new land agent

New Land Agents: Overcome These Barriers and Get to Work

Overcoming Expertise Barriers

Decide on your specialty – We believe the best foundation for finding your niche is to go with what comes naturally to you and what you have plenty of life experience with. It’s imperative that you have confidence in your ability to market and represent the real estate and the clients you choose to work with.

mentor

Find your mentorFind someone that does what you want to do, really well, and join them. Rural real estate will throw you a new curve on a weekly and, sometimes, even daily basis.  If you can align yourself with a solid team and/or an experienced Broker within your specialty, you’ll remove the majority of the risk factor and frustration for everyone involved just from their experience and willingness to help.  Nothing is more exhausting than having an inexperienced Broker floundering on one side of a land deal that doesn’t know how to troubleshoot, problem solve, and keep everyone moving in a positive direction, causing one side to do most of the work in the best interest of their own clients.

Take Courses – Organizations like RLI provide courses, like those part of their LANDU Education Program, that can give new agents the expertise they need to get started and thrive in the land industry as an agent. Make sure to seek out these opportunities and to continue learning throughout your career.

Overcoming Cost Barriers

Vehicle/Fuel costs – If you choose a niche that you’re already living, chances are you have the appropriate vehicle.  Just clean it up and make it presentable. Again, if you join a team, they may have a company UTV available for showing properties. Fuels costs can be somewhat alleviated by having a plan in place to pre-qualify your buyers as far as their wants and needs and their ability to finance. Don’t waste your time in a truck with someone that doesn’t have the stack to purchase the properties they’re asking to see.

Marketing costs within a team can be shared and the experienced Broker can advise a new agent on what works and what doesn’t saving a lot of unnecessary output. Your team or established Broker will usually have a marketing plan in place with appropriate websites and subscriptions that come with no added cost to their Brokers.

Land real estate allows us to make a living at something we’re made of.  It gives us the ability to spend our work days with people that love the same way of life as we do.  It’s absolutely rewarding and can sometimes be brutally hard. Just be prepared to gather more lifelong friends than you could ever imagine, and be sure you protect and treat every one of them like they’re family.  Submerse yourself in education and always do the right thing and you’ll have an amazing career in land real estate!

Clint Flowers, ALCAbout The Author: Clint Flowers, ALC, is the top producer nationwide at National Land Realty, a member of the REALTORS® Land Institute, their RLI Alabama Chapter, and the Chair of their 2019 Future Leaders Committee. He was the NLR Top Producer Nationwide in 2016, 2017, and 2018. He also won the 2017 APEX National Broker of the Year award for Timberland and was in the 2018 APEX Producers Club.

Lisa JohnsonAbout The Author: Lisa Johnson, ALC, is the Owner/Principal Broker at Horsepower Real Estate. Specializing in Farms, Ranches, and Equestrian Properties in Western Oregon, her and her team of land Brokers are among the top rural agents in the area. Lisa is a member of the RLI Pacific Northwest Chapter, and a 2019 Future Leaders Committee member.

timberland agent

A Day In The Life Of A Timberland Agent

One of the reasons consulting forestry, and now land focused real estate brokerage, has been so appealing to me is that the job is not monotonous. Each day presents new challenges and, while experience helps navigate those challenges, timberland agents are constantly learning and coming across new things. It is hard to describe a typical day because each one is unique. There are certain characteristics that make timberland brokerage a unique specialty.

I worked as consulting forester early in my career before transitioning into land agency. These early experiences prepared me for the more technical aspects of timberland brokerage. Brokers need a strong knowledge to help them allocate value among the component parts of properties. The value in timberland can be thought of as comprising two major components: the underlying or bare land and the timber growing on the land (there may also be improvement value). The agent must be able to quantify the timber portion separately from the bare land in order to form an accurate purchase or selling price.

timberland agent in forest

The first step in this process is accurately describing the timber on the property. This usually starts with a current forest stand map that details the acreages associated with each unique stand. A forest stand is an area of similar species composition and age. We prepare for the initial tract visit with an aerial photograph of the tract, and the first visit involves touring the property to identify the stands and stand boundaries. We then describe those stands in terms of species composition, age, site quality, silvicultural treatments, and any other relevant features. We take this field information back to the office and, using our GIS system, create an accurate and up-to-date stand map with associated acreages.

We then decide if the property requires a full timber inventory (cruise) to accurately value the merchantable timber. Ideally, all merchantable stands of timber will be inventoried prior to a purchase or sell. This gives either the buyer or the seller confidence in the timber value of the asset. If this is not possible, or the party does not want to incur the expense, an experienced forester or broker can provide estimates of the per acre value based on a thorough inspection of the property. Walk through or “ocular” estimates are not as accurate but are significantly lower cost, and may be sufficient depending on the goals of the buyer/seller.

The timber inventory should detail all of the species, forest products, and volumes in each timber category. If the agent is not a forester, they should seek to establish relationships with local consulting foresters in their work area, so that he or she can be engaged to perform timber inventory and appraisal services clients when needed. Pre-merchantable stands, those too young for commercial sale, have value that should be estimated as well. These can be valued if the agent can determine the age, species, and site preparation invested in planted stands or natural stands of timber.

timber forest

Agents specializing in this area of the land business need to have a strong knowledge of timber markets in their work area. They should know the area mills, what products they purchase, how the trees are merchandised (cut up when harvested), and current market pricing of all forest products for the market. In my area of North and South Carolina, I work in five unique timber markets within a 200-mile radius, and the values for the same forest products can vary greatly between each of these markets. If you are going to advise investors on where to purchase land, and help them forecast future timber markets, it is imperative to be networked with consulting foresters, procurement foresters, timber dealers, and mill representatives. These relationships will keep you updated so you can help your clients make good decisions. Armed with a deep understanding of the markets and forest product pricing in the area, a broker can use the timber inventory data to estimate the value of the timber on the property with a reasonable amount of certainty.

