STEPS TO SELLING A FARM IN NEW ZEALAND
Selling your farm for a premium sale price is heavily reliant on three things:
1. Choosing a rural property agent who understands any generational attachment and can work with your family and/or Trustees over a long period of time.
2. Ensuring that your estate agent has relevant agricultural qualifications, professional experience and specialist knowledge of your particular type of farm operation, for example dairy, sheep, beef, crops, viticulture or forestry.
3. The preparation you do in readiness for such a high value transaction.
Selling your farm is likely to be one of the biggest transactions you and your family will undertake. It requires a lot of good communication, reliable advice and requires a great deal more information and preparation than a residential property.
Careful and well managed planning and advice by a strategic thinking farm specialist is invaluable to ensure you don't undersell the asset you have worked so very hard to create.
There may be 'opportunities' on the farm that you want to market to buyers. Establishing the market value of your farm is likely front of mind so choosing the most suitable rural real estate agency with all the resources you need is imperative to get this right.
Find out how to find 'vetted' rural property brokers in your location - a genuine free service in NZ.
WHAT YOU NEED TO KNOW ABOUT SELLING RURAL LAND
Making a great first impression will help sell the farm.
What will a prospective buyer see if they come to your property? Is it tidy with organized areas for buildings and equipment, or is it haphazard? Are the farm buildings and yards intact and presentable, or is there damage that needs repair?
Will a coat of paint spruce things up? Are there potholes to be filled? What condition are the fences in? Are there piles of rubbish, fallen trees or abandoned equipment lying around? These are the types of things that immediately affect the first impression a potential buyer will develop when they arrive to look at your farm.
It is crucial to engage a competent rural real estate agent who will market your farm in a way that optimises your sale price. Call 0800 789 532 for a confidential talk.
CREATE A TO DO LIST AND PRIORITISE IT
It is easy to overcapitalise with improvements, so think carefully about what changes or improvements you will make. Developing a to-do list and then attributing time and cost to each item will help you to prioritise improvements.
Sometimes ensuring the farm tracks are in good condition may be all that is required but know that prospective buyers will want to look at the condition of yards, fences and the pastures. They will check out the buildings, and the condition of the farm implements and quickly form an impression on the viability of the property, be it positive or otherwise.
Overview of the farm and location in detail
Rural real estate agents in your area will know about the community and schools, local farming amenities such as sale yards, freezing works and farm industry groups relevant to your type of farm, however they will rely on you to describe the operation scope such as:
- Current stock levels and number of paddocks
- Condition of infrastructure such as water races, fencing, run-off, protected areas, shelter belts, access tracks or roads
- Number and description of farm implements and chattels
- Soil type, condition and feeding systems
- Overview of elevation, views and climate
- Seasonal patterns of weather and impact
- Improvements made on farm including dwellings
- Think about some of the discussions you’ve had with your stock agent.
Farm record-keeping, online apps, automation and any other systems you keep can add to your credibility as a vendor.
Examples of farm documents to start collating for a rural property broker
If you don’t have these at hand, don’t worry, your real estate agent can advise you or obtain them for you – just collate what you can. Examples include:
- Farm accounts for last three years
- Record of Title and total number of hectares
- A description of the land, fencing, land management use and purpose
- Water consents and supply agreements
- Nutrient Management and fertilizer history
- List and description of the farm buildings
- Health and safety plan
- Description of the farm dwellings, workshops, barns, shearing/milking sheds, water tanks, silage pits, etc.
- Resource consents and compliance records
- Property management memorandum (PIM)
Make sure that you can provide information about stock numbers, fertilizer applications, new pasture, supplementary feed, forestry blocks, effluent disposal, etc.
For Dairy Farms you will likely be asked about:
- Contracts for share milkers and dairy company contracts
- Dairy shed consents and inspection reports
- Discharges and effluence management
- Fertiliser management
- Vehicle access
- Soil contamination
- Irrigation systems
- Protected areas
NZ RULES FOR SELLING YOUR FARM
You and your rural property agent are obligated to disclose information
Real estate agents have a fiduciary duty to potential purchasers. This means that they must not mislead, provide false information, nor withhold information that a purchaser should be made aware of. Your role is to help with this.
You should disclose such things as:
i) Any potential hurdles to a sale, such as family trusts or other financial impediments.
ii) Easements, such as shared rights-of-way, shared water bore systems, access for power lines, etc.
iii) Covenants on the farm
iv) Protected areas or sites of cultural or natural significance. For example, you should identify known Wahi Tapu areas such as Urupa (burial sites), as these will likely have restrictions placed upon them. Areas of natural bush, or public access tracks, for example, may be seen as a positive thing by a potential purchaser.
v) Issues regarding boundaries. If there are issues, it will pay to use a professional surveyor to mark the farm out to avoid problems down the track.
vi) Areas that may be contaminated, such as old sheep dips or effluent disposal.
It’s also helpful for potential buyers to know what local services and amenities are nearby, so think about the attributes beyond the farm too.
Overseas Investment Act 2005 - rules for advertising a farm for sale
Anyone selling a farm must ensure it is offered for sale to New Zealanders on the open market for a minimum period before entering into an agreement with an overseas buyer. Exemptions can be made but in limited circumstances.
How we can help you
We have specialised in vetting real estate agents for vendors since 2009 nationwide. We have a national overview of real estate companies and agents and our vetting criteria is second to none.
Make sure you do your due diligence by requesting a list of rural property agents to compare objectively first. Call 0800 789 532 for a confidential talk.
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Article updated April 12, 2023 by Trish Willis | Member of Property Institute of NZ (IPAC)