How to Prepare & What to Expect
Written by: Greg Fay, Founder of Fay Ranches
Article to be featured in the next issue of Land Investor Magazine
August 2016 marks my 30th year selling land. I’ve been involved in some of the most significant land transactions in several states, including farms, ranches, timber and plantations. This article is about preparing your ranch for sale, however many of the recommendations can be applied to different types of land in any state.
There are generally two types of ranch owners: the multi-generational ranch owner who uses the ranch as their primary income source, and the modern ranch investor who uses the ranch to recreate and as a gathering place for friends and family. For both of these ranch owners, selling a ranch is almost always an emotional process. For traditional ranch families, the ranch has been the fabric that has woven multiple generations together through shared work and hardship, as well as hard-fought successes fueled by a love of the land, country and family.
For an increasing number of ranch owners whose primary income does not come from the ranch, the property serves as a retreat. It is a place they go to escape from day-to-day life, learn new skills (like fly fishing and horseback riding), gather family and friends and strengthen relationships through shared adventure. This is their happy place, where they sleep more soundly than any place on earth.
These are two very different owners, yet for each, when the day comes to sell, everywhere they look will be the tentacles of memories binding them to the land. The memories won’t go away, but there is a loss of connection when you can no longer walk the land. This day will occur at some point for most ranch owners. The key is to prepare and execute the process in a manner that ensures the most beneficial outcome for the owners and their families.
Taxes, Financial Planning & Family Matters
The first and most important step in selling your ranch is making sure your family’s tax and financial planning is current and competently prepared. It’s never too early to start planning for the tax and financial implications of selling your ranch, but it can be too late.
An integral part of preparing to sell your ranch is open communication with your family members, as selling the ranch can act as a wedge that splits families apart. Planning and communication can decrease the possibility of this happening to your family.
Preparing Your Ranch for Show
If you hire a good ranch broker to help you with the sale, the first things he or she will determine are the most attractive aspects of your ranch and how to best show these off to a potential buyer, but there are many things you can do to prepare your ranch to be as attractive as possible to potential buyers.
Deciding on a Brokerage & Choosing a Broker
Once you’ve assessed your property, you’re ready to decide on which brokerage company to work with. You’ll want to think about which land brokerage company will expose your ranch to the largest qualified audience. This is often referred to as “reach.” The more qualified buyers who are aware of your ranch, the better. You’ll also want to list your ranch with a trustworthy broker that you like. It’s important that your ranch stands out, and a good broker will give the buyers a chance to really experience it.
Pricing, Offers & After the Sale
It’s very tempting to list with the company that gives you the highest recommended list price, but the market will let you know when you’ve priced the ranch accurately. It’s important to choose a good, trustworthy broker, who has done their homework. An accurate list price can shorten the process of selling your ranch and will likely attract more than one interested party.