CLEARANCE SALES IN THE FARMLAND MARKET

The ultimate loss financial institutions bear for foreclosed loans is determined by their success in liquidating their acquired property por tfolios. This study examines the price received for land sold by priva te individuals and financial institutions from 1977 through 1990. Afte r adjusting for quality differences, financial institutions received o n average 9.2% less than private individuals. Further analysis reveals that commercial banks received a discount of 5.8%, the Farm Credit Sy stem (FCS) a 9.2% discount, and Farmers Home Administration (FmHA) a 1 4.7% discount. For this sample of 13,375 Kansas sales, it is estimated that the sum of the transfers from financial institutions to land buy ers amounted to $9.2 million.