When a Crop Kicks You in the Gut

Contributor Luke Worrell, ALC, Worrell Land Services, REALTORS® Land Institute

Luke Worrell, ALC

I went to work on August 12th with a lengthy to-do list. I knew it was going to be a busy day and an especially interesting lunch hour. Like most of us involved in farm management and agricultural real estate, I was eager to hear the USDA Crop Report. In today’s fast-moving world, that report can affect the market strongly and swiftly.

All bets are off with USDA reports; I have been around long enough to know that. That said, I was trending towards the camp that was expecting bullish news. I am not sure where you sit while reading this, but in Central Illinois, I don’t see an enormous crop. I see a crop that struggled with record rainfall in June and in some instances, never even got off the ground. With that in mind, I had gone through every farm management account the previous day and gotten figures and delivery dates all lined up for some additional crop sales. I was ready! I just needed the report to be released. Then the report came out…

The USDA raised the corn yield 2 bushels per acre and beans 1.5 bushels per acre. Immediately, corn was down 20 and beans down 60. In an instant, it sent producers and managers scrambling for answers and looking for “next steps”. It should be said that the USDA doesn’t necessarily do a thorough inspection of the crop, and in their defense that is probably an impossible task. Regardless, they put large projections–and in some cases, historic projections–on the states in the Western Corn Belt that have supposedly had more favorable weather. Whether ag experts think the USDA projection is off-base or not, the fact remains that the market trades off of these numbers and until there is new data or an unforeseen outside influence, this is what we have to work with.

It is uncertain whether anything can spark substantial movement until farmers hit the fields. Only when grain crosses the scales will we know what crop we have. Until then, estimates are just educated and calculated “guesses”. Some theorized that FSA preventive planting numbers released on August 17th could’ve provided a bounce. Although there were over 2 million acres prevented from being planted in Missouri and Illinois, the 17th came and went without much movement. Extenuating circumstances abroad could move the pre-harvest market, but that is often harder to project than the crop itself. China’s currency devaluation was the buzz during the week of August 10th. Oil hitting a six-year low on Monday, August 17th is the chatter right now. What remains to be seen is whether any of these outside factors can substantially alter commodities in the interim. If we had gotten a hot dry-spell in August, that could’ve swung the pendulum…but that was a big if.

Perhaps the Pro Farmer crop tour will enlighten traders on what to expect. This annual tour encompasses teams from Pro Farmer scouring the entire Corn Belt with in-depth analysis. The USDA fails to get up close and personal. This crop tour has legitimate boots on the ground with plant population numbers, ear size measurements and ultimately provides yield checks on a multi-state level.

At the end of the day, the report came out and kicked the “Bulls” and optimists in the gut. We very well could be in line for some choppy trading during the next month. Perhaps an outside event or development could form, but I personally wouldn’t bet on it. Treading water until harvest is well-underway is our most likely immediate future. Harvest season is always exciting and often provides a few surprises. Until then, we can wish together that we pulled the trigger on sales the days leading up to August 12th.

Agricultural Land Marketing Basics

Contributor Chip Fortenberry, ALC, Broker Associate, Crosby & Associates, Inc.

Fortenberry, Chip

We as agricultural professionals know how hard we work to find buyers and sellers of land. We spend years of hard work to build our clientele and our reputation. Marketing a property correctly and in a timely manner is paramount to selling the property. Getting the listing is just the first step in the process of selling the property. There is still much work to do. I am sure that most of us are already marketing our properties in an informative, professional manner, but we can all improve our marketing efforts.

Most medium to large brokerage firms have an in-house marketing department which handles flyers, mailers, websites, etc. Other smaller firms may use an outside marketing company. The first step as the listing agent is to get all the pertinent information to the marketing team in a timely manner. This information should include: The full address of the property, GPS coordinates, acreage, photos, aerials, the property description, property highlights, improvements, soils and topo maps, production records / yields, well information, location maps, zoning, permitting, future land use, and demographics. Multiple location maps should be used, as many buyers may live out of state or out of the country and need detailed information to understand the property location.

The completed flyer or brochure and any other pertinent information should then be posted on the company website. After this, the flyer is emailed to recipients in the company database. The recipients should be filtered based on his or her property interests. For example, if the subject property is a citrus grove, the email blast should be sent only to people interested in citrus groves. People tend to trash these emails or even block a sender who constantly sends information that is not relevant to his or her wants and needs.

