Tag: Selling land in Alabama

Preparing Your Land to Sell to a Recreational Buyer

Welcome to the John Hall and Company Selling Land in Alabama series.  This is part four in the series. Go here to read, part one written by Pete Hallpart two written by Hoke Smith, part three written by Josh Hall& part four written by Robert Smith

There are things most people do when they prepare to sell their home: service the HVAC; paint, repair rotten wood where needed, clean up landscaping; straighten up furniture and closets, etc. The same concept applies to preparing your land for sale. All property is not the same. You would treat a 60 acre wooded tract differently than a 400 acre recreational tract with amenities.

Let’s begin with preparing a 60+/- acre wooded tract for sale. The owner should consider thinning some timber and using the money to install a good trails system and 1 or 2 wildlife plots. They should consider getting a boundary survey or at least mark each corner clearly. It is important that there are no boundary line disputes or easement issues with neighbors. Finally, a sturdy metal entrance gate with a lock is a nice feature. If the owner doesn’t know how to hire a logger and/or contractor to do the improvements, a good land brokerage company, like John Hall and Company, has access to these people. The main reason to do this work is “you can’t sell a tract unless you can show it.” If the owner does not want to prepare the tract as we have recommended, he can sell it strictly to a timber buyer. The owner will probably get 25% to 30% less i.e. $400-$500 per acre less at the closing of the sale. If the property is real secluded and has no road frontage it would not be wise to do the improvements herein.

Now, let’s discuss a 400 +/- acre tract of recreational property with a cabin, equipment, shed, a 3 to 10 acre fishing lake, and some wildlife plots with permanent deer stands. This type of property is a land broker’s dream listing, but only if it’s maintained and “shows well.” What should the owner do to prepare this property for sale? Some actions are similar to the small tract discussed earlier. The owner should mark all property lines and corners and install “No Trespassing” signs. It is very helpful to have a boundary survey but the cost can be $5,000 to $7,500. A survey is the only way to determine the exact acreage and our property in this example in this example may sell for $3,000 to $3,500 per acre. The trails need to be bush hogged and “limbed up” and wildlife plots need to be planted in winter or mowed in summer. The pine stands need fire lanes established if the owner has not done so. Many owners fertilize and lime their pond to provide plankton for a healthy fish population. The fishing lake should have some clean, mowed areas along the bank, a well maintained boat dock and fish feeders. Hopefully the pond provides good fishing because it is such a joy to see a 3 year old catch his or her first fish! The cabin needs to be put into very good condition with no roof leaks, no rotten wood, etc. The HVAC, plumbing, and appliances should be in good working order. The equipment shed needs to be cleaned up with all equipment/tools neat and orderly.

Basically, the owner needs to incorporate best management practices for his land, timber and wildlife. Not every practice is cost effective for every owner. It is very important to create a good first impression for your land broker and your prospective buyer when they arrive at your property!

-John E. Hall, Jr. CCIM

What Does It Cost To Sell Land in Alabama?

Welcome to the John Hall and Company Selling Land in Alabama series.  This is part four in the series. Go here to read, part one written by Pete Hall, part two written by Hoke Smith, & part three written by Josh Hall

As a land agent, initial conversations with clients usually involve cost associated with buying or selling a piece of property.  These expenses vary among transactions, but it important to understand basic structuring of how these costs are distributed. Sellers will be responsible for certain closing costs along with real estate commission to the listing broker. Other up-front cost may be required to make the property suitable to sell.

Up- front costs to the seller are not always necessary, but can greatly improve chances of maximizing profits on a particular sale. A property owner will want to make needed changes to improve the aesthetic appeal for prospecting buyers. A key component to this would be having a good road system established. A good internal road system will be appealing to a future owner and also gives curb appeal with accessibility during showings. Cost of an internal road system is dependent upon condition of existing road and the size of the tract. Other important aspects a property owner can adjust for are maintenance expenses such as mowing, land clearing, spraying, planting, etc. These costs are relatively minor part of the transaction but can go a long way in getting the property sold.

