In Part 1, the idea of various land specific websites was discussed. This time let’s surf around the topic of social media. Not that long ago everything was e-business, e-commerce, e-books and now it is just normal day-to-day regular business to have a website, shop online and read digital books. The same thing is happening with social media. To re-phrase an old saying… what was once new is old again.

Social media began with an online place for your “stuff” (most notably the music crowd that adopted MySpace in droves when it debuted) then along came likes, tweets, posts, and now timelines. But now it’s not really social media as a “New” category anymore – it’s business. Nearly every brand has a Facebook page or Twitter account and although new tools show up like Klout and Google+… it really all is just forms of marketing.

New social networks like Chime.in are popping up like popcorn all the time. How could anyone let alone your land agent keep up with all these social profiles? They should be outside on the land and not face plowed into a computer screen, right? True enough maybe but the cold hard fact is that nearly everyone starts their real estate search online long before they contact an agent. The National Association of Realtors had a stat a couple of years ago that was nearly 87% of buyers start their searches online first before contacting anyone. That number has likely increased even more.

So how do you know if your land agent is marketing your land on the right social media sites? The short answer is you don’t! No magic silver bullet exists that puts your listing on every single place but as with most things there are some hot spots. The major players are Facebook, Twitter, LinkedIn and now Google+ might be added to that list. So should your land be listed in all these places? Probably not. However, agents that network aggressively will have profiles on these sites and keep them current. An agent flooding their news feeds with listing advertisements will be ignored lightning fast as users quickly hit the “Hide” button.

A quick and easy way to look up what profiles a person or brokerage has is to see if they have a Follr profile like this or an About Me profile. These sites or others like them list all the profiles in one place and make it easy to see at quick glance which networks they use. The number of profiles is not necessarily indicative of effective social media presence because sometimes profiles get setup at hundreds of places but they are never maintained so look for activity at least monthly or in some cases weekly depending on the network. So we’ll use the top websites as examples of how land might be marketed.

Facebook

First, Facebook. WHY? Well, because the whole universe is on there it seems. Facebook individual profiles are not the best place to market anything but likely the agent would have their job description and links to their websites or listings from their profile. The other option is a Facebook Business Page which is probably where most agents post information about new listings or they might even have a special tab setup just for listings. However, an overlooked source on Facebook is group interest pages like hunting pages where someone might be posting that they are looking for hunting land. This is a perfect opportunity for an agent to pop in and comment that they have a listing that might work. A word of caution though… Social media is time consuming and not everyone is going to be active on all sites so just because an agent is not posting and commenting all over the place does not mean they are not marketing your land.

LinkedIn

Next up, LinkedIn. This is definitely not a place to advertise listings but it is one of the best places for agents to network and connect. The profile should be current with links to their listings or website but again posting listings in the news feed will not be useful. However, there are several groups where listings can be promoted and discussed. We have used some of the cattle and beef networks where we keep up on hay and alfalfa topics and have posted links to our pasture listings when appropriate. LinkedIn also has several real estate groups where listings are allowed but moderation is key or the listings will just get lost in all the noise.

Twitter

Finally, we have Twitter. Basically a shortened bullet point version of other sites like Google+ or Facebook. You have to talk concise and fast on twitter and the news feeds move so fast that just like the commercial – it will be so… 47 seconds ago. Twitter users hate automatic tweets from other sites so if a twitter account is linked to Facebook and the comments are being automatically posted – they are cut off after 140 characters and then the person has to go click on the Facebook link which defeats the purpose of being on Twitter. The 3 best advantages of Twitter are lists, hashtags and chats. Lists are one way to group users together so you can read news feeds from specific followers. Hashtags are the number pound (#) sign before words on Twitter and they make it easier to find tweets on topics you are interested in. For example, by searching for #LandThink you can pull up only tweets with those hashtags. Hashtags get very popular during breaking news like #Egypt or #Japan and of course Charlie Sheen’s antics can be followed via hashtags. Hashtags go hand in hand with chats as well. You can follow a topic of discussion by following that particular hashtag. #haytalk is only about hay but they also have specific chat times where in real time they discuss issues like livestock feeding and forage management. There are hundreds of chats going on each week and finding new places to connect on any topic is very easy on Twitter.

