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land agent

How An Accredited Land Consultant Can Maximize Your Land Transaction’s Value

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Now that we’re officially into the Spring selling season there are many sellers thinking about selling their land in the near future.  If you happen to be one of these sellers, then you owe it to yourself to consider interviewing a REALTOR® with the Accredited Land Consultant (ALC) Designation to represent you and your best interest.

ALCs make up less than 1% of the population of REALTORS® across the United States; this is primarily due to the fact that it is not an easy designation to obtain.   Unlike other designations that can easily be earned after attending an 8- or 16-hour class, the ALC Designation often takes years to finally accomplish. With over 100 hours of education required, as well as closed transaction volume requirements, the process is one of the most tedious in the real estate business.

Whether you’re selling a working farm or ranch, transitional land, a hunting or fishing property, timber ground, or a development, ALCs are educated and experienced to represent you in the sale or purchase of your property.

While other real estate agents may be part-time working a few hours a week, the dedication and commitment of a full-time ALC is constantly working for you and your best interest.  Whether it’s their unique marketing tactics to get you the most qualified buyer, their professional mapping standards, or their capability of networking with other professionals all across not only the United States but also the world, ALCs are some of the most committed and professional land brokers in the real estate industry.

As a seller, the track record of ALCs has a direct correlation to putting more money in your pocket and doing it in a timely fashion.

Quite often, sellers of farms and ranches will get to a point in their lifetime where it is just too difficult to work the land anymore, at which point they’ll decide to put it on the market. An ALC can provide the proper contacts for you, as the seller, to consider the tax consequences before you actually put your ranch on the market.  A lot of less educated brokers often overlook this crucial step.

Prior to putting your property on the market, it is important to have a discussion with an ALC about who the target market will be for your real estate.  Often I’ve dealt with sellers that think the buyer for their property will be a working farmer or rancher like them, only to have me educate them that the highest and best use for their 160 acre ranch is no longer a ranch at $2,000 an acre.  Due to the high costs of real estate prices in the city, the highest and best use is now four 40-acre home sites at $3,500 an acre.

ALCs often have a much broader scope of property marketing and advertising than the typical real estate agent. While putting a sign on the property and putting the listing into the local MLS might be sufficient for selling a home in a hot market, selling a ranch or a rural property takes some serious understanding of how to properly market the property to qualified buyers. No two properties are the same; therefore, it doesn’t make sense to have the same marketing approach to every listing.

Every rural property is unique and so are the buyers that are going to purchase them. While harvest information and production numbers might be important on a hay farm for sale on a county road, elevation, topography, and proximity to public land access are important to a recreational property a little further down that same road. The hay farm could be purchased by an investor doing a 1031 Exchange if the numbers are clearly advertised and put in front him, while the recreational property could be purchased by a buyer who has been saving up for several years just to find a little property where they can take their kids hunting and fishing.  These two buyers will likely not be looking on the same websites and publications for these two totally different types of properties, and ALCs realize that.

It is not easy to finance vacant land, ranches, and recreational properties. Many buyers are uneducated to this fact and are under the impression they can purchase land with little cash down like they did their first home when they only had to show up with 3% – 5% down payment at closing. Buyers contact me on a weekly basis on my land listings and are shocked when I qualify them and tell them that they will need 25% – 35% down in order to make a land purchase. By working with an ALC, you, as seller, are going to get a REALTOR® that understands how to qualify buyers before they step foot on your property. That ALC is also going to have the lending institution contacts to make sure that a buyer doesn’t get under contract on your ranch, just to have the deal fall apart a few weeks later due to financing reasons.

If you’re thinking about selling your property in the near future, why not work with the best in the business? Let an ALC represent you in your next land real estate transaction, and see the results they provide for not only your pocketbook, but also your time. Check out the REALTORS® Land Institute’s Find A Land Consultant search tool to find an ALC near you.

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: Justin Osborn, ALC, is a licensed associate real estate broker with The Wells Group. Justin is a member of the REALTORS® Land Institute and serves on their Future Leaders Committee.

The Characteristics & Attributes of Land

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Unlike homes in certain residential developments across the country, no two parcels of land are the same in my mind.  Sure they may have similar views or produce a similar crop, but there are likely many different attributes that each property might have that are not visible from just a site visit online or from studying a map of the property.  In order to completely grasp these attributes to their fullest extent, there are a number of important questions that must be asked prior to making an investment in land.

