“Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization. REALTORS ® should recognize that the interests of the nation and its citizens require the highest and best use of the land and the widest distribution of land ownership.” – Preamble to the NAR Code of Ethics
Accurate, reliable and timely information is vital to effective decision making in almost every aspect of human endeavor, whether it be for personal or business gain. It is absolutely essential for making the most informed decision. As one of our responsibilities as licensed real estate professionals we are to “protect the public.” In the absence of accurate information, people will make bad decisions. Being a member of the REALTORS® Land Institute provides the public with the information that you and I are considered as “the land real estate experts.”
Being the Expert
In today’s world of more highly educated adults and, more specifically, the millennial sector, the qualification of being more than fifty miles from home with a brief case doesn’t qualify a person as an expert. As part of today’s college educated society, the process for making a business decision in a specialty area outside that of your educated profession is to hire an “expert.”
When a client hires an expert, the most important quality they look for is someone who presents themselves as a professional. A potential client will evaluate a REALTOR® on how articulate they are, their personal appearance, and the degree of comfort they demonstrate with the specific area of expertise.
Most likely you’re already fluent in several specific areas of real estate. You may know a little bit about several different types of real estate, but stressing overall knowledge doesn’t let you stand out from your competitors.
Alternatively, consider your unique interests, experience and passion for a specific area of agricultural real estate. Look at your business and calculate where the source of the majority of your transactions comes from.
In essence, what is it about real estate that attracts you and gets your juices going? Do a strong and precise evaluation of what you know best, what you wish to know more about, and what will get traction in your area. Then, focus on those issues that come out at or near the top of the list. In order to gain the edge, you will need to acquire all of the detailed information that is available in that area. Sources can be online, seminars, and/or professional meetings with networking opportunities. Accurate information is crucial to nearly every professional and academic discipline because facts are the only way humans can ascertain truth. With that said, the purpose of this article is to emphasize the importance of providing accurate information to our clients and some processes to attain that information.
Communication of information is key
Based on nearly forty years of experience in farm land sales, management and consulting, I have prepared what I consider to be a comprehensive checklist of detailed information that is the basis for listing a property for sale or when representing a buyer, it’s used to acquire the right information. One of the most frustrating issues for me is when I am evaluating a property for a potential buyer and the listing agent provides only a general summary of the information and, in some cases, inaccurate information.
I would like to illustrate a perfect example of why using a land real estate broker with specialized expertise in these types of transactions—preferably an Accredited Land Consultant—is necessary. A while back, I received information on a farm, provided to me by a farm broker, that was not his listing. That fact was disclosed, which is the correct process. The property included a nice residence and several outbuildings. The large barn had been refurbished into a family party facility and the farm did contain some tree and berry crops. The information packet from the listing broker contained significant information about the improvements but very limited information concerning the crops, soil types, crop varieties, historic crop yields, and lease history.
I use this as an example to illustrate two things: First, in my opinion this is not providing the seller of the property appropriate fiduciary service on selling their farm. Second, as a farm buyer’s agent, I will either pass up the farm right away or have to spend significant time acquiring the appropriate detailed information required to make an informed decision for my client.
The “rest of the story,” as Paul Harvey always said, is that the broker whom presented this property to me did end up doing the work researching the appropriate detailed information. However, he had a very difficult time of acquiring all the usual crop history, even though he attempted, because it was a bit difficult working with the listing agent. Again, the farm broker worked very hard and did the best he could.
Again, I use this example for a few reasons: First, you would not be providing your client (the seller) “expert” service, because as a result of not providing adequate detailed information, many potential buyers will simply pass on the deal. Second, as a member of the elite RLI you would not be appropriately representing our society. Third, you will be losing deals. With the technology available today, your goal should be to provide 95 percent of the information which a potential buyer will need to make an informed investment decision. I use 95 percent because no two investment experts think alike so there will always be some unique information that every potential buyer will request.
Where do you get the information?
First, start with a very detailed interview with the seller, the current tenant, and the respective Farm Security Administration (FSA) office. Be certain to get a letter signed by the seller giving you permission to access their information at the FSA office.
Second, verify the information provided. Even though the information is provided by the seller, I have found that sometimes their memory may not quite be totally accurate.
Third, you can use websites available for aerial, soils, topo, land-use, water permit registrations, drainage, and FSA information. I have a list of websites that may be of interest and am happy to share if you drop me an email.
Fourth, contact your fellow ALC colleagues for information about areas which you may NOT be real knowledgeable. The MOST valuable resource of information for my business is the tremendous network of colleagues that I have created through all the years of being a member for professional agricultural organizations like RLI. That is why I feel so honored to have earned the ALC designation this year and to become a member the most “elite land experts” in the nation. I have known many of the ALCs for years and am certain that when I call on one of them for assistance, there response will always be “what can I do to help you out?”; which would always be my response as well. However, if I have the opportunity to list a property which is outside my area of expertise, I contact one of my ALC colleagues whom I know is an expert in that particular type of real estate and refer the listing to them. For me, that is providing me the “expert” quality service to my client.
The network of professionals you create by attending the annual meeting, your local chapter events, and attending education classes will continually expand that network knowledge base for you to draw from. Having been in the business for many years I have been blessed with having done sales, management or consulting work on more than forty different crops in the thirty-nine of the fifty states. There are many other members with similar experiences and we all are your best resources to draw from for information.
Accurate, reliable and timely information is the key to “protecting the public,” which is a responsibility of our real estate license, providing our clients the top level “expert” fiduciary service, and will bode well for building a very successful business. The best information resource you have available is your fellow RLI ALC members. As a reminder, always make certain to use a disclaimer statement on all of your brochures.
One last testimony: I contribute a very large percentage of my success in the farm land brokerage, management, & consulting business to the networking relationships that I created through the REALTORS® Land Institute. Whenever I have called a colleague for help the answer has ALWAYS been, providing they knew the answer, “How can I help you?” In the cases where the person did not know the answer, they always knew someone to contact. I am willing to share my listing due diligence information checklist if you happen to be interested or if I can help you with any type of project, please contact me.
This article originally appeared in the 2017 Winter Terra Firma Magazine, the official publication of the REALTORS® Land Institute.
About the author: Fred Hepler, ALC, has been involved in the land business for over forty-two years and is a licensed broker in multiple states for over twenty-five years. He has experience in selling, managing, and/or consulting in thirty-nine states. He is a past president of ASFRMA where he held numerous positions on committees at the state and national levels and is now looking forward to becoming more actively involved in RLI.