Equally important is the ability of the broker to value the underlying land on the timber investment. There are two primary approaches timberland brokers can use to value the land:

  1. Comparable sales. The sales comparison approach is the primary method used for smaller acreages that have less potential for regular (annual) cash flows. The broker should have a strong understanding of recent timberland transactions in their work area with as much detail as possible to estimate the bare land price realized in each sale (the allocation). This allows the agent to make an apples-to-apples comparison of sold tracts to the subject property. Land focused real estate brokers and local rural appraisers can help agents obtain comparable sale information. Professionals are usually willing to share information with other professionals, so be sure you return the favor to those who assist you.
  2. Land Expectation Value (LEV). The Land Expectation Value (LEV) approach involves using discounted cash flow analysis (DCF) to derive the net present value (NPV) of the net income stream produced by a property over time. The LEV approach does require some specific knowledge to complete accurately – primarily a way to project timber growth into the future. Generally, this approach is reserved for larger transactions with many acres and forest stands involved, those likely to generate annual or at least semi-regular cash flows through frequent harvest events. To complete this approach, the analyst will need to understand the client’s investment parameters as well, including likely holding period and required return. Specialized training and knowledge is required to value a property using the LEV approach.

Timberland is a specialty, and this is a very high level overview of the types of task a timberland agent might work on in a given day. The REALTORS Land Institute offers and excellent introductory class, Timberland Real Estate, as part of their LANDU Education Program. I recommend this course as a first step for those who seek expertise in timberland.

Chris Miller, ALCChris Miller, ALC, is a land broker and consulting forester for American Forest Management, Inc. in Charlotte, North Carolina.

prospecting phone calls

Prospecting Scripts For Land Professionals

Not all REALTORS® love cold calling, but most of those that are successful in the business have learned to do so effectively while making it an integral part of their daily prospecting. Dedicating a portion of your day to cold calling will ensure that you stay sharp on market trends and connected with the owners in your region. There is no better way to keep a pulse on landowner perspectives than by talking with landowners on a regular basis.

A few things to remember before picking up the phone:

  • Plan what you want from the call. Is your goal to get a meeting and/or listing, submit an unsolicited offer, confirm contact info, etc.?
  • Empathize, put yourself in their shoes. What type of land are you calling on and what type of owner are they? What is important to them? You will have a higher success rate if you are able to speak to a landowner about activity in the market and/or topics that are relevant to them.
  • Preparation will lead to confidence. Know the market and data – but, don’t be afraid to tell an owner you don’t know something in response to a question. It is better to let them know you will research it and get back to them, than to guess and get it wrong. This will help to establish trust with the owner while simultaneously giving you a reason to follow up.
  • Enthusiasm is contagious. Nobody wants to have a depressing conversation. You should be excited about what you do. But also, try to mirror the pace and tone of the person you are speaking with. This doesn’t mean copying them, but rather speaking to them how they are speaking to you.
  • Personalize your approach. We are better when we are being ourselves. This could mean adjusting any cold calling script to play to your individual strengths.

prospecting phone and note pad

Below is an example cold call prospecting script for land professionals along with a few variations depending on the nature of the conversation.

Introduction

Good evening/afternoon, this is (name) with (company/firm). May I speak with (owner’s name), the owner of the (land asset) located in (name of city/area)?

The reason for my call is:

Approach 1 (We have buyers)

We have been active in the market and are in contact with several motivated buyers looking for property similar to yours. Would you be interested in considering an offer if one of these prospects would like to submit on your property?

(Wait for response)

  • If they are receptive – Great, it would be helpful to meet and discuss your goals in more detail so that we are able to guide the prospects toward a deal structure that best achieves your desired outcome. What is your availability in the next few days?
  • If they are moderately receptive – I understand this is a big decision and you haven’t had the chance to think about it. At a minimum, could we schedule a quick meeting in the next few days to discuss the market and any specific goals that you have regarding your property?
  • If they are not interested – I appreciate the consideration. Would you like to be kept apprised of market data and see similar properties that we are bringing to market? Is there a reasonable time frame for me to follow up and see if things have changed, perhaps 12 months?

Closing – Going forward, is this the best number to reach you? Would you prefer email? Thank you for your time and I look forward to speaking with you again.

Approach 2 (Recent sale)

We recently sold (name or location of property you recently sold) at a price of (price/acre or another applicable unit) which represented a record value in the market (Alternative – Or use another data point – like the number of offers, quickness of the process, etc. – that may be a motivating factor for another owner) and was shown substantial buyer interest.

Have you considered listing your property to take advantage of the current demand and strong values?

(wait for response)

  • If they are receptive – Great, it would be helpful to meet and discuss your goals, as well as tour the property so that we may provide you with our estimate of value. What is your availability in the next few days?
  • If they are moderately receptive – I understand this is a big decision and you haven’t had the chance to think about it. At a minimum, could we schedule a quick meeting in the next few days to discuss the market and any specific goals that you have regarding your property?
  • If they are not interested – I appreciate the consideration. Would you like to be kept apprised of market data and see similar properties that we are bringing to market? Is there a reasonable time frame for me to follow up and see if things have changed, perhaps 12 months?

