The Best Advice Top Agents Ever Got

A few words can change your life. The advice you get from your mentor, friend, or family member can even change the course of your career forever. Accredited Land Consultants Geoff Hurdl, ALC,, Bill Burruss, ALC, and Terri Jensen, ALC, share the advice that helped shape their successful careers in land.

Know Yourself to Know Others

Understanding yourself is an important part to succeeding in the land industry. You need to know your own strengths and weaknesses in order to improve your weaknesses and play up your strengths.

“Doing the best that I can and to ‘know myself’ have been the underlying themes to my leadership skills,” says Bill Burruss, ALC, winner of RLI’s 2018 Land REALTOR® of America Award.

“These two pieces of advice were instilled by my parents and reiterated by my teachers in high school. Respect for others was also a strong value. It could be argued that I was taught to live The Great Commandment, to ‘love thy neighbor as thyself’. I believe to be successful you have to know yourself. Both my parents and teachers would challenge me by having me evaluate myself regularly. This forced me to understand what I did well, and where I had problems, and ultimately make the needed changes to achieve my goals.”

Don’t Spread Yourself Too Thin

There are lots of ways to make money in real estate. Instead of trying to excel in every single field, Geoff Hurdle, ALC,  winner of the 2018 APEX Wrangler Award, found success by focusing his time and energy on the things he knew the most about.

“My father taught me there were many ways to make money in real estate,” says Hurdle. “One of the most valuable things he taught me was to stick with what you know.  I learned the value of that advice when I strayed from it. It cost me, a lot. I went back to what I knew and I have not looked back again!”

Respect and Hard Work Are Everything

Land real estate is a people business at its core. Respect for your fellow man can help you go far. Burruss also learned that the land industry is one where hard work and a love of land speak louder than race or gender.

“Respect was all about my generation, growing up in the ‘60s. I went through integration in the 7th grade. Within four years, women were hitting the streets in waves wanting equal pay and better job opportunities. Before I became a REALTOR®, I was hired by a person who was gay and then one who was African American. When I started real estate, my broker was female. The reason I got into leadership on the national level was by invitation from the Virginia Association of REALTORS® President-Elect, Nathan Booth, who was the first black president of a REALTOR® state association. All of these people had a great love for their fellow neighbor that I want to replicate. All of them are great because they are great, not because they are female, African American, or gay.”

Terri Jensen, ALC, with National Land Realty also highlights the importance of the three R’s. “Respect for self; respect for others; responsibility for all that I do,” says Jensen.

Hard work is also essential for success in the land industry, as Dan Murphy, ALC, with M4 Ranch Group explained in his 2018 Terra Firma article Getting To The Top: Finding The Apex Of Success.

“Each of us in the industry knows that we only eat what we kill. This industry makes no payment for a second place finish,” says Murphy. “If the transaction does not close, we don’t get paid. Our success at M4 Ranch Group in 2017 is without fail directly tied to the strength, intelligence, and the never-quit attitude of Team.”

Communication Is Key

Making sure that you are not just heard, but understood ensures that you and your client are on the same page.

“If you don’t know the answer to a question, let the client know that,” says Terri Jensen, ALC,. “Do let them know, though, that because of your years of experience, education, and expertise, that you probably know someone who can answer the question.”

The land industry is so massive and there are so many roads to take that it can be easy to feel lost. Listening to advice from land agents with decades of experience can help guide you in the right direction.

Looking to find a mentor in the land industry that can give you the advice that will change your career forever? Becoming a member of the REALTORS ® Land Institute gives you access to a national network of over 1,300 land professionals to connect with and learn from.

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.

 

 

Five Tips for New Land Professionals

This post was originally published on the National Land Realty blog in August 2017.

The timber business has always been in my family. Growing up, my dad owned his own timber brokerage company. It was something I was really familiar with. Being on land, buying, selling and trading it, were all things that I was accustomed to. But it was a career path my dad said I should never take.

I always wanted to do what my dad did, so when he sold his business I wasn’t sure where to go with my career. I ended up going to the University of Alabama and graduating with an environmental degree. And soon after, got a job in Mobile, working for an environmental company where I did safety and environmental consulting. I continued that line of work for about four years before I decided to go part-time with them and obtain my real estate license.

