Buying or Selling Farmland? Auction Technology Pioneered by Illinois Company Offers Flexibility and Freedom to Both Land Buyers and Sellers

CHAMPAIGN, Ill., Jan. 14, 2021 /PRNewswire/ -- For almost 40 years, Murray Wise has been a household name to those familiar with farmland auctions. The land auction method and technology he and several collaborators pioneered in the mid-1980s has become well known for helping sellers and buyers get what they want from their auctions, changing the way many auctioneers do business. 

Wise's firm, Murray Wise Associates LLC, based in Champaign, Illinois, is a leader in farmland auctions, working with both individuals and institutions who buy and sell land. The firm has used the multiparcel land auction method and technology to auction more than $762 million, or 437,000 acres, of farmland and farm-related property.

"We over-divide a property and let bidders put it back together in a way that makes sense to them," said Wise. "The winning buyers pay for what they want, and the seller walks away with a satisfactory sale."

Here's how it works: A seller's land put up for auction is divided into multiple tracts. Then, potential buyers are given the opportunity to bid on these individual tracts. Once bids have been placed on the individual tracts, potential buyers are given the opportunity to bid on the tracts in combinations or continue bidding on them individually. During the remainder of the auction, bids can be increased on individual tracts, or on any of the combinations of tracts that bidders create. The auction software calculates the most profitable way to sell the property, whether from bids on individual tracts or combinations of tracts.

"The technology allows bidders greater flexibility, and we've seen a willingness to bid more to get what they want, because they can also ensure they don't buy what they don't need," said Wise.

Jim Woltz is president of Woltz and Associates, an auction and real estate company licensed in 17 states that works primarily with large commercial and private landowners. An early pioneer of the multiparcel auction system, Woltz says that he's seen first-hand the benefits to both buyers and sellers.

"Before this system, auction companies had the responsibility of putting the parcels together, but in doing so, they would wind up excluding a buyer who was willing to spend more on one particular parcel, but who was not ready to spend a larger amount on a combination that included a piece he or she didn't want," said Woltz. "This system allows a buyer to raise the bid on that one tract and break it back out as many times as they would like."

As software technology evolved, Wise's team made upgrades to their system, which allowed for faster processing speeds and a more sophisticated user interface. This created greater transparency among bidders and of the auction process itself.

"When we started, it took several minutes to compute and organize," said Wise. "Now, we can instantly display thousands of ways the property might divide and sell, right in front of bidders."

Kevin Wendt is president of the Wendt Group, a Midwest auction company that focuses primarily on farmland and farm-related auctions. He says that the system sets apart the auction businesses that use it.

"Many auction companies sell land in multiple parcels, but the key is seamless execution," said Wendt. "In football, everyone has a playbook, but some coaches and players can execute those plays better than others. This is a sophisticated system that lets us execute multiparcel land auctions in a professional, clear and concise manner."

In the 1990s, Wise, then president of the Westchester Group, a global auction and investment company, and Rex Schrader, who died in 2019 and was another early innovator in multiparcel auction technology, began to garner attention as well as headlines for the technology's impact on land auctions. An auction format based on a similar theory was recognized with a Nobel Memorial Prize in Economics in October 2020. Developed by two Stanford University scholars, this format allows the simultaneous auction of radio frequencies across multiple geographies. It was first used in 1994 but has since been adopted around the globe to sell commodities, from telecom framework and electricity to oil and gas reserves.

About Murray Wise Associates 
Murray Wise Associates is focused on helping clients achieve ownership and investment objectives, continuing a decades-long tradition of growth, innovation and commitment to excellence in the land marketing and global agricultural arenas. MWA has managed more than $1 billion in farmland assets and sold more than $2 billion agricultural assets at auction, through private treaty and corporate restructuring transactions.

SOURCE Murray Wise Associates