Many times, retirees who have multiple pieces of real estate don’t live on the farm post-retirement and opt to sell the pieces of land with existing buildings. Open farmland is typically saved by retirees and serves as a future source of income. This farmland can be leased out to renters and managed by a full-service real estate company or broker, taking the hassle out of managing land and tenants during retirement. Real estate taxes – depending on your state – will also be on the minds of buyers.

Retirement can truly be an exciting and emotional time. The process can be complicated, but getting value back for your assets shouldn’t have to be. When you work with honest and transparent auction and real estate companies that have your best interests in mind, the process is simplified and can even be enjoyable. Take your time, find professionals you trust and create a retirement plan that works for you.  end mark

PHOTO: After an online auction, the auction company representative shows a farmer the locations where his equipment will be shipped. Photo courtesy of Big Iron Auctions.

Mark Stock is a Co-owner of Big Iron Auctions.

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