So how do you navigate the maze of social media and know which places are best? You don’t. Maintaining a few good profiles and making meaningful and helpful posts about relevant topics is a general rule of thumb. Keep in mind that this is just a discussion about one aspect of marketing and that each property will have unique marketing requirements due to its attributes and location. Each agent is also different and has tools that work for him or her the best. Not one social media platform or one website is the best or the only place a property should be posted. Social media is just another tool in the box and in the end that really is all you need… a good toolbox.

When you decide to sell your land – whether it be farmland, timberland, ranchland or hunting land, be sure to ask the agent about the websites where your land will be listed. After you ask about websites then ask about social media websites. We’ll do a two-part series and cover social media next time so let’s start with websites.

For residential properties the big three are Realtor.com, Zillow.com and Trulia.com. Although some may include Yahoo, it is really just a Zillow feed. For all practical purposes these websites are useless when it comes to the land market. They are not setup for easy searching for rural properties. They require “Actual Addresses” and for the most part they are just cumbersome and difficult to navigate for any type of vacant land properties.

For land the big three are LANDFLIP.com, LandsofAmerica.com and LandWatch.com. We all have our favorites, but for the most part these websites list more land than all other smaller land targeted websites combined. There are others that feed off or have merged with other sites but these are the main ones that buyers will find first in any search.

So, if your agent is focusing all efforts on MLS advertising which mostly only reciprocates out to residential websites to sell your land then you are likely not getting the full marketing you need. Land buyers search out specific land terms and visit land websites often. Most buyers will tell you that they have had a search setup at a land specific website for months or some cases even years in a specific county or even several counties. Recently, a buyer lead contacted us and told us that they found a land listing that they were very interested in but that the listing agent was from out of state and sold houses at their website. They wanted someone who was actually from our state that specialized in land to help them. They did not even call the listing agent on this property. Instead, they searched out the words “land” and the specific area. So, if your agent is not even getting calls about their listing then you have a major marketing problem.

Another issue with listings is IDX, MLS feeds, and syndication. Unh? What is all that mumbo jumbo and why should you care? Most folks do not care about these terms nor do they even need to know the technical details but your agent should know exactly what they are and whether they use them or not.  If an agent chooses to list land on the Multiple Listing Service (MLS) then agreements can be made and those listings can be shared via IDX at other agent websites with specific rules. Syndication is where the listing feeds out (or syndicates) to other websites. For example, most MLS’s will syndicate their listings to Realtor.com meaning that the agent does not have to go to Realtor.com and re-enter the listing. This all sounds great but the problem is that not all websites bring in the same data nor do they all present it the same way. Some will only list the brokerage name and no agent contact information, some will only import one photo, etc. and the list goes on. It can become a nightmare for an agent because when the listing sells they find it nearly impossible to get it off all the syndicated websites.

The bottom line is that you need an agent that understands and knows exactly where their listings are posted. Also, they need to be able to edit or delete those listings at each and every site. Nothing is worse than having an old listing that a buyer calls on and they are told it already sold. It frustrates the buyer to no end especially now that most of the major websites offer agent advertising by zip code. A buyer will click on a listing and then see three buyer agents that have paid to be there. The buyer contacts one of them and usually the advertiser has no clue about the listing. Buyer frustration cycle starts all over again. Buyers give up and start searching out the listings and specific companies that sell land and contact the listing agents directly about the property.

A major real estate firm recently announced it will stop sending listings to Realtor.com and Trulia.com. This is not a small specialized local company it is a huge brokerage covering multiple markets. You can read all the details about the specifics but the major point is that it is a residential firm not a land brokerage. They recognize the importance of their listing posts and they want their agents to actually get the inquiries and leads for their own listings. Each area will be different and no blanket statements can be made about which site or which listing strategy is best. However, one thing is certain your listing agent should have a plan for the marketing and know exactly where the listing has been posted.

Websites that focus on certain keywords for search engine optimization (SEO) are one of the best tools a land agent can use. LANDFLIP just announced a new specialized search for land listings this week called RANCHFLIP.com. These are exactly the types of tools that you should be looking for your agent to have in their marketing plan.

Marketing includes more than just websites. In Part 2 we will cover social media marketing.

