Some tracts can sell with a single phone call just because they are that desirable or - like quality farmland - just in big demand. But let's be honest - most land needs a period of time on the market to find the right buyer for the right price. If it's cheap enough, it'll sell. If it's in big demand, it'll sell. But what can you do if your tract is not in those two fast-moving categories? Let's consider a few steps that can help.
None of these are a silver bullet solution to your land selling immediately, but taking care of some of these items will certainly make your tract more desirable to buyers who are becoming more and more discriminating.
1. Decide if you really want to sell. This seems simple enough but you'd be surprised at the number of owners who call a land agent, spend all day showing him the property and completing the paperwork to list the tract. They spend weeks fielding phone calls and emails from the listing agent with questions and offers from potential buyers...only to still be wondering if they really want to sell it. This situation is usually the real meaning behind the statement "If it sells, it sells...if it doesn't, it doesn't." It's common for people to be in a position to not have to sell a piece a property - and that's a good position to be in. But an owner needs to make a decision that the property has a price and if he gets that price he'll sell. Or if she gets an offer close to it, she really needs to think it through. That old saying "the first offer is often the best offer" is true more times than not. Being uncertain about your intentions to sell can cost you money.
2. Make a good first impression. If you were buying a house, the last thing you'd want to see is the current owner's dirty clothes in the middle of the floor, a sink full of dishes or a car on blocks in the front yard. Those don't make a positive impact on a buyer when he shows up to look. Well, neither does a gate that won't swing open, roads that haven't been bush-hogged all summer or piles of trash and old appliances scattered around just off the main road. A little cleaning up and clipping the roads goes a long way in making a good first impression.
Just like a lived in home will have dings and battle scars, so will your land. No one expects it to be perfect. But take a look around and see what can be done to simply give it a fresher look. Hiring someone for a couple hundred dollars to simply bush hog the roads and trails in early summer could have a big impact on the buyers your land agent brings to see your property.
3. Eliminate the problems buyers don't want to inherit. That property line dispute you've had with Joe may seem like a little annoyance to you, but any new buyer will likely see it as a potential landmine he'd prefer to avoid. He'll just go buy something else. There are a whole list of issues that may be things we don't want to tackle, but most recreational land buyers are not looking for more problems...especially ones they may pay $2500 / acre for! They just want a nice place to hunt and bring their family and friends. Those issues need to be corrected before your property goes on the market. Here is a list of common problems that don't pass along very well:
No Legal Access - Most buyers avoid this situation like the plague. Talk to someone to guide you on getting the access you've always used made official and recorded in the courthouse. This step will likely cost you some money and some time, but it will make your property more valuable. It will also help sell it in a reasonable time period. If you can't secure legal access then be prepared to price the property accordingly.
Boundary Line Disputes or Uncertainty - People want to know where the lines are when they look at a tract. They want to see the corners marked. Get some prices and consider having a survey done. A survey will also clear up acreage issues that may come up prior to a sale that would cause delays or even a blown deal. If you have good corners, you can also hire a forester to lay in your lines. He can paint the lines or just simply flag them. You could go back and paint the flagged lines. Boundary disputes will come up with a serious buyer and a good land agent. It will get discovered and likely ruin the deal. Talk to your attorney and make a plan to get a permanent resolution to it.
Unopened Successions or Partial Interests - You have to have good title to be able to sell your land to most buyers. Unless buyers are familiar with partial interests, or you're selling it well below market value or you're selling interests in a larger tract (like a hunting club) you're wasting your time trying to sell an undivided share to the general market place of buyers. Property you inherited from a family member may be "yours" in sentiment, but it's not yours in title until the succession is complete and the judgment of possession names you as successor in title. Be sure that family property you have is 100% yours in title before you try to market it for full price.
Encroachments - If you know that your neighbor's barn is across the property line, get it resolved. There are also ways to manage encroachments so as not to allow it to become a form of adverse possession (where possession leads to ownership) over time. Sometimes encroachments can carry over to new owners with no real issues if they've been managed properly. Deal with it today so it's not a bigger problem tomorrow.
These are a few of the major issues that must be handled prior to putting your land on the market - and not just put off on new buyers - if you want the best price in the quickest reasonable time.