I had been looking for a different career opportunity for a while. Somewhere where I could grow and be my own boss. So, in April of 2016, I went to work for National Land Realty (NLR). The opportunity came up through a mutual friend who happened to be a broker for NLR. And I went full speed ahead with only the knowledge and experience in land I had gained while growing up. But it was a challenge I was driven to overcome.

Starting out at NLR as a Land Professional, the first listing I got was in Choctaw County, Alabama. I never really knew how many people were interested in buying land until I got that listing. I ended up generating over five sales on five different properties from that first listing. Closing on that first deal made me more motivated than ever before.

My biggest challenge thus far has been gaining trust within my clients. But trust comes from hard work and doing exactly what I say I’m going to do. Like making sure I talk to the previous landowners, spending more time on each deal… It’s about going above and beyond. And not being afraid to get out there and get muddy.

As a younger and newer Land Professional, I want to offer advice to others out there who are just starting out and want to reach that next level. Here are my top 5 tips on how to get there:

  1. Be persistent.

If I could only offer one piece of advice, it would be to always be persistent. You have to go out and get the business. You can’t just sit around and wait for it to come to you. You’ve got to go dig it up each and every day. Don’t be afraid to ask questions, ask other professionals for help and don’t take no for an answer.

  1. Network, network, network!

Networking is key in the land real estate business. It’s about keeping your name in front of people – creating your personal brand. So, make sure to attend all the outdoor events you can. Get on different outdoor committees and even go to city council meetings. Don’t be afraid to stop at your local bank, coffee shop or co-op store to market yourself and your business. You want to create a culture of, “That guy knows what he’s doing.”

  1. Find a mentor.

Finding someone who’s been in the industry for a while and can show you the ropes can benefit you greatly when you need that extra bit of knowledge on a certain topic or just a boost of motivation. A mentor can also help you see areas where you may need some improvement.

  1. Go above and beyond.

To be successful and get to the next level, you’re going to have to put in the time and the effort. Working longer hours, making those extra phone calls, going to those late-night meetings – all these will pay off in the end.

  1. Be honest and thorough with clients.

Always keep your word with a client. Spend that extra time with them going through each step of the process so they feel confident. You’ll be able to gain their trust and build a relationship with them that could last for decades to come!

Forrest During is an RLI member and land professional at National Land Realty who specializes in acquisitions, sales, recreational, timberland, and conservation properties.

The Value of Finding a Mentor in the Land Industry

This article was originally posted to the National Land Realty blog

Getting started in the land industry can be daunting. From knowing about the latest land laws to networking to juggling a work/life balance, it’s easy to be overwhelmed. Having a mentor in the land industry can help you succeed as a land agent in more ways than one.

Wisdom You Can’t Learn In A Classroom

Although land education is extremely important, to the point of being necessary for agents that want to maximize their earning potential, there are some things you can only learn from experience — such as how to deal with difficult clients or learning how to balance your time as a land agent. These are things you can learn from mentors. A mentor can also guide you away from mistakes they’ve made in the past and learned from, saving you from making those same mistakes as a newer agent.

The benefits of mentorship can go beyond knowledge in the land industry.  A mentor can also guide you towards success beyond a dollar sign.

“‘Successful’ to me was an individual who worked with integrity, spent time away from work with friends and family, was healthy, financially very well off, and had a process and system to their business,” wrote land expert Jacob Hart in a guest post for RLI. “I have learned you can make more money than you can count. However, if you do not have a passion or dreams to go after with that money, more is actually less.”

A mentor can do more than just help you succeed in the land industry. They can help you define and thrive for success in life as well.

Networking

The land industry is a people-driven business, so networking is essential for a successful career. However, meeting new people can be hard, especially if you live in a remote location or are networking when new to the industryFinding a mentor in the land industry opens the door to meeting their partners, colleagues, and clients, which could grow your own client base. Your mentor will know what events are best to meet clients and other land experts. They can also connect you to people on social media or add you to their social media groups.

Your Field of Expertise

Mentors are especially important if you specialize in a unique type of land or service.
If your specialty is in land auctionsvineyardstimberland investment, or mineral rights, not just anyone can be a mentor.

vineyard

There are so many benefits of having a mentor that we couldn’t list them all in one article. We hope this article has inspired you to seek out a mentor to help carve out a path for a successful career in the land industry.

