What’s Right for Your Client?

When assisting a client with a land transaction it is not only important to be able to answer your clients questions but also, possibly more importantly, to be able to ask your client the right questions. Below is a sample scenario of a new client and a few examples of questions a land professional may ask in order to help the client determine the best decision regarding their property.

The scenario
Your client owns land composed of agricultural land, but which also has some woods and water (and you know the highest and best use is continued use of the land as agricultural land and hunting/recreational ground). Your client is reaching a time in their life to make decisions on how best to handle their land for the future and there are many options in today’s world. Some of these could include:

  • selling it for row crop land and the woods/water for hunting/recreation;
  • or, once sold, complete a 1031 exchange to purchase another income-producing property or retirement home;
  • or, keep the farm via leasing it out so that your client has an income in retirement;
  • or, work on a succession plan to keep the land in the family;
  • or, enroll the land in an exclusive ag covenant or conservation easement;
  • or, use the land to build their retirement home or cabin so they can enjoy their retirement and have a wonderful, memory-filled family retreat to pass on to their heirs.

Questions for your client when considering the above options

  • Are you prepared for retirement?
  • Do you need an additional income stream into the future besides other retirement funds?
  • Do you want to continue to farm yourself?
  • Do you have children who want to farm?
  • Do you strongly feel you want your land to continue into perpetuity as ag land or recreational land?
  • Do you already have a retirement home?
  • Do you have funds and time to build and enjoy a family retreat that can be passed on to the next generation?

Starting points
When the future of your land is in question, an appraisal or broker price opinion will provide an opinion of the worth of the land. This factor alone may assist in helping answer some of the above questions for your client. Your client may decide, based on the number of children they have, the number of acres of land and rent or income from that land, there may not be enough income to divide between the number of children and they will elect to sell the land. Or, on the reverse side, they may decide, depending on the number of children and amount of agricultural land, there would be enough income to warrant keeping the land in the family.

Then, are there children who are interested in farming or not? If yes, succession planning can be handled and there are a number of extension offices, attorneys, etc. who can assist with succession planning. If there are no children interested in farming, a professional farm manager could assist the children in managing the farm.

Should the client decide to enroll the land into an ag covenant or conservation easement? An Accredited Land Consultant (broker/REALTOR®) can assist in locating the appropriate agency/entity.

In deciding whether to add a family retreat to their land, the question again is dependent on their financial situation, age, the number of children/grandchildren they have, and so on.

Conclusion
Your client’s land is probably their largest asset and assisting your client to make an educated decision is the goal, even though it may involve tough questions. If you are interested in working with landowners, you can obtain the education, experience, connections, and expertise you need to better assist your client with the tough questions through the REALTORS® Land Institute.

Terri Jensen, ALC, is a Broker/REALTOR®, Auctioneer, and Appraiser in Minnesota and is currently VP of Real Estate/Appraisal at Upper Midwest Mgmt. Terri served as the 2015 RLI National President of the REALTORS® Land Institute, a commercial affiliate of NAR, and is still an active member of the organization, holding their elite Accredited Land Consultant (ALC) Designation.

Ten Lessons for Land Agents from a Decade in the Dirt

This January marks 10 years that I have been in the land brokerage business. Most of the lessons for land agents I have learned came by trial and error, and some have been impressed upon me deeply. That is what happens when you are clueless about what you are getting into, as I was when jumping into this business.

After closing nearly 200 separate land transactions, you see a lot of different scenarios in our line of work. I have had some deals that were whoppers: clients dying, fraud, exhuming a deceased person to prove paternity, a murder on a listing, vandalism to a house, equipment stolen, FBI involved, lawsuits, you name it, I have seen a bunch. That is what makes this business so fun. Below are 10 of the nuggets pertaining to our business that I have plucked from the dirt and carry with me daily.

The land business is about people. About 20% of what we do is about land, and the other 80% is dealing with people. To succeed in the long term as a land broker, you need to be good at the land part, and exceptional at the people part.

The time to do business is when people are ready to do business.

Don’t let your lows be too low or your highs be too high. The land business, as with all sales and service industries, has natural cycles and potentially sharp peaks and deep valleys. Understanding these trends helps you develop an even keel emotionally, and allows you to weather storms and take success with a measure of humility.

“Want to” is the glue that holds deals together. When I am evaluating the likelihood that a deal will come together, I try to measure the motivation. If there is a strong “want to” by both parties, the better the odds that the deal will happen. No “want to” almost always equals “no deal”.

Marketing does not equal selling. No amount of marketing a property to the general public can replace your being able to hand deliver a packet of information directly to the person most likely to buy it. Having those contacts and the strong relationships to make that happen takes time to cultivate. Be intentional about building relationships.

They don’t give out big commission checks as participation trophies.

Always be honest.

You always reap more than you sow. Everything you do in this business has the potential to come back to you in spades; good and bad. Momentum breeds momentum, and inactivity breeds inactivity.