4. Roads, Trails & Crossings. Your tract may be drop dead beautiful down by that cypress slough, but if we can't get buyers down there to it...well, you get the point. Sellers will typically underestimate the value in passable roads, trails and creek crossings. But buyers notice them, or lack of them, right away. And they put more value on them being there than it usually will cost to put them there. Most buyers don't want to pay $450,000 for a project. They want to be able to close at 11:00 a.m. and be riding their 4-wheeler on the place before dark. You and I know that a decent dozer operator can cut a lot of trails for $100/hr. over a couple days and that a 36"' culvert can get us across that creek in the back, but most buyers don't solve that problem themselves. If you invested the time and/or money to get some of this done, you'd be half way to selling the tract before the buyer even shows up. Don't think that you need all-weather rock roads everywhere. Sometimes just 4-wheelers trails, bush-hogged and 1 and a 1/2 or 2 dozer blades wide, is enough to get around the tract and show off the highlights. Make the roads and crossings fit the type tract it is and the price you want to ask for it.
5. Price it Right. One of RecLand's best agents says this almost daily..."If no one's calling about it (your land) it's priced too high." He's right. However, all the high-roller action in the farm land market, pie-in-the-sky promises from weak land agents and what "land is selling for in________" (fill in your own unreasonable comparative area here) causes some people to expect the sun, moon and the stars for their 40 acre land-locked cutover. In our region of the country, if it's priced right - not under-priced! - but priced right, it will get some attention, some calls and will sell in a reasonable time.
Sometimes a buyer with different motivations will pay way more than typical market value for a tract. But that's not the norm. And waiting for that buyer to come along will likely cost you time and money in lost opportunity.
Get a good idea of what the market value of your tract is in a range. I'd rather hear someone say a tract will probably sell in the $1400-$1600 / acre range than try to hit the bull's eye with "I'll get you $1450 / ac for it." He doesn't know that for sure unless he already has a deal in mind and may be leaving some money on the table by not giving it some time on the market. The range of market value, when exposed for a period of time to many land buyers, lets you price it a little above the top of the range. This lets serious buyers know you are for real and presents the opportunity to get at or near the top of the range if it's a desirable place. When you get offers in the range, you can feel confident in making a selling decision knowing you're selling it for what it's worth.
Sometimes a property has enough uniqueness to it that we are not certain where the market values it. Or a seller insists on a much higher asking price than we recommend. In these cases we have strategies to help accommodate unusually high asking prices in order to meet the demands of the tract and still try to get it sold in a reasonable time.
Don't fall into the "Let's ask (sun, moon & stars) for it and see if someone will pay it." This is a bad idea if your goal is to sell the place for its real market value. Serious buyers will just avoid your listing believing that they'd be wasting their time doing any due diligence or trying to deal with that seller. They'll go look at more reasonable deals.
Every real estate company has overpriced listings. It's impossible to completely avoid. Have a reasonable idea of actual market value and what your selling goal is regarding time frame. Then price your tract accordingly.
Good land agents will guide you through the items listed here - and others that are relevant to your particular tract - to help you get the most money you can within the quickest reasonable time frame. These items have made this list because they've been discovered through many land showings and deals made. Give yours tract the edge it needs in a competitive market by doing the extras that will set it apart from the rest.
- Pat Porter
Louisiana Land – Louisiana Land for Sale
In Louisiana, the land is divided by Parishes rather than by counties, and there are 64 parishes in total. Louisiana is the only state that uses parishes instead of counties, though Alaska is divided into boroughs. The location of each parish in Louisiana has an impact on what the land is primarily used for, since location influences population density, climate and other characteristics. Some parishes in Louisiana are largely made up of larger acreages of land that can be used for a variety of purposes. Louisiana land tracts for sale can be utilized for hunting and recreational purposes, farming, timberland and income production, conservation purposes and many other uses depending on your needs.
How you intend to use the land is going to influence the type of land that you buy as well as the location. Each tract of land is going to be completely unique in its characteristics. That’s one of the great features of land…no two tracts are alike. Some will be heavily forested with timber while others may be row crop or pasture land. As they will vary significantly in terms of location, some tracts will be right on a waterway or will contain lakes, bayous or creeks while others will be in the hills and have no natural waterway. You should consider the qualities and characteristics of each piece of Louisiana land for sale to find the tract of land that suits you.
