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25May

Tips & Thoughts On How To Sell A Ranch

If this title had you thinking, “Oh good, I’ll just read this, gather a few pointers and be on my way to selling that ranch!” — think again! This topic would be a great Napoleon Hill “brainstorming” session, wouldn’t it!

My fellow Accredited Land Consultants (ALCs) could all write this article, and certainly could elaborate on it based on their own knowledge and procedures. I hope this piece will help those new to selling larger land parcels, including ranches.

Ranches–first of all–what are they?

They come in all sizes and uses including hunting, hay, cattle, fishing and recreation, high fenced exotics, vineyards, and true working ranches. This will not include a discussion on agricultural production, other than hay as that is an entire subject regarding farmland and not part of this article.

You have secured a wonderful ranch listing, discussed the aspects of the ranch with your sellers, and counseled with them regarding the listing and selling process, expectations and potential results.

Have your sellers tell you what they have loved about the ranch, and different parts of the property. How is the lighting different in the summer versus the winter? What have they changed, built, or modified since they purchased? What would they still change if they were to continue as owners? You need to really get the ‘feel’ of this property, and your sellers are your best resource–now you can share that through your marketing to potential buyers and agents.

Gather your data–no shortcuts!

Surveys; legal descriptions; tax information; how property is assessed (agricultural, timber, wildlife, etc.); mineral ownership; production; water rights; wind rights; BLM leases or other agricultural leases; conservation easement documents if applicable; well logs; zoning information; local utilities; inventory list of exclusions and inclusions (talk to your sellers about this, get this early in process–it will still probably change!); income/expense/proforma statements (as many years as possible); off record items.; distance to airports and FBOs; know the length of runways for private jets, all jets are not equal and require different distances.

Have there been any environmental assessments done on the ranch? Many buyers will want, at minimum, a Phase One–we all know most ranches have their own “landfill” somewhere! Also, inquire about government programs, CRP, Grassland Reserve, etc.

As you move forward, gather information on competitive properties and projects as well as sold and closed properties within a determined area where buyers would look for similar properties.  This could include several states! Collect regional and local information and articles–if in a resort area, sell that! If your ranch has development or conservation potential, put together development costs and estimates.

You will want to gather all building descriptions and specs, floor plans, building diagrams, blueprints, etc.

Study your subject–maps, maps, maps!

Know your boundaries. How much is wooded, how much in crop production, hay production, native grasses?  How many water features? What’s the size and depth of ponds and lakes? Check with your local NRCS office as they have great maps. With your mapping programs, create boundary, aerial, topo, FEMA and flood maps. Locate improvements and points of interest on your maps. Now, create your soils maps–NRCS has a great site for this as do most mapping software. This is important to buyers! Figure the carrying capacity of your pastures; knowing how many AUMs in certain climate conditions will be beneficial information for some buyers. Know the current pasture plans in place; when and how often it is fertilized; how about weed control, planting, sprigging, and so on. Can this be improved? How?

Regarding fences, know which are boundary and which are cross fences. If a ranch is high fenced, find out who built it and when it was built.

When it comes to hunting and fishing amenities, get photos–elk, deer, turkey, cat, ducks, geese, fish sell! If a ranch is primarily used for hunting and recreation, there is a host of other categories on which to gather information.  It is also important to know the areas in certain parts of the country, how many tags a land owner gets, licensing, season dates, etc.  If outside hunting is allowed and if a business is part of ranch, then, all financials are important. Same goes for dude ranches, vineyards and all income production which contributes to value of the ranch and is part of what you are selling.

Yes, assembling all of the critical information that makes you as knowledgeable as the seller about your ranch listing is paramount.  Now you can decide your marketing strategies.  Foremost is determining if your ranch listing is a local, regional or global property in its appeal. Most ranch brokers utilize the excellent esoteric publications of our business.  These magazines were our “bibles” and served as our main Multiple Listing Service (MLS) for years! Now, they can be strategically placed on coffee tables for high-end buyer prospects.

Publications and websites catering to hunting, fishing, and equestrian properties should be considered depending on scope of property. Print publications such as the WSJ, for high end properties, have regional market advertising options. Of course, if a property is more local in scope, then, use your best local marketing publications.

If you have a potential conservation property, consider highlighting that aspect and explain state tax credits and federal tax deductions associated with easements in your marketing materials.

Offer a resource of qualified agricultural lenders. Invite them to be part of your “Open Ranch” tour. It puts you miles ahead if you can offer a knowledgeable ag lender to a prospective buyer and agent. Inexperienced large land buyers may think their local lender or private wealth management lender will secure their financing. We have all been down that path!

Nailing the “Open Ranch”

Yes, have an Open Ranch and invite your network of farm and ranch brokers. These brokers have buyers! This was certainly a successful part of marketing and had great support among the members of the Colorado RLI Chapter while I was there. Texas is vast and properties can be combined with other local ranch listings to showcase your unique properties to your broker network.

Certainly we all know that the “basics” are important in selling a ranch and they are far more reaching when selling a home. A well-staged home and barn is important. The property must have all deferred maintenance completed, be the cleanest it’s ever been. Barns and out buildings must be clean and organized. Fences should be fixed with no sagging wire or broken boards; fence lines sprayed for weeds; etc. This list could go on and on!

Good photography, both still and aerial from a drone, is essential on large properties. Also, having the proper vehicle available to show your property is a must!  A low profile car just isn’t going to work!

These are just a few of the aspects to consider when preparing to market and sell a ranch.  Last, but as important as first, when you are counseling your sellers, ask them about their plans for “after”.  Many sellers are not aware of tax deferred 1031 exchanges and how this IRS code can possibly benefit them.  Have your trusted Qualified Intermediary in your resource list to provide to your sellers-this can possibly save them a lot of tax dollars.

Pull on your boots now and good luck!

About the author: Deitra Robertson, ALC, is President and Owner of Deitra Robertson Real Estate, Inc. She is a founding member broker of American Farm & Ranch and founding President of the Texas Land Broker’s Network. A member of the REALTORS® Land Institute since 1996, Deitra has served as President of both the Colorado and Texas RLI Chapters and on the ALC Designation Committee.

About the Author

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