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What’s in Your Wallet, A Good Land Broker?

What’s in Your Wallet, A Good Land Broker?

What should you require from your realtor? Is your representative qualified, capable and motivated? Is your agent representing you, him or herself, or the buyer? Can you trust your realtor to do the right thing for you? Lots of questions need to be answered before you list your property. The old adage, “you get what you pay for”, for the most part, is true.

Early Rise Ranch - Edisto River 2The real estate business has been difficult since the economic collapse in 2007. Much change has come about as a result of this. As a land broker and forester, I have had to make adjustments like so many others. Competition in our business has increased significantly, as well as more real estate companies and agents entering the profession. Many of the investors that have bought and sold property in the past have become real estate agents to try to make ends meet.

Competition is a good thing. Competition makes us work harder and stimulates creativity for those of us that strive to be the best we can be. Our work has significantly increased but profit margins are much tighter. There is always someone that will list property for a smaller commission and price the property at whatever price to get the listing. I had a professor from the New England area call me looking for land and his statement to me was “I have looked at property for months and everything on the internet is priced twice the market value”. He called me because what I had listed was within reasonable parameters of a true market value.

I could have endless listings if I had the time and funds to put them online and market them. My clients want results though. If your land broker understands and has knowledge of the market, he or she should be able to provide you with a reasonable assessment of value. No one can tell you exactly what your land will bring, but we can certainly give you a close estimate of value. The length of time to sell will also dictate where we price a property. Since 2007, I have learned to ask if there is some urgency or time frame in which a property needs to be sold.

Just having a listing does not help me as a land broker, nor does it help my client. It is important to me to be truthful and realistic. If I accept the job or listing, I john deer feller buncherneed to know everything I can about the property, as well as the seller’s motivation. I am going to spend whatever time and effort needed to accomplish the task. I utilize photos, maps, market data, forestry knowledge and years of experience to generate a realistic price and marketing plan. To a trained eye, value of the land is what it is. Land value may be a little more or a little less but I can estimate a price within reasonable parameters. Having good knowledge of the property better helps me negotiate my client the best price possible. I can tell you with confidence which offers are reasonable and which should be rejected. Furthermore, if the price is not within reasonable parameters and a loan is involved, the property may not appraise. If this happens, everyone’s time and money has been wasted.

I have received scam letters saying an agent has a buyer for my property. After calling them, they don’t know me or where my property is and they better not have been on my property without my permission! Every tract needs to be evaluated before you can have a real buyer. If a realtor has a large number of listings, he may not be able sell them and probably cannot service the listings appropriately. Find out about your brokers sales and get references.

rainbowoverpond-001In land sales, forestry knowledge is hugely important. We just inventoried a large tract with several thousand dollars per acre of timber. We have also sold considerable timber this year in excess of several thousand dollars per acre. Can you trust your land broker to represent your interest and have the integrity to make the right decisions? Does your agent have adequate knowledge of your product and the ability to market that product? Can your agent actually negotiate the deal and get it closed?

Our goal is to provide you with the best data available in order to make sound decisions about your land and/or timber investment. Our years of experience and knowledge of our specific land and timber market enables us to provide you with the expertise necessary to help you make informed decisions. It is very gratifying to help our many clients and know the best possible results were achieved. Give me a call to see how I may be able to help you make the most of your investment.

Change – Inevitable & Continuous

Change – Inevitable & Continuous

Change is a word we have heard a lot since 2007. We have all seen it and felt it. We are all affected by it. Change is inevitable as we learn and grow. As we mature through life and with time, our views and opinions change based on our experience, finance, technology and many other things. It is a continuous process that must be accepted and embraced. Not all change is what we would consider positive but, for better or worse, have to adapt to.

Lane - view 5What does this have to do with your land and timber investment? Understanding how our market is changing requires us to change strategy to achieve our goals. We have to find new and innovative means to compete and find success for our clients. This also means we have to work a little harder in gathering information and knowing about your investment to make a sound positive decision. We also know that there are no short cuts in making sound and prudent decisions. If you have done adequate due diligence, the best or correct answer or path becomes clear.

Green Hill Land and Timber does the due diligence required. Success for our clients is a direct result of hard work and understanding the land and timber business. Confidence in our decisions comes from years of experience and working with other professionals that stand out in our profession. Networking and sharing new ideas is essential to help us do the best job for our clients.

One of the biggest changes we have had to adapt to is banking regulations. There is money available for land purchases but guidelines and qualifying for loans isdouble loaders 1  much different than pre-2007. We are seeing increased sales of all size tracts since December of 2015. Until a few months ago most sales were of smaller tracts unless there were significant discounts in pricing.