Interested in finding a mentor near you? You can use RLI’s Find a Land Consultant tool or get in contact with one of our RLI Chapters to get started finding land experts who have expertise in the same field you’d like to be involved in or who are in your area. We may be biased but we also recommend becoming a member of the REALTORS® Land Institute. The biggest membership benefit we hear about from our members is the networking and camaraderie that their RLI membership continues to bring them year after year which basically makes the membership pay for itself because of the referral and knowledge sharing opportunities.

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.

Training New Land Agents for Real Estate Teams And Brokerages

Once we have a new land agent on our team, we know they will need to learn about the four conversations. Yes, they must learn about things like state specific contracts and compliance issues with your brokerage, but we have found that the most likely predictor of success in the industry is having what we call the four conversations.

 

These conversations focus on proactively generating business and planning activities, instead of just reactively wondering what is going to happen next.

Conversation 1: Listing Appointments

The first conversation is listing appointments. We use this conversation to show new agents that there are tools available to help them focus on their goals and business. This includes both listing and buyer representation agreements.

You can’t help the agents if you don’t have that first conversation. We are having weekly conversations with our agents and looking at where they are compared to where they want to be. This is how my team defines being a business owner.

You first determine what income you want to make for the year. Then, determine how many clients you must represent to earn that level of income. Factoring in your average sale price and commission. Check out Kasey Mock’s piece Ready. Aim. Fire! Strategic Planning for Your Land Real Estate Business for more information about how to set and achieve these kinds of goals strategically.

Conversation #2: Listing Taken

The second conversation is what we call listing taken. After you go on listing appointments, then you have listings taken. Of course, we don’t get them all and some we choose not to represent. If you go on listings and don’t get the seller to list with you or the buyer to have you represent them in their purchase, then we know what we need to improve on.

This is the crossover or what I call the wall of value. Now we are getting ready to earn our commission.

Conversation #3: Closings

The next conversation is closings. To talk about the third conversation, closings, the goal is to take the emotion out of the conversation and create clarity by lifting the fog. Nobody will say no to their own goals. We ask the agents if we can help them set really Big Goals, which helps them to think bigger. If you can’t imagine being successful, it is very hard to achieve.

Conversation #4: Profit.

The final conversation is about profit – not just your gross commission income (GCI). It is possible to earn a huge amount of gross commission and not be profitable. We can track our fixed cost as well as our cost of sales. Leaving us with our actual profit.

These four conversations are a general overview of how we teach new agents to think like a business owner, plan for their future, and not just accept things as they happen. If you need more profit, the best place to start is to either lower your expenses or go on more appointments to increase gross commission earned.

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 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 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.

What’s At Stake With The Disaster Relief Bill?

With dozens of bills passing through Congress every month, it can be hard to keep track of the current state of land laws. One bill that has been particularly hard to follow has been the Disaster Relief Bill. This bill has been debated about and changed for months. As hurricane season approaches, it’s important to know the impacts that the disaster relief bill could have on the land industry.

To understand why the disaster bill is important requires an understanding of the massive impact that natural disasters have had on the land industry in recent years. A series of natural disasters in 2017 destroyed countless crops, livestock, land, and lives. According to a study from Texas A&M, 27% of the state’s cattle population were affected by Hurricane Harvey in 2017. Then, 2018 wasn’t any easier – The estimated agricultural losses from 2018 are estimated to be $5.5 billion for Alabama, Florida, Georgia, North Carolina, and South Carolina and over $3 billion for Nebraska, Iowa, and Missouri. We’re only halfway through 2019, but have already faced widespread flooding, wildfires, and more.

The most recent draft of the bill (which you can read in full here) is still being debated over issues such as disaster relief funding for Puerto Rico and money for emergency boarder security. If the most recent draft is signed into law by President Trump, here is how it will impact the land industry.

Crops and Livestock

With farm debt and bankruptcy on the rise in many areas, the damage on crops from natural disasters has taken a huge toll on farmers. The cold snap in mid-March of 2017 froze thousands of crops and caused $1 billion in agricultural losses. The impacts of these natural disasters last beyond a single crop. Floods can deplete the soil of its natural nutrients, which can take a long time to recover.

The impact of natural disasters on livestock has also put a strain on the rancher’s wallet. Not only is the financial impact of having livestock die bad for the farmer’s bottom line, if the dead animals are not removed in a properly and timely manner, it could impact water quality, the other living livestock, or other natural resources.

The disaster relief bill is expected to provide $3 billion to help recover losses of crops, trees, and vines that were impacted by natural disasters. This will help ease the financial loss for farmers. The grants will also help farmers pay for livestock losses and future crop insurance.