A second expense a seller may want to take into consideration is the completion of a survey.   A survey is not required, but is a great asset in selling a piece of property. A buyer will often want to have a clear understanding of exact acreage and boundary lines before moving forward with a purchase. This will give assurance of no underlying issues such as encroachments or any kind of boundary line disputes. Costs of surveys vary depending on size and shape of the property. It is best to consult with your listing broker to determine if having a survey done is justifiable before putting a piece of land on the market.

After an agreed upon sales price, funds will then be settled at closing. While majority of fees are negotiable as to who pays between buyer and seller, there is often standard fees assigned to each party.  Sellers often account for cost such as agent’s commission, deed preparation, prorated taxes, attorney fees, and any judgments or liens tied with the property. Commission is an agreed upon percentage of the sales price between agent and seller and is the primary expense of the seller.

All land sale transactions are unique in their own way but this gives an outline of standard costs applied to the seller.  All of these factors emphasize the need to consult with a qualified broker. Selling a piece of property can seem like a big task but having an experienced land agent guide the process is critical in obtaining a desired profit.

-Robert Smith

Click here for part five of this series, written by John. E Hall, Jr, “Preparing Your Land To Sell to a Recreational Buyer”

Selling Land in Alabama – What is My Land Worth

Welcome to the John Hall and Company Selling Land in Alabama series.  This is part three in the series. Go here to read, part one written by Pete Hall, and part two written by Hoke Smith

Owning a piece of land for many has always been part of the American dream. It can provide a getaway back to the country for hunting, fishing, horseback/ATV riding, gardening, farming and building family memories.  Due to these memories and activities, many landowners will often “bake” these great times into the value of their land when it comes time to sell. This mistake can result in an overpriced listing that can be difficult to sell. An accurate estimate of value of your land is very important whether you are a buyer or a seller. Therefore, the question that is often asked “What is my land worth?

The first thing to remember when estimating a value of your land is that value is only an opinion and that opinion is only as good as the amount of market data and the detail of data available. A contract is a fact, a listing is fact and a closed sale is a fact and those are some of the data points utilized to arrive at an opinion of value. The market uses the term “comp” for comparable sale or listing. The key is to make sure the data is truly comparable.

Land is often difficult to value due to the lack of availability of sales and listings data. Unlike residential houses, where 80% of all sales are typically input in a multiple listing service (MLS) and the data is readily available, land transactions are not usually included in the MLS. Much of the sales data is scattered amongst many land brokers and consultants and is difficult and time consuming to collect.

So, let’s move to the basics of what is my land worth. The first important step is to accurately assess all of the important economic and physical attributes of your property. I am often asked “What is land going for around here?” That is when I ask…What type of property is it? Crop land, pastureland, wooded land, timberland, cutover land or turnkey recreational land, etc. These different types of land carry different values. My other question would be; “Where is it located? What do the surrounding properties look like? You get the picture. Not all rural land is the same.

Once the owner’s property type and description has been assessed it is time to move on to gather sales and listings of similar property. Sales of similar property should follow this definition of “market value” set by US Federal government for financial Institutions.

A definition of “market value” is below:

The most probable price which property should bring in a competitive an open market under all conditions requisite to a fare sale, the buyer and seller each acting prudently and knowledgeably and assuming the price is not affected by undo stimulus. Implicit in this definition is the consummation of a sale as of a specified date and passing title from seller to buyer whereby:

  1. The buyer and seller are typically motivated;
  2. both parties are well informed or well advised and each acting in what he or she considers his or her own best interest;
  3. a reasonable time is allowed for exposure to the open market
  4. payment is made in terms of cash or US dollars or in terms of financial arrangements comparable thereto
  5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

What this means is when looking for comparable sales in order to arrive at an opinion of value is that the sale should be normal.