The next step is to post the flyer and all pertinent information on the various real estate marketing websites. These may include MLS, LoopNet, Land Flip, Total Commercial, and Lands of America, just to name a few. You should make sure to have any additional pertinent information posted on these websites. There is plenty of room to add additional information such as detailed soils map, location maps, demographics, etc. The greater the amount of information, the better. In many cases, we are dealing with very sophisticated buyers. They need all the information they can get to make an informed decision. It is very frustrating when the only information provided is a plat map and a brief description of the property. We are professionals and should market our properties in a professional manner.

Sometimes, you have to get creative with property marketing. There are a few other methods which could prove effective or even critical. Some people, believe it or not, don’t have an email address. In this case, direct mail might be called upon to reach the buyer, whether through personal letters or postcards. There are various trade magazines and newspapers in which to advertise as well. Lastly, let’s not forget the old phone, whether a cell phone or land line. We must keep in touch with our buyers and alert them when we have new listings that might interest them.

I hope this article was helpful and informative. Good luck marketing your properties!

Chip Fortenberry, ALC, MBA

The REALTORS® Land Institute to the Rescue!

Contributor David Fisher, Partner, Creative Real Estate Strategies

David Fisher, Creative Real Estate Strategies

It was a brutally cold, windy and overcast morning in the Dakotas Territory. The year was 1871. Every living creature exhaling air was immediately turned into vapor from the freezing temperatures. We were soldiers in the 7th United States Calvary Regiment and this particular morning, we were not singing “Garyowens”. Thousands of settlers were flocking to the territory and our job was to protect them. At this moment, many of the settlers were being threatened by the bad guys and we were preparing to ride to their rescue.

Commanding F Company was the American icon Capt. John Wayne. His Second in Command was WWII hero Lt. James Stewart. Work with me here. We were divided into two wings. One the left wing, 1st Squad was manned by the great Virginian Sgt. Randolph Scott and 2nd Squad was led by the incomparable Sgt. Errol Flynn.

The right wing was led by the 3rd Squad’s fearless Sargent Glenn Ford, who later helped defeat the Japanese Navy at the Battle of Midway, and the 4th Squad was led by Yours Truly right out of “The Point.” Again, work with me. The battle lines were drawn and we were ready for action. Captain Wayne gave the order and the bugler belted out the Calvary charge. The horses leaped into action, our swords at the ready and at that very moment….my alarm went off and it was a Wednesday morning in 2015. Another missed opportunity to ride to the rescue. Or was it?

Section 1031 is beginning to receive scrutiny by Congress and that’s probably not a good thing. All of the appropriate organizations including the Institute are lobbying Congress to leave 1031 exchanges alone–and for all the right reasons. But this is Congress, and that means that this will probably become a huge political football. I have no inside information but based on being in practice since the late 70s, my gut feeling is that 1031 exchanges will be modified to some extent. Perhaps, the first 500k in capital gains can be passed on to a new replacement property or something along those lines may be the final result.

So, assuming that Section 1031 is changed in some fashion, how can Institute members ride to the rescue to still help their clients defer capital gains taxes, state taxes where applicable, depreciation recapture, the Obama care tax and possibly the alternative minimum tax when selling a clients’ property. Actually, there are options now and you don’t even need a 1031 to defer taxes. Let’s turn a negative into a positive.

Imagine not having to deal with a forty-five day identification time limitation or loan to value ratios. What if you could sell a client’s great property now, defer taxes and at any time in the future, you can buy any property that you would like for your client AND while you are looking for that property, your client can receive a check every month for roughly five to six percent of the sales proceeds while those proceeds are still tax deferred. Do you think that this might give you a competitive advantage over other brokers that are unable to provide this opportunity?

Imagine working and taking constant risks for thirty or forty years or more and when you’re finally ready to retire, you have to write a check for twenty-five to thirty percent of your liquid assets to the US Treasury before you can retire. Well, fortunately you don’t have to but when selling your clients properties, they do have to write a check to the US Treasury for twenty-five to thirty percent of their sales proceeds and for many, that’s THEIR retirement plan. You can still defer those taxes for your clients and keep more of their hard earned sales proceeds in their pocket and send less to Washington, even if a 1031 isn’t appropriate. Do you think that this might give you a competitive advantage over other brokers that are unable to provide this opportunity?

