Below is a summary of land sales by county. (data from SCWMLS)

Although land prices are slightly down from 2010 levels, buyer confidence is up. Even these first few weeks of January have been unusually busy. On the four websites that I track the page views of my listings, I have seen a big increase in web traffic through December and January. In this digital age when 88% of all property searches begin on the internet, this is a VERY positive sign that this upward trend will continue in 2012.

To learn more about the current market, begin your search here: Southwest-Wisconsin-Real-Estate.com

The number of rural land sales dipped slightly during the 3^rd quarter over the same period in 2010. Richland County continues to see the most action with Crawford County following second and Grant County seeing only one transaction for the 3^rd quarter of this year. The median price per acre also slipped slightly from $2557 to $2501. Cropland is the one strong point in the market. Parcels with larger tracts of tillable land sold at a higher price per acre over similar parcels sold a year ago.

Below is a summary of land sales by county. (data from SCWMLS)

It might be encouraging to note that rural real estate markets often lag behind those in metro areas. Home sales in Dane County are up by 23% for September. This is the 3^rd month in a row that Dane County has seen an increase in sales over the same month in 2010 so perhaps we’re due for an upswing in the land market as well.

As Jonathan Goode states in his recent article on LandThink, “The flow of the land market is shifting.”

To learn more about the current land market, begin your search here: RuralPropertyPro.com

All data was taken from the SCWMLS and did not include residential or commercial land sales.

For those who haven’t been following it, effective January 1, 2010 anyone that rezoned Wisconsin land from the Exclusive Ag designation (farm land) had to pay a fee that could run close to $1000. per acre.  While the intent was to discourage development and protect family farms, not everyone agreed with the law. Often, retiring farmers in the hills of southwest Wisconsin had little to show for their decades of hard work other than their land. In essence, their land was their only retirement plan and the conversion fee limited their ability to get top dollar for it when they sold. Furthermore, some felt that limiting development also reduced the income potential of rural townships which placed further burden on the already stressed family farmer. So with the recent passing of the state budget which included the repeal of the conversion fee, many land owners again saw a light at the end of the tunnel.

But not everyone is pleased. For some, the light at the end of the tunnel might well be a train. After decades of urban sprawl around Wisconsin’s cities, many were hoping that the conversion fee would slow the trend and help preserve the rural farming lifestyle. Now with the conversion fee eliminated, it may be back to business as usual since buyers or sellers of rural farm property can once again rezone without incurring conversion fees.

Since buyers and sellers generally watch the bottom line, this is a positive development in the current real estate market. Having a costly fee removed from the equation will lower the total property cost and influence consumers to move forward toward a real estate transaction.

When someone decides to buy a rural property, frequently the first inclination is to get out and “go shopping”.  Viewing properties is usually fun, especially when they are located in the country and the sun is shining.  But making that your very first step could lead to disappointment along the way.  Unfortunately, I often meet folks that have only a vague idea of the steps involved in the real estate shopping process and as a result quickly get frustrated with the endeavor. To avoid such frustration, there are four distinct steps that buyers should consider to prepare for serious shopping.   

1. Choose Your Price Range     Step one is so important yet many buyers procrastinate because it’s just not fun to get pre-approved for a mortgage. Yes, it’s certainly more exciting to look at properties and dream than to have your mortgage banker or accountant tell you the cold hard facts, but skipping this essential step will only lead to disappointment later. There are few things as disheartening as having your heart set on a property only to find that you just can’t swing it financially. Knowing what you can afford will help you shop with confidence. You’ll also save time by only concentrating on the properties that are within your budget.    

2. Choose Your Area     This second step will require you to spend some time online and in your car researching the area where you want your property to be. Too often people short cut this step and as a result they spend days looking at properties in a certain location only to find that they like a different area better.  One example is the Driftless area of Southwest Wisconsin. I frequently meet people that are completely unaware of the rugged beauty and reasonable prices just a few hours from their front door. A little time spent exploring different areas would have revealed this hidden jewel to them before they spent days looking elsewhere.

Some things to consider when doing your research are:

A)    How far are you willing to drive from your principal residence? A property is of little good to you if you don’t use it.

B)     What are your preferred recreational activities? Is there opportunity to enjoy the activities in the area?

C)    Will your friends or family be willing to join you there? Too often I see buyers hoping to use a property to reconnect a family only to find that the family members seldom make the trip.

D)    Do you like the communities in the area? Second homes often turn into primary residences at retirement so will you enjoy spending more time there?

A little time spent researching various location options will help you feel confident that there isn’t something better for you just over the horizon.   

 3. Choose Your Agent     Once you have an area selected for your recreational property or second home, it’s time to choose an agent to work with. While some people just call the agent that is on each for sale sign, most buyers find that working with a single agent is to their advantage. When you work with several agents, each one may pressure you to buy their listing instead of considering the best property for you.

When a buyer is committed to working with a single agent, it allows that agent to focus on the buyer’s needs and provide service without the pressure to buy any certain property. Most agents have access to the listing info for all of the available properties in the area so your agent can work with you on virtually any property you are interested in.  Enlisting your agent in writing as your buyer’s agent allows him/her to represent you (not the seller) in the transaction and allows them more freedom when advising you.

