WHAT HAPPENS WHEN THE WRONG BROKER…
TRIES TO SELL A RANCH PROPERTY
Real estate offers a wide range of specialty practices, much like the health care industry. While many doctors are general practitioners, there are also specialists in pediatrics, orthopedics, emergency medicine, and as we know now with the Coronavirus, epidemiology and pathology. Real estate practitioners have a similar range of specialties. The typical residential broker deals in single-family houses or perhaps condos and townhomes on a day-to-day basis, which is the equivalent of a general practitioner.
Luxury homes, commercial property, hotels and motels, farms and ranches, even churches!
There are specialists in real estate as well. Just as you would want to engage a specialist for a hip replacement or a brain surgery, a property seller should look to a specialist when selling unique types of real estate. There are brokers who specialize in selling almost every unique type of property—luxury homes, waterfront homes, mountain land, hunting property, commercial property, hotels and motels—heck, even churches! One of the most important specialty groups is the world of farm and ranch brokerage. It takes a unique set of marketing skills, farm and ranch knowledge, and special expertise to sell farms and ranches. And when a “doorbells and window shades” broker gives it a try, the results are often comical and sometimes disastrous. In fact, just like medicine, a broker trying to sell a ranch without the skills and knowledge could be accused of malpractice.
Mistakes are made without farm & ranch knowledge and brokerage experience
Selling residential real estate—the typical 3-bedroom, 2-bath home on a city lot—requires skills and expertise, and many ranch brokers don’t enjoy the process. Home inspections, lending requirements, HUD forms, homeowners’ associations—it can be a frustrating business to a farm and ranch broker who would rather be outside. When a residential specialist tries their hand with a ranch, however, the consequences can be serious, and it’s usually the seller who suffers as a result. Here are some examples:
· Incorrect legal description on a large ranch sale—a residential broker made an offer on one of our mountain land listings. My broker associate called me when looking over the legal description in the sale contract. It seems the buyer’s agent had gone into the county website and copied the legal description from the sellers’ property record, but it was a legal description for the mineral rights, not for the property itself. If we had not caught the mistake, the buyer could have bought the mineral rights for the property, but not the deeded land. And the mineral rights were almost worthless.
· Huge pricing errors in ranch real estate—one of my ranch broker friends came across a listing that looked appealing, but the pricing was wildly over-inflated. He called up the listing broker—a residential agent from Denver. “So…just out of curiosity, how did you arrive at the listing price? Because by my math, it’s worth about $1.5 million, and you have it priced at $5.16 million.” The broker replied, “Funny you should ask! It just so happens that the seller’s birthday is May 16.” Ouch! The broker didn’t even try to do any market research, and they used a completely irrational approach to arrive at pricing. So the seller has a mis-marketed, very badly priced listing that will languish on the market unsold for the entire time the property is listed with that broker, and it will become stigmatized. When it eventually sells, statistically speaking, it will sell for at least 10% less than its true value.
· Water rights are not included in a ranch sale—as ranch brokers, we commonly see brokers neglecting to include water rights in the purchase of a property. Water is gold when it comes to ranches, and there’s an old saying in the West—“Whiskey’s for drinking, and water is for fighting.” Many tricks have been played with water rights over the years. A favorite trick by the canny old rancher is to offer a beautiful green irrigated property for sale—and keep half the water rights to himself to use on his remaining acreage adjacent to the sale property. When the buyers try to irrigate the next summer, they’ll have a heck of a time growing a hay crop, and only later will they find out that their broker should have investigated the water rights more thoroughly.
· Mis-marketing a ranch property—many residential properties are marketed by mass platforms such as Zillow or Realtor dot com, which don’t typically include acreage. These platforms work fine for selling houses, but not for acreage. When there’s an old 2-bedroom, 1-bath, 1,000-square-foot home on 600 acres, it won’t get many looks on Zillow when it’s priced at a couple million dollars. It’s just the wrong place to market a property with large acreage. Ranch buyers peruse certain websites and marketing platforms, and often those sites are very expensive. The typical residential broker will not invest in a pricey monthly contract to advertise one or two listings. Along those same lines, it’s common for an uninformed broker to place a large ranch in a “residential” category on the MLS, when it should be listed in “Farm and Ranch” or “Land”.