Another tax deferral strategy that might face Congressional scrutiny in the future is the stepped up basis. I have met a number of older land owners who intend to pass their property on to their heirs instead of selling their property because of the large tax liability that the sale will create, and because a 1031 isn’t appropriate. That’s not necessarily a bad strategy unless you make a living selling real estate.  If you do sell real estate, it is possible for the land owner to sell their property and defer taxes and turn an illiquid asset into a lifetime retirement income. When the land owner passes on, the income can be passed on to the heirs. And you just sold a great property.

The great thing about the REALTORS® Land Institute is the sharing of ideas and strategies and that’s why Institute members and Accredited Land Consultants (ALCs) tend to be more successful and have higher incomes than non-members I certainly hope that Congress doesn’t make changes to Section 1031 but if they do, we can still ride to the rescue of our clients without having to be John Wayne or….even me. Let’s turn a potential negative into a positive today by recognizing there are other ways to defer our clients’ taxes than a 1031. You will sell more real estate and keep more of your clients’ hard earned sales proceeds in their pockets and sending less to Washington. Happy selling and deferring taxes!

David is a Partner at Creative Real Estate Strategies, a 2015 Silver Partner of the Institute, and has been in the industry since the late 70s. His years of experience help him to assist land brokers in helping their clients defer capital gains tax, state tax and depreciation recapture taxes on their client’s sales proceeds when either their clients are unable to complete their 1031 or the client would like to sell and retire but still defer taxes. By understanding these tax deferral strategies, brokers have been able to sell more real estate. David can be reached at 713-702-6401 or at david@cresknowsrealestate.com

Section 1031 Exchanges are Important to a Healthy Economy

Contributor James Miller, Assistant General Counsel, IPX1031®

Assistant General Counsel for IPX1031®

Over the past two years there have been numerous proposals to restrict or eliminate I.R.C. §1031 tax deferred exchanges.  These proposals are based on misunderstandings about §1031 and do not account for the powerful stimulus impact that §1031 exchanges have on the US economy.  This article will debunk a few of those myths and discuss the findings of a couple of recently released studies that quantify just how important §1031 exchanges are to a healthy US economy.

Myth: Section 1031 allows taxpayers to avoid capital gains taxes, and to defer gain indefinitely.

Truth: Under §1031, taxes are deferred—not eliminated.  Section 1031 exchanges structured under the IRS regulatory safe harbors are neither tax savings vehicles nor “abusive tax avoidance schemes.”  Payment of tax occurs: 1) upon sale of the replacement asset and 2) incrementally, through increased income tax due to reduced depreciation deductions.  A recently conducted study entitled “The Economic Impact of Repealing or Limiting Section 1031 Like-Kind Exchanges in Real Estate” conducted by Professors David Ling and Milena Petrova (“Ling & Petrova Study”) examined more than 1.6 million commercial real estate transactions between 1997 and 2014.  It found that nearly eighty-eight percent of properties acquired in a 1031 exchange were ultimately sold in a taxable sale, rather than a subsequent exchange.

Myth: The absence of a precise definition of “like-kind” is administratively difficult for the IRS and creates the opportunity for abuse.

Truth: The definition of “like-kind” is well understood, §1031 is neither administratively difficult nor abusive.  Like-kind exchanges facilitated by professional Qualified Intermediaries, and conducted within the regulatory safe harbors, are straight-forward transactions that follow a well-understood set of rules (including definitions), procedures and documents.

Myth: Like-kind exchanges are used only by the wealthy.

Truth: Like-kind exchanges are used by a broad spectrum of taxpayers at all levels. Section 1031 is fair, benefitting taxpayers of all sizes, in all lines of business, including individuals, partnerships, limited liability companies, and corporations.  A 2011 industry survey concluded that sixty percent of exchanges involved properties worth less than one million dollars, and more than a third were worth less than five-hundred thousand dollars.  Exchanged properties include real estate, construction and agricultural equipment, railcars, vehicles, ships and other investment and business-use assets.

Myth: Elimination of §1031 like-kind exchanges will raise significant revenue.

Truth: Elimination of §1031 would result in a long-term reduction in Gross Domestic Product (“GDP”) of the US.  Section 1031 is a powerful economic stimulator, encouraging investment in small and medium sized growing businesses, thereby promoting US job growth. Section 1031 exchanges contribute to the velocity of the economy by stimulating a broad spectrum of transactions ancillary to the actual exchange which, in turn, generate jobs and taxable income through business profits, wages, commissions, insurance premiums, financial services, and discretionary spending by gainfully employed workers.  This transactional activity raises state, local and federal tax revenue through transfer, sales and use taxes and increased property taxes.

