After a relatively slow first quarter – because of the wet weather – the farmland market has sprung to life with many properties on offer and more public auctions taking place. A landowner who makes the big decision to sell can go for a private treaty sale or for a public auction. Which to choose?

There are noticeable local preferences. Auctions are very popular in Leinster counties including Meath, Longford, Westmeath, Kildare and Wexford. In Munster, while they are popular in Limerick, they are less so in counties Cork and Kerry.

In much of Connaught, private treaty is most popular and public auctions less so.

Some operators of private livestock marts are also very active in the farmland market – and are already set up to do auctions. Other auctioneers prefer private treaty, so this may be a consideration if deciding to sell land.

Public auction

There is also the consideration that some properties are suited for public auction. This includes prestigious and large farms for which there are a number of strong potential buyers, located in an area where land rarely changes hands. Split holdings which can be offered in a number of lots can also go well at auction.

Some properties are definitely not suited for public auction. These include plainer and smaller holdings for which there is no queue of buyers, located in an area where plenty of land comes on sale. Private treaty can suit where a buyer wants to offload some outlying land to buy land near to hand.

The best advice will come from an experienced auctioneer who knows the likely buyers in their locality and what they are looking for. No auctioneer wants to run an auction and get no bids.

COVID-19 lockdowns accelerated interest in online auctions. A benefit is that it is easier for potential buyers to bid, including people based elsewhere for work, etc.

Of course, both private treaty and auction aim to get the maximum market price for the landowner. But there are two major differences to keep in mind.

First, a successful auction sale will have the farm sold quickly. A farm must be put on the market four to six weeks ahead of the auction date. This is to give potential buyers time to organise finance and borrowings. This process, incidentally, takes longer now that decision-making has moved from local bank branches to central loan departments.

After a successful auction, a deposit is paid and the buyer has four to six weeks to close the sale and pay the balance. The seller, meanwhile, must be committed to a sale if going for auction.

Private treaty sale

In contrast the typical private treaty sale takes about six months to close and that regularly stretches out to 12 months. Banks take that bit longer to provide finance when there is no deadline. Both buyer and seller have more time to think about the deal. It can be the case that some private treaty sellers are actually only lukewarm about doing a deal.

With a public auction, the sale price is disclosed and widely known. Some people have no concerns about this. It is usually not a problem where a farm is being sold by the family of a deceased landowner, who are no longer living in the area. For example, it’s often not a concern in an executors’ sale.

Nonetheless, it is a concern for many landowners and, if so, they will opt to sell by private treaty.