Well, apparently it’s not the newspaper anymore. As a culture we have completely shifted away from something we once thought was essential to our way of life. It was our window into the world. Newspapers held our leaders accountable by reporting of their plans and actions. Conversations around town centered on articles that appeared there. One of the most iconic images of the American way of life is the picture of dad sitting in his chair with the dog laying beside him on the floor, while he smoked his pipe, warmed himself by the fire, and read the newspaper. Responsible citizens had to read the newspaper. Socialites needed to read the newspaper. Businesses loved to use the newspaper…which brings me around to my point. “Finally!”, you say, “Robert, I agree with you but what in the world does that have to do with land?!?”. I’m glad you asked. I’m tired of wasting hard earned money advertising your property in the newspaper to make you feel better. It ain’t gonna work no more!

The way we consume information has changed dramatically. We have more and more individual control over what information we choose to ingest. People simply are not choosing the newspaper as their source of information any longer. When it comes to information about land, the land market, and what’s for sale, the Internet is King. Newspapers are simply a jester in his court today. “Now Robert, What have you got against newspapers?”. Nothing. I like them. I’m a bit antiquated and like reading them. They are comfortable to me. I understand and like that the editor will throw his particular bent into the facts and pass it off as unbiased. Come to think of it, that’s probably much worse in the way we consume info today. I’m biased. You should go out and buy land. Right Now!

Back to the subject at hand. Newspaper ads don’t sell your property anymore. I’ve been in this business long enough to know that the classified ad in the major metropolitan newspaper nearest to the property was once the standard-bearer for most brokers. If you wanted to make the telephone ring at the office, you simply placed an ad in the classifieds, and thousands upon thousands of people saw the ad. The phone would ring non-stop with a well-worded few lines and a toll-free number for them to call. It was the way business was done. Brokers have always known this was better for prospecting than selling a particular property, but sellers demanded it anyway. Brokers provided it, and that was that. Today sellers still ask for it, because that’s what they are “supposed” to ask their agent to do for them. The results are dramatically different. I’ve known this for quite some time, as has anyone else in the business, but the listing public still does not collectively “know” this. As an example, our company recently began marketing a major landholding in Alabama. The seller asked that we provide newspaper advertising in addition to all of our other marketing efforts. We wanted the listing, and agreed to do so. So we ramped up on the opening week of college football…the one time of year when newspaper sales is the highest in the South. We ran ads that weekend in several metro-areas in the Southeast. Thousands of dollars spent, thousands of newspapers printed. Not One Call!…even with the toll-free number. Not one. This type of campaign would have generated a hundred calls or more at one time. The world is different today.

Our world is filled with advertisements. People are largely either oblivious or completely resistant to it now. Numb might be a good word. Until someone is ready to consume your particular advertisement, or they independently recognize their need for your product, it’s very hard to squeeze into their consciousness. They have to choose to let you in. If they let in a tenth of the information they are hit with a day, they feel is if they will explode. But they crave information that they deem important. They will search it out. They value information from people they have deemed important to them. Think Google and Facebook. You came to this blog because you value land information. How many other opportunities to take in advertisements and information are all around you, as you read this, that you have chosen to block out in favor of land-related information? Newspapers are part of the old world of information that was given to us in broad strokes. People are looking for a fine-point pen. The Internet allows that. People can search out the particular information that they want to consume. That information is highly valuable to them. They read it, study it, validate it, use it, and believe it. Newspapers no longer have that power. This is the strength of property listing sites such as LANDFLIP.com. The people that are there have a desire to consume the information they find there. They have the potential to reach literally billions of people…not the thousands of a major metro newspaper. That’s why I want to invest my money to promote your property there. Every dollar I spend there is worth at least $1,000 spent in newspaper advertising. It’s that much more valuable to you too, Mr. Seller.

So you have land for sale.  Either one tract or a hundred.  Are you advertising your property on the Internet?  Surely you know that at least 90% of all land buyers start their search on the Internet these days…at least those that start without prodding from a persistent agent.  So, if you are reading this, and not marketing your land on the Net, please take this as your wake-up call.  It’s time to move on to the new-fangled Internet gizmo to help sell your property.  But maybe that’s not you.  Maybe you are “listing” your property for sale through sites like LANDFLIP.com.  Are you marketing land on the Net or just “listing” it?  Ahh HA!  What’s the difference?  Maybe that’s why it’s not working for you?  Assuming that your goal is to use your online advertising to help sell the property, let’s take a brief look at the bare-bones of marketing land on the Internet.

The first step in Internet marketing your property does not start on the Internet.  It starts with buying a decent digital camera.