Ernst & Young recently released a macro-economic study, Economic Impact of Repealing Like-Kind Exchange Rules, that found that the U.S. economy would contract by approximately $61 – $131 billion over ten years if §1031 was eliminated.

Other key findings of the Ernst & Young and Ling & Petrova studies included:

  • Like-kind exchanges encourage capital investment. On average, taxpayers purchased replacement property that was approximately thirty-three percent more valuable than their relinquished property;
  • Elimination would increase the cost of capital and slow the velocity of investment;
  • Like-kind exchanges contribute significant federal tax revenue. Thirty-four percent of exchanges were only partially tax deferred; some federal tax was paid in the year of the exchange.  Additionally, eighty-eight percent of replacement properties are eventually sold in taxable sales rather than in a subsequent exchange, resulting in higher taxes paid due to increased capital investment.   Elimination would result in less federal revenue.
  • Like-kind exchanges create jobs. Real estate acquired through a like-kind exchange is associated with greater investment and capital expenditures (job creating property improvements) than properties acquired without the use of a like-kind exchange.
  • Elimination of §1031 would impact the overall economy, with an unfair concentration in certain industries including real estate, construction and equipment manufacturing and leasing.

The complete Ernst & Young and Ling & Petrova studies can be found at: http://www.ipx1031.com/wp-content/uploads/2015/03/EY-1031-Economic-Study-3-2015.pdf and  http://www.ipx1031.com/wp-content/uploads/2015/07/Ling-Petrova-Economic-Impact-of-Repealing-or-Limiting-Section-1031.pdf.

Both studies quantify that like-kind exchanges are important to a healthy economy.  They increase transactional activity, provide an incentive to improve properties and increase investment in the US.  Make sure your elected representatives know the facts.  Click here to send them a letter telling them that §1031 is important to you and your livelihood.

Jim Miller is the Assistant General Counsel for IPX1031® a Qualified Intermediary, a national leader in §1031 tax-deferred exchange transactions and a wholly owned subsidiary of Fidelity National Financial.  He is an approved LANDU instructor for the “Tax Deferred 1031 Exchanges” course, “Advanced Tax Deferred 1031 Exchanges for Land Professionals” course and helped author the ALC Exam and the “ALC Core Course Manual.”  Miller can be reached at 602-850-8630 or at james.miller@ipx1031.com.  To reach your closest IPX1031® office, call 888-771-1031 or visit www.ipx1031.com.

A Transition from Military to Land Real Estate

Contributor Caleb McDow, Crosby and Associates, Inc

Caleb McDow

On June 22nd, 1944, President Franklin D. Roosevelt signed into law The Servicemen’s Readjustment Act of 1944. More commonly known as the GI Bill, this act provided millions of returning service members the opportunity to receive educational and financial benefits. These benefits included money for education and training, home loan guarantees, and even unemployment benefits. By the time the original bill ended in 1956, almost eight million World War II Veterans had participated in an educational or training program. The GI Bill has undergone two major revisions since its original adoption, but the core aim of the bill has remained constant– to provide educational benefits for Veterans of the United States Armed Forces.

In recent years, our country has seen a large number of men and women separating from the military services, and the transition to civilian life can be difficult. The services themselves, and the Department of Veterans Affairs, have many programs to help ease this transition. This helps service members get jobs, apply for college, or receive job-specific training.

The REALTORS® Land Institute has created its own program to assist transitioning service members. It was implemented in 2014 and is known as the Military Transition Program or MTP. The MTP provides enormous benefits for service members who are interested in the land or real estate industry. Anyone who has served in any US military service since the year 2000 is eligible. I have personally benefited a great deal from the MTP and would like to tell you all about it.

First, here is a short personal military history. I spent 9 years in the US Navy after receiving my commission thorough Auburn University’s ROTC program. I had dreamt of flying jets on and off aircraft carriers since I was very young. So…that’s what I did. After training to fly and receiving my Wings of Gold in Pensacola, FL, in 2005, I was assigned to Naval Air Station Oceana in Virginia Beach, VA, where I trained for nine months in a F/A-18 Super Hornet. I then spent three years stationed in Atsugi, Japan, and deployed aboard the USS Kitty Hawk and the USS George Washington in the Western Pacific Ocean. Following my operational tour, I was sent to Naval Air Station Lemoore, CA, where I served as a flight instructor in a F/A-18. After one year, I was assigned to serve as Flag Aide to the Commanding Admiral of the Joint Detention Center in Guantanamo Bay, Cuba. Once complete there, I returned to Lemoore, CA, where I served an additional year as a flight instructor.