A land sale in which a seller is forced to sell due to a court order or a bank foreclosure or where the adjoining property owner paid a premium because it was next to them is typically not a comparable sale.

A land sale that brings a premium sale price due to the owner offering below market financing (say 0%) is not typically a good comparable sale.

A land sale that was not exposed to the open market and the seller accepted the first offer they received is typically not a comparable sale.

A sale where one of the parties to the transaction was uninformed, such as a party did not know the true timber value or did not know the property was contaminated or had a WRP easement attached to it is not typically a good comparable sale either.

Although most sellers would appreciate it if the adjoining landowner would pay a premium, this is not typically the case and is rare.

Once a sale has been identified for comparability to your land it is then important to research the transactional and property characteristics and compare them to your property.

Transactional adjustments include:

Property rights conveyed: Do all rights go with sale, mineral, surface, timber, etc?

Financing terms: were terms normal or favorable due to owner financing?

Conditions of sale: Normal sale or not. Maybe the buyer paid a premium because they were on the back side of a 1031 exchange or maybe the sale was to a family member for a discount.

Expenditures made immediately after purchase: Did the purchaser pay a commission, or did purchaser have to buy access or clear a title problem after the purchase?

Market conditions (change in value over time). If the sale is a year or two old has the market changed?

All of the above have to be known, considered and adjusted for as it compares to your property.

Property adjustments include differences in:

Location: Area or neighborhood differences and proximity to major cities or major interstates.

Physical characteristics: access, topography, interior road system, flood zones/ wetlands, size, shape of site, improvements on the property.

Economic characteristics: CRP rent, timber leases, hunting leases, surface or mineral royalties or amount of timber.

Non-realty components of value: Land transactions often include personal items such as tractors, ATV’s, trailers or furnishings to name a few.

It is vitally important to understand each sale used as a comparison to your property to draw a credible conclusion in understanding what your property is worth. The more sales and listings available the more credible the opinion. Also, having the sales data is the first step to know what your property is worth but accurately analyzing the data is equally important. A business analyst once told me “just because you have the recipe, doesn’t make you a good cook.”

Remember, market changes are not linear.  It goes up and down and is like a wave in which there are troughs and crests within the rise and fall of overall land market movement. If your property is listed at the same time many similar properties like yours are listed, it could a trough moment where the supply exceeds demand and vice versa, a crest moment where demand exceeds supply if yours is one of the few listed properties for sale at the time. So, the number of listings also needs to be reviewed in light of the comparable sales.

Over the years I have seen many investments in land not optimized due to the seller not wanting to pay a knowledgeable broker or consultant prior to selling their land. I have seen this in other industries as well and have personally not paid for advice when I should have. My advice is to keep your day job and do what you do well and have a professional broker, appraiser or consultant help you with pricing your land and exposing it to the market in order to maximize what you receive for it.

– Josh Hall, MAI

Click here for part four of this series, written by Robert Smith, “What Does it Cost to Sell Land in Alabama?”

Click here for part five of this series, written by John. E Hall, Jr, “Preparing Your Land To Sell to a Recreational Buyer”

Selling Land in Alabama – The John Hall & Company Advantage

When John Hall and Company is hired to sell your land, our goal is simple. We endeavor to command the highest possible return on your investment by marketing to a class of buyers willing to pay a premium for the time, effort, and stewardship you have poured into your property.

Selling land is our passion. We don’t see it as a job as much as a calling and serving our clients is our reward. As a 4th generation land owner my values and love for the land were shaped from my great grandfathers on down. One farmed cotton and owned a gin in North Alabama and the other bought acreage for his timber and cattle operations in Montgomery County. My father grew up on these properties, taught his boys to hunt, and our passion was fueled from lessons learned through conservation. My father started our company 35 years ago upon the foundations of INTEGRITY, SERVICE, and PRACTICING THE GOLDEN RULE. As such we only hire specialists whose passion reflects our own and who adhere to the core values he outlined so many years ago.