Forests

Wildfires claimed countless trees, properties, and lives in the past few years. Part of the Disaster Relief Bill sets aside money that will go towards forest restoration, hazardous fuel management, and other expenses related to protecting trees from natural disasters; including $720 million for urgent wildfire suppression and $480 million for an Emergency Forest Restoration Program.

Clean Up and Prevention

Preventing and cleaning up the impacts of natural disasters can be extremely costly. Large sections of the most recent draft of the bill include funds for marine debris removal, improving hurricane and flood intensity forecasting, restoring and rebuilding national wildlife refuges, helping rebuild national parks, fixing local roads, and more.

While this bill has been mulled over for months, there may be good news on the horizon. The House recently passed a multibillion-dollar disaster aid package on Friday, May 10th, and the Senate is expected to vote on the bill before a weeklong Memorial Day Recess. This means it is one step closer to getting the final approval from President Trump. Be sure to reach out to your elected officials to make sure they know how important disaster relief is to the land industry, especially private property owners.

One great way to stay on top of the latest land laws is by following us on social media on Facebook, Twitter, and LinkedIn. We cover the most important land laws and news that you need to know!

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.

The Great Fake Meat Debate

Not so long ago, the fake meat market wasn’t much more than a few packets of grey tofu dogs that no one touched at the barbecue. Now, the meat alternative industry is a $1.5 billion market. Curiously, production and consumption of real meat are also on the rise. Do these two seemingly-opposite industries have more in common than we think, and can they live in harmony?

It’s nearly impossible to ignore the rise of fake meat. From Burger King planning to roll out Impossible Whoppers by the end of 2019 to White Castle already offering Impossible Sliders, fake meat is everywhere. The sudden and shocking success of fake meat has taken many industry officials by surprise. How could a product that was so niche for so many years suddenly become so popular?

One of the main factors that led to the success of fake meat products is advancements in food science that increase the taste and texture of fake meat. Scientists can now study what makes meat taste so good at a molecular level and replicate it with plant substitutes. Not only can they make the meat taste better, but they can also make the product look more like meat, too. For example, the main ingredient in the Impossible Burger is heme, a molecule that gives blood its signature color. They also use coconut fat and potato protein to mimic a burger’s natural greasiness and texture. Other companies use soybeans, seitan, and Quorn.

Another reason for the rise in fake meat is that Americans have become increasingly health conscious. A recent study from John Hopkins University showed that over 60% of Americans are making efforts to eat less meat.

Health-oriented customers have also played a large role in the rising real meat economy. Americans hit record levels of meat consumption in 2018. According to the USDA, the average American will consume 222.2 pounds of red meat and poultry. Other animal products, such as eggs and milk, have been on the rise as well as Americans trade-in carbs for protein. As high-protein diets become increasingly popular, some adjust their diet by adding meat substitutes to cut back on red meat, while others focus on incorporating high-quality real meat into their lives. The strong economy also lets the majority of Americans afford beef and chicken despite rising meat costs.

While the two industries are both enjoying success, there is concern from the beef industry about the effects of labeling fake meat as ‘beef’ on real meat products. If the value of real meat products is impacted, this could have serious drawbacks for ranchland values. Ranchers are pushing for an official definition of beef and meat. The top priority in the National Cattlemen’s Beef Association’s list of official 2019 policy priorities is to clarify the definition of those words.

“The use of traditional beef nomenclature on alternative products is confusing to consumers and weakens the value of products derived from actual livestock production,” claims the NCBA’s 2019 Policy Book.

The goal isn’t to get rid of fake meat for good, but to make sure that the customer knows what they are buying.

“While at this time alternative protein sources are not a direct threat to the beef industry, we do see an improper labeling of these products as misleading,” said the  Policy and Outreach Director of U.S. Cattlemen’s Association, Lia Biondo, to USA Today. “Our goal is to head off the problem before it becomes a larger issue.”

Luckily, many titans of the fake meat industry seem to be on the same page.

“I think it actually could help us more than it could hurt us because it starts the national dialogue around what really is meat, and if the origin of meat really matters to the consumer,” said Ethan Brown, the founder and CEO of Beyond Meat, to CNBC.

While meat alternatives are still a relatively new concept to American markets, fake meat could have a lot to offer farmers. Since many fake meats are created from plants such as soybeans, fake meat companies could become steady clients of many farmers.