Closing – Going forward, is this the best number to reach you? Would you prefer email? Thank you for your time and I look forward to speaking with you again.

Approach 3 (General)

We are active in (your region, specific location of the land, specific land type, etc.) and are reaching out to owners to learn about their goals and so we are able to speak generally about each asset in the market. Do you have a few moments to discuss your property or is there a better time to speak?

(wait for response)

  • If they are receptive(Start asking questions.) Given how strong the values are at this time, have you considered selling? Would it be helpful to your estate planning if we were to provide a broker’s price opinion? Have you considered purchasing more land to increase the scale of your operation? How is everything going with your operation? Would you like us to send you information about activity to keep you informed about market trends? (have several potential questions to ask based on the type of property, specific market trends, and type of ownership).
  • If they are moderately receptive(get to the point) I understand you are busy. I wanted to quickly understand if you have considering selling, buying or are simply holding at this time…. Any information we could provide or questions about the market we could answer to assist you with your planning?
  • If they are not interested(ask to follow up with questions via email. If they don’t want to talk and won’t give you their email, MOVE ON.)

Closing  Going forward, is this the best number to reach you? Would you prefer email? Thank you for your time and I look forward to speaking with you again.

Through the practice of cold calling, you will become more comfortable and capable at gauging the conversation and guiding it in the direction you would like it to go. The bottom line is to pick up the phone and remember, an imperfect cold call is far better than no cold call. Happy calling!

Matt DavisAbout the author: Matt Davis is a real estate broker with Cushman & Wakefield. He is based in San Diego, CA, and assists clients with the disposition and acquisition of investment grade agricultural and transitional land assets. He is also founding member of the company’s Land Advisory Group and Agribusiness Solutions Team. Matt is a member of RLI and has served on their Future Leaders Committee.

hiking recreational land

Need To Knows For Buying Recreational Land Right Now

America is a land of wide-open spaces and with all its natural wonders how can you ever decide where to buy? What do you need to take into consideration?

My first consideration is made when considering the recreational opportunities desired. it sounds basic but you’d be surprised how easy it is to forget at the start that you need to have an end in mind. For example, for whitewater rafting you have got to have a river or if trophy whitetails make you heart race, let’s talk about deer habitat. You can’t have hiking trails without land anymore than you will have trophy bass without water.

bass fishing recreational property

Now that you have a idea of what you want to do with your time lets talk about how you get there.

I would recommend you start your search by talking with a Accredited Land Consultant (ALC) – find a land consultant. These are men and women that have spent years in the land business, completed education to enhance their ability to handle land transactions, and are masters of all facets of land sales. Most are outdoors man who live the lifestyle as well, hunting, fishing, etc.

If you decide that you want a property that can be managed for trophy deer your ALC will help you determine if the property you are looking at has the qualities it will need. Perhaps you will need a private wildlife biologist, or maybe you’ll need a heavy equipment operator that can clear travel lanes or create a pond for year-round water.

If you are considering buying a parcel that is in a national forest, have you considered all the recreational opportunities that just outside your door? Most national forests allow hunting and fishing on their lands as well as ATV trails.

If you are a fly fisherman, there are thousands of miles of private land with trout streams running through them. Imagine what a legacy you will leave behind if three or more generations all grew up fishing the same stream at grandpa’s place.

This just a drop in the bucket of all the different exciting opportunities that exist beyond the sidewalks and streetlights. Happy hunting!

About the Author: Tim Hadley, ALC, is an agent with Keller Williams Realty in Gladstone, MO. He joined the REALTORS® Land Institute in 2017 and is currently a member of their Future Leaders Committee.

 

kasey mock

About the Author: Kasey Mock is the Director of KW LAND Division at Keller Williams Realty International. Mock is a member of the REALTORS® Land Institute now serving on their Future Leaders Committee. Make sure to check out his break out session diving further into this topic at the 2018 National Land Conference in Nashville, TN, in March.

blockchain real estate

Blockchains in Land Real Estate

Blockchain in land real estate has not quite yet been accepted by business leaders. Misconceptions and misinformation have created an environment that is delaying adoption. While no technology is a universal perfect fit, we should look for situations that benefit from blockchain’s best features. We should take the time to understand blockchains in order to maximize their potential as an asset that can have positive impacts on business.

Understanding Blockchain

Think of blockchain technology as a ledger that is distributed to many parties. Just like a published book, the information recorded in the ledger is permanent, cannot be altered, and everyone who needs a copy of the ledger has one. If you want to change the information that has been published, you have to ensure changes are made to every copy of the book. In terms of a blockchain, the information is across the internet on various computers. The difficulty only increases as the number of books in circulation increase. Another point to note here is that high circulation publications are difficult to completely erase from history.

Just like any new technology, there is a vocabulary associated with blockchains. Breaking down the word blockchain, block being a log of stored data and chain referring to how the data links together, is a good place to start. Then you start hearing words like cryptocurrency, token, coins, and smart contracts, all of this can be overwhelming. For now though, the most important technical term to remember is the overall synonym for blockchain: distributed ledger. As a business leader, keep reminding yourself that blockchains are tamper-proof records with many copies.

ledger

Each party operates a copy of the blockchain. The blockchain is simply a reserved part of your computer disk. There are two competing ways information is distributed.

Method 1 – This one is called Byzantine Fault. When you record a new transaction, it is first sent out to all computers to make sure they have a copy that can receive the change. If a majority of the computers agree, your local copy is then changed and all others are alerted to the change.