Camera. You can buy a perfectly functional camera for $100.  Learn how to use it.  When you go to a property that you will be selling, take lots and lots of photos.  It costs you nothing to take more photos than you need.  Think about it.  What does a professional photographer do to sell you a few photos?…thats right, lots of photos.  You want to take 5-10 pictures for every photo you think you need to use.   Try to get all aspects of the property.  You may not post all of these photos to the listing, but you will get inquiries asking for more photos at times.  It helps to have them available.  That makes you look like a professional marketer.

Scanner. On the assumption you have a computer and are at least semi-proficient in it’s use, the next thing you need is a scanner.  You need to be able to scan documents, maps, and plats into an electronic format that can easily be posted to websites, or emailed to prospective buyers.  Your land listing on the Net needs to have a clear map indicating the boundaries.  Topographical and Aerial Maps are also very helpful in helping a buyer understand the property…which is the product you are marketing.  Today’s buyer wants to understand these things prior to making a buying decision.  The easier it is for them to get that info, the better.  Good marketing helps them accomplish this.  If the land listing website does not provide a way to mark the property on a Google or Bing map, you need a location map scanned in and available as well…and you need to be on the lookout for a different land listing portal.

Descriptions. You need an accurate and thorough description.  This is not a thorough description, however accurate it might be: ”84 Acres of Land For Sale on Smith Drive”.

A description like that shows the potential buyer that you did not care enough about the property to spend any time there.  Why should they?  Describing a livestock watering tank as a fishing pond runs out of the lines on the other side.  You loose credibility with the potential buyer very quickly.  Thorough and accurate.  Does it have road frontage? Timber? Pasture? A Stream? A Lake? Utilities?…all the aspects that you know that people want to know about it.  It’s OK to sell the good aspects of a property.  Any good marketer and salesman will certainly do so.  However, do not overfluff the goods and create an unreal expectation.  Different properties require different information in the description.  Make sure yours is up to the task of helping the prospective buyer have a good understanding of the property.  Make sure you are marketing it.

Directions. What is the most important aspect in real estate? Location, Location, Location.  You need directions on the online land listing.  People like to know where something is before they actually buy it.  Again, on the assumption your goal is to sell the property, put directions on the listing.

Email. You need an email address that you check on a daily basis.  More often would be preferable.  You need to respond either by email or telephone to those people that have expressed interest in the property, and you need to do it QUICK!  There are many properties out there competing for that buyer.  The quicker you respond, the less properties you are competing with.

You are a marketer. Know your product.  The better you know your product, the more professional you come across to potential purchasers.  The more professional they perceive you, the more likely they are to trust you.  The more they trust you, the more likely they are to negotiate a transaction with you.

Qualify. It’s very easy for every Tom, Dick, and Harry to respond to your online ad.  You have to take a little of the bad with the good.  You must become proficient at figuring out who to spend your time with, and who not to.  Sometimes you will miss.  I know I have.  Nevertheless, you need to pay attention to this step if you are going to leverage Internet technology in your marketing efforts.

The above are the minimum requirements for marketing your property on the Internet.  Anything less is a shot in the dark.  It might hit, and it might not.  Take these steps to make sure you are in line with your target.  You can do much more that will increase your professionalism and  your property’s exposure on the Net.  An example would be a property video posted on YouTube.  Most land sites now offer a way to either host that video itself or enable you to embed a video from a site like YouTube.  Another good suggestion is making sure your on-site property sign has a web address where prospects can find out more about the property.  You don’t want to miss those people because they did not have the info they crave readily available.

You are in control of how the property is presented, not the customer and their reaction to it.  Make sure you do your best to present the property thoroughly and accurately.  That consistently gets the best reaction from a public that is accustomed to ultra-professional marketing.

There is really no lack of information on how to prepare your home for sale. In fact, when I recently Googled the subject I got over 51,500,000 results. Yes, that’s over fifty-one million! While de-cluttering your closets and painting in neutral colors applies to all homes, country properties can create their own unique challenges. I was reminded of this in a recent transaction when it seemed that everything that could go wrong did, along with some things that I could only imagine. How could the deceased relative of a neighbor affect a sale of a property? Well he did and I now have more gray hair- but that’s a story for another day! In my time as a rural property agent I’ve seen a variety of issues kill or derail a transaction which could have been avoided with a bit of preparation. Following are 5 things you can do to give your property the edge over the competition, and help you pocket top dollar at closing.