Choose an agent that can provide the proper tools (i.e. GPS, mapping, ATV) to help you get a really good feel for each property you view. You’ll also want an agent that is experienced in rural property transactions. You wouldn’t expect a medical malpractice attorney to be as familiar with divorce proceedings as a family law attorney. Similarly, an agent that specializes in urban properties won’t be as familiar with the intricacies of rural properties as an agent that does it on a daily basis. Even as I write this, a fellow agent commented to me in exasperation “Is there ever a transaction that is easy any more?” The fact is that rural real estate has changed a lot in the last few years and “perfect” transactions are a lot less common. Having an experienced agent representing you can mean the difference between obtaining your dream property and a lot of disappointment.   

4. Choose Your Priorities for a Property     Once you have an agent that you’re comfortable working with, it’s time to have a good heart-to-heart talk. To help you find the perfect property, your agent will need to know how much you can spend and as many details about your ideal property as you can provide.

A list of priorities is also helpful when you start visiting properties. In some cases you just won’t find everything on your “Perfect Property List”, so decide which features are absolute requirements, and which ones you could live without or add after the purchase. Look into the future especially if you intend to keep the property long term. Will it still work when you retire and could it be modified to meet your needs as you age? Finding the perfect property is often a process and your wants and needs may fluctuate slightly as you shop. Be sure to keep your agent abreast of those changes so the properties he/she suggests are relevant to your current desires.

With these simple preliminaries out of the way, you will be able to enjoy the property buying adventure. Before long your agent will introduce you to a property that you fall in love with and want to pursue.  He/she will be there to guide you through the negotiation process, inspections, permits, surveys, title commitment, etc.  With the proper preparation, you’ll look back at it and say, “That went well.”

VIEW SW WISCONSIN PROPERTIES FOR SALE

If you’ve been contemplating over the winter about selling your property, the time is right to stop contemplating and take action. Spring isn’t quite here yet, but buyers don’t seem to care. Perhaps they are influenced by the warm weather the past couple weeks, or more likely they realize the market is on the upswing. Call volume, website traffic, and showings have really picked up. Serious sellers need to move now to ride this wave.

Best wishes for success.

www.RuralPropertyPro.com

There is really no lack of information on how to prepare your home for sale. In fact, when I recently Googled the subject I got over 51,500,000 results. Yes, that’s over fifty-one million! While de-cluttering your closets and painting in neutral colors applies to all homes, country properties can create their own unique challenges. I was reminded of this in a recent transaction when it seemed that everything that could go wrong did, along with some things that I could only imagine. How could the deceased relative of a neighbor affect a sale of a property? Well he did and I now have more gray hair- but that’s a story for another day!  In my time as a rural property agent I’ve seen a variety of issues kill or derail a transaction which could have been avoided with a bit of preparation. Following are 5 things you can do to give your property the edge over the competition, and help you pocket top dollar at closing.

1. Consider a property survey. A survey is usually a good idea (in many cases it’s required) if you will be splitting an existing property. Even if you aren’t splitting a parcel, a survey can expose issues that may then be cleared up before a buyer becomes involved. Survey markers also give a sense of security to buyers as they “know” what they’re buying.

If you are going to split your property, a consultation with an experienced land agent can be a good idea. Their experience working with buyers can give you valuable insight on where to split the parcel to make it the most desirable. At times just an acre or two one way or the other can mean the difference between a quick profitable sale and a property that stays on the market for years. Your agent can also put you in contact with the proper officials to determine if the zoning is correct for the parcel size you want to create. Be aware that just because you create parcels, doesn’t mean it’s automatically rezoned to allow a residence.

2. Easements: These seemingly simple documents have the potential to cause more stress than just about any other single detail in a sale. The reason is simple. While most other facets of the transaction are negotiated between the buyer and seller, the easement often involves a third party which has no incentive to be cooperative with proposed changes.  That doesn’t mean that you have to despair if you have an easement associated with your property. What I recommend to my clients is that they consider reviewing the easement with an attorney early in the sale process. Many of the older easements that I see in my business are critically vague and will be rejected by a buyer’s attorney leading to a lot of frustration before it’s resolved. Some things that most buyers will want to see on an easement are the width, length, legal description of easement centerline (determined by the survey), whether it is exclusive or non exclusive (others may use it), and whether it’s transferable. Other things may be added based on the situation. A maintenance agreement showing who is responsible for any maintenance on the easement may also be required especially if more than one party has use of it. A poorly written easement has the potential to be a deal breaker, but having an attorney update it before a buyer becomes involved can save the day.  

3.  Government Programs: When you’re preparing to sell your land, don’t overlook any government programs associated with the property such as Managed Forest Law (MFL) or Conservation Reserve Program (CRP) acres.  These and other government programs will affect how a buyer is able to use the property so be sure to disclose them in a timely manner. Having a copy of the contract for the buyer to review will be appreciated and give them the information they need to make an offer while they are still excited about the property. Also, get a copy of any applicable development bylaws and building covenants. Having these readily available allows your agent to forward them to the buyer before an offer is made to help avoid costly surprises later.