I left active duty in July of 2012 after 9 years of service. I transitioned to the Navy Reserve and continue to serve the standard “one weekend a month, two weeks a year” in Jacksonville, FL. After separation, my first task was to return to school–just like a veteran returning from WWII. I attended the University of Florida and received my Masters in Real Estate. I then joined Crosby & Associates, Inc. in Winter Haven, FL to start my new career in land real estate.

Thanks to the MTP, my transition was a smooth one. My first experience with the REALTORS® Land Institute was at the National Land Conference in Charleston, SC in March of 2014. I had only been in the land business a few weeks and was somewhat apprehensive about fitting in and networking with all the other land professionals in attendance. But my apprehension soon turned to excitement. At the opening session, I was introduced to the entire assembly. I also participated in an exclusive MTP session which included the Institute president, past president, and entire executive committee. This gave me the opportunity to meet others as I attended various sessions and networking events. It was easy to strike up a conversation–mainly due to having been introduced at the opening session.  Each and every person I met went to great lengths to welcome me to the Institute and to offer help or advice whenever I needed it. I realized very quickly that the Institute was the perfect launching platform for my new career.

To get a little more specific, the Military Transition Program (MTP) is targeted at people who have served in the US Military in the year 2000 or later and offers the following benefits:

First year of membership – FREE! ($445 value)

Land 101: Fundamentals of Land Brokerage course – FREE! ($295 value)

One additional LANDU elective course – FREE! ($445 value)

Additional educational scholarship opportunity:  John Eshenbaugh Military Scholarship ($500 value)

When you do the math, that’s over $1600 worth of benefits! Plus, the non-monetary benefits are even greater. When I first joined the Institute through the MTP, I was personally called by Ray Brownfield, ALC Advanced. Ray is also a veteran who spent several decades in the military in addition to the land business. He personally contacts every person who joins through the MTP.  I must say, although I have joined many real estate related organizations since leaving the Navy, the REALTORS® Land Institute is the only one I have ever joined where someone called to welcome me to their group.

I also had the benefit of a conference call for MTP members with Bill Eshenbaugh, ALC, who donated several education scholarships to the MTP in honor of his brother, John Eshenbaugh. Bill is a very experienced land broker in Tampa, FL, who does an incredible job of networking and connecting various individuals. He did a great job of encouraging the MTP members in our new careers and gave us the opportunity to leverage his network to connect with others in the industry.

Opportunities like these are just a small sample of my experiences after having joined the Institute through the MTP. In general, the entire group of members has been well above average in terms of making a new guy feel welcome in a brand new community. I’ve had frequent instances of people saying “thank you for your service,” followed by an engaging conversation about the land business and an offer to help however they could. These encounters solidified my desire to be heavily involved in the Institute, and I have already seen lots of success networking and collaborating on deals with other members.

So, for everything that I have benefited from since the day I joined the organization, let me turn the tables and say to the REALTORS® Land Institute, “thank you for your service!”

—Caleb McDow

If you know of a service member who would benefit from MTP, please contact Institute staff at 800.441.5263.

For more information about the Military Transition Program, contact

Institute staff at 800.441.5263.

Why a Drone?

Contributor Kent Morris, Accredited Land Consultant (ALC), Waddell Land Co., LLC

Morris, G. Kent, ALC

I have become super interested in drones and have done a lot of research in preparation of buying one. That day finally came… I bought a DJI Phantom 3 Advanced. Drones are also known as UAVs (unmanned aerial vehicles).


Why a drone? To begin with, I believe it will be an important tool for my land brokerage business and I believe it will help me sell more properties. A drone provides photographs and video from oblique angles–the images are awesome! If you are buying a large tract of land, farm or ranch you’ll really want to see lots of different aerial views including satellite images.