Method 2 – This one is called Mining. When you record a new transaction, thousands of “miners” are notified. Each one tries to come up with mathematically unique representation of the transaction. The first person to come up with the solution earns part of the fee (every transaction requires a token). This is a tremendously wasteful exercise (from an electricity standpoint) and has been heavily criticized. It has resulted in mining farms operated by folks looking to create revenue.

I have been asked, “If blockchains are a record-keeping mechanism, what is wrong with using databases the way we do today?” My answer is that there is nothing wrong with what we do today. The industry has an enormous investment in documents so any suggestion that we should move millions of them into a blockchain is unrealistic. The effort would be a needless waste of time and storage capacity. However, using the book example, a better approach would be to record the location of a book and then to document any changes that have been made since its publication as new events are added.

The difference between a database and a blockchain is like the difference between a driver’s license and a driving record. Information on your driver’s license is subject to change over time. Your weight, address, and appearance (photo) are best stored in a database because they change over time. Now consider your driving record. It is a series of events that are not subject to change. In a database, the information stored there is subject to change. With a blockchain, the information is a permanent track record of events.

Blockchain in Real Estate

Short, time-based events are easy to record with a blockchain. Asset management activities generate excellent examples of events in commercial and residential real estate. Some of the activities that create events are:

  • inventory
  • maintenance activities
  • tax payments
  • improvements

Using blockchains, builders and developers can quickly identify who supplied materials, where they were used, and how they were handled. This is why many supply chain companies (especially food handlers) are adopting blockchains. Blockchains are good at asset management because they create trustworthy records. They create tamper- proof records and no special software, services, or procedures are needed to recover from catastrophic outages. Damaged computers simply reconnect to the network and recreate the lost information from other copies.

The Real Estate Standards Organization (RESO) has created a workgroup that thinks events are applicable beyond real estate brokerage. Events allow real estate professionals to easily exchange information between lending, public records, and insurance companies. The workgroup is not facilitating the exchange of underlying documents, simply a ledger of events (think of a timeline).

Caution Ahead

We should consider the impact of legislative and regulatory efforts to protect privacy on blockchains since they contain tamper-proof, permanent records. If information written to a blockchain can never be erased, personal information like account numbers, passwords, or contact information should not be recorded. The security community calls this kind of information Personally Identifying Information (PII) which has “the right to be forgotten,” according to GDPR. We can expect to see continued legislative and regulatory efforts to protect privacy, so it is important to keep this in mind when implementing blockchain technology in the industry.

Legislative and regulatory actions intended to help consumers can actually end up hurting adoption. A review of actions at the state level published last year showed that blockchain definitions used in legislative language varied significantly between states. We should think about one of the main points in The High Cost of Good Intentions by John F. Cogan; government strives to act in the best interest of the citizens but ends up stopping innovation that is designed to help them. We should be working with local, state, and federal governments to make sure they understand the impacts of their actions.

blockchain

Still Learning

Earlier this year, I attended the 2019 National Land Conference hosted by the REALTORS® Land Institute (RLI) in Albuquerque, NM, to discuss blockchain technology. One of the challenges I noted was implementing blockchain technology at the county level. The decision-making process at over 3,000 counties slows down adoption significantly since millions of records would have to be transposed.

I was pleasantly surprised to find blockchain uses I had not yet considered. Possible uses for blockchains in land real estate include:

When they were first mentioned, I assumed the issues were similar to those faced in the County Recorder’s office. I came to realize the value of RLI.

We have established that blockchains are good at capturing small events. When a property changes owners, what is purchased can be the result of subdividing or combining tracts. Many county recording systems have difficulty combining properties. Blockchains are good at tracking splits and combinations because they are optimized to record event history.

Recording water rights are more complex because both surface water and groundwater need to be considered. However, as the population increases, simple first-in-time and first-in-right historical surface water rights are being challenged by legislation and regulation. These complexities make recording surface water rights with blockchains an ideal solution.

Groundwater record keeping can be more complex than a simple rule of capture situation. Drilling, natural erosion, and abuse of the aquifer are all conditions that can be detected with periodic testing.

Blockchains can be used to reference test results creating a tamper-proof, time- based record. Indigenous land rights are another area of land transfer that can impact development plans. Blockchain technology is ideally suited to create records that survive multiple transfers and do not need to be routinely researched.

I saved mineral rights for last because they are more complex than the aforementioned items. With water, there are two facets to consider: surface and groundwater. The courts still see disputes over the definition of what constitutes a mineral. Royalty agreements routinely include many parties and need to be researched before the transaction is closed. These complexities can be captured using blockchains.

The effort to record mineral rights with blockchains should avoid capturing old records. Instead, new research should be recorded from this point forward. Many of the records are very old and are needed for historical backup. Scanning and digitizing historical documents do not help the process of documenting mineral rights. Recording mineral rights agreements and interpretations in blockchains create tamper-proof records that many parties can reference electronically.

blockchain bitcoin crytocurrency

Cryptocurrency and Smart Contracts

Due to the well documented volatility of cryptocurrency, it is unlikely that we will see wide scale purchasing of property using cryptocurrency. The banks are not ready to lend this form of currency yet and commissions will probably not be paid this way. The number of cryptocurrency property transactions will never exceed today’s volume of 100% cash transactions.

This is a good time to clarify some blockchain jargon. Cryptocurrency denominations are typically called tokens or coins. Tokens must be purchased before use and are not typically interchangeable between applications. Buying and selling tokens is still a complex process, but the community is trying to simplify it. There have also been improvements to token interoperability between blockchains.