Interest rates on treasuries remain low, stock market fluctuation and price volatility makes investor consternation understandable. Land is an attractive hedge on john deer feller buncherthis volatility and uncertainty. Consumer credit is still very low and financing is very attractive but you will have to have sufficient down payment. Returns on land, timber and agricultural land are a reasonable and safe investment assuming you have adequate time in your planning horizon. We are experiencing a surge in calls, activity and sales in land investments of all sorts. We are also seeing more buyers wanting land in the country as a change from city life.

So change is here and the investors are rethinking strategies. The economic wheels do seem to be churning and we have an optimistic view. There is still much uncertainty in our changing world but positive things are happening. Due diligence is imperative in finding the right land investment for your needs. We can help you with this very important decision. It does not cost anything to make a call to see what we can do for you.

Reflections & Projections 2015

Reflections & Projections

The year 2014 was a positive one for us with good land and timber sales. We are certainly not at the 2007 volume of sales, but we have experienced good activity. The larger-size land sales ($500,000 & up) have lagged, but smaller tracts have moved very well. All sales are directly related to price and the associated real value. Farmland and timberland are in demand at a price based on the property’s projected return. Recreational properties are still lagging, as discretionary spending for many is in short supply.

Interest rates are low and obtaining financing does not seem to be quite as difficult. Pricing a property and the appraisal process is much more difficult. A property must appraise using viable comparable properties for the bank to lend on land. The lending institution typically requires 20 to 30 percent of the purchase price as down payment. We have found that land must be priced within reasonable parameters or buyers will not make offers or even look. Listing a property at too high a price does not work. It is vitally important to evaluate every asset in determining price and to be able to justify the valuation. A trained and experienced land broker will understand this and be able to make this valuation.

The timber market is holding steady with its typical sporadic ups and downs. In our experience, it is very helpful to already have your timber evaluated and cat log skidderready to sell when the market is up for your type products. We have helped many landowners catch that perfect market and take advantage of it. Pulpwood prices are strong in our area. CNS and pine sawtimber prices are good, depending on planted wood versus natural wood, and some weather related adversities. Hardwood sawtimber prices are excellent. The USA, and specifically the Southeast, is a very competitive and strong market. We recently sold land to a Chinese company expanding into our area to supply raw material to their mill in China. They see our area as a viable sustainable market for their business.

Our Projections

Green Hill Land & Timber has a positive outlook going forward but we are cautiously optimistic. Commodity prices are dropping, which are causing farmers to reevaluate their budget and farm plans. This will likely cause farm rents to adjust down. Some predict this will have an effect on land values as well. This may be a good time to sell farmland, especially if interest rates begin to rise. This administration has kept interest rates low and have not shown any interest in raising rates at this point. Many landowners find they get a very comfortable return or cash flow from their farm leases. This is another positive feature of land ownership.

We see technology as a very exciting and positive aspect of farming. Technological advances reduce costs, helping to create a positigrowers754-fields6ve bottom line. Low interest rates and low energy costs have also been a very significant factor in the farming community. This increased efficiency and productivity adds stability to our land market. Though the outlook appears positive, we see a very competitive market, with investors scrutinizing and analyzing every penny. This stems from one of the longest recoveries this country has experienced, causing a change in every American’s mindset. Each property will be identified, analyzed and classified based on its own associated value. There will be more work involved in determining why an asset is worth the asking price versus another property. Appraisal values will be scrutinized more closely. Lending institutions are more willing to finance but are requiring buyers to have more skin in the game in the form of higher down payments. There will be more sales and lending, but nothing comparable to the bubble level of sales in 2007. Quality tracts will demand premium prices, but lesser properties’ prices will reflect what the property has to offer based on return. The days of “Oh it’s priced a little high, but that’s OK” are gone.

The timber maturelargepinesmarket will remain good with periods of short-lived exceptional prices. Our area is very competitive and supplies a huge amount of fiber. As the economy continues to strengthen, we hope to see pine sawtimber prices increase but expect it to be a lengthy process. If you have high quality hardwood sawtimber, right now is the time to test the market. Find out what your timber investment is and what it is worth. Your timber could be a larger asset than you think.

If you are looking to sell land and/or timber, Green Hill has the experience, expertise and attention to detail that will make your investment a success. As a land or timber owner, it is imperative you know all there is to know about your investment to be certain you get the best return possible. We want to help you do this. Let us know if we can be of assistance to you.