There are many uses for drones:
Agriculture – “Agriculture, far and away, is going to be the dominant market for UAV operations,” the spokesman from the  Association for Unmanned Vehicle Systems International told National Geographic in a recent article. The article continues, “The precision agriculture movement uses technology to monitor fields, increasing yields and saving money. Gielow noted that precision applications of pesticides, water, or fertilizers, which drones can help by identifying exactly where such resources are needed… Drone cameras can spot where nitrogen levels are low, meanwhile, or watch the growth of a specific field section, can also help farmers. Drones with infrared light cameras can reveal plant health by reflecting how efficient photosynthesis is in various plants.” The uses of drones in agriculture are endless.

Drones (UAS) agriculture / farming

Security and reconnaissance – commonly used in police force and military. Drones can photograph suspected illegal activity including immigrants crossing the borders so law enforcement can react in a timely manner. The military uses drones to deliver munitions.

Photography (Real Estate) – Drones deliver great aerial photographs from oblique angles. However, change is on the horizon. REALTORS® are in a wait and hold pattern as the FAA continues to create and clarify laws regarding the matter.

Entertainment – use for simple recreation these vehicles are just fun! However images and videos are commonly used in sporting events and film making, the list is endless.

Commercial – Even Amazon has on the drawing board plans to deliver packages in urban areas.

As you can see, the uses are endless and this in not a comprehensive list.

Have fun and fly safe! View Kent’s blog.

The Time for Real Estate Agents to Adapt Has Come

Contributor Luke Worrell, ALC, Worrell Land Services, REALTORS® Land Institute

Luke Worrell, ALC

I have to admit, I don’t particularly enjoy talking about the environment.  In fact, I try to avoid it if it is anything beyond the current weather needs of our crops or soil.  It’s a hot button for some, so perhaps I am just leery of pushing it.  It can also get complex and the verbiage can start sailing over my head pretty quickly.

This might be a unique personality trait, but I get the sense other Accredited Land Consultants (ALCs) and real estate land professionals agree with me. We get busy in the day to day tasks of our jobs and the larger scale or “macro” environment chatter passes me by.  I totally understand the importance and like to think I am not being naïve with my certain level of apathy.  I am also willing to admit that the time has come for me, and perhaps others like me, to change.  The time is coming where farm managers won’t be able to get by with the basics of environmental small talk about what regulations might be in place.

This became clear to me recently when I was privileged enough to participate in a “Next Gen” program in Springfield sponsored by Dupont Pioneer.  We spent a day and a half in and around the Capital hearing from professionals in the governmental and regulatory arena.  The take away was obvious:  There are some serious and valid concerns regarding where we stand as an industry and how we handle our farms.  Councils, Coalitions, Alliances, etc. are all forming (and with sound reasoning) to see changes implemented.

We heard from the Illinois Council as well as the Environmental Protection Agency and the Alliance for Sustainable Agriculture.  Attendees got the sense that some of these efforts are in their infancy but will become much hotter topics of discussion in the years to come.  If I were more qualified, I could write several articles on the ongoing water rights issues across the nation (Google “Des Moines Water Rights Lawsuit” and set aside 36 hours to read it all) — that will garner most of the headlines but it doesn’t end there.  Nutrient stewardship, field print calculators, cover crops, increased organic practices…the list could go on long enough for you to get bored and stop reading this post.

Farming can be very generational.  I grew up in the 80’s and 90’s often going to my grandparents on the weekends.  I lost my Grandpa late last year but we loved talking about the “olden days” and my memories of watching him farm when I was a child.

In retrospect, the “olden days” we spoke of aren’t all that old.  The world moves quickly.  Think about what the industry looked like when you started.  Farmers are doing things today that would shock their predecessors.  We will have to adapt and be savvy when it comes to these environmental issues.  So let’s educate ourselves, have an open mind, and prepare for the dialogue to get tricky at times. Most importantly, let’s treat Mother Earth kindly and prepare to show her respect because she is going to be demanding it in the future.

LAND…What’s Selling…Who’s Buying?

Contributor Kent Morris, Accredited Land Consultant (ALC), Waddell Land Co., LLC

Morris, G. Kent, ALC

I recently participated in The 2015 Land Markets Survey with Land Brokers across the country and the results were recently published by the REALTORS® Land Institute. As expected there were some very modest improvements in sales and sales price. The following chart shows how the country was divided into regions for reporting purposes. We’ll focus on Region 3 where I practice Real Estate. The bulk of property selling in Region 3 is primarily timberland and recreational properties.