Your reputation gets to the room before you do. How you treat people, how you conduct business, and how hard you work will be talked about in a room before you ever come through the door. One of my favorite principles for this come from ancient King Solomon, “A good name is to be chosen rather than great riches, and favor is better than silver or gold.”-Proverbs 22:1

The team you work with will make or break your business.

The land brokerage business has opened many doors for me that I never anticipated. I am grateful for the opportunities and income it has afforded my family. Joining the REALTORS® Land Institute (RLI) has been one of the best parts of the journey so far. I value the relationships and knowledge that have been a part of being associated with this great group of land professionals. Earning the Accredited Land Consultant (ALC) Designation has been a source of pride, and has made me better at what we do. I would encourage everyone that wants to make a career out of being a land broker to join RLI and work toward the elite ALC Designation. The benefits are well worth the time and money invested in the process.

Many of you reading this article have been at this far longer than I, and have many more insights into what it means to be a true land professional. I look forward to learning more and getting better if the good Lord gives me more time. Thanks to all of you who have invested in and helped us “youngsters” get started in the land brokerage business. We are standing on the shoulders of good men and women that gave us an example and an opportunity.

Jonathan Goode, ALCJonathan Good, ALC, is a licensed land broker and partner with Southeastern Land Group serving Alabama and Mississippi. He co-hosts the weekly radio program and podcast “The Land Show” to share his love of the land with people across the country.

Six Steps to Take After You Purchase a Land Property

Purchasing a land property can be a wise investment. Whether you are looking to build a home on the property, cultivate farmland, or want the land developed for any other purposes, it is important to take the right steps after purchase to ensure your plans for the property can be carried out smoothly. After finalizing the purchase, you will need to carefully survey your land, get all documents in order, and get the property into a good condition to fulfill your plans for it.

1. Study the Topographic Map
Before finalizing the sale, you should obtain a topographic map of the property from the seller and check to be sure you know exactly what you are buying. After the sale is finalized, a good first step is to carefully study the map to get the lay of the land. If you are intending to build a home on the property, identify flat areas that may be good to lay a foundation, as well as areas that will need to be cleared of rocks or debris. If you are planning to raise livestock, you can also plan out where they can graze and how best to keep your animals penned in. This map will also show you the exact boundaries of the property you purchased.

2. Establish Boundaries
If the land you just purchased does not already have fencing or natural barriers running along the edges of the property, you will want to establish boundaries. There are many reasons for doing this. If you are preparing farmland, you will want to keep wild animals out, and if you intend to build a home, boundaries will prevent hunters or other trespassers from walking around the property. Be sure to create your boundaries based on the specifications of the topographic map, which will show you exactly how far the property stretches, and choose the material for your boundary wisely. Wooden fencing is the most visually attractive option, but if you are looking to keep livestock in or predators out, barbed wire is usually best.

3. Have Your Land Evaluated
If you intend to build a home, or other structures such as a barn or garage, you will want to have your land professionally evaluated after purchase. Hire a local builder to survey the land; they can take into account topographic conditions, drainage, sun direction, privacy, and other factors that will help determine where on the property you decide to build. Many companies offer free on-site evaluations for customers intending to build.

4. Pick Up Trash
You would be surprised at how much garbage can be accumulated on large plots of land, particularly if it was unowned or unused before your purchase. Whatever your intentions for the property, you will want to clear your land of trash. This will improve its visual appeal, get it ready for development, and keep livestock from coming in contact with garbage. Some trash will be obvious, but keep in mind that items like glass and rusted metal often rest just below the top layer of soil, which can cause them to blend in with the ground. Check the entire property carefully; occasionally, you may even find something interesting or useful among the waste.

5. Clear the Land
After trash has been removed, you will need to clear the land of obstructing boulders, fallen trees, or other debris that can cause problems for land development. You will likely need to hire professionals to help dig out large rocks or clear massive trees; although if you own a reliable chainsaw, you can often cut trees up yourself and then remove them or use the pieces for firewood. Do not complete this step until you have carefully surveyed your property and chosen where you will be building, as you will likely need to more thoroughly clear the site of the foundation for your home, barn, or other building.

6. Meet the Neighbors
One of the most important steps after purchasing land has nothing to do with building or finances. By introducing yourself to your neighbors, you not only gain potential friends, but if the neighbors have lived on their property for a long time, they may be able to offer advice on clearing and developing the land. In addition, being on good terms with your neighbors can be a lifesaver if you ever have a medical emergency or other crisis situation.

By carefully following these six steps, you will ensure that you are ready to work or live on the land you just purchased. The most important thing is to have a plan for what you will do with the land; while these steps will always need to be taken in some capacity, exactly how you go about it will depend on your intentions for the land. As long as you take stock of the property after purchase and hire professionals when necessary, you will have the land ready for farming, building a home, or other property development in no time

About the Author: Alex Briggs is a contributing writer for Lone Eagle Land Brokerage, Inc. In his spare time, he enjoys hiking, traveling, and spending time with his family.

wind energy

Does Wind Cool a Hot Housing Market, or are Wind Farm Worries Overblown?