Real and fake meat are here to stay. One industry doesn’t need to fail for the other to succeed. A changing customer base, strong economy, and scientific advancements have all helped both industries become the successes they are today.

Looking to buy some land to start your own real or fake meat empire? Be sure to always work with a land expert in your area to get the best deal for your money.

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.

What RLI Is All About – A Personal Story

Our daughter, Jess, and her husband, Brian, are Air Force and were being transferred from Maryland to Texas for a brief six to nine month period. Her husband was stationed in Alabama for three months prior to that and our daughter and 19-month old grandson lived with us during that time period. Jess was responsible for finding a rental home in Texas.  She had planned on making a two to three day trip for house-hunting, signing a lease, etc.

Just like everyone else, we started with online searches for rentals.  No sooner would we find something that looked ok, we would call and find out it was already rented.  Consequently, I recommended she not make a trip and save the $1000+ for a house-hunting trip that would probably end up being wasted time.

So, next steps – Mom to the rescue, as I am an ALC and can network with other land REALTORS® all over the country.  A search through RLI’s Find a Land Consultant tool helped me to find someone in the area that Jess and Brian were being transferred to, and a call was made to RLI Member Michelle Rushing, an agent with United County/M & M Ranch Land Investments.

Michelle was super to work with! From providing information on available rentals and information on rentals we asked her about to even answering texts and emails when she was away from the office at a class! Then, Jess finally found a rental that looked promising and was available; completed the lease application, etc., but the leasing company wouldn’t finalize the lease until she walked through the house.  Creativity again by Mom, I called the leasing company and asked if a proxy could walk through the house on our daughter and son-in-law’s behalf. The company said yes. So, I placed yet another call to Michelle, who graciously agreed to do this for us. She provided great information on the home, the neighborhood and surrounding area, and Jess and Brian were able to move forward with the lease!

I cannot say enough about the willingness of Michelle as an RLI member. I later discovered Michelle had just joined RLI two weeks prior to my call, and she was impressed that she had already received a referral call from the Find A Land Consultant on the RLI website, just because she had invested in being an RLI Member! This to me is part of what RLI is all about – networking, helping each other, and trust in each other… even when members may not have met each other before.

Special thanks to Michelle and I hope to meet her at an upcoming RLI class or event!

About the Author: Terri Jensen, ALC, served as the 2015 RLI National President and is currently a Broker with National Land Realty based out of Minnesota. Of 18,000+ REALTORS® in Minnesota, Terri is one of only 14 to have earned the elite ALC Designation (Accredited Land Consultant).  This designation, through the REALTORS® Land Institute, requires rigorous experience, education, and expertise in the areas of real estate, auction, appraisal, 1031 exchange.

Should I Invest in Timberland Real Estate?

I’m often asked “Should I invest in timberland?” and “If I invest in timberland, is it better than investing in stocks, bonds, farmland, etc. etc.?” My answer is generally “It depends” because the term ‘better’ is almost always subjective… What is better for one investor may not be for another depending on end goals. Understanding the basics of how to establish and achieve your goals in a timber investment is paramount.

Timing Your Investment Goal

We all want our investments to grow in value and make us wealthier, and timberland is just that… a growing investment (pun intended). It enjoys stable, steady growth, paying no attention to the volatility of today’s political world, and that is one reason why many of the wealthiest people in the world invest in timberland as a method of diversification and asset protection. Annualized returns range from 6-20% in my experience, sometimes more, with many factors weighing in, almost all of them related to the demand of the local timber market equally or greater than the actual land related aspects like site quality and stocking.

But, while well stocked and managed timber stands grow in size and value each year, unless you acquire a sizable portfolio, cash flows may only come every 3-7 years after reaching a merchantable size. So, when deciding to invest in timberland, it’s important to be able to service any debt obligations during those periods between cash flows and before buying, understand when you’d like to receive the bulk of the cash flows that will come during the timber’s “rotation” (financial lifetime of the stand). For example, if you intend for your timber investment to pay for your 3-year old child’s college fund, it may be wise for you to buy a well-stocked tract of pine plantation that’s 1-2 years old. This should enable you to buy more acres at a lower price, and those stands should be reaching a merchantable status as your child approaches 18 years old. That plantation will generally see 3-4 thinnings between the age of 15 and 30, all the while graduating into more and more valuable product classes through the process referee to as “product change,” until you ultimately clearcut and begin the process again.