Compensating work is a much better application of cryptocurrency. Instead of closing the entire transaction, you can order just those services you would like to be performed electronically. Services can have conditions such as “do not execute during business hours,” or more complex rules, such as, “on the fourth day, transfer $1,000 to this system.” The logic that controls these kinds of services is called a smart contract. Smart contracts are not the same as legal contracts. A traditional legal contract is the outcome of negotiations and often contains attachments, addenda, and amendments related to the transaction. Smart contracts are not unique to a specific transaction. They can operate on a transaction but are not unique to the transaction. Smart contracts only represent conditional logic.

A good example of a smart contract can be found in fund disbursement. The hard part of designing smart contracts is capturing all of the options within a request. Imagine a vending machine that you can use to order transaction services. If the right number and type of tokens are inserted, you can select an in-stock item. The machine releases the item (i.e., the smart contract is executed). If those conditions are not met, the item (if there is one) is not released. The options you want can affect the number of tokens required to select the item.

Final Thoughts and Application

Do not ignore blockchains. Pretending they will not emerge will not stop them. You do not have to understand them at a technical level. Look for blockchains to emerge within business practices that need improvement, especially in the record-keeping area.

The biggest factor that can stop the widespread adoption of blockchains is resistance to change. Business leaders have a fiduciary duty to manage the risk, which includes being wary of unintended consequences. Until the risks are known and at least partially mitigated, policies do not change. Business leaders still need more education about blockchains before they’ll be comfortable with adoption.

Thinking about how blockchain could benefit your real estate business? Practice looking for applications that need both permanent records and require access by many parties. Blockchains will probably enter the industry through applications in ways that most will not even know they are using them. For now, just stay aware and keep an eye out for potential uses in your business.

This article was originally published in the Summer 2019 Terra Firma magazine.

Mark Lesswing NLC19 speakerAbout the author: Mark Lesswing is a Blockchain Entrepreneur who holds a Bachelor of Science degree in Industrial Engineering from Lehigh University. He started programming robots just out of college and, in 1988, began working with object-oriented programming. Mark has worked for large database vendors such as Sybase (as a startup) and Oracle spending a summer in Europe setting up international operations. In 1992, he launched his own consultancy and was involved in corporate turnarounds. Mark joined the National Association of REALTORS® in 2001 and as the Chief Technology Officer was a tenacious advocate for data standards and innovation. He is a frequent speaker at major trade conferences and is listed in the International Who‘s Who of Information Technology and the National Register of Who’s Who in Executives and Professionals.

Broker Tips For Choosing & Recruiting New Land Agents

The Value in a Value Proposition

For a land real estate business to be successful, it must be good at recruiting new land agents, both attracting and retaining them. Your priority should be to have a well-defined value proposition. There are two parts to creating a well-defined value proposition for recruiting new land agents.

This first is the financial value to your team or brokerage with total agent splits, etc.

The second part will be defining the resources you provide to potential recruits, for example, in terms of leads from the company websites, technology, print ads, and whatever else it is that sets your brokerage apart. Next, you should also address the more intangible elements of why they should choose to work with you. For example, “We are the best-known land brokerage in the area” or “We have a culture of sharing that welcomes new agents,” etc.

Once you have a well-defined value proposition, it’s time to go find some talented people.

Prospecting Recruits

First things first, call agents that you have worked with in the past. Then, start calling agents that are working in the area(s) you serve. Next, begin thinking about the people you already know who are in ancillary positions that may be able to become good agents. Lenders, county extension agents, insurance agents, and even wildlife biologists are all a natural fit to join the land industry.

Now comes the time to set appointments with potential recruits. In order to have a consistent interview process, we recommend crafting a standard list of questions. This helps to maintain a consistent schedule for you and the new potential recruit, and it gives you the ability to best compare candidates. Besides if you do not have a consistent list, you will spend more time with some than others, missing information which could lead you to overlook some talented people.

Recruiting Top Candidates

Once you begin the recruiting process there are a few factors to consider.

First and foremost is determining if there is a cultural fit. If they don’t want to work from the office and everyone else does, there is a lot of potential for disagreement over the long-term. A lone wolf is not comfortable in an office full of people who share information and best practices.

Next, you’ll want to examine the potential agent’s drive or motivation. If someone is financially motivated, are they willing to do the activities necessary to earn enough business to create the income they desire? If they are only willing to put in the minimum effort and expect championship results, they are doomed to failure. It is your responsibility to set reasonable expectations upfront.

A person that says they like their brokerage but they feel like there must be something else in this business is an ideal candidate to have these conversations with. Ask about their business, how do they currently generate leads for clients? This will give you the opportunity to showcase all the tools and systems that your team offers. At this point, most people can see the value in partnering with you and are ready to come onboard. If not, set a follow up time and keep the dialogue going.

Immediately after the interview, it’s time to set follow up appointments. Consistent communication is the key – just like it is with potential sellers – remember the best agents typically are already working in the field and the decision to move to a new team is not taken lightly.

 

Tim Hadley, ALCAbout the Author: Tim Hadley, ALC, is an agent with Keller Williams Realty in Gladstone, MO. He joined the REALTORS® Land Institute in 2017 and is currently a member of their Future Leaders Committee.

 

kasey mockAbout the Author: Kasey Mock is the Director of KW LAND Division at Keller Williams Realty International. Mock is a member of the REALTORS® Land Institute, serving on their Future Leaders Committee. Make sure to check out his break out session diving further into this topic at the 2018 National Land Conference in Nashville, TN, in March.