Conservation Easements

Is the land encumbered with a conservation easement?  This should be one of the first questions asked when looking at land in my mind.  While some landowners may be looking to permanently conserve the land while getting a healthy tax benefit, others may want to have the opportunity to develop it at some point down the road.  I’ve seen lots of common sense conservation easements over the years that do not hinder the use of the land in a significant way, but I’ve also seen some bizarre conservation easements that can greatly affect the overall market value of a property.  Consider the long-term effects of a conservation easement and if they’re right for you and your heirs.

While most parcels of land do not have conservation easements, some might have rules, restrictions, or covenants that the owners must abide by.  It’s imperative that this be investigated so that you know what can actually be done on the property.

Hunting Properties

Buyers of hunting properties, especially in the West, often look at proximity to public land.  While many landowners consider it a luxury to border National Forest, a lot of recreational buyers consider it a negative if there is a public trailhead nearby.  The last thing any outdoorsman wants is to purchase a gorgeous high-country elk hunting property bordering the National Forest, just to the have the public legally walking on the other side of the fence in blaze orange come hunting season.

In states where public land is more rare, it’s quite common for a hunting buyer to look at smaller properties that are adjacent to large cattle ranches or large farms full of crops, as these will typically hold and attract a significant amount of wildlife.  If the neighboring properties are all 80 – 160 acre parcels with homes, then there is a very good chance the hunting opportunities will be very limited compared to if the neighboring properties are a peanut field on one side and a cattle ranch on the other.

Waterfront Properties

Avid fly fisherman will often look for two types of properties.  Those with deep enough pockets strive for acquiring a long stretch of river, often at least half a mile, to hold enough holes where they can fish without feeling pressured from neighbors both upstream and downstream.  Those looking for more affordable options will often look in ranch communities or platted subdivisions that offer fishing easements for its members or property owners.  These fishing easements can range from 1 – 6 miles of premium fishing habitat with very little pressure, as most property owners in these types of communities are typically absentee owners who have a primary residence is another state.

When purchasing waterfront land it’s important to obtain a floodplain map.  These can often be found through FEMA, but I encourage you to have the land surveyed so that you have the most up to date accurate elevations.  If you’re ever planning on building, be sure to do your proper due diligence and investigate insurance options prior to your purchase.  Flood insurance certainly isn’t cheap and it must be considered prior to purchasing land in low-lying valleys or along waterways.

Farmland

If farming is the primary purpose for a land purchase, knowing the soil type and the annual precipitation is going to be imperative.  If water rights are applicable, details of the water rights and the method of delivery for those water rights will be imperative to understand.  The length of the growing season and cuttings per year must be considered as well with farm ground.

Access

Access is another key component when comparing different parcels of land on the market.  While most properties around the United States have decent year round access, it is not unheard of for there to be no year-round access.  I’ve seen properties that can’t be accessed in the winter unless it’s via snowmobile, and I’ve seen properties that can’t be accessed after a heavy rain due to all the clay.  Vegetation and soil type can vary from region to region, and it’s important to know how those can affect the access during the different seasons of the year.  Along with access must come the conversation of access easements.  It’s certainly not ideal to cross a neighbor’s property to get to yours, so this also must be investigated if it does not appear that the property has direct access off of a road.

Utilities

Location of utilities and infrastructure should be a given when it comes to looking at land, especially residential home sites, but I’ve seen several buyers purchase land over the years because of a fabulous view it offered and didn’t give any consideration to the costs of pulling utilities to the property.  While solar has certainly gotten much more popular over the past few years, the majority of the public still desires to be tied into the electric grid.

Domestic water should certainly be another characteristic that buyers consider if they plan on living on the land.  If purchasing land in a rural area, it’s wise to talk to the neighboring landowners with improvements and see what the depth, yield, and quality of their water wells are.  (Some states have this information posted online on their Division of Water Resources website).  If you see a water trailer or a pickup truck parked next to their house with a portable cistern, this should be a red flag as it likely means they are literally hauling water for domestic use.

Residential

When dealing with residential homesites it’s important to consider the direction in which the land lays.  For example, a prime home site in the Rocky Mountains will often have good southern exposure for generating great natural light in the cold winter months.  On the other hand, a home site in the Texas Hill Country would ideally be more east facing and have a lot of mature trees on its western boundary, providing a good amount of afternoon shade over the home in the hot summer months.