But, if you’d purchased the wrong age class of timber, you may have missed your income window and had to come out of pocket or borrow money while you waited on the stand to mature. Please note: The merchantable age of a stand is subject to several factors, and the age of clearcutting and when you thin may change based on your objectives. The ages of 15 and 30 are just commonly seen benchmark ages in the southeast for private landowners. Finding the right timberland tract for your goals is key to success as an investor in this type of property.

Define Your Management Strategy

Elaborating further, a critical part of investing in timberland is having a successful management strategy. Are you managing for money, for wildlife, or a balance of both? They don’t have to be mutually exclusive, but you’re also not growing trees for future harvest(s) inside those huge food plots you installed to hunt monster bucks and turkey in. So, before or after you buy a tract of timberland, enlist a true consulting forester that acts as your fiduciary, working purely for your best interests, in order to help you establish the best management plan for you. We have many forestry consultants on our team that work hand in hand with landowners looking to balance timberland investment and recreational use as well as landowners looking for pure economic return. Whatever your objectives, without a sound timber management strategy in place, you will leave a lot of money and time on the table.

Another major driver in timberland returns, and possibly the most important, is competition. Timber and the product classes that it consists of are commodities, and the value of those are greatly affected by supply and demand. As such, you want your timber investment to be located in an area with a high concentration of mills that compete for the product classes your timberland will produce, generally within a 60+/- mile hauling distance of that market area (commonly referred to as your “wood basket”.) If you purchase timberland in an area with only a single or few mills, demand for your timber will likely be low and local supply will be high, so the timber prices paid will generally be dictated and depressed rather than driven up by market competition, which negatively effects your returns in both the short and long term. And, once it’s time, it’s harder to sell timberland in an area with consistently low timber prices.

In the past, I’ve elaborated on the importance of site index, site prep and planting, and the many tax advantages of owning timberland vs. other investments, such as basis depletion, a multitude of deductible capital expenditures, long term capital gains treatment, and conservation easements. But, one of my favorite attributes of timberland is how tangible it is vs non-land investments. Timberland is an investment with roots than run deep, providing an opportunity for you to manage your timberland in a way that allows you to spend time with your friends and family outdoors, teaching them about the blessings bestowed upon as land stewards, and the ability to leave a legacy behind that your loved ones can benefit from for generations to come. That kind of return is beyond measure.

This post is part of the 2019 Future Leaders Committee content generation initiative. The initiative is directed at further establishing RLI as “The Voice of Land” in the land real estate industry for land professionals and landowners. For more posts like this, click here

 About The Author: Clint FlowersALC is a top producer with National Land Realty, a member of the REALTORS Land Institute of Alabama, and a member of the 2018 Future Leaders Committee.  He was a NLR Top Producer Nationwide in 2016 and 2017. He also won the 2017 APEX National Broker of the Year award for Timberland.

 

land real estate agent

What You Need To Know About Choosing The Right Real Estate Agent!

Whether you are buying a house or selling land, it is one of the biggest things you will ever do in your lifetime. Therefore, choosing the right real estate agent is crucial. You may ask, “How do I choose the right real estate agent?” Here are some things to look for or consider when making that selection.

  • Trustworthy: First and foremost, you need to feel completely comfortable talking with your real estate agent. Choose someone you can relate to because you will be spending a lot of time with them. Make sure they feel real to you and most importantly, trustworthy. You want someone who is experienced, ignore all the flattery and promises. Finding a trustworthy agent can go a long way in ensuring your property sells at top dollar or that you’re buying at the best price in the market. Don’t go with an agent who promises you the highest price for your property, find one that has a proven track record of success and the skills needed to get you the highest price. Don’t ever be afraid to ask agents for testimonials or referrals from their past clients to make sure they check out.

  • Expertise: People use the terms REALTOR® and real estate agent interchangeably, but they are not the same. Not every real estate agent is a REALTOR®. REALTORS® are members of the National Association of REALTORS® (NAR) and subscribe to the REALTORS® Code of Ethics. This Code is strictly enforced by local real estate boards. The standards that they uphold and adhere to are much more restrictive and confining to conduct than those state guidelines governing agents who simply hold a real estate license.

Take it a step further and choose a REALTOR® who is a member of the REALTORS® Land Institute (RLI) as they are experienced professionals that specialize in land transactions. If you want the best of the best in the land real estate business then you need to choose an Accredited Land Consultant (ALC). They aren’t just land sales professionals, they are the most prestigious, experienced and highest performing land sales experts in the country. They have a proven track record of success in completing land transactions and are certified to have completed over 104 hours of education courses in conducting land transactions.