4. Title Search: Here’s a scenario that you don’t want to experience: You have an accepted offer, the home inspection went well, and approval for financing is looking good. Then the title search reveals a surprise that derails the train. While most “surprises” can be resolved, there may be a few days of nail biting before the train gets back on the rails. Most of these surprises can be avoided by getting a preliminary title search at the time of listing. When you order a title search, the title company will conduct a comprehensive search of public records, maps, and documents to disclose any recorded easements, liens and encumbrances. If any potential deal breakers are uncovered, you can get them resolved before an offer is written.

5. Home Inspection: This last tip holds true for any property with a residence but especially for rural homes. Talk to your agent about getting a home inspection at the time of listing. The inspection is generally done after the offer is made, but completing it up front allows you to repair any defects before a buyer sees the house so you can negotiate with confidence knowing that everything is as it should be.

The good news is that sellers often don’t follow these suggestions and their sale is completed anyway. On the other hand, in a buyers market like we’re experiencing now, being prepared can not only add value but help your rural property stand out in the crowd. Taking care of these things ahead of time could very well mean the difference between a sold sign by the driveway and the disappointment and frustration of an offer that falls apart at an inopportune time.

Post by: Jay Frazier – Broker Associate with First Weber Group

1. The leaves are off the trees and the crops are harvested so the visibility is great. The snow enhances this visibility as the trees, springs, rock outcroppings and other features are in sharp contrast.

2. The snow isn’t as deep as you may think. Here in Southwest Wisconsin much of the early snow we received is melted down to a hard layer with a little fresh powder on top. Walking is quite comfortable and because of the added visibility you have to walk much less to get a good feel for a property.

3. You won’t get cold. A couple warm layers will keep you comfortable in all but the coldest weather and in my opinion it’s better than 80 degrees and humid!

4. No bugs and poison ivy.

5. There’s less competition for properties in the winter as there are fewer buyers on the hunt. In some cases, this can mean better deals.

6. For hunters this is a great time of year to check for wildlife sign and make note of where they’re traveling in case you purchase the property. By noting when the last snow fall was, the number of tracks can tell a story on animal density.

7. And finally, getting out into nature on a winter day is a great cure for cabin fever and will leave you feeling refreshed and exhilarated.  Give your agent a call and don’t miss out on this rural property prime time.

Jay,     .…my biggest problem is I still cannot get a handle on the ‘worth’ (based on return, not emotion) of timber property.  I’m familiar with farmland returns and projections, but I have no clue on timber. I’m having a difficult time figuring out what it is truly worth with the state and projections of the timber market.  I know you cannot ‘advise’ on ‘worth’ of timber, but do you have any websites, publications, or other sources you could direct me for me to educate myself? 

Well, that’s a million dollar question! The quick answer is: No, I don’t have a good place for you to go to educate yourself to the extent needed to determine timber value on a given property. Also, some sources of information and websites have a hidden agenda so you don’t get the complete picture. 

The longer answer is that the timber value of a property is variable based upon current markets, the stand (species and density) on the property, when it was last cut and how much the owner is willing to harvest (how does he/she want it to look when the cut is completed). It is also complicated by what any existing MFL (Managed Forest Law) contracts will allow you to do. To further confuse the issue, timber value fluctuates based on the whims of interior designers and the public as certain wood species come into style, then fade away only to come back into vogue a decade or two later.  Of course, the law of supply and demand dictates that the popular species are more valuable.   

When I value a property to list it or advise a buyer client, I usually establish a baseline that assumes that there is a mix of hardwoods and it hasn’t been logged heavily in the last 10 years. The key word is heavily as I don’t discount for a few trees harvested in that time frame as long as it hasn’t been decimated. For my purposes, if it is to be classified as wooded, then it has to have a various mix of trees of differing sizes. That is the baseline I use and I don’t add or subtract value if that is the case. Now if most of the mature trees were harvested recently and it will be more than 20-25 years before another harvest would be practical, I will subtract value. On the other hand if there hasn’t been a cutting in the last 20 plus years and there is an abundance of quality trees ready to be harvested, I will add value.  Bear in mind that very seldom does a property become available that has a large quantity of mature trees unless the seller is very aware of their value to the property and wants a premium price. 

That being said; the only way I know of for the typical buyer to determine the timber value on a property is to hire a forester to do a current valuation and estimate that value 5, 10, 15 or 20 years into the future. Don’t forget, you can’t just add that value to the value of the land because you do need some amount of trees just to be at the baseline that I described. Be aware that what a forester does is just an estimate. When I was in the lumber industry, it was not uncommon for several foresters to cruise the same stand of timber and have their estimates vary considerably.  

While timber can add significant value to a property, unfortunately, it’s not as easy to quantify as tillable land income. Since you may not be able to realize the income from timer for a number of years, it generally needs to be viewed as a long term investment and in the mean time appreciated for its aesthetic value.  

post by: Jay Frazier  Broker Associate with First Weber Group

“I about crapped the next day” he said.  Another of those things that happen in the great outdoors that we just shake our heads at.

Post by: Dan Bomkamp