Rural Real Estate Trends and Directions - Nine Predictions

1.  Prices of almost all types of rural real estate will rise steadily in the foreseeable future.  Rates of appreciation will vary, according to where the property is and what type of property it is. Appreciation rates will beat inflation and have less volatility than stocks.  Four or five percent annual appreciation is a reasonable—and modest—forecast.

2.  Impacts, both real and imagined, of global warming will encourage relocation from the coasts inland, particularly away from the Southeast U.S. and Gulf Coasts.  Upper middle south and mountains will benefit,particularly non-coal-mining areas of Tennessee and Kentucky.  Rural areas of colder states will benefit; hotter, drier states will become less attractive. Read more »

Remodeling and remuddling your place in the country

Spring brings out the remuddler in us. Warmth encourages knocking down, throwing out, fiddling with and adding to.

The line between remodeling and remuddling is clear after the fact. A remuddle never looks quite right and doesn’t work quite right either.

Particularly prone to immediate remuddling are new property owners who have convinced themselves that anything that was plenty good enough for the previous occupants must be done over. I’ve also observed this behavior among my local woodchucks.

I, too, have succumbed to this new-owner need to replace what is with something I’ve half thought out. I think this instinct in men has something to do with testosterone and marking territory. I’ve never met a guy who was unhappy with a crowbar in his hand.

Women in my experience remuddle less and remodel more. On the negative side, they care about interior design. I suffer constant criticism from both my wife and daughter for hanging my college lacrosse stick in our living room. They refer to it as  “decorative adolescence.” Read more »

Fourteen Numbers You Need to Know Before Buying Country Property

1.  Acres.
How many acres will the seller convey to you, physically on the ground and legally in his deed?  These numbers should be the same, but are often different.

A surveyor can plot the seller’s deed description on a topographical map that you can use in the field. The plotting will determine exactly how many acres the seller can convey to you by deed and whether the deed description closes.  If the drawn boundary does not close, there’s an error in the description. It’s not uncommon to find either more or less acreage on the ground than in the deed.

2.  Tax-assessed value.
What is the tax-assessed value of the seller’s property?  This dollar amount is supposed to reflect a reasonably current fair market value of the seller’s real estate.  It is the number on which the seller’s property taxes are calculated.  The number is found in the county courthouse where taxes are assessed.  Tax-assessed values are updated every few years, but they may not reflect actual current market values, especially in rapidly appreciating markets.

3.  Fair market value (FMV).
What is the current fair market value (FMV) of the seller’s property as an entirety.  You can determine this by hiring an appraiser to do an appraisal for you before you submit an offer.  Make sure that your appraiser is approved by the lender that you plan to use, otherwise you might end up paying for two appraisals. A local real-estate broker can perform a competitive market analysis (CMA) of recent sales for you.  A CMA is similar to an appraisal done by a licensed appraiser, but not as rigorous.  Use the property’s FMV in negotiating price with the seller.

An appraisal does not research property for defects in title, acreage and its assets.  The appraisal provides you with an appraiser’s opinion about the market value of the property in gross terms.  It generally does not determine the real market value of timber and minerals. Read more »

How to sell country property in a crummy market

Many sellers today may feel quietly desperate. Recession is here; credit is tight; buyers are scarce; property is not moving.

Real-estate gurus advise sellers to cut their prices, pay more of the closing costs and improve their properties, if only cosmetically. Gurus, in my experience, usually urge followers to spend money, often on them.

Sellers can help themselves by embracing three principles: full disclosure, play straight and act reasonably.

The main idea is for the seller to build — dare I say this in a real-estate column? — a “relationship” with a buyer that rests on transparency and trust.

Recently, I found a For-Sale-By-Owner property advertised as 200 acres “of heaven” with all mineral rights. It was priced at $230,000.

I contacted the seller who gave me a little location information. The coordinates he provided were wrong. I asked him for a topographical map with boundaries roughed in, which he may have had, but, in any case, never sent. Read more »

Ten Quick Tips for Buying Land in the Country for Investment and Profit

1. Don’t make a deal on your first visit.  Don’t buy impulsively.  Don’t make an offer before scoping the property.  If you disregard this advice, include a 60-day study contingency with results acceptable to buyer in your contract; this allows you to void the contract if you find something during escrow that’s a deal-killer.                

2. Visit on a cold, rainy miserable day.  Look for water problems on the roof and at the foundation.  Is the creek high or in flood?

3. Visit at night and on weekdays.  Is night-time lighting offensive?  Traffic?  Noise?  Odors?

4. Submit your offer in the lowest low of the off-season.  Early January is a great time to buy rural property outside of the South, especially when the seller’s Hummer bogs down as he’s driving you around.

5. Never confide in a real-estate broker or agent who is working for the seller. Never reveal your finances or your best price.  Never tell such a broker or agent that you love the seller’s property or that you need to have it. NEVER. Read more »