When purchasing Louisiana land, consider the qualities described by the seller or the real estate agent to get a feel for what the tract has to offer. A typical listing will tell you what you can expect to find in the area, such as what specific trees are growing there and what, if any, recent saw timber volume data is available, what mineral rights are available, or whether or not there is any development potential on the land. Good listing information will include details like the surrounding area if a hunting tract, crop base information if a farm, availability of utilities and access and should always include detailed aerial and topographic maps.
When buying Louisiana land, it will benefit you to consider many different options and locations throughout the state. Louisiana offers a wide variety of land types. The best way to get a feel for what’s available to you is simply to check out as many options as you can prior to making a purchasing decision or placing an offer on a piece of land.
Pat Porter is the broker for RecLand Realty, LLC. For more information about Louisiana Land for Sale, see his website at www.RecLand.net.
Due Diligence…Verify, Verify, Verify
Doing due diligence on a tract of land you want to buy falls on the shoulders of one individual…you. No one will care about the deal any more than you. Prepare to do your homework. The depths of due diligence, and the items that will need to be discovered, verified and researched, will vary depending on the type of land and its intended use. Let’s consider a few basic areas related to rural real estate.
Due diligence starts with the purchase contract. Read it, understand it, ask questions about it and use it to fully detail the terms of the purchase as they have been negotiated with the seller. Your real estate agent should be diligent to help you document the terms of the deal clearly in the contract. Having the seller and buyer see “eye to eye” on the terms at this stage of the deal will reduce the chances of something going wrong for either party before closing.
Depending on the present use of the land, you will need to verify any number of items that will affect your future use of the tract. Have you seen the CRP or WRP contracts? Have you read the restrictions of the conservation easement, the deed restrictions or other encumbrances that will limit the use of the tract? What about that hunting lease or farm lease…does it match what you were told during the negotiating process? Ask to see the conveyance document on “deeded accesses” if you are unsure about that servitude.
If you plan to clear some of the tract for farming, development or even a new road, will you be clearing wetlands? Will that bridge you need require a 404 from the Corps or mitigation credits? Diligent buyers of farm land look for large diesel spills at wells and near full tanks and check for empty chemical containers dumped in nearby ditches or creeks to alert them of potential environmental quality issues.
Timberland buyers should understand the area markets and mills if buying a tract in a new area. Will the terrain allow complete mechanical harvest or are there acres that loggers just won’t work? Do you have good access to get your timber out?
Your closing attorney should be able to catch title issues that may cause you problems if left uncured, but you may need to specify that he look for items that are critical to your reason for purchase. For instance, if you’re buying half the mineral rights, does that mean half of 100% or does the seller only own 50% herself? A general title search will not necessarily determine this information for you.
You can verify river stages, flood histories and FEMA flood plain data yourself online these days if the tract is in a marginal elevation area. But you need to do this. Ask your real estate agent to help you identify internet resources if you need them. Confirm the information you’ve been told if you’re unsure.
The list of items to verify goes on and on depending on the tract and its use. The point is to confirm, verify and understand all the major items that will impact you the hardest. The real estate agent is required by law to tell you about all material facts he is aware of that may impact the property’s value and use. The key is “that he is aware of.” Your agent may not know everything about every detail that is critical to you. You as the buyer are ultimately responsible to satisfy and protect your future interests with thoughtful due diligence.
Pat Porter is the broker for RecLand Realty, LLC. For more information about land for sale in Louisiana, Arkansas, Mississippi and Texas, see his website at www.RecLand.net.
One result of land segmentation is more and more land boundaries. Disputes among adjoining landowners are increasing. Boundary trees are often at the center of the dispute. Our law has one set of rules applicable to trees and plants growing on the boundary and another set of rules applicable to trees growing on neighboring property near the boundary but whose roots and limbs extend over the boundary. La. C.C., Art. 687 and 688.
TREES GROWING ON THE BOUNDARY
Trees and other plants growing “on” the boundary are those in which the boundary line passes through the trunk. A tree may initially not be a boundary tree but, over many years of growth, grows into the boundary and, thus, becomes a boundary tree. Once a determination is made that the tree or plant is a boundary tree, the first consequence is that the tree is co-owned, with each adjoining property owner owning an undivided interest in the tree or other plant.
