How does CLHbid.com compare to the alternatives?

Last updated on July 2, 2024

CLHbid.com vs. Private Sale

Private sale is the most basic selling platform that has been around for centuries. One of its benefits is it that it saves on third party fees. Private Sale usually involves limited marketing by the Seller, either online or in conventional media, or it may be as basic as a deal made with a neighbor at the kitchen table.

This platform often fails to maximize value due to limited exposure of the property and the struggle owners have in negotiating with a neighbor or tenant. Further, a Private Sale can often create a division between neighbors, as some may feel they were not given the same opportunity as the chosen Buyer.

There’s a better, easier way that covers the downfalls of a private sale.

Let’s take a look at some of the advantages to using CLHbid.com.

We take the stress out of selling. You are not forced to choose between friends, neighbors or even relatives. They are all given an equal chance. We use a fully transparent platform where no “special favors” or unfair advantages are possible. All bidding is confidential with only the name of the highest bidder given to the Seller.

Here’s where it gets even better: Since we use “state-of-the-art” target marketing, every auction receives proper exposure. Your land is seen using still and video photography. We incorporate drone technology as well as rotary winged aerial photography so that potential Buyers can fully appreciate the farm or ranch you are selling. We market your property with strong signage, extensive digital media coverage, direct targeted mailers in your community as well as other advertising specific for your property. Our goal is to spread the word about your land and generate maximum exposure. After all, the more people who know about your property, the better your chances of a successful result.

CLHbid.com vs. Public Auction

Proceeding by way of a Public Auction using a National or Multi-National Company incurs higher selling costs than Private Sale, but often the benefit is in exposure and, more importantly, access to the auction format. From the Seller’s point of view, often a reserved bid is not allowed, meaning on auction day the seller is ‘all in’ where everything at the end of the day sells, regardless of price.

One drawback of the public type of auction is there tends to be less confidentiality as often everyone’s laundry is open for viewing on sale day, in either the farm yard or auction ring. Bidders colluding against the seller becomes easier.

Another drawback of using this approach arises when a seller is selling numerous parcels on choice. It is very hard for a large Buyer to acquire the entire ‘en bloc’ farm or ranch to gain economies of scale. Often those Buyers trying to assemble a large block of land refuse to bid at such an auction out of fear of ending up with just one ‘rubber boot’ so to speak (getting only a portion of the parcels and missing some key ones).

Also at these auctions, often the home quarter sells first and any buyers missing out on it, wanting the entire farm or ranch, stop bidding and head for their pickup in the parking lot (unlike the CLHbid.com scenario where you can miss out on the home quarter at the outset but still acquire the entire farm or ranch at the conclusion ‘en bloc’). Although one cannot discredit the marketing potential of these large firms, given advances in the internet, social media, etc., it is arguable that the marketing advantage associated with these large firms has been greatly diminished in recent years.

So how do you get around this type of auction scenario?

CLHbid.com offers so many advantages to both the Seller and the Buyer.

Just like the multi-national guys, we too have a marketing system second to none. Both online and traditional marketing combine to expose your land to thousands of potential buyers.

On certain multi-parcel sales, the ‘en bloc’ process kicks in with another level of bidding that ‘raises the bar’ so to speak. Imagine having high bidders of multiple parcels paying a premium to the seller to acquire all the land they’re allowed to bid for in an ‘en bloc’ parcel.

When it comes to financing, CLHbid.com provides the Seller with advantages over the multi-nationals. The key with us is flexibility. Just like running your farm or ranch you need to be flexible to succeed. Same with us. For example: If you want to sell by auction and carry some of the debt back at a better interest rate than you can get at your bank, we can do that for you.

CLHbid.com vs. Private Tender

The use of the Private Tender platform for selling has been receiving more attention in recent years it seems, whether warranted or not (at CLHbid.com we would argue it is not warranted). This increase in attention, perhaps, is driven by the desire of Sellers to have a set exit date. Private tenders offer potential Buyers a one-time opportunity to bid on land that likely will not come up for sale again in their lifetime. The process is relatively simple — 3 or 4 advertisements are placed in the local newspaper with a date set for the opening of sealed tenders. Marketing costs are kept to a minimum, as often the Buyer is seen as being someone within 50 kilometers of the land (although one can never be certain) and someone within hearing distance in the local coffee shop.