1. Consider a property survey. A survey is usually a good idea (in many cases it’s required) if you will be splitting an existing property. Even if you aren’t splitting a parcel, a survey can expose issues that may then be cleared up before a buyer becomes involved. Survey markers also give a sense of security to buyers as they “know” what they’re buying. If you are going to split your property, a consultation with an experienced land agent can be a good idea. Their experience working with buyers can give you valuable insight on where to split the parcel to make it the most desirable. At times just an acre or two one way or the other can mean the difference between a quick profitable sale and a property that stays on the market for years. Your agent can also put you in contact with the proper officials to determine if the zoning is correct for the parcel size you want to create. Be aware that just because you create parcels, doesn’t mean it’s automatically rezoned to allow a residence.

2. Easements: These seemingly simple documents have the potential to cause more stress than just about any other single detail in a sale. The reason is simple. While most other facets of the transaction are negotiated between the buyer and seller, the easement often involves a third party which has no incentive to be cooperative with proposed changes. That doesn’t mean that you have to despair if you have an easement associated with your property. What I recommend to my clients is that they consider reviewing the easement with an attorney early in the sale process. Many of the older easements that I see in my business are critically vague and will be rejected by a buyer’s attorney leading to a lot of frustration before it’s resolved. Some things that most buyers will want to see on an easement are the width, length, legal description of easement centerline (determined by the survey), whether it is exclusive or non exclusive (others may use it), and whether it’s transferable. Other things may be added based on the situation. A maintenance agreement showing who is responsible for any maintenance on the easement may also be required especially if more than one party has use of it. A poorly written easement has the potential to be a deal breaker, but having an attorney update it before a buyer becomes involved can save the day.

3. Government Programs: When you’re preparing to sell your land, don’t overlook any government programs associated with the property such as Managed Forest Law (MFL) or Conservation Reserve Program (CRP) acres. These and other government programs will affect how a buyer is able to use the property so be sure to disclose them in a timely manner. Having a copy of the contract for the buyer to review will be appreciated and give them the information they need to make an offer while they are still excited about the property. Also, get a copy of any applicable development bylaws and building covenants. Having these readily available allows your agent to forward them to the buyer before an offer is made to help avoid costly surprises later.

4. Title Search: Here’s a scenario that you don’t want to experience: You have an accepted offer, the home inspection went well, and approval for financing is looking good. Then the title search reveals a surprise that derails the train. While most “surprises” can be resolved, there may be a few days of nail biting before the train gets back on the rails. Most of these surprises can be avoided by getting a preliminary title search at the time of listing. When you order a title search, the title company will conduct a comprehensive search of public records, maps, and documents to disclose any recorded easements, liens and encumbrances. If any potential deal breakers are uncovered, you can get them resolved before an offer is written.

5. Home Inspection: This last tip holds true for any property with a residence but especially for rural homes. Talk to your agent about getting a home inspection at the time of listing. The inspection is generally done after the offer is made, but completing it up front allows you to repair any defects before a buyer sees the house so you can negotiate with confidence knowing that everything is as it should be.

The good news is that sellers often don’t follow these suggestions and their sale is completed anyway. On the other hand, in a buyers market like we’re experiencing now, being prepared can not only add value but help your rural property stand out in the crowd. Taking care of these things ahead of time could very well mean the difference between a sold sign by the driveway and the disappointment and frustration of an offer that falls apart at an inopportune time.

“Should I try to sell my land now?” is a question many rural property owners are currently asking themselves. Over the holidays lots of people had family meetings to discuss what they are going to do with family-owned land in the coming year. Landowners often get to the end of the proverbial diving board and stand there staring into the murky waters that make up our current land market and take a long look before committing to make the leap.

I love working with landowners, and 9 out of 10 times I am the listing agent in a transaction. A listing agent works for the landowner, and should try to be as helpful as possible in helping their client achieve his goals while selling a property. When asked by sellers about what they should do or expect if they decide to sell, I try to be as honest about the current state of affairs as possible and help them have the expectation that even when marketed properly it could take a year to sell a nice property. I invariably hear, “Well I’m not going to give my land away. I don’t have to sell it.” (That phrase must be written on a slip of paper closing attorneys or estate executives hand out to new landowners when agents are not around, because that response is universal.) My advice in that situation is almost always to wait another year or so because you may be able to realize more money from the sale of your land then. Landowners usually follow up with, “But I would like to go ahead and put it on the market.”