The experience gleaned from 35 years in the business, years of good will from building relationships, and first-hand understanding of all types of land transactions in Alabama ultimately give you, the land owner a significant advantage. We sell hunting plantations, timber investments, AG and cattle land, conservation easements, mini farms, and all types of land investments.

Selling Hunting Land:

The Company and Broker you decide to hire is the most important decision you’ll make after deciding to sell. In an overcrowded industry where corporate land companies have moved in and hired weekend warriors or anyone willing to get a real estate license, the industry has lost its heart and soul. You deserve a specialist with local market knowledge, technological marketing expertise, experience, and the information on hand to maximize your investment. You deserve the difference that results from using John Hall & Company.

There are a host of influences that can affect your property’s market value. Some you can control some you cannot. You may not be able to choose the timing or what pine pulp wood is selling for but make no mistake about it the broker who sells your land will make a difference in your net profit whether you are in a bear or a bull market.

At John Hall and Company we understand the significance the power of information will have on your net profit. When it comes to serving our clients, we have an intimate familiarity in the markets we serve because we put boots on the ground. We understand there are outliers and characteristics of certain properties that are rarely taken into account by most brokers and appraisers. There are certain areas where we find micro markets within the same county allowing us to justify a much higher bare land value than a property that is located fairly close by. It may be due to their better soils which produce better food sources and ultimately bigger wildlife. Certain areas may have been influenced by an institution like the bird dog field trials in Union Springs. Over time the field trials attracted a wealthy clientele of purchasers willing to pay a premium in this coveted area. A seller may own a smaller hunting tract surrounded by predominantly larger landowners who typically manage their plantations for trophy wildlife. Are you taking into account higher building costs and permitting issues associated with building a lake when assessing its worth? How will the new timber mills coming online effect the value of on your timber?

Whatever the case may be we can often identify these outliers and justify a command a higher price when we evaluate your property.

We have an incredible database of comparable sales we collect from the transactions we have sold, our relationships with appraisers, and the institutions that finance land. Being informed gives us the advantage when negotiating a price because we can justify it.

The biggest tool in our arsenal is our holistic marketing plan we have implemented to help identify and target our buyers. Quite simply, our strategic reach is second to none. We are continually educating ourselves in order to remain on the cutting edge because marketing in this day and age is constantly evolving. After engineering a personalized brochure of our client’s land we advertise the listing on a host of aggregator websites. This provides us the opportunity to expose your land on a local, regional, and national level. We utilize social media campaigns, Search Engine Optimization, create videos through our drone footage, and attract potential buyers through interactive mapping software. Newly listed properties are blasted out by reaching thousands upon thousands of past and potential clients. Every land broker and residential agent in the state receives a copy of the marketing brochure and they are encouraged to bring all offers.

To those of us who love the land, we understand the value of investing in hunting land is more than financial. Memories made while passing down your values through hunting and good stewardship cannot be measured in dollars and cents. The safety and security of knowing your family has a place to go during uncertain times is impossible to quantify. We know that during the time you own your property it’s almost inevitable that you will put more money in the land than it can produce. The financial that can result from investing in a hunting plantation is realized when the land is sold.

There are a host of influences that can affect your property’s market value. Some you can control some you cannot. You may not be able to choose the timing or what pine pulp wood is selling for but make no mistake about it the broker who sells your land will make a difference in your net profit whether you are in a bear or a bull market. When it comes time to selling your land, you can trust our team to guide you from the initial assessment through closing. I welcome you to take advantage of our knowledge and unique skill set in order to maximize your investment.

-Pete Hall, ALC

Click here for part two of this series, written by Hoke Smith, “How Does Selling Land Work?”

 Click here for part three of this series, written by Josh Hall, “Selling Land in Alabama-  What is My Land Worth”

Click here for part four of this series, written by Robert Smith, “What Does it Cost to Sell Land in Alabama?”

Click here for part five of this series, written by John. E Hall, Jr, “Preparing Your Land To Sell to a Recreational Buyer”