Often Private Tenders are administered by the Seller’s law firm. The process however, is less than transparent as I am sure we have all heard of Tenders being ‘shopped’ to either a preferred party or a lower tenderer in an attempt to ratchet up the price. Given our human nature it is very likely the Buyer submits a Tender that equates to his/her best guess at what they can ‘get the land for’ as opposed to ‘the maximum price they would pay’ for the land. We all know no one ever bids the highest price they are willing to pay on their first bid at an auction. At CLHbid.com we believe the tender process compromises value and integrity in exchange for simplicity. It is not uncommon to hear of tenders submitted that state “We hereby tender X% more than the highest tender” making a mockery out of the entire tender process.

Transparency equals integrity

At CLHbid.com a bidder knows instantly whether or not they’re the current high bidder. We are fully transparent and you see all bid amounts during our auctions. If you’re the high bidder, you know you were only one click above the last bidder. Unlike a live auction, at CLHbid.com bidders don’t know who else is in the game. Even better, the Seller has no access to the identity of the bidders during the process. This prevents the Seller from being able to review tenders and trying to contact the lower ones, manipulating the process. Only the name of the successful bidder is disclosed to the Seller at the close of the auction.

CLHbid.com vs. Professional Realtor

The value of a Realtor tuned into a specific market sector speaks for itself. For a Seller, using a Realtor means listing the property for sale at a set price (the ‘List Price’). By using a List Price the Seller sets an upper limit at the outset which in itself is backwards (as opposed to letting the market set the upper limit).

To complicate matters, most Buyers view the list price as a number in excess of what the Seller actually thinks the land is worth. The list price then becomes a negative cap set by the Seller while signaling to the Buyer that the value of the land is likely some amount below the list price. At a time when the Seller should be in control, the Seller shows their hand first — often a sign of weakness in negotiating.

Determining a ‘list price’ for agricultural land is problematic to say the least. At best, the process can be somewhat of a guess. Get it wrong on the high side and it may sit on the market for years. Get it wrong on the low side and the dairy farm sells during the night within hours of listing (arguably for well below market value).

When dealing with agricultural land, complex variables, not applicable to residential or commercial land, such as ‘assemblage’ and ‘market concentration’ come into play. The phenomenon of ‘assemblage’ is one in which area producers covet land that’s close to their existing farm, sometimes paying well above what many would think a property should be listed for in the first place.

Forty years ago, with most farms being small in size, factors such as economies of scale and market concentration were non-issues. However, the trend to fewer and larger land holdings has changed things. Today, if a producer has forty quarters in an area, adding one quarter across the fence adds little to fixed costs. To further complicate matters, the physical qualities of agricultural land is not nearly as significant a factor in ascertaining value as it once was. Advancements in farming practices have meant the productivity differential between poor land vis à vis higher quality land have been greatly diminished.

One of the drawbacks with setting a list price is our human nature. It is often said 80% of farmers sell on a down market. When the market is going up they tend to think it will continue (until it suddenly reverses). The same mentality is true when land is listed for what is perceived as an inflated number. As the list price is reduced over time many believe the trend down will continue. The result being there is a built-in bias for the listing price to drop just because potential Buyers wait on the sideline in expectation it will drop. Buyers are also very conscious of not wanting to look unwise in the eyes of their neighbours. A parcel of land can sell by auction well over what would be considered the appraised value, and no one questions the logic of the Buyer. Yet back up the clock and list that same property at what it just sold for, and most buyers aren’t willing to make an offer for fear of looking foolish for over paying.

Another drawback of the listing process is that there is no ability to plan ahead, not knowing when a sale may occur, or perhaps worse yet, what to do if only a portion of the farm or ranch offered for sale finds a Buyer. For a Seller, holding on to only a percentage of land is fraught with carrying costs and economies of scale issues. To alleviate some of these issues, often the listing will require the farm or ranch to be sold as one parcel. This is in itself hugely problematic, in that it excludes those Buyers wanting just one parcel and who are willing to pay a premium for it.

CLHbid.com eliminates these challenges

With our online tender platform, a firm sale date is set, CLHbid.com sets a starting bid and the “what-if” question is diminished. The Seller can plan ahead knowing the date of the bidding. None of this “I wonder if I have to buy inputs for spring” or rent out the lake cabin until the land sells. Another advantage is that the Buyer begins the bidding process at a fair value set by the Seller and CLHbid.com.

The Seller is in control of the process. Unlike a listing, auction prices move upwards, not downward from the list price. Plus, the CLHbid.com format caters to all Buyers whether interested in the entire farm or single parcels. At CLHbid.com, we have witnessed first-hand where a large ranch or farm will not sell when listed by a realtor as one package, yet when we break up the parcels into packages we engage multiple Buyers, either not having the financing to buy the entire package or more likely only wanting certain parcels that fit into their existing operation. The likelihood of money being left on the table is greatly diminished with this process.