Another question one should consider when looking at land is the long-term potential of that land generating an income.  There are a variety of ways to generate income from vacant land.  A few examples include the following:

  • Income from leasing the mineral rights
  • Income from leasing the pasture for grazing
  • Income from leasing the land for crop production
  • Income from leasing the water rights
  • Income from leasing the land for storage (RV’s, boats, etc…)
  • Income from leasing RV or tiny home sites
  • Income from leasing the land for wind turbines
  • Income from a hunting or fishing lease
  • Income from recreational activities (mountain biking, ATV-ing, etc…)
  • Income from harvesting timber

Wildfires

With the wildfires that unfortunately spread across many states this year, another important factor to consider when purchasing land is the likelihood of the land burning and the long-term effect it could have on the property.  Is the land a healthy forest with little undergrowth vegetation, or is it full of dead timber that is likely to go up in flames?  What are the neighboring properties like that border it?

Despite what many folks might think, selling and purchasing land is not an easy task.  I encourage you to do your proper due diligence and think about one of the most important attributes of all, and that is the family memories that land can offer for generations to come.  Whether it’s eating a meal from the family garden, watching a child harvest their first Thanksgiving turkey, or building a cabin next to the river, the right parcel of land can offer the opportunity to bring families together in a way that unfortunately far too few of people are truly experiencing these days.

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.

Justin Osborn is a licensed associate real estate broker with The Wells Group. He is a member of RLI’s Future Leaders Committee.

 

A Record LANDU Education Week

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In 1984 George Straight was launched to the top of the charts with his # 1 song Does Fort Worth Ever Cross Your Mind. Now, 34 years later, a record number of RLI Members will likely be launched to the top of the charts in their own markets thanks to one of the best LANDU events ever put on by RLI. With 50 participants involved in nine full days of intense classes, along with evening festivities most nights, there was certainly not a down moment during the week.

Attendees came from all over the United States this year. We had representation from brokers that specialized in selling the Alaskan frontier, the California coast, recreational properties in Colorado, hunting ranches in Montana, working ranches in Texas, timber farms in Georgia, rural developments in Tennessee, commercial properties in Alabama, and citrus groves in Florida. The camaraderie and knowledge alone that was shared amongst just the attendees was certainly both enjoyable and valuable. It’s quite clear just from engaging in conversations with RLI members from across the country why they are some of the top real estate agents in their markets.

The RLI Texas Chapter hosted us to a fabulous evening at the Fort Worth Stockyards. Visiting the Texas Rodeo Hall of Fame and Niles City Hall Saloon were wonderful ways to start the evening. A special thank you must be given to Lone Star Ag Credit for the drinks and amazing dinner they treated us to at Lonesome Dove Bistro. What would an evening in the Fort Worth Stockyards be without a night cap at the White Elephant Saloon?

Obtaining the Accredited Land Consultant (ALC) Designation is no easy feat. With 104 educational hours being required, it’s something that can literally take years to accomplish. LANDU did a fabulous job of condensing these hours into the nine days that we were in Texas, without cutting corners on the quality of the education. I’ve taken real estate classes in multiple states across the country, and I must say that the instructors we had at LANDU were by far some of the best instructors I’ve ever had. It was an honor to learn from them and hear about their years of experience in the real estate industry.

In the Transitional Land Real Estate course, we discussed the financial aspects, physical attributes, and the governmental, legal and economic factors that can greatly impact a piece of development ground.

This carried over smoothly to Land Investment Analysis where we analyzed data to calculate the net present value, net future value, internal rate of return, and multipliers and ratios for different properties when determining the highest and best use of those properties.

In the Land 101: Fundamentals of Land Brokerage course, we discussed the tools and techniques that are involved to strategically market and sell both vacant land and rural properties.

Agricultural Land Brokerage and Marketing was certainly educational in that it brought to light all the different economic factors that can affect the value of agricultural land.  It also taught us how to analyze and calculate the income potential of farm land.

The Tax Deferred 1031 Exchange class educated us on the different tax laws that exist for our clients, and how we can help them defer taxes on their investments.

Even though I’ve been a licensed REALTOR® for 16 years, the topics that were covered in the Transitional Land Real Estate class, Land Investment Analysis class, and Tax Deferred 1031 class each gave me tools that I literally put to use in my practice within the first three days of being back in my hometown.  Being able to pass along my knowledge and expertise to my clients will certainly separate me from my competition, and I have LANDU and RLI to thank for that.

As George Straight says in Does Fort Worth Ever Cross Your Mind… “Good memories don’t fade so easy.  Does Fort Worth ever cross your mind?” I think I speak on behalf of the majority of the attendees that participated in this year’s LANDU Education Week when I say that the good memories will certainly not fade so easy from the fun times we created getting to know one another, and when Fort Worth crosses our minds we’ll think of the eventful evening we had together that night thanks to RLI.

 

Justin Osborn is a real estate broker with The Wells Group. Justin is a member of RLI on the Future Leaders Committee working towards earning his ALC.  He currently resides in Durango, CO.