2019 Market Update

By | Ag Land Values, General

We are overdue to give you a market update on land sales in the Southern Red River Valley, so here goes!

  • Value wise, we are seeing an increase in farm land values in 2019 compared to 2018, specifically on the ND side in Cass and Richland counties. Cass County especially has had a strong year in terms of price/acre results!
  • Volume of land sold so far is lower than in 2018, however there will be more land sales in Q4 of 2019 that may end up pushing us above the 2018 volume.
  • Overall we are seeing some better land being sold in 2019 compared to 2018. This is one reason we are seeing higher values overall, but demand in general has been strong as well.
  • There are more buyers than sellers in the farm land market right now, and we expect that trend to continue for awhile.

We’ll share some specific stats in early 2020 once all the 2019 sales have been recorded. Until then, if you want specifics or are curious about land values in your immediate area, please contact us any time and we would be happy to share.

Until next time!

Andy Westby

How can I find recent sale prices for farm land?

By | Ag Land Values, General

As a Realtor & Auctioneer, I often get asked by friends and family how much a specific piece of land sold for recently. It’s human nature for people to be curious about area land prices, either because they maybe own similar land or want to buy land like it in the future, or perhaps they are just being nosy! Regardless, I think having current, accurate data about the market is important for many people. Here are a few ways you can research land prices if/when the need arises.

  • You can visit or call your county recorder’s office and ask for a list of recent ag land transactions or deeds to review. In North Dakota for example, most recorded deeds in the county will likely include the sale price right on them, unless they are between family members or title is exchanged via a Quit Claim deed (prices are exempted on those).  Some counties maintain a monthly or yearly spreadsheet of ag land sales that they may provide to you for free or for a small fee (Clay County, MN has one for $20 for example where Cass County, ND will send you one for free).
  • In North Dakota, you can subscribe to a service called NDRIN (North Dakota recorder’s information network @ http://ndrin.com/). This website aggregates digital copies of ALL recorded documents across the state so you can search by things like Grantor (seller), Grantee (buyer), or even section-township-range. It costs money each month to subscribe but for people who need regular access to sales data it is a great tool. Minnesota has an online tool as well at https://www.mndor.state.mn.us/ecrv_search/app/openCustomSearch to research sales history but I haven’t found it as current or helpful as NDRIN on the North Dakota side.
  • Call your local agent/auctioneer! Most people “in the business” should be up to speed on the local market. If they really have it together they can provide you with a wealth of recent transactions, even the ones they weren’t a part of. Worst case they may be willing to share details on the deals they were involved in, since once they have been recorded they are a matter of public record usually anyways.

If you are curious about recent land prices in the Southern Red River Valley, do not hesitate to contact us as we have a wealth of sales data we would be happy to help share should it be helpful to you!

Until next time,

Andy Westby

SOLD! Recent Transactions, May 2019

By | SOLD! Recent sales

Hello and welcome to another successful “Closing Day” report! The Goldmark Ag Land Sales & Auction team was proud to help a client sell a great parcel of land in Cass County, ND on the edge of South Fargo. This incredible piece of land was just one mile south of Davies High School in Stanley township and offers great potential for future development. We have sold a number of parcels just like this in recent years and are proud to help yet another land owner find success. More info about this great parcel can be found below. Contact us if you would like help in selling or buying land in the Southern Red River Valley as well!

Stanley Township, Cass County ND

Until next time!

Andy Westby

New Listing Alert! Cass County, Raymond Township Land

By | New Listings

The Ag Land Sales & Auction team at Goldmark Commercial Real Estate is proud to present another excellent parcel of farm land with GREAT future development potential. The property is just on the northern doorstep of West Fargo, putting this farm land in the growth path of the city. Owners will benefit from farm land income before the land is eventually developed. This land is fully protected by the proposed FM Diversion is priced to sell!

You can read more about the land here. If you have any questions or interest, please do not hesitate to contact us!

Until next time!

Andy

SOLD! Recent Transactions, March 2019

By | SOLD! Recent sales

Here we go again! Checking in with another successful “Closing Day” to report. The Goldmark Ag Land Sales & Auction team was proud to help a client privately sell a great parcel of land in Cass County, ND. This incredible piece of farm land sits in Gardner township and offered the absolute best, most productive soils in Cass County. More info about this great parcel can be found below. Contact us if you would like help in selling or buying land in the Southern Red River Valley as well!

Gardner Township, Cass County, ND

Until next time!

Andy Westby

SOLD! Recent Transactions, Feb 2019 (part 2)

By | SOLD! Recent sales

Yet another successful “Closing Day” to report! Late last month the Goldmark Ag Land Sales & Auction team was proud to help a client privately sell a great parcel of land in Cass County, ND! This parcel sits just north of West Fargo in Reed township and offered a nice mix of productive soil with long-term development potential. More info about this great parcel can be found below. Contact us if you would like help in selling or buying land in the Southern Red River Valley as well!

