Farmers who are selling up can’t do anything to alter their geographical location, average land values or the political climate of agriculture.
But they can pave the way to a smoother sale by avoiding common mistakes that put prospective buyers off. We ask eight agents what the common errors are.
1. Not formalising agreements
Chris Templar, associate at Bletsoes in Stratford-upon-Avon, says that failing to formalise agreements with anyone who rents land can be a big own goal.
Time and again, deals done on a handshake with a tenant or a neighbour cause issues, he says.
Depending on the type of agreement that party feels they have, the value of freehold can be affected.
“Putting in place a formal agreement for as little as a couple of hundred pounds could save farmers thousands down the road.”
2. Rushing to sell
There are generally two types of seller – those with time and those against the clock.
“Coming across as though you have the luxury of time is quite important,” says William Langmead, farm agent at Strutt & Parker in Salisbury.
Mistakes include rushing to take brochure photos in the winter and taking viewings before the farm looks at its best.
“Buyers will smell blood and think that they are on to a deal with someone who needs a quick sale. The more that you can show it is a reasoned sale, the stronger your hand in negotiations.”
3. Not providing enough information
“Introducing any piece of new information that potential buyers haven’t been told about up front can erode confidence,” says Philip Hoare, associate director at Savills in Banbury.
First impressions start with the sales brochure and sellers should present as much detail as possible.
“Agents and solicitors can then produce a comprehensive brochure and data room that has everything a buyer needs, removing uncertainty.”
Yield data, cropping information, full planning history, names of neighbouring businesses and soil indices all help build a picture.
4. Setting an unrealistic guide price
Over-egging a guide price is the most fundamental mistake sellers make, according to James Brooke, partner at Bidwells in Norwich.
“Farmers see something that they think is of similar value, but one side of the road can be different to the other side,” he said.
Soil conditions, quality of buildings, ease of access and consistent yields are all markers that set farms apart.
“There is a lot more behind valuing a farm that an owner might see. Sometimes they are worth more than the seller expects because it’s a walk-in farm requiring little investment.”
5. Creating a bad first impression
Thinking about how a prospective buyer sees your farm is an easy way to get on the front foot.
“You never get a second chance to make a first impression,” advises Sophie Clotworthy, farm agent at Woolley & Wallis in Salisbury.
“Vendors should ensure the entrance is neat and tidy with mown verges, good fencing and gate hinges re-hung. You want potential purchasers to be wowed, not thinking what it’s going to cost to fix everything.”
6. Imposing restrictive covenants
Clawback or uplift clauses can make potential bidders walk away.
Andrew Tuffin, partner at Symonds & Sampson in Sturminster Newton, says agreements were originally used in urban areas where housing developments or planning permission were likely. But they are far more common now.
“It can appear that the seller is trying to have their cake and eat it,” Mr Tuffin said.
He advises that buyers may stomach sharing 25% of the uplift, but that 50% is too high.
“Sellers should consider leaving them out altogether with a view to achieving the highest price now.”
7. Failing to resolve water issues
The importance of a mains water supply depends on the incoming farmer’s plans.
But chartered surveyor Charlotte Rogerson from Berrys in Shrewsbury, says two recent sales have included issues that needed resolving.
“Foresee the problem and show buyers that there is an alternative solution, or implement that alternative for them – for example, connect to mains water.”
All holdings should have water supply maps available to show prospective buyers where the water comes from, where the header tanks and pumps are located, and where the spurs are to troughs.
8. Moving too slowly
Stags’ farm agent in Launceston, Andrew Ranson, says paperwork and legal affairs should be in order to complete sales as quickly as possible.
“A recent buyer lost patience with the speed of the vendor’s solicitor and pulled out,” he said.
He advises vendors to choose their solicitors carefully and the cheapest is not always best value.
“Something similar to an auction legal pack can ensure you hit the ground running. Your agent and solicitor can advise you what you can prepare in advance.”