  • Connections: Having a good network of other agents in the industry can help sell a property faster. They can also help provide their clients additional value because they may know an expert in everything from conducting 1031 Tax Deferred Exchanges to conservation easements. If they are not exactly sure about something, they have a national network of land agents they can easily reach out and connect with to help make sure their clients are getting the best value out of their property.
  • Tech Savvy: Technology advancements in the industry have provided more tools for real estate agents to remain connected while on the go, which is especially important in fast-paced market places. At the same time, these changes have also raised the bar for what it means to be a good agent. It’s no longer about possession of information, but about being able to translate that information into useful insights for buyers and sellers.

Looking back 15 years ago, the real estate market was a different animal, information-wise. It could take hours trying to find old documents and records that were buried in folders. It put buyers in a much different place than they are today. Not only do you get answers to simple questions much faster, but you can also get any document sent to your email without leaving the comforts of your home. With today’s technology, you can access detailed property records right from your smartphone. There is more transparency for consumers, making them feel empowered during a real estate transaction.

Technology enables agents to deliver more value through new and innovative ways to connect and communicate with their clients. Having software, along with apps and tools at their disposal gives them an edge in today’s market. These tools take the “grunt work” off the agent’s plate so they can spend more time building relationships with their clients.

Make sure to also take a close look at how the agent is marketing other properties and ask how they plan to market your property. Are they using a website, social media, and digital ads? Do they have brochures or information packets available? Is there an MLS listing? Drone footage? Property maps? Is there signage clean and up to date? Using the latest technologies to market a property can help decrease days on market and increase the final sale price.

Finding the right agent takes balancing credentials and interaction. You want to choose someone you like. Keep in mind, not all real estate licensees are qualified to assist you in buying or selling land. Their license may make it permissible to practice, but their inexperience in land transactions could be costing you thousands of dollars and potentially getting you or themselves into legal trouble. Do your research, ask for referrals, talk with the agents’ recent clients, and do some interviews before choosing the best agent for your particular real estate needs. Don’t forget to check for license and disciplinary actions with your state’s Real Estate Commission. All agents are not all created equal. If it feels right after doing your research, vetting against the above considerations, and meeting with them, then they just might be the guy or gal for the job!

Looking for a land professional in your area? Use the REALTORS® Land Institute Find A Land Consultant search tool to find an agent in your area that specializes in conducting land transactions.

This post is part of the 2019 Future Leaders Committee content generation initiative. The initiative is directed at further establishing RLI as “The Voice of Land” in the land real estate industry for land professionals and landowners. For more posts like this, click here

About the Author: Wendy Forthun, ALC, is an Accredited Land Consultant with 1 Stop Realty Inc in Kasson MN. She specializes in farmland sales, management and 1031 Tax Deferred Exchanges.

Knowing The Difference Between 1031 Versus 1033s in Land Real Estate

As real estate professionals, we have a fiduciary responsibility to help our clients achieve their goals relating to real property. Often times, these goals revolve around maximizing the return the client will achieve either during the acquisition or disposition of their real estate assets. A valuable tool in this process is the like-kind exchange. This tool could permit non-recognition of a gain for tax purposes, allowing our clients to invest ALL of the proceeds from a sale into a new asset.

As land professionals, many of us encounter owners of raw land assets that generate very little cash flow, or worse, don’t have potential to generate income. The ability to sell this passive asset without any tax exposure and exchange into a cash flow asset such as an apartment building or net leased shopping center is a power motivator that can in many cases, substantially increase our client’s income and positively impact their lives.

As investors, it is imperative that you seek the guidance of your tax advisor, a Qualified Intermediary (QI), and a real estate professional well before considering a disposition or acquisition to ensure the transaction is structured appropriately to achieve your overall financial goals.

What is a 1031 Exchange?

Since 1921, Internal Revenue Code (IRC) Section 1031 provides for the opportunity to defer payment of capital gains tax liability by reinvesting the proceeds from the sale of a relinquished property into another similar asset. There are many nuances to the code but generally, to exchange from one asset to another, the proceeds of a sale must be reinvested into a “like-kind” property. “Like-kind” refers to the character of the asset, not the quality. For example, property purchased and held for investment purposes may be exchanged for another investment property. The properties can be land, apartments, or different so long as they are both held for investment. Conversely, a primary residence being sold and exchange into an investment asset would NOT qualify. So long as the process is followed, the taxes are not eliminated but payment of the taxes is delayed until such time as the gain is realized when the acquired asset is sold, without being exchanged further.

