Pros and Cons of Selling Land to a Kansas Land Company

Kansas is known as America's breadbasket thanks to its fertile soil, flat landscapes, and abundant sunshine that make it an ideal place for farming. With roughly 90% of the land in Kansas utilized for agriculture, there is a robust market for agricultural land across the state. However, when it comes time to sell your Kansas property, especially vacant plots or farmland, you may be wondering if working with a local land company is the right move. Here we'll explore some of the key pros and cons of selling your land to a Kansas land company versus other options.

Overview of the Kansas Land Market

Kansas has over 52 million acres of land with the average price of farm real estate at around $1,750 per acre as of 2021. Prices can range greatly though based on factors like location, size of the plot, existing structures and improvements, soil quality, access to utilities and more. For example, irrigated cropland will sell for more than non-irrigated land. Prices also fluctuate regularly with commodity prices, drought conditions impacting crop yields, and other macroeconomic factors.

Selling vacant plots or agricultural properties can pose some unique challenges compared to selling developed residential or commercial real estate. There is often specialized knowledge required to accurately appraise agricultural properties. And buyers tend to take a more careful and lengthy process to assess all aspects from drainage to mineral rights before making an offer.

Pros of Selling to a Kansas Land Company

Selling your land to a local Kansas land company like [Land Boss], which specializes in agricultural properties, offers some unique advantages compared to listing your property on the open market.

Cash Offers and Quicker Sales

One of the biggest appeals of selling to a land company is that most deals close within 30-60 days with all cash offers. For those interested in fast liquidation this is extremely beneficial compared to typical land sales that can take upwards of 1-2 years to finalize. Local land companies already have the capital on-hand to buy properties outright.

As-Is Condition

You also avoid costs preparing the land for sale like mowing, clearing brush, tearing down eyesore structures, or paying for additional inspections and reports. Local land companies are experts in recognizing underlying potential value and buy properties in as-is condition.

No Commissions or Closing Costs

Working with a real estate agent to list and sell land on the open market typically incurs a 5-6% commission. And most sales also require the seller to cover some portion of closing costs for paperwork, title transfers, legal fees and more. However, selling directly to a land company means avoiding all commissions and closing costs in most cases leading to maximum profit.

Certainty Despite Volatile Conditions

Commodity crop prices, droughts impacting yields, rising interest rates, and other factors lead to a volatile agricultural land market in Kansas making property values fluctuate wildly year to year. However local land companies can provide more certainty and flexibility when buying your land that protects you from downturns while still getting fair market value.

Cons of Working with a Kansas Land Company

While there are quite a few pros to selling your land to a local Kansas company like Land Boss, there are also some potential downsides to consider depending on your specific situation and priorities.

Below Market Value Offers

To account for their own costs, overhead, and need to profit from reselling the land, most Kansas land companies will offer below true market value when buying properties. Industry averages indicate offers around 65-85% of appraised value depending on different factors related to the property. So, while convenient, you may leave money on the table compared to selling the land yourself at full market price, which admittedly does come with its own challenges and risks.

Loss of Emotional Value

Another con especially for families that have owned their land for decades or even generations is the emotional loss of no longer retaining the property as part of the family lineage. And while land companies can pay cash, many sellers also prefer the pride of knowing they helped another farmer, rancher or local family get their start by selling directly to them instead.

Tax Implications

There may also be increased tax payments when selling to a land company compared to transferring within the family or utilizing provisions like 1031 exchanges to defer capital gains taxes. A qualified tax professional can help analyze the exact impacts based on your profit, income levels and other assets.

Limited Broker Guidance

You also lose out on leaning on a real estate broker's expertise negotiating offers, properly documenting the sale, and navigating the closing process if going direct to a land company. Again, for those focused on convenience this may not be an issue. But first-time sellers may feel more comfortable having an agent represent their interests, make fair value comparisons to other recent sales, and ensure proper handling of paperwork.

Key Factors When Selling Land in Kansas

If you decide to move forward with selling your Kansas property to take advantage of current high demand and prices for agricultural land, keep these other tips in mind regardless of what kind of buyer you work with:

• Understand exact property boundaries - work with surveyors to clearly mark borders and confirm total acreage to avoid any disputes down the line
• Research easements or right-of-ways - identify any existing utility easements for power lines, pipelines etc. that may impact land usage
• Check property tax status - make sure no back taxes are owed and accounts are clear of any liens
• Confirm water rights - especially critical in Kansas, clarity over water rights for irrigation, wells, municipal water access etc. directly affects valuation
• Inspect land for damage - flooding, overgrazing or land mismanagement can negatively impact offers if not addressed
• Verify mineral rights - oil, gas, aggregate mining potential can entice buyers but make sure ownership rights are fully disclosed

Selling Land in Kansas With Land Boss

As one of the leading Kansas land companies focused specifically on agricultural properties, Land Boss offers a streamlined, transparent experience for land sellers. In just 5 years we have already completed over 100 successful land transactions across the state. With an all-cash offer, you can complete the entire sales process under 60 days start to finish without any extra fees. We take on the burden of securing financing, covering closing costs, and handling ongoing ownership responsibilities. Contact us today for an initial consultation!

Final Thoughts

Selling your agricultural land in Kansas can be a major financial and emotional decision full of complexity. Working with a specialized local land company like Land Boss simplifies the process through benefits like: guaranteed all-cash offers, no commissions or closing costs, and avoiding lengthy property listings. However, make sure to carefully analyze tax implications and understand you may receive below full market value to account for the convenience and certainty provided. Every situation is unique, but for many property owners ready to sell undeveloped plots or family farms, partnering with an established Kansas land company can ease the transition burden when the time comes to let go. Just ensure you vet the reputation and expertise of the land company, clarify all details upfront in purchase agreements, and keep documentation organized as your transaction progresses towards closing.

Frequently Asked Questions (FAQs)

How quickly can I expect to receive payment when selling my land to a Kansas land company?

Most Kansas land companies like Land Boss aim to provide all-cash offers and can pay out proceeds from a sale in as little as 30 days after closing. This rapid payment is much faster than traditional land sales.

What costs will I pay when selling my agricultural property to a Kansas land company?

Selling directly to a land company means avoiding real estate commissions, typically 5-6%, as well as closing costs for title transfers, county paperwork and legal review fees. This saves sellers thousands in overhead.

Does a land company’s offer take into account mineral rights or potential oil and gas deposits on my Kansas land?

Yes, the underlying value of assets like mineral rights will be assessed by Kansas land companies and factored into purchase offers made for agricultural properties, especially vacant plots ideal for drilling/extraction.

How do offers from Kansas land companies compare to the overall agricultural property market?

Industry averages indicate most land companies offer 65-85% of appraised market value based on recent comparable sales and current conditions impacting farm real estate.

Can I still claim capital gains tax advantages or 1031 exchange eligibility when selling to a land company?

In most cases selling directly to a land company voids eligibility for tax deferment strategies, so it is important to consult a qualified accountant or tax advisor before finalizing any property transfer to understand total impacts.

‍