Sometimes a tree growing on the boundary causes a problem for one of the adjoining co-owners and not the other. For example, assume a 150 year old beautiful live oak tree is a tree through which the boundary line passes. However, its branches and roots, through no fault of either co-owner, are encroaching upon and doing serious damage to the foundation of a home belonging to one of the co-owners. May the co-owner who is being damaged demand that the other co-owner remove the tree? Short answer: No. Our law provides that the co-owner who is being damaged has the right to remove co-owned trees that are causing damage, but he must bear the entire expense of removal of the co-owned tree. The party being damaged does not have a claim for damages against the other co-owner. The entire cost of the removal, and all damage resulting from the removal, must be borne by the co-owner who was initially damaged by the co-owned tree. Neither the expense of the removal nor the damage may be shifted to the adjoining co-owner. However, neither can the adjoining co-owner collect damages for his loss due to the removal of the beautiful tree.
Another question that arises in the context of a boundary of commercial timberland is the status of trees along the boundary. These trees are also co-owned. Any boundary that passes through a tree is a boundary tree and, accordingly, co-owned by the adjoining property owners. One question that arises is whether or not one of the co-owners has a right to cut the boundary tree without the permission and consent of the other co-owner. The answer is no. Any cutting, removal or even damage to a boundary tree would invoke the treble damage statute and expose the wrongdoer to the payment of three (3) times the value of the tree and attorney fees. Further, if the boundary tree has been “marked” and provides evidence of the boundary (so-called “line tree”) then the unconsented cutting may expose the wrongdoer to even greater damages than would be due under the treble damage statute. The removal of a marked line tree may necessitate an expensive survey to re-establish the boundary, the cost of which may be greater than treble damages. Thus, landowners cutting or operating near a boundary should take precautions to make sure no trees on the boundary are cut or damaged without the consent of the adjoining landowner.
TREES GROWING NEAR THE BOUNDARY
Many tree trunks are located entirely on one landowner’s property, but near the boundary. Roots and branches of trees growing near a boundary usually protrude over the boundary into property owned by another. What are the duties and obligations of the adjoining landowners? An example with illustrate.
Assume a large magnolia tree is growing entirely on property owned by Mr. Jones. However, the roots of the magnolia tree have grown across the boundary and protrude into Mr. Smith’s property. The roots are now interfering with the foundation and plumbing of Mr. Smith’s home. What can Mr. Smith do to mitigate this problem? In this case, Mr. Smith has the right demand that Mr. Jones remove the roots and branches that extend onto Smith’s property and are actually causing damages to Smith’s property. However, Smith does not have the right to demand the removal of the roots or branches unless they are causing an actual problem. A landowner does not have the right to demand removal, at the adjoining landowner’s expense, unless the protrusions are actually interfering with the use of his property. A landowner does not have the right, even at his own expense, to cut either branches or roots at the boundary unless the protrusions are causing him actual damages.
What if a pecan tree trunk is growing entirely on Mr. Jones’ property but whose branches overhang onto Mr. Smith’s property? Neither the roots nor the branches are causing any actual damage to Mr. Smith. However, Mr. Smith asserts that he is the owner of all pecans that fall on his side of the boundary. Can Mr. Smith keep the pecans that fall to earth on Smith’s side of the boundary? Although there is no case or statute directly on point, it is believed that Mr. Jones, as the sole and only owner of the tree and all of its fruit, would be entitled to all of the pecan crop, even those falling beyond the boundary. Mr. Jones is believed to have a limited right of trespass in order to recover his pecan crop but without damage to Smith’s property.
Trees or other plants growing on or near a boundary are frequently the source of disputes among adjoining landowners. Disputes among adjoining landowners arising from tree or other plant growth are more frequent as more and more people live closer and closer together and tracts of land are segmented into smaller and smaller parcels. If such a problem arises, consult legal counsel if the problem cannot be amicably resolved.
Authored by Paul D. Spillers, Attorney
Theus, Grisham, Davis & Leigh, LLP
3139 Mercedes Drive
Monroe, Louisiana 71201
318-388-0100, Ext. 18
*** Mr. Spillers has been a client of RecLand Realty, is a landowner and is active in the forestry industry in the south. www.RecLand.net
By Paul D. Spillers
A good wildlife management plan provides more than just recreation and pleasure. Wildlife can add value to your land investment and tax savings. Astute landowners are learning the Tax Code provides for tax deductions that can put more money in your pocket each April 15th. A real world example illustrates how a landowner can enjoy his land and save tax dollars while his investment increases in value.