I am a word picture kind of guy, so let me use a metaphor to help describe the current market of rural land in Alabama, and from what I gather it is much the same in other parts of the country. The market is currently packed with available rural properties for sale. LANDFLIP.com currently has 1339 active listings of land for the state of Alabama. I have done some research and discovered that there are over 100 companies that have some emphasis on land sales in our state. If we were to assume that a whopping 10% of all available rural properties in our state are on LANDFLIP.com, then we would have about 13,000 tracts of land for sale in our state at this moment. When a seller gets ready to put their property on the market, they essentially enter a competition with a host of other owners that are selling too.

Imagine you live in a major city, and you would like to go to a store that is 15 miles away at the heart of the city, and you need to be there about 5:00pm on a weekday. You know from living there for years that the freeway will be packed with people coming and going at that time of day. You have to decide how important it is to you to make it to that store at that time. So you hop in your car, and enter the fray. This same scenario is playing out right now in the rural land market. Lots of people are selling in this market for many reasons: the land may be bank-owned, distressed, or sellers simply need the money. Whether people are headed to the city-center to visit a store, hospital, or try to get home, they are all still part of the congestion. The reasoning makes no difference.

You look across the median to the south bound traffic and you see light congestion and drivers leisurely changing lanes. That is what a seller’s market looks like. Sellers can set prices within reason and have separation from other properties. That is what a seller needs to move a property in this market too: SEPARATION.

All of the cars on the freeway are moving at the same speed so they stay bunched up. This is exactly what happens when properties are priced according to stale comparable sales. A log-jam develops and properties seldom sell at those asking prices.

So how does a seller differentiate their properties from the competition? I tell my clients two things will sell your land in this market: price and marketing.

Price- It is imperative that you price the property correctly right out of the gate. New listings get a lot of attention as soon as they come on the market, and a well-priced property can sell within days or weeks with the right exposure. If you try to list it at a price that is too high to “just see” in this market, your land will get lost in the shuffle. I am seeing properties listed at 15% to 20% of the appropriate price get no attention, 5% to 10% will get minimal activity, and a property 5% to 10% under can get you a really quick sale. That is because properties offered slightly under the market price get attention from savvy buyers who know what price they “should” be paying. That is one way to get separation.

Marketing- Your land needs exposure to every prospective buyer. A seller or their agent must have a good strategy to advertise a property broadly. If 85% of prospective buyers are beginning their search online, as the NAR reported last year, then your land must be visible to those searchers. This is one way that a great land agent will help separate your property from the mix. A great agent uses the basic online tools to market it, but is also innovative and finds ways to maximize exposure for your property.

You don’t want a middle-of-the-road land agent in this climate. Find a great agent that has the pulse of the market in your area, and let them go to work on helping you sell your land. For your land to sell right now it has to stand apart from the competition through a combination of great features, good price, and exceptional marketing exposure. Find a way to separate your land from the traffic jam and get it sold this year. If you have a property on the market currently, make the necessary changes now and hopefully they will be met with success.

Everyone is swallowing hard in this market: sellers on price, buyers on turning loose of money and not knowing where the economy is headed, and agents at laying out money to market listings that may not sell. Finding a win-win solution for each party to a transaction will help get more deals to the closing table.

I am sure everyone has heard over and over the saying location, location, location when it comes to real estate.  That may hold especially true for residential and commercial markets, but I think it’s less important for the land market particularly the rural, farmland, and hunting land sectors.  Usefulness, Use, & Best Use are my replacements for location, location, location when it comes to rural land.

Before you list your land there are many factors to consider. Robert King’s recent post here on LandThink covers preparation of the land in detail but one thing that is usually overlooked by sellers is the actual market data.  A quality comparable is data on a property that has SOLD – not on the market for sale. An active property listing may give you an idea of your competition but it gives no indication of actual price sold. If there is any chance the buyer of your property would need financing, then an appraisal will be done and they always use sold data, not active listings or pending contract properties.

Things to look for in the comparables:

Sold Date
The date of the sold transaction is most important right now because of the fast changing market conditions.  Using comparables from a year ago is no longer feasible.  Some areas are so remote you may have to use a full year to even get a few comparables but try to keep it under 6 months if at all possible and take into account the seasons as well.  If several sales were in December they could have been lower prices due to willingness to sell by year end for tax purposes. Take care when looking at a comparable sale because you need to know more about the sale than just acres sold, sold price and the date.