For most of us, buying a home is the most financially consequential decision we make. So it makes sense to protect that investment—and find out how major developments in the neighborhood will affect our most valuable asset.

Traditionally, three factors have an outsized impact on home values: strength of the local economy, low taxes, and access to good schools. For rural communities that may go years between major investments, the arrival of a wind farm has large benefits in all three areas.

Over 99 percent of wind power projects are built in rural America and on private land. That means project owners lease small segments of property from large landowners—usually farmers and ranchers. The concrete pads on which they build wind turbines, and the gravel lanes to reach them, typically leave 98 percent of the land undisturbed and available for other uses, such as crops, livestock, hunting, and off-road vehicles.

And the checks start arriving for thousands of dollars per turbine per year.

Those lease payments can really add up: in 2016 alone they totaled $245 million across America, a figure that is steadily rising. That creates a steady source of income for landowners, as well as a new tax base that agricultural communities can count on. It’s especially meaningful during years of drought, poor harvests, or crashes in commodity prices. In fact, many farmers call wind their new drought-proof cash crop.

“It will not change how we operate, it will not change anything about our lives. But it will be an additional income stream that I suspect will be very handy,” said John Dudley, whose family has been ranching in Comanche, Texas, since the 1880’s. “It’ll allow [our] family to have that ranch for a long time.”

Dr. Sarah Mills of the University of Michigan’s Gerald R. Ford School of Public Policy recently examined the concrete benefits of wind income for Michigan farmers. Among her findings:

  • Farmers with turbines on their land have invested twice as much in their operations over the last five years as those without them.
  • Turbine-hosting farmers have purchased more farmland in the last five years than non-hosts.
  • Farmers with turbines are more likely to believe their property will be farmed in the future, and they’re more likely to have a succession plan in place for when they retire.

Crucially, Mills also found that landowners with wind turbines spent significantly more on improving their homes and farms.

Beyond income for farmers and ranchers, wind projects also create jobs in the local community. Wind turbine technicians, one of America’s two fastest growing jobs according to the U.S. Bureau of Labor Statistics, are needed to operate and maintain projects. That offers new career opportunities for young people.

It also helps small businesses thrive, another key component in keeping local economies healthy. For example, Auxilius Heavy Industries, based in Fowler, Indiana, performs services for many of the area’s local wind farms. The company has been able to double in size each of the four years since its founding.

Community members don’t need to work in wind or host turbines on their land to realize its benefits, however. Because they are usually built in rural areas with low tax bases, wind farms often become a county’s largest taxpayer. That boosts local budgets and can help pay to fix roads or build new hospitals, without having to raise taxes. In fact, in some communities, wind revenue renders local taxes totally unnecessary. In Sheldon, New York, for example, the town abolished local taxes for eight years because wind revenue covered all of its budgetary needs.

Wind’s extra revenue also strengthens the third pillar of home valuation: access to a strong school system. New financial resources from wind allow rural school districts to offer services they otherwise would not be able to.

“Oh my gosh, it’s been a game changer for us,” said Jeff Synder, superintendent of the Lincolnview school district in Van Wert, Ohio. “Now we have the windmill money opportunity, we have $400,000 per year for 20 [years]. I didn’t have to pass one levy, ask [our taxpayers] for anything.”

The Lincolnview school district was able to provide every student grade K through 12 with a laptop, and fully fund the repair and replacement program. In New York, the Lowville school district used wind revenue to build a new athletic field and offer advanced placement courses, and it has a swim team called The Turbines. In fact, students from the Lowville district perform so well on standardized tests, compared to areas with similarly low average family income, that researchers from Syracuse University are now studying Lowville to see what makes it so successful. The added programs funded by wind surely play a role in the system’s success.

For those concerned about the impacts of wind farms on property values, the evidence shows there is no cause for concern — long-term, comprehensive studies show wind power doesn’t affect property values. In 2014, Lawrence Berkeley National Laboratory (LBNL) along with University of Connecticut examined 122,000 home sales near 26 wind facilities in densely populated Massachusetts between 1998 and 2012, comparing transactions within a half-mile (1,500 of the sales) to similar transactions up to five miles away. Based on a detailed analysis the researchers were unable to uncover any impacts to nearby home property values.

LBNL has conducted two other major studies on this topic (in 2009 and 2013), and in all cases, found no statistical evidence that operating wind turbines have had any measurable impact on home sales prices. As an author of the 2009 report stated “Neither the view of wind energy facilities nor the distance of the home to those facilities was found to have any consistent, measurable, and significant effect on the selling prices of nearby homes.”

