How to determine the right selling price of my farm property? What is the fair price of my farm? these questions are paramount and the answer will strongly impact the communication and the transmission trajectory. There are different methods to evaluate a farm and we will quickly introduce them. Asset valuation Asset valuation is the sum of the value of each of the elements of your farm taken separately: land, buildings, equipment, livestock, stocks, house, etc. It is advisable to retain the sale value of each of these items. While the operation is relatively simple for movable assets (equipment, livestock, stocks, etc.) for which market values are known, it is more complex for real estate assets:
This patrimonial approach is favoured by sellers but will come up against the purely economic approach of buyers. Economic valuation In this approach, the profitability of the agricultural holding should be considered. Indeed, a company has no value unless it generates a result. Different methods are then applied:
Combined valuation The various values should generally be mixed to determine a combined valuation. Combined valuation In addition to these methods, market values should also be considered. Indeed, the local market can have a significant impact on the selling prices recorded. As well as the characteristics of the farm which are not always taken into account in heritage and economic approaches: location of the plot, neighbourhood, functionality of the buildings, possibility of future development, etc. The selling price Determining the price you want to obtain is an important first step. But the selling price can sometimes be different. It may be necessary to allow for some negotiating room. These remarks are regularly made to us and are justified.
Determining a sales price is therefore a complex affair. We can only advise you to carry out an assessment with an accounting center or land expert and complete this approach by the opinion of a Quatuor Transactions negotiator. . |