Reed Township, Cass County, ND

Until next time!

Andy Westby

SOLD! Recent Transactions, Feb 2019

By | SOLD! Recent sales

Another successful “Closing Day” to report! Earlier this month the Goldmark Ag Land Sales & Auction team was proud to help a client sell a great parcel of land in Cass County, ND! This parcel was listed for sale and we spent a couple months negotiating and closing the deal. More info about this great parcel can be found below. Contact us if you would like help in selling or buying land in the Southern Red River Valley as well!

Stanley Township, Cass County ND

Until next time!

Andy Westby

What is a Private Sale?

By | General, Owning & Selling Farm Land

As you likely know, there are MANY ways in which farm land can be sold. Most people tend to think of auction sales, sealed bid sales, or traditional listings. However, another VERY common method used in selling farm land is what we call the “Private Sale” method. No, this isn’t some Black Friday or Cyber Monday gimmick used by retailers. It is a very legitimate sales strategy we can employ to help Clients achieve their goals.

What is a private sale?

If you take a look at the recent land sales we have handled, you may notice a good number of these parcels show the method of sale was “Private Sale.” In those cases, the Client did not want us to publicly list and advertise their land. Because of that, we did not list it in the local newspaper or hang posters at all the area elevators and cafes. For various and valid reasons, these Clients wanted to maintain a level of privacy and confidentiality through the process of selling their land. The private sale method allows us to do just that.

How does a private sale work?

While this method of sale clearly limits the marketing strategies we can employ (sorry Agweek, no advertising budget for you!), it does not limit our ability to find buyers and achieve great results for our Clients. In these circumstances, first we work with Clients to build a targeted list of potential buyers. Then, we execute a strategy of quietly reaching out to let them know of the confidential opportunity to buy the land. We do this through phone calls, emails, direct mailings, and in-person meetings. As a result, we are usually able to get multiple parties interested in the land through these tactics. In the end, we are able to negotiate a good price without doing so in the public eye.

Perhaps you own land but do not want to tell the neighbor or family you are selling. Or maybe you just do not like your personal business aired on the line for all to see. Whatever your reason, we can help you discreetly and successfully sell your land should a Private Sale be your preferred method. Contact us today to learn more if you would like!

Until next time!

Andy

A 101 for a 1031 Exchanges

By | General

If you have ever bought and sold land or commercial real estate before, you likely have heard of (or maybe even executed) a 1031 exchange. I have found many clients know a thing or two about them, while others are experts having done numerous 1031’s in the past. However, many clients I work with are unfamiliar with the rules or entirely new to the concept. So let’s dive into the topic of 1031’s and arm you with more information on this incredibly powerful tax-saving, wealth-building tool!

PS: Remember, we aren’t lawyers and we aren’t accountants…so ALWAYS consult with them to make sure you follow all the right rules and regulations!

What is a 1031?

In its simplest form, a 1031 Exchange is the process provided for by the IRS to defer capital gains taxes from the sale of one property by using the funds from that sale to buy another “like-kind” property. For example, if you are selling a $1M property and you have capital gains of $500k, rather than paying taxes on that gain (which could easily be 25% or more), you can purchase a replacement property with those funds and defer your capital gain (i.e. no tax is due after your sale). Pretty powerful stuff!

It is called a 1031 Exchange because it is defined in Section 1031 of the IRS tax code. The IRS has had a process for deferring capital gains on property dating all the way back to 1921 actually, and over the years it has taken on different rules and changes to become a VERY common process among real estate owners and investors. There are a number of rules you must follow around the type of replacement property you can buy (“like-kind”) and when you must finish the process in order to qualify. Let’s cover the big ones rules…

Note: If you plan to do a 1031 when selling a property, just tell your Realtor and/or closing company that you intend to do one. They will help guide you from there and make sure that a “Qualified Intermediary” is ready to handle the process and paperwork for you. There are even multiple types of 1031 exchanges and some other things to note…here is a good resource with more details direct from the IRS.

What does “like-kind” mean?

To qualify for a 1031 Exchange, the IRS says you must purchase a “like-kind” property (which becomes your replacement property) to replace the one you sold (which is called the relinquished property). Thankfully the definition of “like-kind” is quite broad. If you own real estate for your business, trade or for investment, you can purchase any type of real estate that meets that criteria. So if you are selling farm land, you can buy more farm land OR you can buy an apartment building, warehouse, or piece of development land. All would be considered investment property, and therefore “like-kind” to what you sold. One important thing to note here is you cannot buy replacement properties outside of the United States to qualify for a 1031 Exchange.