“Wind is a lucrative, sustainable ‘crop’ for our farmers and entire community,” said Susan Munroe, president and CEO of Van Wert County’s Chamber of Commerce. “We hope to continue to harvest wind to not only build economic success for our county but provide sustainable, renewable energy for our state.”

About the Author: Greg Alvarez is the Deputy Director, External Communications, for the American Wind Energy Association.

 

raw land

How Raw Land Investments Can Equal Retirement Income

Raw land investments can serve many lucrative purposes, but have you considered retirement income among them? From rental properties to fix-and-flips, retirement investors have utilized their business expertise to build a comfortable future. Some investors may not realize that property is a permissible retirement asset, but tax-advantaged savings vehicles like IRAs and 401(k)s can own a house, commercial building, or vacant land the same way they can own stocks. These accounts feature tax benefits that can help offset any tax-related concerns that may otherwise deter a potential real estate investor. Pre-developed land has flown under the radar as a viable option for real estate IRAs, but that has changed rapidly over the last several years. 

The beauty of self-directed retirement lies in the hands-on nature of certain business activities. In the context of a vacant land deal, the roles of the broker and of the investor are virtually the same as a transaction with non-retirement funds. Investors must maintain a degree of distance from their IRA holdings, but they’re still able to establish terms and prepare documentation. IRA holders may even pursue non-recourse financing on behalf of their plans to broaden their purchasing options or compensate for a capital deficiency. 

 Although an IRA—as its own investment entity independent of the IRA holder—is able to invest in raw land, the plan holder must follow certain rules to avoid prohibited transactions and possible tax consequences. If your piece of IRA-owned property needs some measure of work before leasing or selling it, the use of personal funds, assets, or efforts would be limited or restricted. For instance, your IRA may own a plot that you’d like to lease as farmland, but there’s a dilapidated barn that has to be removed before you can proceed. Because your retirement plan owns the land, you may not pay for the barn’s demolition and removal with your own money, nor may you fire up a bulldozer to knock it down yourself. Any and all expenses inherent to the development, maintenance, or repair of the property must be covered with IRA funds.  

 In maintaining suitable distance from their retirement assets, investors must also be careful not to conduct IRA business with disqualified persons. Such individuals include anyone in the plan holder’s direct familial lineage or their spouses (daughter, father, son-in-law, etc.) and any individuals with fiduciary responsibilities to the IRA. Non-lineal family members like siblings, existing business partners, or trusted friends are non-disqualified persons and may therefore interact with the IRA more directly. They can provide repair services, serve as property managers, or even take up residence as your tenants. Concerns regarding disqualified persons revolve around the separation of one’s personal funds from his or her retirement dollars. IRAs and other such accounts provide significant benefits, so it’s important that tax-advantaged income never reaches the personal bank accounts of plan holders. 

 That being said, disqualified persons are not 100% prohibited from getting involved with IRA-owned assets. Keeping the money separate may prove especially challenging under these circumstances, but partnering with disqualified persons is certainly possible. Let’s review a few example scenarios that may arise when a self-directed retirement plan and a disqualified person work together on a vacant land investment: 

  • Your IRA and your father own a piece of raw land together, each with a 50% equity share. 
  • If you both decide to sell the property, you would each receive 50% of the sale proceeds in accordance with your ownership percentages. Any other income from the asset would be distributed evenly in the same fashion.   
  • Let’s say you elect to sell your IRA’s portion but your father wants to keep his. This is perfectly allowable as long as the IRA portion isn’t sold to a disqualified person (including you). 
  • If you decide to build a residential or commercial property, all expenses would have to be covered in equal amounts. Both parties could pay no more or less than 50% of any applicable costs. 
  • Just as you wouldn’t be able to retain your IRA’s money on a personal basis, your father could not accept income credited to your IRA.  

Whether you go in alone or pursue an investment with a series of partners, a raw land investment with a self-directed IRA is worth considering. The same approaches that you’ve already mastered—hold and flip, land leasing, construction, etc.—can be applied to assume genuine control over your retirement. Your IRA has the opportunity to yield the same profits that you’ve come to enjoy with your personal pursuits, all while garnering the tax-deferred or tax-free benefits that are only available through retirement investing. A growing marketplace of offerings, expanding technology, and a new breed of IRA providers that specialize in alternative assets like raw land are making it easier than ever for real estate investors to make a virtually seamless transition into this arena. 
About the Author: Bill Humphrey is co-founder and CEO of New Direction IRA, a provider of self-directed retirement plans. With over 20 years of experience as a certified public accountant, Mr. Humphrey has broadened his expertise to include real estate and other alternative retirement holdings. Since 2003, New Direction IRA has provided administrative services for thousands of alternative investments in IRAs, 401(k)s, and health savings accounts.

 

rural house

Five Essential Tips to Maintaining a Rural Home

Living out in the country certainly isn’t for everyone. Some people are too accustomed to the city life, have a need to be near other people or desire a home with no maintenance. However, for the right type of person, there’s nothing better than a rural home.

