Guide to Selling your Farm

Guide to Selling your Farm

Selling your farm can be a tricky and sometimes even traumatic experience. A farm is often a seller's biggest asset and, therefore, has a huge influence on their financial future. Agrisell would like to take the stress out of the sale with our guide to the fundamentals of this process.

1. Contact your agent
Contact your local Agrisell agent to discuss the sales process. A number of factors need to be taken into consideration, such as the sales timeframe, the applicability of VAT to the transaction, whether the farm is a going concern, the harvest and movables included or excluded from the sale, and so forth. It is important to appoint a professional, knowledgeable agent, who can give you specialist advice.

2. Determining a price
Let Agrisell assist you with a market related assessment to ascertain the current value of your farm. It is vital to use an agency that understands the agricultural sector, as this is a specialised area that differs significantly from residential valuations. The local market is competitive, so farms need to be priced correctly to facilitate a timeous sale.

3. Listing your property
Your Agrisell agent needs to obtain all the relevant information about the farm to highlight its positive features to prospective buyers. The agent will need to visit the farm in person to take marketing photos and to familiarise himself with the farm, especially in terms of matters relating to water and water rights, soil types and farming infrastructure. Agrisell will use this information to prepare a professional prospectus to present to prospective buyers.

4. Farm viewings
Presentation is easily overlooked on a working farm. The once trusted but now rusty tractor in the yard does not make a good first impression. Your agent will discuss ways of presenting your farm to make it more appealing to buyers. Viewings with potential buyers will be scheduled at reasonable and convenient times.

5. Accepting offers
Upon receiving an offer, you need to evaluate the terms and conditions, including the validity period, when determining your response. Important considerations include the amount offered as well as the payment terms - whether it is a cash offer or any suspensive conditions. Examples of suspensive conditions include finance and/or bond approval, the sale of another property or the requirement of a due diligence. You can either accept the offer as is, or make a counteroffer with your terms and conditions. The contract becomes binding once both parties have agreed to all the terms and conditions and both have signed the agreement or deed of sale. Your Agrisell agent is crucial in negotiating the most favourable terms and conditions for your sale.

6. Signing of transfer documents
The seller has the prerogative to appoint the conveyancer to attend to the transfer. Once all conditions of the contract have been met, the transfer and bond documents, if applicable, are drafted by the conveyancer. Both parties will then sign the respective transfer documents and the buyer will sign the bond registration documents. All relevant transfer costs will be paid by the buyer, on request of the conveyancer, before the transfer date. These costs include VAT or Transfer Duty, whichever is applicable, transfer fees and bond registration costs (if applicable).

7. SARS rates clearance / transfer duty receipt / Municipal rates receipt
The seller is responsible for paying the rates, including advance rates if required. The conveyancer applies for a transfer duty receipt from SARS, a rates clearance certificate and the makes the necessary payments.

8. Compliance certificates
The seller should provide compliance certificates, that might be required for electrical, gas, electric fencing and others that might be applicable. These costs are for the seller's account.

9. Guarantees
The conveyancer obtains guarantees from the buyer or his bank for the purchase price, or the balance of the purchase price if a deposit is being paid. Notice should be given to the seller`s bank that the existing bond on the farm should be cancelled to avoid penalty cancellation fees. The conveyancer requires FICA compliance as protective measure against fraud and money laundering.

10. Lodgement at the Deeds Office
Once all documents are signed, costs paid and certificates obtained, the lodgement documents are prepared by the conveyancer for lodgement at the Deeds Office.

11. Registration and proceeds
The conveyancer lodges the necessary documents at the Deeds Office for registration. After registration ownership passes from the seller to the buyer. The buyer's new bond is registered and the seller's existing bond is cancelled, if applicable. The guarantees are paid to the conveyancer, where after the seller receives the net proceeds less the estate agent's commission. The new owner takes occupation of the newly bought farm.

12. Congratulations, you have now officially sold your farm!
You have now officially sold your farm.

13. Handover procedures
It is important to plan for a smooth handover to the buyer on the date of transfer to ensure that farming operations are not disrupted and that all relevant licences, service/supplier contracts and movable assets are transferred into the new owner's name.

14. Tips when selling your farm
a. If possible, continue farming while your farm is in the market. A farm is more appealing when there are crops or livestock visible and in good condition.
b. Continue general maintenance.
c. Arrange in advance with an agent to take professional marketing photos when crops are at their peak or when the veld or crops are lush and green.
d. A lost Title Deed will delay transfer, so ensure you are in possession, or know where the original Tittle Deeds are secured.
e. Obtain soil and water analysis, if relevant, as this can help buyers make informed decisions.
f. By giving a sole mandate to one agency you encourage buyers to compete on price, whereas multi-mandates often lead to agents dropping prices to close a deal.
g. Choosing the best agency for your specific needs:

• you will benefit from Agrisell, as we are the leading agricultural real estate agency in the Western Northern Cape, with a national footprint of knowledgeable agents,
• you can benefit from our diverse marketing platforms to get maximum exposure,
• benefit from Agrisell's network of more than 50 agents working closely together to match buyers sellers, and
• with Agrisell it is all about customer service.