Country By Regions
Region 3 Reported Average Sales Close to 100 Acres
As you can see most participants reported 2 -3% Increases
The chart above shows Increase/Decrease By Land Type and by far most reported 0 – 5% Increases
Now, Who is Buying? Generally speaking Corporations are buying development and commercial properties. Families and Individuals are buying ranches and recreational properties. See the following graph.
I think there are 2 very important points: 1) If you have been waiting on prices to bottom out, you have probably waited too long and 2) in my opinion, interest rates will move up (not down). If you have been waiting to buy that tract of LAND…..now is the time!
Read more form Kent’s Blog here.

Are There Different Types of Water Rights?

Contributor Kent Morris, Accredited Land Consultant (ALC), Waddell Land Co., Llc

Morris, G. Kent, ALC

One of the first cases involving water rights was Tyler v. Wilkinson in 1827. This was a dispute between 2 mill owners. Could the upstream mill owner impede the flow of water to the downstream mill owner. Thus, Riparian water rights came into existence.

Generally speaking, the type water rights you own depends on where you live. Those who live in the eastern United States have ‘Riparian rights’. Those in the western U.S. have ‘Doctrine of Prior Appropriation’. Below is a pie chart showing who holds the most water rights in the U.S.:

water rights graph

Lets describe what these different type water rights are:

Land-based or Riparian Rights
Riparian rights are based on land ownership and are protected by property law. Riparian rights state that only the owner of the banks of the water source have a right to the ‘undiminished, unaltered flow’ of the water. Riparian rights are only transferable when the riparian land ownership title is transferred to a new owner. Typically, riparian rights are not severed from the land.

Doctrine of Prior Appropriation
The use of water in many of the states in the western U.S. is governed by the doctrine of prior appropriation, also known as the “Colorado Doctrine” of water law. The essence of the doctrine of prior appropriation is that, while no one may own the water in a stream, all persons, corporations, and municipalities have the right to use the water for beneficial purposes. The allocation of water rests upon the fundamental maxim “first in time, first in right.” The first person to use water (called a “senior appropriator”) acquires the right (called a “priority”) to its future use as against later users (called “junior appropriators”). In order to assure protection of senior water right priorities and to maximize the use of this scarce and valuable resource, many states have adopted detailed schemes for the determination and administration of water rights. These state regimens define to a large extent just what a water right is.

However, as one might expect, most states have adopted a Hybrid System. Many of these states originally operated under the Riparian Rights then later adopted parts of the Prior Appropriation rules.

Read more from Kent’s Blog here.

Networking at the 2015 National Land Conference

Guest Contributor Marshall Brown, Marshall Brown & Associates

Brown 7451-printableWith the National Land Conference coming up, I thought it might be helpful to provide some networking tips to you. A number of my clients find networking at conferences to be a challenge. Below are some helpful tips which I also hope you will find useful.

  • Be an active participant in seminar discussions – be willing to initiate, facilitate or report on behalf of your small discussion groups.
  • At the end of seminars that really interested you, ask the group if anyone would like to continue the discussion during a break or over dinner. Meet and talk more with anyone who indicates interest, and have a professional discussion on the topic. Be willing to share what you know while respecting others’ expertise and opinions as well.
  • Find out as much about their professional interests and expertise as you can without coming across as pushy.
  • Exchange business cards afterward. And if you are “between successes”, be sure to have a business card made to bring to the conference.
  • Print stickers for the back of the business cards you take to the conference that says “We met at the National Land Conference in March 2015” – they might not think to do that, and it will remind them how they know you.
  • Write the topic you discussed on the business card before turning it over – again, this will jog their memory.
  • Get their business cards, and link their contact info to your notes about their interests and expertise.
  • Email them the week after the conference to tell them how much you enjoyed the discussion (but don’t ask for business or a job).
  • Email them several weeks or months later with a question that interests you on a topic in which they have expertise – don’t forget to remind them where you met. See if this develops into a conversation.
  • For the people who would exchange email, follow any paths that present themselves during your discussions that pertain to your long-term or short-term goals.
  • Remember the Exhibitors – introduce yourself to selected exhibitors and let them know your interests; leave a business card so they can help connect you with others with similar interests.
  • Never eat alone; as much as you may want to re-charge, this is the best opportunity to make connections.

I will be presenting IDENTIFYING AND BUILDING YOUR BRAND and a roundtable discussion DEVELOPING AN EFFECTIVE NETWORK…so stop by and say hello! Looking forward to seeing you in Tucson!