There are plenty of benefits to living in a rural area. The one you’ll likely notice first is how quiet and peaceful it is without the constant noise that becomes a part of life in the city.

Of course, when you live in a rural home, it presents its own unique set of challenges. You need to handle more tasks yourself, and nature can rise up quickly if you don’t stay on top of it. With the following tips, you’ll be able to better maintain your rural home.

Invest in the Tools for the Job

There’s just no sense in trying to extinguish a fire with a water gun. You don’t want maintaining your land to be any more difficult than it has to be, which is why you should invest in tools that make the job easier. The right tools will depend in part on your home and the amount of land you have. If you’ve acquired quite a bit of land, a push mower or even a small riding mower just isn’t going to do the trick.

A good riding mower is important to keep the grass in check because it can get out of control quickly, especially after some rain. Planning on planting anything? You’ll need a soil tiller. A compact tractor is a good choice for its versatility, as you can use it to mow, dig, move snow and much more.

barn house

Build a Barn

This can be expensive, but look at it like this – you’re already going to invest money in equipment for your home. If you then leave that equipment uncovered, weather will cause all kinds of wear and tear, reducing its lifespan. You may be able to get away with using your garage depending on what equipment you have, but you’re likely going to need a barn at some point.

Besides, barns are cool. They can be a source of pride and a relaxing retreat if you’re the sort who enjoys some manual labor – and if you’re looking into country living, you’d better be. If you plan to have any animals on your land that won’t be living in your home, then you’ll need a barn for them as well anyways.

Establish a Fence Line

Even though you want to stay close to nature, you also need to make sure the land that’s yours is clearly identified. Fence lines can help you to corral animals, section off portions of land for a specific use, or identify property lines. Disputes over where your property ends and a neighbor’s begins can be frustrating. Avoid that headache entirely by establishing a fence line.

After you’ve got your fence up, walk along it occasionally to check for any issues. If posts are rotting, replace them. If they’re loose, reset them so that they fit snugly. Make sure the fence is snug and if it’s an electric fence, test the voltage at different areas.

 

Keep the Area Near Your Home Especially Well Maintained

Some wild animals can be a treat to watch. There’s nothing like spotting a family of deer or a herd of elk while you’re sipping your morning coffee. Other animals – pests, essentially – will see your home as the perfect place for their own safety. Rats and snakes can be dangerous and you definitely don’t want them setting up shop in your home.

One personality trait that many of these animals have in common is an aversion to crossing open fields. That’s precisely why they like the look of your home and surrounding shrubs; they look for places where they can easily hide. If you’re mowing the grass and trimming bushes regularly, it’s far less likely that you’ll have any pest problems. And when in doubt, you can call in your very own enforcer, leading into the next tip.
farm dog
Get a Dog

They’re called man’s best friend for a reason and dogs are perfect company in a rural area. They’ll be thrilled to have so much open space to run around and play. Besides being nice to have around, dogs can also help in many ways around a rural home. Many dogs have herding instincts to keep livestock in the proper area. Breeds that are especially good at this include the Australian cattle dog, the Australian shepherd, the border collie, and the Rottweiler, although there are also many others.

Predators and pests will think twice about coming near your home or your livestock when they smell or hear your dog. And of course, your dog would love the opportunity to alert you whenever someone stops by your home.

Living in a rural area can be an extremely rewarding experience for the right type of person. Despite all the tips you could read, some of the learning simply comes from experience of rolling up your sleeves and getting out there. However, if you invest in the right tools, identify and organize your property, and consider getting a dog, you’ll be on the right track and avoid many potential issues.

About the author: Selene Strong is a contributing writer and media specialist for Bradley Mowers. She regularly produces content for a variety of landscaping and gardening blogs.

young professional

Young Professionals: Earning The Elite ALC Designation

Starting out as a young agent in the land real estate business is usually an intimidating challenge. When I obtained my real estate license five years ago, I started researching ways to gain knowledge and experience in land sales. I quickly found there are plenty of places to learn about the real estate business in general but very few opportunities to learn specifically about the land aspect of real estate. I found the REALTORS® Land Institute (RLI) and learned about their Accredited Land Consultant (ALC) Designation. I soon figured out this was an organization I needed to be a part of and the ALC was a designation I sought to obtain. Having the ALC Designation is an honor for anyone and it can really set you apart from your competition.

“Receiving my ALC Designation took my career as a land broker to another level.”