This does not require an investor to trade their real estate straight across or sell their relinquished property and acquire a replacement property at the same time.  By using a QI, investors are given a certain period of time to complete the acquisition of their replacement property.

What is a 1033 Exchange?

Similar to IRC Section 1031, Section 1033 provides for non-recognition of gains and deferral of the tax liability. The primary difference is that a 1033 exchange can be used only when the property is being relinquished through a “forced-conversion.” Examples of “forced-conversion” would be taking by eminent domain or loss from a natural disaster, even if insurance proceeds are received.

While similar, there are distinct differences between the two.  Below are highlights of some of the rules and how they differ between the 1031 and 1033 exchange.

 

  1031 1033
Use Exchange of real property held for productive use in a trade or business or for investment. Exchange of property compulsorily or involuntarily converted as a result of eminent domain, destruction, or theft.
“Even and Up Rule” – Equity Equity in the replacement property must be even to or greater than the net equity of the relinquished property.

 

Equity cannot be replaced with additional debt.

Cost of the replacement property must be even to or greater than the net proceeds received.

 

Equity can be replaced with additional debt.

“Even and Up Rule” – Debt The amount of debt on the replacement property must be even to or greater than the amount of debt relieved on the relinquished property.

 

Debt can be replaced with additional equity (i.e. cash).

The value of debt on the replacement property must be even to or greater than the value of debt relieved on the property converted.

 

Debt can be replaced with additional equity (i.e. cash).

Replacement Property Criteria Like-Kind Similar or related in service or use
Notification Period Within 45 days of the disposition, must notify the Qualified Intermediary of the potential replacement properties. Identification of potential replacement properties is not required.
Timing Within 180 days of disposition, escrow must close on all replacement property. Within 2 years from the end of the first tax year in which gain is realized, escrow must close on all replacement properties. Special rules extend this period to 3 or 4 years.
Vesting The same taxpayer that sold the relinquished property must purchase the replacement property. The same taxpayer that sold the relinquished property must purchase the replacement property.
Improvements Exchange funds cannot be used to improve land already owned. Conversion proceeds can be used to improve land already owned.
Related Parties In most cases, the replacement property cannot be acquired from a related entity. In most cases, the replacement property cannot be acquired from a related entity.


Reverse 1031 Exchange

On September 15, 2000, the Internal Revenue Service issued Revenue Procedure 2000-37. This explains how to complete a “Reverse 1031 Exchange,” a scenario where an investor acquires the replacement property prior to selling the relinquished property. In this scenario, a QI (through a special purpose entity) will act as the Exchange Accommodation Titleholder, acquire and hold or “park” legal title to either the relinquished property or the like-kind replacement property during the exchange.  This structure is more expensive and complex than a traditional exchange and should be reviewed with a tax advisor to ensure the investor’s specific situation warrants use of this structure.

Tax Cuts and Jobs Act

Signed into law on December 22, 2017 The Tax Cut and Jobs Act took effect on January 1, 2018 and substantially modified the IRC. Specific to Section 1031, the act eliminated personal property exchanges, limiting the ability to exchange assets to only real estate. It is now titled, “Exchange of real property held for productive use or investment.” However, certain exchanges of mutual ditch, reservoir or irrigation stock are still eligible for non-recognition of gain as like-kind exchanges, if considered to be real property under applicable state law. 

State specifics and claw-back provisions

Particular care should be given to exchanges involving relinquished property and replacement property in different states. Many states have withholding requirements applicable to non-residents. Although most states allow investors to sell property in that state and exchange into property in another state and defer state taxes, some states have claw-back laws. Claw-back laws permit a state to recapture the state income tax when the out of state replacement property is sold.  To avoid potential double taxation, it is critical for an investor to research how the states they are dealing with treat these transactions.

This article is intended to be a primer on like-kind exchanges and highlight some of the nuances and considerations needed to successfully complete these transactions.  Nothing in this article should be considered tax or legal advice and any investor interested in learning more about exchanges should speak with their tax adviser and a Qualified Intermediary. 

About 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 serves on their 2019 Future Leaders Committee.