Incentives
A qualified land agent that follows the market will be able to use unpublished data to support documented sold reports from MLS or other services.  Agents out in the market talking with landowners will know if land had been split, or if investors drove up a price in a bidding war or if a seller provided down payment assistance at closing which actually lowers the selling price. Every sold price in the MLS has a story.  The more experienced agents that focus exclusively on land sales will know the stories and can help you interpret the data.

Features
Features do not have nearly the impact on land sales as they do in residential sales. Certain features are inherently appealing though and will usually garner a higher sales price.  For example, in Kansas especially in grassland areas a pond is an excellent feature. All weather roads are a big feature in some areas where dirt roads become impassable during rains. So make a list of features and see how your land compares.

Use
What is the use of the property?  Is it the best use?  Was the land ignored by the seller which caused a lower price?  How can the land be used now?  Did the use change drastically and if so did it affect the price?  These are all things to consider and look at when evaluating comparable sold data.  Pre-development land can cause prices to skyrocket in an area but that does not necessarily mean that all land in that area can bring the same amount.  A qualified land professional can help you interpret the trends.

Distressed Sales
Should REO, foreclosure, short sales or any type of distressed sale be used as a comparable?  It depends. Some short sales actually still sell within market ranges so in that case they should be used. In reality there have been far fewer land foreclosures than residential so the impact of these sales in the land market will not be as drastic.

Competition
Finally you need to know what you are up against in the market.  You should drive by if possible or do online tours of other land for sale that is comparable to yours. Curb appeal is more of a factor now with land than it ever has been before especially with recreational land. If your opening gate is made of barb wire and falling over and the comparables all have solid metal gates with locks or even automatic openers then you need to make improvements or adjust your price accordingly.

After you have evaluated the data then decide your course of action.  If you are adamant on a price that does not coincide with the data then be prepared to have your listing agent say no to your listing.  You could linger on the market for ages and that would be a detriment to your marketing plan.  Instead offer the following solution to your agent.  If your projected listing price is drastically off from the data then sign a Pricing Agreement Addendum to your listing and agree to a sliding price change.  For example if you believe you can list your property at 25% above what the data supports then agree to a 10% price reduction every 60-90 days to keep your listing competitive in the marketplace.  Also re-evaluate any new sold data that comes out after your listing is put on the market.

Using sold data to determine your listing price will provide the best estimate of market value and decrease your marketing time.

If you have ever been involved in the marketing of timberland with mature timber on the property, you have probably faced the dilemma of deciding if you would be better off to cut the timber and then sell, or sell with the value of the timber built in. The solution to this dilemma will vary by property, location, species of timber, timing, goals, your tax situation, and many other variables. For example, in a market that shows strong recreational value in timberland properties, you are usually better off selling the property with the trees still standing up. However, this is not always true. It might be that the stand is so thick that one cannot easily navigate through it, and the recreational component of the property would benefit from a thinning. Lots of variables and several options could leave your head spinning and ultimately lead to inaction or a bad decision. It’s fair to say that this is a problem where two heads are better than one. Maybe three or four. I would suggest you and your agent work together on this decision. If the tract is large enough to warrant the expense, the services of a consulting forester will be extremely helpful in this process. You may also need the help of your accountant to help you sort out the tax consequences of your decisions.

Below, I will discuss some of the things you need to know in order to make the best choice financially, and then show you a mathematical approach to this decision.

1. What are your options for timber harvest? Treatments available might include: Clear-cut, thinning, partial-cut, or no-cut.
2. What is your financial timing? Timber harvest can bring in quick cash, but will probably delay final liquidation of the asset. Not cutting the property allows you immediate access to the real estate market, but sure does not guarantee a sale within a given time period.
3. What is the value of the timber that you will realize if you clear-cut, partial-cut or thin the timber? How much you thin the stand can have a big effect on this number. Any fees you will have to pay as a result of your decision to harvest the timber should be subtracted from your projected gross sales before application of the formula below.
4. If you cut any timber, how much will it cost you to make the property marketable again? Road repair, disposing of forest waste (limb piles), replanting, burning…etc. Many times the timber contract you negotiate can make the timber buyer responsible for these costs.
5. What is the tax liability incurred from the sale of the timber? This publication from Purdue Extension might be helpful in helping you calculate your taxable income from the sale.
6. What is your projected market value of the property after the elected treatment? What is your projected value of the property with no treatment (no-cut)? This is where an experienced agent will be helpful to you.
7. What is your projected tax liabilities for the sale of the property with and without the treatments? You might find this link on the IRS website helpful in determining this.