Here is why…

  • Education: The knowledge I gathered from taking LANDU courses offered through RLI helped me greatly. The course content is second to none and the instructors offer “real life” situations where you can put this knowledge to work in the field. The lessons you learn and the people you meet can help you many times over and many years down the road.
  • Networking: Networking with other RLI members and ALCs has led to several opportunities in my real estate career. I have had numerous referrals and joint listings that I can directly tie back to the connections I made at either State RLI Events or at the National Land Conference. I believe meeting another agent at one of these events and getting to know them better on a personal level makes it much easier to be able to put a deal together with them down the road.
  • Credibility: Being an ALC sets you apart from the rest of the “pack” of real estate agents. It gives you credibility when talking with clients and prospective clients. For instance, where I work in Alabama there are over 26,0000 real estate licensees and brokers and of those real estate licensees only 19 are ALCs. This gives a young agent who holds their ALC a real advantage over most of the real estate agents in our state. In 2015, I got the chance to interview with a prominent family for a listing on a ±380 acre timberland listing in Central Alabama. While in the interview, they asked what made me different from the rest of the agents that they had spoken with. I explained to them that I had recently received my ALC Designation and that the work and education that it took to get there gave me the specialized expertise needed to conduct their transaction. A few days went by and they called me and told me I had the listing. Since then, I sold that tract, along with several other properties for the family, and helped with a couple of consulting and appraisal jobs.

I honestly believe the ALC Designation helped me land what could very well be a “career long” client.”

I owe much of my success in my real estate career to the education, networking, and credibility I received through RLI while obtaining my ALC. I truly believe that ALCs are the “Best of the Best” in the land business and the ALC Designation is something that everyone in the business should work towards.

About the author: Calvin Perryman, ALC, is an Associate Broker and Appraiser with Great Southern Land. Calvin is an active member of RLI, serving on the 2017 Future Leaders Committee. He graduated from Auburn University with a Bachelors Degree in Agricultural Business and Economics in May of 2011. Shortly after graduating from Auburn he obtained his real estate license and has been in the real estate business since 2011.

land real estate

Uncovering Motivations to Buy or Sell Land Real Estate

“I want to sell, but I don’t need the money.” This is a common refrain uttered by people who are contemplating the sale of a piece of real estate. If they do not need the money, then why are they selling? Finding the “Why”, the “What”, the “When”, the “Who” is an essential part of making a real estate deal come together.

Several years ago I helped some seller clients sell about 800 acres of beautiful hardwood and pine timberland that had been in the same family for over 70 years. There were simultaneous offers to purchase the land, one came from a hardwood timber company and the other from a small group of land investors. My clients looked at both offers, and immediately rejected the one that had “timber” in the name of their organization. One of the family members told me, “These other people may cut the timber also, but at least it isn’t in my face.” I believe the timber company would have ultimately paid a higher price than the investors did, but the sellers preferred to deal with individuals instead of the timber company. Their motivation was not only money, but also seeing that the land ended up in good hands.

Here are a few considerations regarding motivation that I have seen influence the decision of buyers and sellers.

  1. Past Experiences- Past experiences, positive or negative, can play a significant role in the outcome of a real estate deal. I have seen sellers refuse to sell to an adjoining land owner because of some long-running family feud. I have seen buyers refuse to make an offer on a listed property because they had a bad experience with the listing agent in the past. Those little details can mean all the difference between getting your deal done or not. 
  1. Time is of the Essence- Timing can be the most crucial part of a real estate transaction. A buyer may need to identify and make an offer on a replacement property because they are doing a 1031 exchange. On day 45 of their identification period, a buyer may be extremely motivated to try to work something out to avoid paying 15% to 20% in capital gains tax. Sellers may be faced with an immediate expense for a home repair or the loss of a job. If you wait a month to make a decision, they may find alternate sources of funding, and no longer be highly motivated to sale. I learned a long time ago, “The time to business is when someone is ready to do business.” The whole world can change for someone in a day, so don’t miss out on an opportunity because you dragged your feet. 
  1. Fear of Missing Out (FOMO)- If you’ve ever seen the look in a buyer’s eye when they missed out on a property they really wanted, you know what I am talking about. They missed one, but By George, they will not let that happen again. In 2015, I watched a professional athlete miss out on buying a property that would have been an ideal tract for him. Instead of paying the asking price and buying a tract he would have enjoyed for decades, he tried to make a lower offer and he missed out on the deal. He was trying to save about $150/acre and did not offer full-price. Another buyer came in one hour after the ball player made his offer, he offered full price, and bought the property. Two years later, the athlete found another property, across the river from the tract I sold, for about $750/acre MORE than the one he had the opportunity to buy before. He overpaid for a property of lesser quality because he did not want to miss out again. 
  1. Feel Goods- Emotions play a big part in many real estate deals. About 2/3 of the properties I sell are related to estate transition, and these farms and land have often been owned by the same family for generations. When it comes time to sell a property, they want to know that it is going to be to someone who will be a good steward of the property that their family has enjoyed for so long. I saw this exact thing happen several years ago when a family hired me to help them sell a property to a board member of The Nature Conservancy. They were convinced that this beautiful hardwood property along a pristine river would be protected in perpetuity if they sold to this type of buyer. Often, older farmers will offer owner financing or will sell at a reduced rate to help a younger farmer get started on their land.