MR. ROBERT SPARRE:
In 1961 Mr. Robert Sparre purchased a 191 acre farm in Kent County, Maryland for $24,000.00. The farm included a house in bad repair, a barn, shed, dilapidated outbuildings, and old fences. The land had been previously farmed, except for 40 acres of trees, a 7 acre pond, and some gravel pits. The hilly land was infertile. It had a very low Ph and was deficient in nutrients. The land bordered on a small creek running into Chesapeake Bay and had the potential to attract ducks for hunting.
Mr. Sparre’s purposes for buying the farm were: 1) to have a retirement home when he reached retirement age; 2) provide a supplemental source of income from hunting fees; and 3) profit from the expected long-term appreciation in the value of the land. When the land was purchased he was an engineer living in Delaware, two hours driving time away.
Mr. Sparre’s activities on his land produced consistent losses for almost 20 years. The losses averaged about $15,000.00 per year. His total income from engineering averaged about $40,000.00 per year. Mr. Sparre made extensive efforts to seek the best available advice from various consultants on how to maximize profit from his land and his wildlife activities. He had soil tests performed and added fertilizer and lime and other needed nutrients. Food plots were established in an effort to attract waterfowl and upland game. Waterfowl was raised for release on the property. Revenue from hunting fees was minimal, though it gradually increased over the years. The house was repaired. Hunting revenue increased when Mr. Sparre started providing lodging and meals to the hunters. Despite his best efforts, however, the expenses were always greater than annual income from the farm. Tax losses were deducted and reduced the amount of income taxes he paid. Despite the consistent losses, Mr. Spare continued his efforts to make money on his investment.
The IRS finally reviewed Mr. Sparre’s tax returns and, considering the consistent losses, concluded he was operating his land as a hobby, or personal pleasure, and not for a profit. The IRS disallowed all deductions associated with the land. However, Mr. Sparre disagreed with the IRS and asked the Tax Court to review his case. The Tax Court agreed with Mr. Sparre and rejected the IRS’ position. The Court held that he had the “intent to make a profit” and the losses were all deductible. Sparre vs. Commissioner, T.C. Memo, 1980-45.
The Tax Court agreed with Mr. Sparre that many years of losses were predicted when the land was purchased. Mr. Sparre made the investment knowing that he would have to endure the cost of improving the land over many years and creating a good wildlife habitat before he could sell and realize a profit from his investment. Mr. Sparre maintained detailed financial records that were given great weight by the Court. He had sought the best available advice from legitimate experts about alternative ways to earn income from the land, including wildlife management, food plots and forest management.
At the time of the trial the fair market value of the property, because of price appreciation was more than double the aggregate tax losses that had been claimed by Mr. Sparre. Appreciation in the property’s value more than covered the aggregate losses. The Court also noted that the losses were a large percentage of Mr. Sparre’s annual income from engineering. The losses, compared to his income, made it clear that the farm was a real financial burden, providing an even greater incentive for Mr. Sparre to manage it to produce a profit when the property was ultimately sold.
This case illustrates that a recreation enthusiast is not necessarily barred from tax savings by the hobby loss rules. If a landowner has a sincere and bonafide intention to make a profit, activities related to wildlife habitat and land improvement can yield substantial income tax benefits. However, it is critical that the activities be conducted in a business-like manner, including the maintenance of detailed records and obtaining advice from recognized experts. When motivated by profit, and not something done solely for fun, the Tax Code will yield valuable deductions and tax savings. Before embarking upon what can be not only a pleasurable, but profitable, venture consult with your tax advisor. Your advisor can provide necessary, and valuable, guidance.
Paul D. Spillers is a Board Certified Tax Attorney who practices with the firm of Theus, Grisham, Davis & Leigh, LLP, Monroe, Louisiana. He also is a land and timber investor and has an appreciation for wildlife and its management. He may be contacted at 318-388-0100 or at firstname.lastname@example.org.
*** Mr. Spillers has been a client of RecLand Realty, is a landowner and is active in the forestry industry in the south. www.RecLand.net
An inexpensive way to establish a creek crossing on hunting land for sale in order to add value and improve overall access.
Making and executing a modest plan to add or improve the overall access to hunting land for sale will help it sell quicker and likely allow it to be be sold for more money.
You can add value to hunting or recreation land for sale by making some early improvements to enhance or preserve the view.