 

 

Five Books All Land Agents Should Read

What’s better than settling down with a really good book? The only problem we can think of is that there are so many great books out there about the land industry that there’s not enough time to read them all. For this article, we’re sorted through hundreds of books to find the five best books that can help land agents learn more about the industry, learn new skills, and study the success of other great land agents.

The Land Flipper: Turning Land Into Dollars by E.B. Farmer

This book was at the top of Accredited Land Consultant Lou Jewell’s list of his favorite books about land. It is an excellent introduction to the land industry and includes step-by-step chapters following the entire land selling process. Some of the chapters include:

  • How to find, negotiate and buy land with very little money out of pocket
  • Dividing land in order to multiply your profit.
  • Techniques for improving the land in order to make it attractive to buyers
  • Cheap, easy ways to market and sell your land

If you know a new agent who just started selling land, this book could be a great “welcome to the industry” or “welcome to the brokerage” gift.

Buying and Investing in Land: A Guide for Land Purchase: How to Buy Land the Smart Way and Learn How to Avoid Land Scams — Even if You Are a Beginner by Dianne Ronnow

This book shares the secrets to success of the wealthiest land sellers and investors. It also exposes the biggest scams in the land industry that even the most experienced land agents have fallen for and teaches you how to avoid being tricked. Whether you’ve just started your career as a land agent or have decades of experience under your belt, this book can be a great addition to your land library.

How I Turned $50 into $5 Million in Country Property – Part Time: And How You Can Do the Same by B.K Haynes, ALC

When a book is written by an Accredited Land Consultant, you know it’s going to be a read worthy of your time! B.K. Haynes, ALC, channels what he’s learned from over fifty years of buying and selling land into a comprehensive look at buying, selling, and investing in rural land.

The Greatest Salesman in the World, by Og Mandino

This book, found in William Burruss, ALCsGoodReads, may not be about buying or selling rural land specifically, but the lessons about salesmanship, hard work, and success are essential for land agents. The book even comes with a suggested reading structure so that you have time between chapters to reflect on and think about the different books.

Buying Rural Land: Tips and How-Tos by Tom Brickman

Looking for a quick read? Tom Brickman’s e-book is a collection of short essays and articles about rural land. Brickman shares what he’s learned from 40 years in land. The book covers includes “to-do” lists for buying and selling land, what to look for when inspecting a property, and tips on developing people skills. The best part of all? It’s free!

We’ve only covered the tip of the iceberg when it comes to great books for land agents. If you know of other books that helped your career in land, be sure to mention them in the comments section. Happy reading!

Want to learn about the land industry in a more hands-on way? Be sure to check out our upcoming LANDU courses to learn about everything from Transitional Land Real Estate to Land Investment Analysis.

About the Author: Laura Barker is a freelance writer based out of California for the REALTORS® Land Institute. She has been with RLI since October 2017.

Land Investment

Growing Green: An Investor’s Guide To Investing In Land Real Estate

We believe investing in land real estate starts with the why. For a broker to serve a client well, they need to understand why a client wants to start investing in land real estate. Often, the why has little to do with financial issues. Why do they want to invest? What is important to an investor? Are there are financial, emotional, and recreational benefits to investing in land for them?

Once we understand the why, then it’s a matter of figuring out the financial entry parameters for the investment – total dollars to be spent, desired geography, the target rate of return, etc. After we learn the big picture parameters, we can help shape expectations. Setting expectations at this stage is critical. In all areas of land investing, so much of the long-term financial success hinges on how well we do in helping a client achieve realistic expectations to purchase an asset. Buy low, sell high isn’t a complicated idea, but it’s very hard to execute (especially on the buy side).

investing in land real estate

It is important for the broker to discuss this and help the client consider the liquidity of the land investment. This discussion will help the client keep in view the ‘long-game’ with the prospective sale of the asset, which may be years down the line. As brokers and trusted advisors to our clients, having that exit strategy/discussion is important. Take notes, and make sure the client knows and remembers how and why they chose to do what they did.

Investing in land real estate is one of the oldest investments in the world. The significant wealth of the world originated with land ownership. Land is also traditionally one of the most conservative investments, with land held by families for generations. Institutional investors have named land as a new asset class.

Changes in technology, world demographics, and government policies have caused land income and land prices to increase. The financial performance of land as an investment has offered financial stability, steady earnings, and diversification from other investments. Land earns well compared to other assets.

Our team of farmland professionals helps individuals, families, and organizations buy, sell, and own income-producing land – primarily for those who do not provide their own labor or machinery. We professionally manage 2,400 farms with 550,000 acres for our clients.

asset return characteristics chart for investing in land real estate

Land is a stable investment. However, there is risk to managing it. An investor manages risk through the selection lease or operating arrangement, farm location, soils, crops, water quality, and quantity. Each of these factors is predicated on geography. Buying land in the corn-belt has a different risk profile than buying land in the West, Delta, or Southeast.

Our team of farmland professionals helps individuals, families, and organizations buy, sell, and own income-producing land – primarily for those who do not provide their own labor or machinery. We professionally manage 2,400 farms with 550,000 acres for our clients.