Finding the motivations to buy or sell land real estate from the individuals in your real estate transaction will go a long way to helping you get your deal closed. It is important to ask questions of your customers and clients that will give you the answers you need to find out what really matters to them. Money is not the only motivation for many buyers or sellers, and I have seen a seller be offended by a buyer “showing off” with how much money he has. Your odds of a successful real estate transaction increase when the parties are able to each get what they want, and sometimes it takes more than just money to make the deal come together.

Jonathan Goode, ALCAbout the Author: Jonathan Goode is an Accredited Land Consultant (ALC) with Southeastern Land Groupand is a licensed real estate broker in Alabama and Mississippi. Jonathan is also a co-host of the weekly radio program, The Land Showand loves to serve people buying and selling land.

Kudzu: Friend or Foe?

Kudzu.  The mere mention of the word often invokes a visceral combination of both annoyance and fear.  Personally, I think of the movie ‘The Blob’ which was first released in 1958 starring Steve McQueen and Aneta Corseaut battling a gelatinous, alien life form that slowly engulfed everything in its path.  Similarly, I view kudzu as a scary, green pest slowly creeping along, plaguing the land in which it captures, and becoming the perfect habitat for an evil creature to live patiently waiting for its next unsuspecting victim to wander too close!  Am I being a bit dramatic?  Possibly. However, I’ve yet to meet anything other than a rattlesnake that considers kudzu a friend.

I was recently showing a beautiful tract of land to a client.  Everything was going well until we rounded a corner and there it was – a gigantic kudzu patch that looked like it had been growing for decades.  Rightfully so, the client expressed concern with having this on the property.  He wondered if kudzu could be eradicated and if so, would it be in his best interest to do so from both a financial and land preservation perspective.  These great questions left me eager to learn more about this common yet mysterious annoyance that I had become somewhat complacent towards having grown up in the South. Where did it come from originally?  Did it have a purpose?  If destroyed, does it do more harm than good?  I’d always considered kudzu a foe…but could it be a friend?

Cultures in the Pacific Rim utilize the kudzu root in cooking, teas, and herbal remedies.  The history of kudzu in the United States began in 1876, where it was brought to the World’s Fair in Philadelphia from Japan with the purpose of controlling soil erosion.  Seven years later, the Deep South embraced it as a beautiful ornamental plant that provided excellent shade for porches during the sweltering summer months!  Mesmerized by the immediate benefits of this hearty plant many of our ancestors used it for livestock feed, fertilizer, honey, and even a potential source for bio-fuel.  The government embraced the kudzu “bandwagon” and paid folks to plant it.  By 1946, they estimated over 3 million acres had been planted throughout the country.  They soon realized that this “dream plant” was turning out to be a nightmare rapidly spreading up to a foot a day especially in the Southeastern states due to its drought- thriving indigenous nature.  It climbed up trees, shrubs, and anything in its path… like “The Blob” …blocking sun rays thus diminishing or eliminating all of the photosynthetic productivity of the plush greenery underneath. Any soil erosion it may have prevented was ultimately a moot point considering its path of natural plant destruction.

In 1953, the U.S. Department of Agriculture removed kudzu from their list of suggested cover plants.  It was not until 1997, however, that it made the Federal noxious weed list.  To date, it is believed that kudzu now covers close to 7.5 million acres in Alabama, Mississippi, Georgia, Tennessee, and Florida alone! In addition to being a nuisance, kudzu has a significantly negative economic impact throughout the United States.  It is estimated that power companies spend between $1,500,000 – $1,700,000 annually to repair power line damage caused by kudzu.  The U.S. Forest Service reports have a much more conservative estimate of approximately 227,000 acres of kudzu growing in our forests. Some estimates are that close to $300,000,000 of lost forest productivity occurs annually due to kudzu infestation.

So, what did I tell my client?  Not to automatically dismiss a property because of kudzu, however, be sure to estimate the cost and time involved with controlling it.  County extension offices are typically equipped to assist landowners in determining the best plan of action based on their specific needs and location. Here are some of the most commonly used techniques for controlling kudzu on private land:

  • Mechanically:  mowing or cutting the vine back to slightly above ground level.  Kudzu debris should be completely removed then burned to prevent regrowth.  Another mechanical method involves completely removing the root crown by using a shovel to expose the base and then an axe to sever the root just below the crown.
  • Chemically: applying herbicides once at the beginning of the growing season (May) and then again in late summer or early fall. To completely kill the plant, plan on spraying 40-80 gallons an acre bi annually for a few years.  Tordon and Triclopyr are common herbicides used to eradicate kudzu.
  • Naturally: enlisting the help of animals to graze the kudzu.  Many use a small herd of goats or sheep to help in the battle.

Kudzu. It just goes to show you that something that started way back in 1876 as a clever idea to control soil erosion turned out to be a foe at best, “The Blob” at worst, and most definitely not a friend.

