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Gathering and Verifying Comparable Sales for Rural Land

As a rural land appraiser, comparable sales are the “life blood” of my business. Of the three common methods for appraising – cost, income, and market data – I tend to use the market data approach the most often both as an appraiser and as a real estate broker. This method allows me to gather reliable and verified comparable sales which are both vital for pricing and appraising properties.  Here are a few ideas on how to do this in your rural land markets:

Sources for Comparable Sales

Networking with Market Participants

Talking with local market participants has proven to be the best way I have found to locate sales. Whether you are at the local restaurant eating lunch or at an agricultural trade show, you should always keep your “ears to the ground” for recent land sales. You may hear these sales in conversations with farmers, foresters, buyers, sellers, bankers or other individuals.  When you hear mention of a sale that you do not have in your database, be sure to listen closely and ask questions if the timing is right always being courteous of others’ time and privacy. If someone seems as if they don’t want to talk about the sale, respect that and try to do further research elsewhere such as utilizing probate records or having conversations with other brokers or appraisers involved.

Company Sales

My best sales are by far the ones where one of our company’s representatives (myself or another broker) is involved.  These internal transactions can almost always ensure that great data will be gathered to verify a sale considering that we should have all of the maps, closing statements, contact information and other necessary data readily available.

Multiple Listing System (MLS)

MLS is a great tool to utilize in your search for comparable sales in more populated areas (considering I appraise and sell land in rural south Alabama, I do not have the opportunity to utilize it often).  Further detail verification of the transaction and property will be necessary since MLS’s are geared towards Residential Real Estate but it’s an excellent “starting point,” if available.

Other Appraisers and Brokers

It is imperative to keep a good working relationship with appraisers and brokers in your market area if you want good data on comparable sales. I have made many great friendships by sharing and receiving comparable sales with other appraisers. I met several of these appraisers at various American Society of Farm Managers and Rural Appraisers (ASFMRA) events. After meeting other appraisers in my area, I always try to follow up by phone call or email to remind them to let me know if I can ever help them with comparable sales in my area. Many of these appraisers have sent work to me when they were either too busy or had a conflict of interest. “Friendly Competition” in the appraisal world is something that we must continue to work towards.

Verifying Comparable Sales

It is always best to speak with someone directly related to the transaction to verify a comparable sale. Of course, if you live in a “disclosure state” you can find items like: purchaser, seller, closing date, legal description and purchase price on the deed at the local probate office. However, in most cases there are other items that make up the purchase price that must be researched further. When verifying comparable sales, I almost always start at the probate office to verify that the sale actually closed, print a copy of the deed so that I have it for my records, and look up the property on the county tax map to verify its location. I will then try to contact someone directly involved with the transaction to determine items such as: improvements located on the sale and their contributory value, timber value, long term leases and their contributory value, equipment or livestock included with the purchase, just to name a few. I find it is most beneficial to speak with buyers, sellers, and agents involved with the transaction. More times than not there will be two sides to the story which you must reconcile to determine the true makeup of the items involved with the sale.

Comparable sales research is something that will make you a better real estate broker or appraiser. I believe you never can know “too much” about your local land market. Knowing your market will help you competitively price land which is ultimately helps it sell quicker, this “hands on” approach of digging through sales will likely introduce you to valuable market participants with great lead potential that you otherwise might not have met in your everyday professional life.

This post is part of the 2018 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: Calvin Perryman, ALC, is an Associate Broker and Appraiser with Great Southern Land. Calvin is an active member of RLI, serving on the 2018 Future Leaders Committee and as the 2018 President of the RLI Alabama Chapter. He graduated from Auburn University with a Bachelor Degree in Agricultural Business and Economics in May of 2011. Shortly after graduating from Auburn he obtained his real estate license and has been in the real estate business since 2011.

Effectively Networking for New Land Professionals

Networking always has and always will be a vital component to any successful real estate professional’s career. Being new to the industry can be especially daunting considering the number of real estate professionals entering the business.  To put it simply, the best piece of advice I can share is “you must be seen to be known.” In order to establish yourself in the marketplace and be successful, you need to be seen “out and about” by your existing and prospective clients at local and regional functions.  Here is an outline of several ways you can effectively network to grow and sustain your real estate business:

  1. Network with Industry Leaders Face-to-Face
    Get to know the top industry leaders and let them know you are in the business. By industry leaders I mean Brokers and Agents (within your company as well as your competitors), Appraisers, Lenders, etc. which have been in the land business for some time and are thought of as the “go-to guys.” It may be tough to get much of their time considering their busy schedules, however, try offering to take them to lunch or stopping by their office for a quick chat when you’re in the area. Be sure to have something to offer them, for example, if you stop in to see a broker you could take information on a new listing or ask them about specific buyer needs that you may have. I am always surprised how much more I learn by stopping by someone’s office and talking for 10-15 minutes in person vs. calling, texting or emailing them to check in. Always be willing to sit back and listen when they start talking, you will be surprised how much you learn.
  2. Start Using Social Media Networking
    Social media has become a huge part of the land brokerage business. It is a great way to network with buyers, sellers, and industry leaders as well as market your clients’ properties. I recommend creating a “business page” along with your personal social media pages. The business page will allow you to promote your business in a professional manner that can be easily reached by the public. A tactic I’ve found to be successful is periodically sharing items from your business page to your personal page. This will send traffic over to your business page often resulting in very credible leads. You will also find that once you’ve established yourself in the business, many of your clients will become actual friends and will likely become “friends” with you on your personal social media pages. This is a great way to stay in touch with your clients. By simply “liking” their post or wishing them a “happy birthday” you will stay on their mind and when they need a land professional they will be more likely to think of you.
  3. Attend Conferences and Industry Events
    Conferences are one of my favorite ways to network. Generally, at these conferences there are great speakers and trade shows, along with some of the best of the best in the industry. I highly recommend attending the National Land Conference by the REALTORS® Land Institute which is typically held in the Spring of each year. This premier event is attended by the foremost leaders of the land industry and is a great venue to gain expertise from the best industry speakers and teachers available. In addition, Conservation, Agricultural, and Forestry conferences are held throughout the Nation each year and provide great networking opportunities. There are also local and state chapters such as The National Wild Turkey Federation, Ducks Unlimited, Delta Waterfowl, and Safari Club International that host events.  All of these can be very beneficial in getting to know like-minded individuals with an interest in buying or selling land.
  4. Network in Your Local Community
    There is no replacement for being involved in your local community. If you take care of and help the people at home, they will take care of you. There are great networking opportunities in most local areas including: Sponsoring Charity Events, Participating in Church Events, Sponsoring Youth Sports teams, etc. You should make it a point to be present at many local community events such as trade shows, community cook-offs, historical society events, etc. Along with volunteering and sponsoring these events it is also a great idea to be involved with your local Chamber of Commerce. Many of the people you see and meet at these events will eventually have a need for a land professional or perhaps know someone who needs a land professional. When this happens, you want them to always think of you.

This post is part of the 2018 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: Calvin Perryman, ALC, is an Associate Broker and Appraiser with Great Southern Land. Calvin is an active member of RLI, serving on the 2018 Future Leaders Committee and as the 2018 President of the RLI Alabama Chapter. He graduated from Auburn University with a Bachelor Degree in Agricultural Business and Economics in May of 2011. Shortly after graduating from Auburn he obtained his real estate license and has been in the real estate business since 2011.