Buying a farm: the finance checklist

What is the first thing to sort out before buying a farm?

The first job is to know your borrowing position before you fall in love with a property. A farm purchase involves a large contract, a specialised valuation and often a tight settlement, and rural properties sell at auction or by tender where there is little room for cooling-off or conditions. Knowing what a lender is likely to support, and on what terms, turns a hopeful bid into a disciplined one.

This checklist walks through the finance side from first inspection to settlement. Ownright Custom Finance arranges farm purchase finance Australia-wide, and director Trevor Scott has worked with rural buyers, sellers and lenders for more than four decades. The list below reflects the questions that come up again and again.

Checklist item 1: Do you know what you can borrow and what you must contribute?

Rural lenders assess three things at once: the farm’s valuation, the buyer’s financial position and the business plan. Your deposit might come from cash, equity in an existing home or farm, proceeds of a sale, a family contribution, or a combination.

Work through:

• Total equity available in existing property and the lender’s attitude to using it as additional security.
• Cash reserves after the deposit, because the first season needs working capital.
• Other debts, such as vehicle or machinery loans, that reduce capacity.
• Income from off-farm sources that supports repayments. See our guide on off-farm income and farm lending.

A broker can compare how several lenders view the same position before you make an offer.

Checklist item 2: What will the valuation say, and what if it falls short?

The lender decides how much to advance based on its own valuation, not the contract price. If the valuation comes in under the price, the buyer has to fund the gap. In a competitive market that is a real risk, so ask before bidding how a lender values comparable properties in the district.

Valuers look at land class, soil, rainfall or irrigation, carrying capacity, improvements, access, water entitlements and recent local sales. Our guide to what lenders look for in a farm valuation explains how this works.

Checklist item 3: Has the water been checked?

Water can be the single most valuable part of a farm, and in many parts of Australia it is a separate title from the land. Check:

• Whether water entitlements are included, or must be bought or leased separately.
• The type of entitlement and its reliability in dry years.
• Bores, dams, licences, meters and transfer requirements under state rules.
• The condition of pumps, channels and irrigation infrastructure.

A valuation that does not clearly separate land and water can create a gap between the contract and what the lender will fund. See water and irrigation finance if infrastructure needs funding after purchase.

Checklist item 4: What do the farm’s numbers really look like?

Ask the seller for several years of production and financial records, and build your own budget rather than relying on the agent’s description. Lenders will want:

• Realistic yields or carrying capacity, based on an average year.
• Input costs, labour and overheads for your operating style.
• Commodity price assumptions that are conservative.
• Debt servicing from farm income alone, and then with off-farm support.

A lender who sees a conservative budget is more comfortable than one who sees a perfect year assumed.

Checklist item 5: Which entity will own the farm?

Whether the farm sits in individual names, a company, a trust or a partnership affects tax, asset protection, succession and the loan itself. Lenders typically require guarantees from principals, and a trust purchase brings extra documents. This is a decision for your accountant and solicitor before you sign, not after. Ownright can explain how each structure tends to look from a lender’s side.

Checklist item 6: What are the upfront and ongoing costs?

Cost	Notes
Stamp duty or state equivalent	Varies by state; some states have concessions or exemptions for primary production. Check the state revenue office.
Legal and conveyancing	Rural contracts can be complex, with leases, easements and water issues
Valuation and inspections	The lender’s valuation, plus building, pest or environmental reports where relevant
Lender fees and mortgage costs	Described by each lender; ask for the full list
Insurance	Property, crop, stock and public liability
Working capital	Seeds, fertiliser, fuel, wages and feed until the first income arrives

Adding these to the funding plan avoids a gap on settlement day.

Checklist item 7: Are there government or specialist programs that can help?

For eligible first-time farm buyers and succession arrangements, the Regional Investment Corporation offers the AgriStarter Loan, aimed at helping secure a first farm business. Eligibility and credit criteria apply and it sits alongside, not instead of, commercial finance. The Rural Financial Counselling Service can help with budgets and the broader plan if you qualify.

Checklist item 8: What if timing is tight?

Contract-to-settlement gaps can be short, particularly at auction. If you need to sell an existing property or wait for funds, a short-term arrangement can bridge the gap, provided there is enough equity and a clear exit. See farm bridging loans and farm purchase loans. Speed depends on the lender, the security and how quickly documents arrive, and it is never certain.

Checklist item 9: Have you thought about the conditions in the market?