Early Rise Plantation

Early Rise Plantation is reminiscent of the true southern charm of the old low country plantations. This top notch Gentleman’s Property is perfectly set up for hunting, fishing, entertaining and enjoying a grand time with family and friends.

Six Steps Involved in a Successful Timber Sale

Are you interested in having a timber sale? This article outlines the basic steps to follow to make your timber sale a successful one. All of the steps below raise questions you need to answer. These questions will help you plan or set goals to manage your timber investment and make your timber sale more successful.

[Read more…]

What’s My Land Worth?

The traditional way to value land is through the use of comparable sales. But what do you do when there are no comparable sales, an inability to secure financing and even fewer buyers? Many banks are requiring appraisals and requesting “Broker Price Opinions”. A BPO is what the broker believes is a reasonable price the property will sell for based on several factors related to the current market

The true market value is what a ready, willing and able buyer will pay that a seller not under duress is willing to accept. As a land broker, we try to evaluate the property based on the assets on the property, recent comparable sales of similar properties and other properties of like kind that are for sale on the market.

This valuation process has nothing to do with what you paid for your property or what value you want for the property. I have many landowners telling me they paid X amount of dollars for property and they want that amount plus a brokers fee as the sales price. I understand this and appreciate what they want, but buyers are going to research the property and compare it to other properties to find the best deal.

The first part of our valuation consists of breaking the property down into compartments of varying assets from timber type and size, land type, improvements (houses, barns, lakes, rivers, …) and anything we can find that adds value to the land including character. This may include a timber inventory and many other assessments of value. The second part is in a previous blog on our site regarding knowledge of the product and that market (Two Most Important Factors in Selling Land). It is important to know what other similar properties are on the market in that region.  Other available properties do have an affect on the value of your land. Part of our job is to have knowledge of these properties.

Many factors affect the value of land. Green Hill land & Timber is heavily involved in the land and timber market in this region. We understand the process in evaluating land and timber and can help you understand what and why your land is worth what it is. These values do change over time based on economic factors and the value of the improvements. Let us know if we can assist you with your land and timber investments.

Two Most Important Factors in Selling Land

Two factors that have a huge effect on the successful sale of your land is product knowledge and market knowledge. We keep statistics on our marketing, tracking who, what and where our leads originate and general listings activity. We also follow other trends in marketing of land and rural property. There are hundreds of places to spend money marketing, but where do you put ads that actually produce real buyers?

Buyers for rural property tend to look in areas other than MLS or Realtor.com. If you are searching for the traditional home buy, go to those sites. They work very well for that market. We have found that many of our leads have come from years of direct mailing and market awareness of who Green Hill Land & Timber is. We also reach outside of our market by participating in several huge networks utilizing the World Wide Web and national organizations that specialize in rural land, farmland, timberland and recreational properties. We have a strong local presence, but also have many non-local buyers contacting us. The ability to interact in both of these markets is hugely important in successful marketing.

Knowledge of your product is equally important in successful land sales. If you are contacted by some of the sophisticated buyers we reach, you must understand all about your product. These types of buyers are usually busy and want all the data necessary to decision making in a brief, condensed package. This means you need a professional with knowledge of the product being sold or you are already at a disadvantage.

Green Hill Land & Timber understands our product and we know where to find the few buyers there are in this tough economy. We specialize in rural land. We have the forestry background necessary to market timberland deals and make them work. When it comes to land and wildlife management, we have developed many properties optimizing the specifics of the landowner’s needs and goals. We understand rural land, what it takes to market the product and where to market your product. We would like the opportunity to help you with your land and timber and make it a successful experience.

Are You Paying The Right Amount of Rural Property Taxes?

Rural landowners have options to reduce their tax liability. Review your information at the tax assessor office to be certain what you pay taxes on is correct. Things to look for are correct acreage, structures, improvements and tax covenants. The tax assessor’s office does a remarkable job managing a huge amount of data. However, there are errors that go undetected and it is the landowner’s responsibility to verify their information.

I worked on one property about 100 acres short and another 100 acres over what the tax assessor was using for acreage. Some of the older plats are incredibly accurate but sometimes there are inaccuracies. I wrote a stewardship plan for a client and asked him if he was renting the house on his property and if he wanted to thin the pines. Turns out he did not own the house and pines, and had been paying taxes on a house and 30 acres of land for nearly 25 years. The tax office said they would start sending the tax bill to the proper landowner. There was no refund of taxes. The landowner needs to be certain of what they are taxed for.

