Land Auctions: How Farmland and Land Auctions Work, and How to Run Them Online

A land auction sells farmland, ranches, hunting ground, timber tracts or development lots to the highest bidder on a fixed day, instead of waiting months for an offer. Sellers like it because the market sets the price and the sale closes on a known timeline. Buyers like it because the terms are the same for everyone and the price is visible.

Farmland is where land auctions are most common. Estates settling an inheritance, retiring farmers and absentee owners often sell through an auction company rather than a listing agent, especially in the Midwest and Plains states.

How land auctions work

Most land auctions follow the same shape, whether bidding happens in a sale barn, online, or both at once.

Price per acre, not per farm

Land is usually bid per acre. A bid of $9,200 on an 80-acre tract means $736,000 for the tract. Bidding per acre makes tracts of different sizes easy to compare and keeps increments sensible.

Tracts, buyer’s choice and multi-parcel bidding

Larger properties are often divided into tracts so a neighbour can buy the 40 acres next to them without taking the whole farm. Two formats handle that:

• Buyer’s choice: tracts sell at a price per acre, and the high bidder chooses which tract or tracts to take at that price. Bidding repeats on what’s left until every tract is sold. In many buyer’s choice sales, unsold tracts aren’t recombined afterwards.
• Multi-parcel (combination) bidding: buyers can bid on individual tracts or on any combination, and the seller takes whichever mix of bids produces the most money. Schrader Real Estate & Auction Company says it pioneered this format for farmland in the 1980s.

Multi-parcel bidding is where online software earns its keep. Tracking which combination of bids is currently winning is hard to do by hand and easy to do on screen.

Absolute or with reserve

An absolute auction sells to the highest bidder regardless of price. A reserve auction lets the seller decline if bidding doesn’t reach a minimum, sometimes described as “subject to seller confirmation”. Our guide to absolute vs. reserve auctions explains when each sells for more.

Earnest money, financing and closing

Land auction terms are stricter than a normal land purchase, and they’re set out in the sale terms before bidding opens. Typical terms:

• Earnest money: often 10% of the purchase price, paid on auction day and held by a title company until closing. In some sales it’s non-refundable.
• No financing contingency: bidders are expected to have cash or financing arranged before they bid. If the loan falls through, the deposit is usually at risk.
• Set closing date: the balance is due on a fixed closing date, typically by wire or certified funds.
• Taxes, leases and minerals: each sale states who pays the current year’s taxes, whether a farm lease carries over, and whether mineral or wind rights transfer.

Read the terms for every sale. Two auctions in the same county can handle taxes, possession and minerals differently.

How to find land auctions

Searches for “land auctions near me” are common for good reason: land auctions are local and advertised locally. The main places to look:

• Land auction companies and farm managers in your state, many of which run online bidding alongside live sales.
• Online real estate auction sites that list land with homes and commercial property. Our list of real estate auction sites covers the national ones.
• Farm equipment and agricultural auction sites, where farm real estate sometimes appears next to machinery. See our list of farm auction sites.
• County and government sales for tax-forfeited and surplus land. Our guide to tax deed and sheriff sales explains how they work.

Tips for buying land at auction

Walk the ground before the sale, or pay someone local to. Check the soil survey and productivity ratings if it’s cropland, the FSA records for base acres and any conservation contracts, and the drainage tile maps if the seller has them. Ask about the lease: a farm tenant may have rights into next season.

Set your per-acre maximum before bidding opens and include closing costs. And if it’s a buyer’s choice sale, decide in advance which tracts you’d take as a first pick and which only as a combination.

Running online land auctions

Land auction companies increasingly run sales online, or simulcast a live sale so remote bidders can compete with the room. A land auction platform needs a few things a general auction site doesn’t:

• Multi-parcel bidding that shows bidders which tracts and combinations are currently winning.
• Per-acre bidding with the total price calculated for each tract.
• Maps of each tract with boundaries, plus aerial and soil information.
• A due diligence room for surveys, title commitments, leases and FSA documents, sometimes behind an NDA.
• Bidder registration with proof of funds, and earnest money deposits collected online.
• “Subject to seller confirmation” settings for reserve sales.
• Live simulcast for auctions that also run in a sale barn or community hall.

Our real estate auction software covers that list: multi-parcel bidding, GIS maps, due diligence vaults with NDA, proof of funds, earnest money deposits, KYC checks, “subject to seller confirmation” and live simulcast. It runs on your own server under your brand, installed and set up by our team at no extra cost, for a one-time $899 to $2,999 with no commission on land sold. Per-acre bidding displays or a specific mapping provider can be added as custom work, typically $1,000 to $10,000 one time. For the wider business model, see starting an online real estate auction platform.

Frequently asked questions

How do land auctions work?

Land is offered on a set date, usually bid per acre and often split into tracts. The high bidder signs a purchase agreement, pays earnest money (often 10%) that day and closes on a fixed date, usually without a financing contingency.

What is a buyer’s choice land auction?

Tracts are sold at a price per acre and the high bidder picks which tract or tracts to take. Bidding then repeats on the remaining tracts until all are sold.

What is multi-parcel bidding?

Bidders can bid on single tracts or combinations of tracts, and the seller accepts whichever mix of bids brings the highest total.

Can I get financing for land bought at auction?

Yes, but arrange it before you bid. Most land auctions aren’t contingent on financing, so a failed loan can cost you the deposit.

How do I find land auctions near me?

Check land auction companies and farm managers in your state, national real estate auction sites, agricultural auction sites and county tax sales.