Land has unique characteristics, compared to other real estate and securities:

  • Land has the potential for perpetual income. If owners are good stewards of the land and maintain and improve the land, the land will produce income
  • Land produces tangible production – something Whether the land grows commodity crops, veggies, livestock, or timber, it is real production.
  • Quality land builds and maintains value through a combination of soil, location, water, climate, logistics, and community. Selecting land for investment allows the investor to hand pick the location and characteristics that help maintain value and position for future growth in income and

Government policies shape and influence the land use, ownership, and potential future uses. Land ownership offers stability with changing government policies. Many of our governments have difficulty managing their economies and lack the fiscal discipline to balance their budgets. There are few investments which offer financial performance based on producing food and tangible commodities that adjust for inflation and economic changes.

The technology revolution is impacting land efficiency, water management, genetics, cultural practices, and food safety – all which impact land values. Land production and income is a result of improving yields, quality of production, production efficiencies, and demand for food, fuel, and fiber for a growing world population. Examples include average corn yields increasing by 400% from the 1930s to today, and productivity improvements with labor content today for an acre of corn or soybean production of less than one hour per acre per year. One American farmer now feeds an average of 116 people.

Land values are directly correlated with the benefits received from the land. As productivity, yields, and prices have increased, so have land values.

Finally, investing in land real estate can provide additional benefits beyond pure financial rewards. In addition to producing something for the world, you have an environmental benefit and the recreational components of hiking, hunting, fishing, and pride of ownership.

How do you participate in land ownership? You do not need to live on the land and operate and manage it yourself. There is professional assistance and an active land rental market. Professional management of your land investment is available. There are thousands of little decisions to make while managing and improving the value of your land, all of which can make a larger difference among land investment results than people would imagine. The relationship between an owner and their manager/operator is special. They share a connection to the land and a relationship to making the world a better place.

This article was originally published in the Summer 2019 Terra Firma magazine.

Randy Hertz, ALCAbout the author: Randy Hertz, ALC, is CEO, broker, and farmland professional with Hertz Farm Management and Hertz Real Estate Services, specializing in land brokerage and management. He is a senior instructor for the REALTORS® Land Institute’s LANDU Education Program who has a bachelor degree from Iowa State and an MBA from Harvard Business School.

farmland

Has Wall Street Abandoned Farm Producers?

The Chairman of the Federal reserve told a group of senators that in spite of the deterioration of the farm economy, banks are in good shape to make ag loans. This is in stark contrast to the top 30 banks showing a nearly four billion dollar decline in agriculture loans held in there collective portfolios. For example, back in 2008, JP Morgan began growing its ag holdings which reached nearly 75% by 2015. Now, with incomes being reduced and Chapter 12 bankruptcy filings on the rise, they seem to be pulling back from the farm economy despite what the Federal Reserve Chairman says.

Many rural banks are now in a hard spot having to turn away longtime customers because they cant accept any more risk on there balance sheets. However, this may well force some of these producers into the Chapter 12 that the lenders fear. This is reflected in FDIC reports that 1.5% of farm loans were 90+ days late or lenders had stopped charging interest because they were nonperforming and not likely to be paid as agreed.

If you have a local bank that is still lending, shake their hand because they are having a hard time as well!

About the Author: Tim Hadley, ALC, is an agent with Keller Williams Realty in Gladstone, MO. He joined the REALTORS® Land Institute in 2017, serving on the 2019 Future Leaders Committee.

 

 

Related Articles

Cannabis

Concerning Cannabis

In 2012, the citizens of Colorado voted decisively to become the first jurisdiction in the world to allow legal adult possession, use, growing, and retail sales of cannabis (marijuana). Colorado has had legal medical marijuana since 2000. The 2012 amendment to the Colorado Constitution (Amendment 64) also set forth retail marijuana sales rules, a taxing structure that provides for revenue to schools, public and youth education regarding cannabis, and the production of industrial hemp.

Colorado became ground zero for cannabis reform and many other states and municipalities have since been looking to Colorado for guidance and example. Colorado citizens, in greater numbers all the time, have supported this groundbreaking change and the legislature, regulators, and industry have been working diligently to construct a business and legal framework within which to operate.

Cannabis reform is also sweeping the nation. Thirty-three states and the District of Columbia currently have passed laws broadly legalizing marijuana in some form, and the 2018 Farm Bill set the framework for legal industrial hemp nationwide. This movement will continue and the Federal government will catch up or be forced to approve and adapt in time as reform states lead the way. The latest Gallup poll on cannabis shows 66% of all Americans across the board support full legalization of this ancient plant. Canada has had legal hemp since the 1990s, and last year they legalized marijuana nationwide.

hemp

Colorado has managed this matter pretty well by writing good laws, monitoring the law’s status and effects, and adjusting regulations as needed to mitigate unanticipated issues for regulation and law enforcement while addressing the needs of the ancient industry. The entire conversation has changed in our state – fewer talk of fears and pot jokes and more talk of business opportunity. In short order, legalization has brought about normalization. For example, in Denver proper, there are more dispensaries than Starbucks.

Retail cannabis sales in Colorado began in 2014. Last year, the adult use (recreational) sales alone topped $1.5 billion, with tax revenues of over $266 million in calendar year 2018. Since 2012, the cannabis industry has created over 2,500 new jobs in the state; jobs that are home grown (pun intended) and won’t be exported overseas.

Colorado studies have shown little impact to law enforcement due to adult use, declining use by youth under 21, increased tourism, and tax revenues in excess of predictions. Appropriately, marijuana is regulated by the Marijuana Enforcement Division of the Colorado Department of Revenue and industrial hemp is regulated by the Colorado Department of Agriculture.

