A CROPPING spread in Western Australia’s northern wheatbelt is set to road-test online auction as a means of selling large-scale rural property.
Listed on the Openn Negotiation website, the 3301-hectare Arrowsmith Farm is one of a kind on the platform, which currently has more than 160 mostly residential properties for sale across Australia.
Agents for the sale of Arrowsmith Farm are Chad Smith, Yves Beagley and Craig Walker, all from Nutrien Harcourts.
Mr Smith said online auction was identified as a selling option worth investigating for the vendor, a family operation relocating to a larger holding closer to Geraldton.
“It’s a first for one this big in WA,” Mr Smith said.
He used the platform to sell a lifestyle block in WA last year, and said it has been used by other agencies to sell dairies in Victoria.
Appeal in price transparency
While expressions of interest (EOI) has in recent years been the favoured vehicle for selling large-scale properties, Mr Smith said he could see online auction becoming popular because it offered price discovery in the lead-up to the live auction.
“People can get jack of EOI; you do your due diligence, and you just throw a dart like you’re blindfolded, or you keep bidding until you’re out.
“With this, the price is transparent.”
Registered bidders can lodge bids on the property as soon as it lists on Openn Negotiation, and under the paddle number they receive once they are approved by agent and vendor, prices bid are visible to other registered parties.
At the vendor’s discretion, live bids can also be visible to observers.
Mr Smith said properties can be sold prior to the online auction date if only one bid has been received, and if the vendor wants to exercise that option.
“If there are two bids, you can bring it forward.”
Mr Smith said he thought online auction could well sit alongside venue auctions, listings and EOI as an option for selling farms capable of attracting strong interest.
“If you have a venue auction, bidders can be worried about other people looking at them and watching where they get to.”
“This way, there’s not that stress, and you can still get your bidding flurry so the best possible price is achieved.”
The reserve for online auction can change at any time during the property’s listing in the lead-up to the auction date, but if the reserve is exceeded, the property must be sold at that price.
Good fit for Arrowsmith Farm
Mr Beagley said Arrowsmith Farm’s favourable location with good improvements, water and soil, made it an ideal fit to trial open auction.
“We thought the transparency of the online auction system would appeal to the market for this property.”
“Bringing something new to the market was an exciting prospect for us.”
Timing was also a factor, as the potential buyer could settle prior to the opening of this year’s winter-crop planting window.
Mr Beagley said the online auction can be of benefit to the bidder.
“You might have a top-end figure in mind, and if that’s passed before auction day, then you can move on to other opportunities.
“It relieves the pressure on having all that bidding occur in a few minutes.”
WA farms in demand
Mr Beagley said there was still a strong level of demand in WA for medium-rainfall country like that in which Arrowsmith Farms is located.
The property’s average canola and lupin yields sit at around 1.5-2 tonnes/ha, and 3-4t/ha for wheat and barley.
Arable area is listed at 2331ha, with mostly softer soil types of yellow sandplain, gravelly sand, loam and gravel loam.
While not running sheep at present, Arrowsmith Farm has the infrastructure to accommodate them.
The property has double frontage to the Arrowsmith River, plus bores and a reticulated water system.
Unless sold prior, Arrowsmith Farm will be auctioned on 8 February.
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