· Poor photography, description, and presentation—real professionals in the ranch world are also great marketers, photographers, and website specialists—or they know people who are. They are storytellers. Ranch real estate specialists can immediately tell when a residential specialist has somehow gotten a ranch listing. When there are several hundred acres of streams, meadows, fields, and woods, with livestock, horses, wildlife, and barns, the listing photos are overloaded with pictures of the inside of the house. The
The right way to list a farm, ranch, or large vacant land property—tell the story!
Just as a patient needing a knee replacement shouldn’t ask a plastic surgeon to do the job, why would the same person hire the wrong broker to sell a farm or ranch? It doesn’t make sense, but it happens all the time. Often it has to do with family relationships or “connections”—somebody’s niece or nephew just got licensed; I know that guy from church; she’s my sister-in-law; I play golf with him. As much as we may like our friends and relatives, it’s a poor way to transact a large property. Sellers should take the ranch sale process seriously, knowing that every day on the market is a ticking clock that cannot be reset. Every buyer that passes on the property due to inaccurate pricing or poor market placement is a missed opportunity. Every buyer who never finds the property due to poor marketing is someone who will never write an offer. The wrong broker can cost valuable time, money, and opportunities. We’ve seen properties linger on the market for several years when listed by the wrong brokers. If you have a ranch or farm property to list, treat it like any other business deal. Better yet, treat it like you’re sick! Find a professional who is the best in that business and your health is at stake!
Interview farm and ranch brokers—learn about their marketing platforms
A seller who feels bound and determined to “throw a bone” to a real estate agent friend or family member can ask that person to find the best danged ranch broker in the business, who will pay them a referral fee. Then get down to business and interview several recommended professionals. Ask them about their typical listings; duration on market; if they’ve sold a property like yours before and give examples; marketing reach; photography skills; social media presence; website platforms; drone video; and their professional affiliations, certifications, and designations.
Act like a buyer and see what’s out there! Go on a ranch search
The best way to learn how brokers market properties is to act like a buyer and imagine that you’re going to buy a ranch yourself. If you’re not internet savvy, find someone who is, go to the library, and sit down at a computer and do some searching. It’s a big, bold world out there, and lots to learn. When you see what good ranch brokers are doing with custom interactive mapping, drone video, website penetration, and clean, clear property presentations, it becomes much easier to choose the right broker. When one team or broker keeps coming up again and again, it’s because they have a lot of practice and a lot of sales. Again, who would you rather trust—the intern who is doing their first surgery, or the steady hand who has done it a thousand times? It’s the same with ranches. Let the professionals do the job.
UC Ranches for Sale is one of the world’s largest ranch marketing platforms
United Country has been selling rural real estate—farms, ranches, country homes, log homes, mountain properties—since 1925. The specialized UC Ranches platform is a specialized group of qualified ranch brokers within the larger United Country brokerage community. With specialists in cattle ranches, recreational ranches, luxury ranches and lifestyle properties, hunting land, farms, and mountain land, each specialist on the www.ucranchesforsale.com platform has been selected for their knowledge of ranches, farms, water rights, mineral rights, marketing skills, and experience in selling farm and ranch properties. For ranch owners looking to sell their properties, the UC Ranches platform is an excellent place to start.
Gary Hubbell, ALC, is the broker/owner and auctioneer with United Country Colorado Brokers & Auctioneers and Western Real Estate & Auctions. Licensed in Colorado and Utah, Gary has sold ranches, farms, resorts, outfitting businesses, luxury homes, hunting land, horse properties, country homes, and mountain cabins across the West. He is a proud member of the Realtors Land Institute, where he has earned the coveted designation of Accredited Land Consultant. You can reach him through his website, www.uccoloradobrokers.com