Other states have recognized the futility and costs of cannabis prohibition and are beginning to realize that it is a product that is best regulated, taxed, and properly controlled rather than treated as a criminal matter. Idaho, Kansas, Iowa, Texas, Nebraska, Wisconsin, and South Dakota are the remaining states that have resisted cannabis reform and several of those are either reexamining their status or have citizen-driven initiatives attempting to modernize the regulations in their jurisdictions.

Current legal retail marijuana sales in the US are approximately $6 billion. With recent legalization in California and Michigan, those figures are expected to grow exponentially. The estimated total marijuana demand in the US (including black market) is $50-$55 billion, which is the potential under nationwide legalization. The hemp products industry is hovering around $620 million and is estimated to exceed $5 billion by 2020. Clearly, this is an exciting growth industry with much opportunity. There are numerous impacts of the changing laws to the real estate industry, including land brokers, and it is a billion plus dollar industry that should not be ignored.

“Thirty-three states and the District of Columbia currently have passed laws broadly legalizing marijuana in some form, and the 2018 Farm Bill set the framework for legal industrial hemp nationwide.”

At some point, it is likely that we as real estate brokers in reform states will encounter a cannabis issue in the course of daily business. It could be an inspection issue for a home grow, a request for cannabis appropriate properties, warehouse or retail facilities, leases, hemp production farms and processing, or a myriad of other possibilities. Whether this poses a difficulty or an opportunity, you should be aware of the rules and regulations of the industry.

Hemp and marijuana are the same plant: cannabis sativa. The cannabis plant contains over 60 compounds known as cannabinoids which are unique to the plant. Hemp is a variety of cannabis sativa that contains less than 0.3% of delta-9 THC (tetrahydrocannabinol), the component of cannabis that produces the high from marijuana.

cannabis field

Hemp has been a historically important crop and was widely used in industry prior to being made effectively illegal under the Marihuana Tax Act of 1937 and rendered completely illegal under the Controlled Substances Act of 1971. Hemp has a long list of useful applications: fiber, cloth, paper, oils, plastics, lubricants, cosmetics, food products, bio-diesel and ethanol, insulation, and building materials. It has more than 25,000 documented uses, but will not produce a high.

Industrial hemp was first addressed in the 2014 Farm Bill, which allowed interested states to establish programs for research of propagation, growing, utilization, and marketing of hemp. The first seven states that chose to participate gained a head start in developing a robust hemp industry.

The 2018 Farm Bill, passed last December, made major changes to the law:

  • Defines hemp as any part of the cannabis plant containing 0.3% THC
  • Removes hemp, as defined, from the Controlled Substances Act
  • Provides that raising hemp will not impact participation in Farm Service Agency programs
  • Provides that hemp can be included in Federal Crop Insurance programs
  • Requires each state to propose a state plan or operate under Federal rules
  • Allows states to opt out of hemp production
  • Allows interstate transportation of hemp and hemp products

The passage of the new 2018 Farm Bill has really energized interest in the crop; however, full codification, rule writing, and promulgation and implementation of all elements of the new law will take time. Most Federal rules will not be complete until the 2020 crop year, and some issues like crop insurance could take longer. Some farmers have tried hemp production and have decided to wait until the rules are clear and the markets settle before planting again. Processors are still catching up with growers, leaving some farmers with a harvested crop with nowhere to go. I always advise a producer to secure the sale before planting the seed.

The hemp plant has about a third less moisture and nutrient requirements than corn and far less, if any, pesticides. It is an annual plant that grows rapidly to a height of 8 to 12 feet with large seed heads, a fibrous stalk, and tap root. About 40% of the plant material is returned to the soil, adding organic matter. Hemp is a dicot plant with a deep tap root that improves soil aeration and water permeability, particularly in compaction prone soils. The crop is harvested for seed (used as seed stock and a source of oils and food products), fiber (for cloth, paper pulp, rope, insulation, building materials), and production of CBD (cannabidiol), a non- psychoactive substance used medically to suppress seizures, reduce anxiety, pain relief, and other uses. The cannabis plant is resilient and grows well in several different soil types.

As commodity prices for traditional crops remain at 30-year lows, hemp is poised to be a viable, productive plant for continued agricultural production and has raised major interest from all sectors of the agriculture industry. Every hemp meeting for farmers that I have attended has been a standing room only crowd. Approximately 78,000 acres of hemp were grown in the US in 2018. Of that, 70% was grown for production of CBD; 10% for grain; 10% for fiber; and 10% for other uses or crop loss. Some states have opted out of hemp production so far, including Kansas, Nebraska, and Idaho. Over exuberant and uninformed law enforcement has caused several instances of hemp transporters being arrested and detained on marijuana charges. These arrests are examples of some of the rough spots that may occur during the transition to a legal cannabis economy.

I have developed a four-hour course entitled Cannabis Country that goes deeply into the topics addressed here plus an in-depth history of cannabis prohibition, the multitude of uses of the plant, phytocannabinoids, endocannabinoids, legislation, propagation, markets, and the future of cannabis in the US. Watch for it near you or contact me for information and scheduling.

This article was originally published in the Summer 2019 Terra Firma magazine.

Kirk Goble, ALCAbout the author: Kirk Goble, ALC, has been a Colorado licensed real estate broker since 1988 and founded The Bell 5 Land Company in 2000. He specializes in farm, ranch, land, and water brokerage. He is a member of the National Association of REALTORS®, The Greeley Area REALTOR® Association, and the REALTORS® Land Institute. Goble was awarded the Land REALTOR® of America by the REALTORS® Land Institute in 2013 and is a LANDU instructor for RLI.