Thinking of selling a hobby farm?
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Farm Story
You have lived in Washington County for 4o years and always knew that at some point in time the work would get to be too much for you and you would have to move. Where? That’s another question and one that gets answered after we figure what to do with the farm or acreage property that you have lived on for most of your life. Maybe it has even been in your family for generations and no one has thought about selling it for 80 years. But now, none of your kids have any interest in the lifestyle or could they afford the price if they did and at some point you know that you won’t be able to keep the place up. And when that happens it will begin to deteriorate and probably lose the value that you have spent years creating.
This is a common story that I hear from many property owners in the St. Croix Valley and Washington County. They can’t stand the thought of moving from paradise but they know the reality that at some point the story comes to an end and its better to prepare a little early for the inevitable. Maybe even secretly you’ve wandered what life would be like if you didn’t have to do chores every morning in the middle of winter or cut grass for 3 hours every weekend in the summer.
Step 1: Figure out what you have
The first step to selling your hobby farm is to figure out what is the highest and best use of the property and by doing this you figure out the maximum value the property can be sold for. I am not saying anything about deciding how to sell your property at this point but you want to know what your options are and what the highest potential value of your property would be. There are other factors that will influence which path you ultimately decide on such as how much time and effort you want to put into some of this and how much more money one option has than the other. Also, certain options will sell faster than others and that is a factor. Most hobby farms are on over 10 acres of land and the minimum lot size in many of these areas is 5 or 10 acres. So, lets take a property in an area that is zoned for 10 acre lot minimums. if a property is currently on 30 acres, there is a potential for creating three 10 acre lots. In order for new lots to be created there also has to be a minimum amount of road frontage depending on the municipality, lets say 300 feet. So if you have 600 feet of road frontage you most likely would be able to create an extra lot for sale. Now, look at the value of the original homestead on 30 acres and its value and compare that to the value of the orignal homestead on lets say 15 acres and another newly created 15 acre parcel. The topography of the land and any wetlands and driveway access would play a part in how the new parcel should be laid out but this gives you a general idea. If you think that the the value of the house on 15 acres and the value of the newly created 15 acre parcel is higher than selling the homestead on 30 acres, you should contact your city planner and tell them what you are thinking. You are not committing to anything at this point. You are just looking to see if what you are considering is feasible.
The planner will let you know if your idea seems reasonable. They will let you know what you need to do to perform a lot split. There is a formal application process that is online and easily downloadable. But that is all if you decide to actually perform the lot split. Maybe you won’t but at least you want to know what the highest value of your property is. It really isn’t that difficult to split off one parcel of land from a homestead and often that is the best option for an owner. I generally find that additional acreage land is worth about $5k/acre after about 10 acres, where a 10 acre parcel can sell for $10k-$20k/acre by itself.
Step 2: Start to downsize and declutter
This could probably be step 1 once you know that a sale is coming and this can take several years, depending on how much junk you have accumulated over the years. And this is probably the one that scares a lot of people because of the amount of stuff that seems to accumulate in the assortment of out buildings that we can fill up.
The first think I would do is get a dumpster and start to throw things away. There are many dumpster companies out there that will drop off a dumpster, usually a 10 yarder is fine to start with and leave it on your property for as long as you need it and then pick it up and haul it away for $400-$500. You want to make sure not to get one with high sides that make it difficult to throw things up and over the sides but other than that the size isn’t that important. If you fill one up, you can always order another one.
There are also auction companies out there that will come to your house and auction off much of your personal property. I have use Twin Pines Auctions out of Forest Lake and they generally take about 50% of the price of an item. They are very good at valuing odd items like saws and old furniture or older farm equipment. They do an online auction and also allow buyers to come out during certain times and view the property. They get an amazing turn out. Its a good way to get some money out of items that have some value but not a lot. If you do have any larger value items, like a tractor or a snow mobile, it might make sense to sell that separately on Craigslist or through other channels to maximize the value where you don’t have to give 50% away. You can also set aside any items that you don’t want to sell or include in the auction.
So, after the dumpster and the auction you should have made a good dent in the amount of belongings that are left. Barns don’t have to be completely cleaned out by the time you put your property on the market, but they usually do by closing so if you are downsizing anyway, it probably makes sense to have the property show better to buyers. It is possible that you can negotiate the buyer to take a lot of your junk that is left but you will need to pay extra for that.
Step 3: When to sell?
Life happens and circumstances come up that don’t allow us to follow the plan, but if you can, I would try to get a hobby farm on the market in the spring. Generally the buyers of these properties are families with kids still in school and they would like to move after the school year is over and prior to the next year. This means they are looking in April - June and would like to close in June-August. The buyers usually are established enough in their careers and they have enough income to afford the cost of a hobby farm but young enough that they can handle the physical labor that a hobby farm requires. They usually aren’t in the toddler phase of parenting where they can’t keep their heads above water, but are looking to provide their school age children with a lifestyle of farm animals and work that they can enjoy for many years. There are some buyers that have enough money to be able to hire a lot of the work to be done and just enjoy the privacy of country living and for them, and maybe schools aren’t as big a concern, but in general I would pay a lot of attention to trying to sell during the school cycle.
Overall, selling a hobby farm can seem like a daunting proposition running the gamut from, I can’t believe anybody would ever buy this place to I can’t believe I would ever sell this place. But, times are always a changing…and there comes a time when a home needs to go to a new owner. Just plan a little bit ahead, move a little slower than a normal seller and maybe you will even be surprised at how your investment paid off…
