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Virtual Auction

December 13, 2008
By: Sara Schafer, Farm Journal Media Business and Crops Editor
 
 
During the auction period, US Farm Lease provides a sign to display at the edge of the field for lease, directing farmers to their Web site to bid on the property.Free market enterprise is taking over farmland bidding wars. The farmland market has a new online medium for landowners to post land for rent and let farm
operators negotiate the price. US Farm Lease, LC (www.usfarmlease.com), went live in mid-October. Within the first 10 days, they had 10 field listings for auction and more than 70 registered operators looking at properties.

"There are a lot of hungry farmers out there wanting to find more farmland,” says Brooks Lofstedt, president of US Farm Lease. "We've had an outstanding response rate from registrations in just the first 10 days.”

US Farm Lease is designed as a tool for do-it-yourselfers, as well as realtors to use to assist their clients, Lofstedt says. The company was founded by Mark Gannon, CEO, in Ames, Iowa, after seeing a need for a market-driven way to rent farmland. This way, landowners can get a better feel for the market value, and farmers can have a fair chance to rent land in their area.

Gannon, along with Lofstedt and Kate Tucker, have many years of experience in the rural land market and wanted a way to offer their services to landowners at more reasonable prices. Gannon has operated Gannon Real Estate and Consulting in Ames for more than 18 years and has been in the farm real estate and lending business for 30 years.

Even though the company only had regional listings at press time, they are prepared to offer services nationwide. Currently, the site includes cropland listings for Iowa and Missouri. The site also lists pasture and recreational land.

How it works. When registering, both parties should be prepared to answer a series of questions and provide contact information. Landowners are asked to provide details on the land for rent (acreage information, farm characteristics, yield history, recent improvements, etc.) and to post maps and pictures.

Farmers are required to submit references and credit information, as well as details about their farm operation.

Registration is free, but at the end of the open auction, the landowner and winning tenant each pay $250 to cover transaction costs. During the auction, landowners get a "land for lease” sign to post on the property and local advertising.

After the sale and at each payment interval, tenants forward lease payments to US Farm Lease for processing. The cost of the package service is 3% of the gross lease value the first year and 1% in each consecutive year of the lease.

"This type of service requires a lot of trust in a company,” Lofstedt says. "We have the landowner's best interest in mind but also know the tenant needs to be treated fairly. Even though it is a Web-based application, we have plenty of support to help clients through the process.”

Build a connection. "Landowners can post field information, previous harvest history, pictures and maps to the listing site,” Lofstedt says. "At the same time, operators can post information: operation information, previous rental history—almost like their farm resumé.

"Bidders may be familiar with the property, but the landowner will want to include soil information, government payment information, maps and lease details,” Lofstedt adds.

Like most farmer relationships, it's about more than the highest bidder. "We will be encouraging landowners to use crop-share and flexible cash rent leases. Renters should give the landowner as much information as possible.

Include family and current farm operation information. Include pictures and your personality,” Lofstedt adds.

Fast Facts:

¡Registration is free.
¡Web site has listings for cropland, pasture and recreational land.
¡The landowner and winning tenant each pay $250 to cover processing costs of the transaction and advertising by US Farm Lease.
¡Renters forward their lease payment to US Farm Lease each year; the company then acts as an intermediary to assure landowners receive timely and accurate payments.



You can e-mail Sara Brown at sbrown@farmjournal.com.

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FEATURED IN: Farm Journal - December 2008

 
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