The Covid-19 crisis has led to some online and private auction sales, but public auction and private treaty are likely to remain the main methods of doing business once the restrictions are lifted
The farmland market, like all other parts of the economy, is hurting as the Covid-19 crisis bites.
With strict guidelines on physical distancing and travel restrictions in force, the options for selling land by auction are limited. But sales by private treaty, private auction and online auctions are continuing.
The online option is a relatively recent and rare vehicle for land sales. It could, however, become more mainstream if restrictions around public gatherings remain in force beyond the summer.
The private auction process is also increasingly used. A hybrid of private treaty and public auction, it involves a call for expressions of interest after which contracts are sent to the interested parties. These will enter a bidding process, generally by phone, that has a firm deadline.
Public auction and private treaty remain the predominant methods used for selling land and around the country, the preference for each method varies.
In Wexford, David Quinn of Quinn Property says the preferred method for land sales remains public auction.
"In this neck of the woods, if land isn't put up for public auction, people will wonder why. Up to 75pc of our land sales are by public auction."
He says auctions score better than other options for transparency, speed, clarity and competition. According to the Wexford auctioneer, the transparency of the process means that from the first bid to the moment the hammer falls, the level of interest in the land and the accepted value of the land are plain for all to see.
The speed of the process makes it fast and efficient for all involved. "Contracts are signed on the day, 10pc of the value of the sale is paid over and there is no turning back. It's done and dusted in a few hours," he said.
In contrast, he regards the private treaty route as slow and cumbersome, with no pressure on the customer to make a decision.
On the clarity of the auction route, he says: "The buyer has to have affairs in order, has to have the money in place because contracts are issued on the day," he said.
Finally, Mr Quinn believes the competitive nature of auctions means that, more often than not, strong prices will be paid.
In contrast, Clonakilty auctioneer John Hodnett prefers the private treaty route, which he says reflects the sensitivities of rural people in relation to land ownership and land use.
"For instance, if a property comes up for sale and has been leased long term by a local farmer, in a public auction, local people may not be prepared to bid against the sitting tenant."
Similarly, it may be believed locally that a neighbouring farmer is the man who will buy a certain parcel of land when it comes for auction. The farmer in question may have no interest, but no one will check it out and on auction day, the sale can fail because nobody is ready when the neighbouring man doesn't even turn up.
"Vendors often don't like the publicity that comes with a public auction. Likewise, purchasers don't like the publicity and the pressure of the public auction," he said.
But Laois auctioneer William Mansfield is a great believer in the public route. "The real bidders come out on the day," he says. "Once people make sure they have the money lined up, know their limit and hold to it, you will have a good auction."
And he says it can be an advantage to have an agent acting, be it a solicitor or an auctioneer, as an agent is more likely to hold firmly to the spending limit.
On the downside, he says that an auction where land fails to attract its guide can establish a poor guide price and lead to protracted private treaty negotiations.
Alison De Vere Hunt of Cashel Marts doesn't have a preference for public auction or private treaty, believing it all depends on the market.
"We had a great year in 2018 when everything we brought to auction sold for top prices, but 2019 was a slow year for auctions, it was just a different market," she says.
"The auction route is very clean, but it can be off-putting for people who like to keep their affairs private," she adds.
David Quinn saw a private auction deliver as strong a price as a public auction when the sale of a parcel of roadside land was switched from the public arena due to Covid-19 guidelines.
The 26ac roadside holding at Churchtown, Clough, near Gorey in Wexford, was guided pre-auction at between €10,000 and €12,000/ac, and on the day, it sold in two lots, making a price believed to be close to €15,000/ac. Described as top-class ground, the holding is on the old N11 Gorey to Camolin road.
The telephone bidders competed for the holding in two lots and as an entire. Lot one consisted of 10.7ac, the second 15.2ac.
The lots won the day, with two local part-time farmers each buying one, outbidding a local farmer chasing the entire.