If you have decided that your financial timing could include timber harvest, below is a formula to help you break it down to a mathematical decision. You might need to run this calculation for any acceptable cutting treatment and then compare the results.

Projected Value of the property if you do not cut it
—
Projected taxes resulting from the sale of the asset at the projected value for not cutting
(If you are experiencing a loss on your investment at the projected market value, plug in the projected tax write-off here as a negative number)
—
Projected Value of the property after the elected treatment
+
Projected taxes resulting from the sale of the asset at the projected value after the elected treatment
(If you are experiencing a loss on your investment at the projected market value, plug in the projected tax write-off here as a negative number)
—
Projected net Income from timber sales
+
Cost to make the property marketable again
+
Taxes incurred from the sale of the timber
=
Positive Answer = Don’t Cut; Negative Answer = Cut
(A positive answer means that you are better off not applying the treatment in comparison to not cutting at all. A negative answer means that you are better off to apply the treatment in comparison to not cutting at all.)

Again, there are many variables that you have to account for along each step of the way. I hope this helps you to break down the process into a series of smaller, more logical decisions that add up to a better financial decision for you. This process is purely financial. Many other factors may play a role in your decision. Remember, lean on your agent for market advice that is specific to your property, a good forester for timber advice, and your accountant to help you understand your particular financial situation.

Sellers lower their asking prices to move their properties in a market that’s turned against them.

A cut in price will have more impact on buyers if it’s packaged with three trust-building gestures that position them to make a deal.

1. Provide complete property information.

I advise sellers to put together a packet that includes the following:

• Seller’s deed with boundary description. If the seller did a title search when he bought the property, offer it to the buyer. If the seller is offering less than a general warranty deed and fee-simple ownership (all rights, including minerals), explain why and what it means. Sellers can offer warranties as part ofa purchase contract that go beyond their deeds.
• Disclose any easements that run with the land, such as conservation restrictions and provisions for ingress and egress
• Topographical map with drawn boundaries or recorded survey
• Current tax-assessed value and property tax
• Balance on seller’s mortgage, if any; name of lender; assumability
• Original purchase price or seller’s adjusted basis in the property; length of seller’s ownership
• How is the property owned—individual (s), husband/wife, estate, business entity, etc?
• Willingness or not of seller to finance buyer; include conditions and format
• Honest valuation of particular assets, such as agricultural land and facilities, timber, minerals, income-producing activities, etc.
• Cost of current insurance; scope of coverage; insurance vendor
• Environmental issues that affect or limit use of property, such as floodplain, archeological resources, endangered species and their habitat; wetlands; ground issues (earthquake or landslide zone, sinkholes), invasive species, dumps, etc.
• Patterns of trespass, nuisance and annoyance
• Boundary disputes. Encroachments. Fences off survey lines. Unrecorded documents.
• Reason for seller selling.

Some very good country brokers follow this rule of thumb: “The more you tell, the more you sell.”

In this market, sellers have to build trust with their buyers. Full and accurate information is the way to do this.

Don’t exaggerate the value of assets or conceal problems. When the buyer discovers the truth, the trust that the seller has been building evaporates.

2. Explain your price.

Price is the bone that buyers and sellers usually gnaw on. “This is my price,” the seller says. “Too high,” the buyer replies. And it either goes from there, or goes nowhere.

I’ve found that buyers are more receptive to a seller’s price when it’s explained and justified with honest numbers.

3. Sellers: Make yourselves available.

When property is listed with a broker, a wall is erected between seller and buyer. Some think it’s useful to keep the sides apart with no face-to-face communication.

With country property, I’ve found it’s invaluable for the sides to meet, talk things over, build a relationship, find common ground and learn things that only the other knows. The seller has more information about his property than any agent, no matter how diligent.

Sellers can distinguish their properties from others on the market by distinguishing themselves. Providing an opportunity to meet in person, talk on the phone and email is the way to reach a deal in troubled times.

Talk is cheap; trust is dear…and invaluable. Build it…and benefit.