About the Author: Eric Leisy, ALC, is an avid outdoors-man, freelance outdoor writer, REALTOR® & Land Specialist for Great Southern Land Co.

sage grouse

Sage Grouse Management in the News

I read the recent article noting that our new Secretary of the Interior was directing mangers of the public lands to include flexibility in their plans to improve on sage grouse habitats. This, and in other articles I have read, continue to reference “livestock grazing” as one of the reasons for the decline of the sage grouse. In one article, they cite the main reasons for the decline of the sage grouse: “In 2013, the FWS identified 14 threats to the greater sage grouse: nonnative invasive plants, energy development, sagebrush removal, improper grazing, range management structures, wild horses and burros, pinyon-juniper expansion, agricultural conversion, mining, recreation, urbanization, infrastructure and fences.”   Interestingly enough, they always leave out the one reason that probably has the most impact on sage grouse populations and that is “Predators.”

We have more predators of the sage grouse now than ever before and still most will not recognize them as a major factor. One predator in particular whose population has grown by a thousand percent is the raven. University studies since 1948 have shown ravens as major predators of ground nesting birds and a 2003-2005 study “The Effects of Raven Removal on Sage Grouse Nest Success” by Peter S. Coates and David J. Delehanty of Idaho State University confirms the benefits of taking Raven’s out of the picture for improved nest success.

sage grouseWhy not give credit where credit is due? Some believe it is because controlling predators won’t give the public lands managers the control on other resource users that using “critical habitat” does.  There are organizations in the West whose main goals are to interfere with livestock grazing on public lands. In Idaho, they are trying to have dirt tanks (ponds created to store water for livestock) filled in because they are used as breeding grounds by mosquitoes since they are carriers for the West Nile disease which is found to also kill sage grouse.  Any of us who spend a lot of time in the habitat will tell you that these same ponds are frequented by many species of wildlife that benefit from them, just a livestock do.

Many argue that there has been entirely too much time and money spent on improving “habitat” for sage grouse. Historical records indicate there were very few sage grouse in the Great Basin before man settled. The journals of early day settlers such as Peter Skeen Ogdon (1828-1829); Jedediah Smith (1827); John Charles Fremont (1843-45) pay a lot of attention to wildlife and the diets of the native American’s they encountered.  In all these journals, there was one record of sage grouse found as a diet item (RE: testimony of Nevada Assemblyman Ira Hansen 2011). In the meetings in 2012, when the U.S. Fish and Wildlife Service (USFWL) was conducting a hearing on the potential listing of the sage grouse, they noted that they were using as a starting point the mid 1800’s and the areas they identified as sage brush areas at that time.  They were also using a two-million bird prediction based off that number of acres of sage brush.  In other words, the number of Sage Grouse being managed for is based on poor data that is not substantiated by historical records.

Livestock grazing can actually be a benefit to sage grouse and, if you look at the records, you will see that at the same time we had the most livestock on public lands is when we had the largest sage grouse populations. I believe mainly for two reasons:  first, we had an active predator control program at that same time; and second, over grazing of grass species allows shrubs to encroach onto those areas being overgrazed.

Livestock grazing kept the excess fuels down and we had fewer range fires. Managing for grass required leaving excess grass to reseed and I can tell you we have a lot more grass now than when I was a kid in the 1950’s and 60’s. In those days, we didn’t have government fire centers that did the firefighting, we did it ourselves. All the ranchers and other county residents would drop what they were doing when a fire started to put it out. That meant bull dozers being loaded and put on fire lines, it meant filling barrels with water, grabbing soaked seed sacks to slap out flames, and not stopping even at dark.  In fact, we usually got the fire under control at night as the winds calmed down and the moisture content of the air went up. We don’t have forests to deal with so fighting fires at night isn’t much danger.  Unfortunately, even today, the agencies who now control firefighting shut it down at dark and wait until after their 7 am fire meeting is over the next morning to get back to it. Changing this one policy would keep the size of our fires down considerably. To their credit, however, this year they are getting on the fires much sooner that they have in the past.

In summary and in my opinion  a)the sage grouse are not at a low enough population level to justify being listed as threatened or endangered;  b) the Critical Habitat Provision of the Endangered Species Act is being abused to list species whose populations don’t warrant listing; c) Livestock grazing is not a negative to the sage grouse; d)Predators are not even sited as one of the main impacts on the population even though there are numerous studies that show they are a large factor; e)the agency’s policy of not fighting fires in the Great Basin at night has burned literally hundreds of thousands of acres unnecessarily. On the other hand, I just sold a 10,000 acre ranch I had listed for over eight years to be used for sage grouse meditation with federal agencies. Suave on the sore!

About the author: Paul Bottari, ALC, is Owner/Broker for Bottari & Associates Realty Inc. in Wells, NV. Paul serves on the REALTORS® Land Institute 2017 Government Affairs Committee.