Rural landowners have another very important tool in reducing their tax burden. There are three tax covenants that can be entered into that will reduce the tax bill. If you have larger land parcels, usually larger than 25 acres, you are eligible for local conservation easements. These easements are designed to help farmers, recreational and timberland owners reduce their tax burden by being taxed on a current use basis rather than a higher and better use valuation. If you live near a city and have 500 acres of timberland that could be used for development, you will pay taxes on a timberland investment. The covenants typically reduce the tax liability by 30% to 40%. Two of the covenants (Preferential and CUVA) are for ten years and the other (FLPA) is fifteen years. If you subdivide or develop property, you breach the covenant and have to pay penalties. There is a little more to it than I have explained but it is a great tool we recommend to many of our clients.

The tax assessor’s office assigns value to different land types based on quality or productivity such as upland, bottomland, cropland, swampland… They also assign value to improvements on your property. The tax assessor does a remarkable job but sometimes there are discrepancies that you can appeal or at least question the chief appraiser as to the accuracy of certain valuations.

One last comment on valuation is that, in Georgia, timber is not taxed annually like property taxes. You pay a severance tax or timber tax when you harvest the timber. This was a very good ruling protecting timberland owners. If you paid taxes on the timber as an ad valorem tax for 30 years and never sold the timber, you were taxed for the value of something that was never realized. In case of storm or fire damage whereby the timber could not be harvested or sold, you still paid tax. Today, you only pay tax on income you actually realized at time of harvest.

We hope this information s helpful in these times when every penny counts. Green Hill Land & Timber, LLC always welcomes the opportunity to help you with your land and timber investments. Please give us a call if you have questions on buying or selling land and timber.

screven-county-ga-754-8-acres/

Brady’s Branch Farms is 754.8 acres of gently rolling land with excellent soils. There are 5 center pivot irrigation systems with a total of 29 towers.

When and Why to Thin Your Pines

Thinning pine plantations is a process that occurs naturally with the help of Mother Nature or better yet, a forester. I am an advocate of thinning pines as soon as possible to keep the stand healthy and growing at its maximum growth rate. Thinning opens the stand so the trees grow, changes character of the woods and enhances the wildlife habitat.

 First, let’s look at why we should thin. Different landowners have different goals which can change the timing of thinning. If you are looking at managing for maximum returns from timber harvest, we tailor our management practices to facilitate growth of sawtimber and/or poles. These products are the most valuable. When figuring in the time value of money, it serves no purpose to grow trees past a certain diameter as you will get no more money for the product. Therefore, we grow trees as fast as possible to get them as large as possible or to the more valuable sawtimber size product.

We plant a certain number of quality trees per acre in order to get good growth and stimulate the natural pruning of the lower limbs. It is time to thin, when you see the lower limbs beginning to die and fall off, tree diameters have reached a certain size and tree height is adequate. You should not wait so long as to lose the proper percentage of crown (tree top) that you loose growth potential. Some soils are better than others, varying the timing of first thinning. Typically, we thin around the age of fifteen years. We will groom the stand again five to seven years later. The purpose of second grooming is to take out less desirable low quality trees and save the best crop trees. Final harvest will be around thirty five years of age.

There are several factors that will influence when we will harvest. First would be stand health and quality. There are times when disease, seedling quality, pine beetles, or fire will dictate an early harvest. In rare situations, the harvest may even be a final or clear-cut harvest to start over. Even though we have provided basic guidelines for harvesting, we can still harvest timber at any time during the rotation or life of the timber once it reaches merchantable size around age 14.

Most timber harvest are a result of sound management that follows the goals of the landowner. Some other management criteria are wildlife management, aesthetics, and sawtimber production. If we are managing for wildlife, we may thin heavier than normal or leave special buffers. Most sawtimber rotations thin at ages 15, 23 and final harvest around 35, as mentioned above. Soil productivity may vary the timing somewhat. We manipulate timber stands for aesthetics based on what the landowner perceives to be beautiful or appealing.

Price deserves a paragraph for itself. Timber is not an annual crop that has to be harvested exactly at a certain age. It does not make a huge difference if we harvest this year or in two years. Most likely, the timber will be fine and remain in good condition. Personal tax preferences or timing of other investments may influence a timber harvest. Price does fluctuate heavily, influencing when we may want to harvest. It is very important for pulpwood thinning to be done in a timely manner to keep stands healthy and growing. The second or final harvest of higher value products should be timed with a good market. Weather will have an influence on pricing, too. Weather can cause a basic supply and demand curve that will produce significant swings in the market price of all products.

Green Hill land & Timber, LLC works very hard to bring all of these factors together in managing our clients’ timber investment. We would like the opportunity to help you with your land and timber investment.