ABARES publishes regular outlooks on commodity values and conditions. In its September 2026 release it forecast the gross value of agricultural production easing to $99.4 billion in 2026-27, with livestock prices softening and seasonal conditions poor in parts of northern New South Wales and Queensland, but with favourable crops in South Australia, Victoria and southern New South Wales. Regional differences like this affect both the price of farms and a lender’s view of the risk.

How should the offer or auction be approached from a finance point of view?

Rural property is sold in several ways: public auction, private treaty, expressions of interest and tender. Each has a different finance consequence.

• Auction: the contract is typically unconditional on finance, with a deposit due on the day and settlement in a set number of weeks. Finance needs to be in place beforehand, not arranged afterwards.
• Private treaty: there is often room to negotiate a finance clause, a valuation clause or a longer settlement, though competitive interest may reduce that leverage.
• Expressions of interest or tender: the seller may weigh the certainty of the offer as much as the price, and a documented finance indication can make an offer more credible.

A lender’s conditional approval is only as good as its conditions, so read them. Common conditions include satisfactory valuation, satisfactory due diligence, evidence of the deposit and review of the contract. If any condition cannot be met in time, the deposit may be at risk. That is the reason we encourage buyers to speak with us before the sale date, not on the Monday after.

What due diligence should happen before exchange?

Finance is only one part of due diligence, but a few items overlap directly with what a lender will check.

• Title search: easements, covenants, mortgages and caveats registered against the property.
• Council or shire zoning: whether the land use, dwelling entitlements and any planned subdivision are permitted.
• Environmental and biosecurity: native vegetation limits, contamination, weeds and pest status that could affect use or value.
• Leases and sharefarming arrangements: who holds the right to farm what, and for how long.
• Native title or cultural heritage: relevant in some regions and for certain parcels.
• Roads and access: legal access, road conditions in wet weather and distance to markets.
• Infrastructure: condition of sheds, yards, fencing, bores, dams and power.

A solicitor with rural experience can run through the list. Lenders will often ask for the title search, the contract and the valuation, and any surprises in these tend to slow or stop the approval.

How do you plan the first season after settlement?

The first twelve months of ownership are where many purchases get strained. Costs arrive before income, seasonal conditions are unknown and the new owner is still learning the paddocks. A good funding plan allows for it.

1. Estimate input costs from settlement to first sale or harvest, including labour and feed.
2. Add a buffer for a poor season, since an average year is not guaranteed.
3. Consider whether a working capital line, a farm management deposit or a short-term facility should be arranged at settlement rather than later.
4. Check insurance on crops, stock, property and public liability.
5. Plan for machinery needs, whether bought, leased or contracted. Our guide on farm machinery: lease versus loan covers the choice.

Lenders respond well to buyers who show they have thought this through. It signals a farm that will keep meeting its repayments after the excitement of settlement is over.

Which seasons suit buying a farm?

Rural sales cluster around the seasons. Many properties are marketed in spring when paddocks look their best, and some districts see a rush after harvest or a good break. Buying in a rush can mean paying a premium, while buying in a quiet or difficult season can offer better negotiating room, though it also means inspecting a property that is not at its best. Finance timing should follow the same logic: a conditional approval ready before the listing season lets you move when the right farm appears, rather than scrambling after it has gone to auction.

Should you walk away from a farm if the finance does not stack up?

Sometimes the best outcome of a finance check is learning that a particular property is out of reach on the terms offered. A farm that needs a larger deposit than you hold, a valuation well under the asking price or a debt the income cannot carry is a warning, not a puzzle to be forced. Walking away costs far less than being locked into a contract that strains the business for years. A candid view from a broker before you bid is part of what we are for, and it often points to a better-fitting property or a different structure.

What documents will lenders ask for in a purchase?

• Photo ID and evidence of deposit funds.
• Financial statements and tax returns for the buyers and any related entities.
• Statements for existing loans and a list of assets and liabilities.
• The contract of sale and any special conditions.
• A farm business plan or budget.
• Details of the structure that will hold the farm.

Common mistakes in farm purchases

• Bidding before knowing how a lender will value the property.
• Ignoring water, easements, access or leases hidden in the title.
• Underestimating working capital for the first season.
• Choosing the ownership structure after exchange.
• Leaving finance until after the contract is signed.

Where does Ownright fit in?

We help buyers work out the right finance before contract, then arrange the lender and structure that suits. Because our network spans banks, specialist lenders and private funders, we can often compare options a bank branch will never mention, including combinations of a main facility and short-term support. No outcome is guaranteed, and each lender sets its own criteria. If you are looking at a property now, tell us about the farm you are chasing and we will map the finance before you bid. The line we like to use is that if Ownright can’t find the solution, no one can.