What are the time limits to do a 1031 Exchange?

There are two big dates to know about when doing a 1031 Exchange. The first is the identification period. From the date of closing on your relinquished property, you have 45 days to identify one or more replacement properties. This is a HARD date, meaning if 45 days go by and you have not yet identified replacement properties, you WILL pay the tax on the gain of your relinquished property. There are numerous methods for identifying the replacement property, but the most common is the “rule of 3” where you list up to 3 properties that you may purchase (you don’t have to buy them all, but you can if you have enough funds).

The second important date to know is that from the date you sold your relinquished property, you have 180 days to actually purchase and close on the replacement property (or properties). Here again, if you get to the 181st day and haven’t closed, then you will be paying that tax bill.

How long is the tax deferred?

That depends. If you sell your replacement property and do NOT do another 1031 Exchange, then the capital gains due on your original relinquished property AND your recently sold replacement property will be due. The great thing about 1031’s however is that you can keep doing them over and over! So if you sell your replacement property, you can do another 1031 Exchange to buy a new replacement property. Some clients even plan to use the “defer, defer, die” strategy…which sounds a bit morbid but it essentially means if you keep deferring capital gains through 1031’s until you die, when your property is passed to your heirs they will receive a stepped-up basis in the property (up to a limit) and the tax obligation goes away! Again, always consult your accountant and/or lawyer with matters such as this.

Why do I need a “Qualified Intermediary” to do a 1031 Exchange?

One last important rule to point out is that to do a 1031 Exchange, you MUST use a Qualified Intermediary (“QI” for short). This is a neutral third-party that acts on your behalf to accept and hold the funds from the sale of your relinquished property, and then they use those funds to help you purchase the replacement property. It is critical you never directly receive the funds from the sale of your relinquished property. They must go directly to the QI. They will handle the funds and the paperwork to make sure you follow the rules and properly defer your taxes per the Section 1031 code. Most title/closing companies can serve as a QI, but if you ever need a list of organizations that can help just let us know.

What is a 1033 Exchange?

Normally I wouldn’t bother explaining a 1033, but here in the Southern Red River Valley (specifically Cass County, ND), we have had numerous clients qualify under the rules of the 1033 Exchange.  This is the IRS Code for an “involuntary conversion”…i.e. a forced sale such as the land acquisitions being done for the Fargo-Moorhead Diversion. The 1033 functions in much the same way in that it helps sellers defer capital gains, however the time limits are MUCH longer and more flexible than on the 1031 Exchange rules. For example, under a 1033 Exchange the seller has up to 2 years to find and acquire their replacement property. They can also accept the funds from their sale instead of holding them with a QI as required by a 1031.

Here in the southern Red River Valley we have helped dozens of clients perform 1031 transactions, saving hundreds of thousands of dollars in taxes for them. They are a fantastic tool for accumulating and preserving wealth. If you are thinking about selling Red River Valley farm land and want to explore your 1031 or 1033 Exchange options, please contact us and we would be happy to show you how we have helped other people do the same thing!

Until next time,

Andy

 

 

YTD Sales in the Red River Valley

By | Ag Land Values

It has been some time since we did a check-in on sales activity on the North Dakota side of the southern Red River Valley, and there are some interesting trends to discuss! As we detailed earlier this year, sales started out pretty strong in Cass County yet were more moderate in Richland County. Through 9 full months now, that trend has continued in Cass while Richland has now picked up steam to outpace last year’s numbers at this time. Let’s talk a few details…

In Cass County, we count 31 arms-length deals with an average price of over $4,150/acre county-wide. That compares to a year ago at this time where we had counted 23 deals at an average price of $4,190/acre. It appears the majority of these sales are some of the less productive ground however, which generally is going to be sold at a discount to the best of the best soils. Sales for the higher productivity land have averaged over $4,800/acre YTD for example, with highs in the mid-$5k’s/tillable acre.

Richland County started quite slow but has had a much busier summer and fall, with 19 arms-length deals being recorded by our count from January through September. The average price has been around $3,600/acre which is in line with where it was at this point last year. Here again, we are seeing some of the less productive land trading which will limit the upside on pricing.

These numbers seem to indicate strong, consistent demand with largely neutral prices compared to last year. Keep in mind we saw rising prices last year so it’s great to see things not decrease given the tough time the Ag markets and operators are having this year (this blog post analyzed 2017 in Cass County for example). I expect to see a similar volume of ag land selling this fall as we saw last year…perhaps even a bit more depending on how yields and prices shake out the next couple of months.

If you want more details or to talk about buying or selling farm land in our area, feel free to contact us anytime!

Until next time,

Andy

X