There are a large number of farms in which a huge amount of farming is done, and agriculture is the prominent source of earning in most parts of the world. There are different types of commercial farms where different varieties of crops are grown. Traditionally farming was done by the farmer and his family himself working in the field. But, nowadays farming is more about using different types of machinery along with manpower. Many families are nowadays adopting the modern way of farming by taking the benefit of technology and different types of machinery.
But, even if your farm is working effectively and successfully, one day, you will think of selling it to grab new opportunities or to retire. So, to sell a farm fairly, you must follow the steps given below, which will help you to sell it easily and earn profits.
1. Always keep accurate records of your business
The businesses which are carried on by a family generally don’t have proper documents, and the farms are running on an informal basis. Many farms are connected with the local areas, which result in barter systems and the existence of unique transactions.
But to make a profit by selling your farm, you will require proper documentation as you need to convince the buyer that the farm is profitable. Also, documents show that the farm is not illegal as the buyer will not be willing to enter into an illegal transaction.
2. Focus on earning profit
The families who are operating their farms independently mainly focus that they must be able to fulfill their basic needs and demand. So, if they are selling their farm, they need to earn profit to be self-sufficient. Many times the farmers are not able to earn profit by their farms, and the cost of operating a farm is more than the number of crops and food they produce. So, in such cases, the farms usually earn profits by other products or services that can be produced on the farm beyond agriculture.
The farmers can increase their profits by producing some profitable crops or by using technology. Any other methods can also be used to show that the farms earn a profit because if the farmers will not be able to show that the farm is profitable, then the farm cannot be sold successfully. So, if you want to sell your farm, you must start focusing on the profit and make necessary adjustments to show that your farm is profitable to attract the buyer.
3. Take advice from advisors
When the buyer is satisfied with the farm, and you come closer to selling the farm, it is very essential to involve a professional in the selling process who can take care of all the legal formalities. A farm involves the sale of land, sale of assets, both tangible and intangible, and sale of a business. To conduct the selling process comfortably, it is beneficial to involve a real estate agent, lawyer, broker, etc. in the selling of a farm. All of them will help the owner of the farm to take care of all the documentation, handling the sale process, taking care of negotiation, and final payment.
If you will handle all the formalities by yourself, then, it may be very hectic as well as you may do something wrong. So involving a team of advisors is always a better option.
4. Give some advice to the new owner to ensure that your farm operates successfully
One of the most important things which you can do after the sale is to inform and advise the new owner how you have been operating the farm successfully for so many years. This will ensure that your farm works and operates successfully even after you leave. It depends on the buyer whether they need your help or not. The experienced buyers don’t need much of your help, but most of the buyers seek to know new ideas and ask many questions about the farm from the seller. Providing such help to the buyer can enhance his confidence in himself as a new owner of the farm.
This was all about how you can sell your farm and earn profits. But despite selling the farm, the farmers also face some difficulty when they need to divide the farm among his family or children. Dividing land is not an easy task. There are three solutions given below, which will help you in dividing the farm.
How to divide the family farm?
Generally, a family farm is owned by multiple members of the family. Selling it would be difficult if all the members of the family do not agree. It may be possible that one sibling wants to sell it, but the others are against it. This type of confusion can be removed by dividing the farm equally between all the members of the family.
So the main solutions for such divisions are:
- The land can be purchased by the farming heir from their parents after the age of their retirement. The money or proceeds earned from such selling can then be divided among the heirs accordingly. But this will create the problem of capital gains.
- Another solution is to purchase the farming land by the farming heir after the death of the parents. This solution will remove the problems of capital gains tax.
- Another solution is that the parents can divide the land of the farm among all the heirs equally by giving an equal piece of land to every heir. The heir should be given the right to rent the land for a specific period, or the heirs can also do cultivation in the land.
The bottom line
So this was all about how to sell your family farm fairly. If your farm is not earning a profit, or if you are in urgent need of money, it is always beneficial to sell your farm and earn some hard cash. But remember to find out the price of land in your neighborhood before selling your farm.