Buying Country Property

I often hear people fantasize about buying property in the country; if asked, I suggest that before they begin their search they clearly define their goals for the purchase, both short-term and long-term. Defining their goals will go a long way in ensuring the property ultimately purchased will serve their needs.

For example, a weekend getaway a short drive from your current home may have very different requirements than a place that will eventually become your full time home and a business enterprise, such as farming, ranching or tourism.

Do your homework – the Internet provides access to a vast array of information, use it to your advantage to help narrow your search to locations and communities which meet your needs. On-line databases of real estate listings aid in finding property listings in all 50 states in the U. S.

Depending on the type of property you desire determine areas of the country that might be good candidates – research the personal and property taxes in those areas, the demographics, school districts (if applicable), medical facilities, roadways and transportation, utilities and costs. If you plan on farming, ranching – for that matter any form of agriculture, research the best areas to support this in terms of climate, soil, rainfall, markets for your product, etc., and pay close attention to the current asking price for properties in the area! If you will be financing the purchase, find financial institutions that are willing to work with you on the purchase of country properties and determine their terms for financing! Some institutions have limits and guideline on financing rural properties – some will not finance acreage.

Do these things before enlisting the help of a realtor! Keep in mind that most realtors work on a commission basis; they appreciate working with clients who can clearly articulate their needs with respect to a property, have their finances in order, and are serious about making a purchase. Also keep in mind, that all realtors are not equal.

Before choosing a realtor – interview the realtor to ensure he or she possesses the knowledge and experience to ably assist your purchase of country property. I do not recommend engaging a realtor that is not familiar with the area in consideration and/or the sale or purchase of country properties. Just because a realtor has won awards for the number of homes sold in the city or suburbs does not mean he or she has the knowledge to ask the “right” questions in transactions involving country properties with acreage.

Oftentimes, buyers will contact a particular realtor because that realtor has a property “listed” for sale in an on-line database, for example, www.realtor.com. The realtor that advertises the property for sale can either be the owner of the property or has been engaged by the property owner to assist with the sale of their property. Buyers need to determine from the onset of contact with a realtor, who the realtor would represent in the transaction if the buyer decides to make an offer on the property. This is important – if the realtor is not going to represent you – the buyer – you will not be able to rely on the realtor for advice during the transaction; if you are not personally knowledgeable and experienced in the purchase of country property, this can place you in a serious disadvantage, both when the offer is written and negotiating terms of the contract through closing of the sale. Once you determine who the realtor represents, you can better decide how to proceed. For example, the realtor, even though he or she represents the owner, can schedule a “showing” of the property to afford you the opportunity to view the property in detail. The owner’s realtor may also supply you with certain information about the property, i.e., a “Sellers Disclosure”, if asked.

A “Sellers Disclosure” is a document the owner of the property fills out that provides information on the property, such as the location, the amount of land, the condition of the property, etc.; this document should be part of the documents the realtor receives from the owner at the time of “listing”. All states may not require this document – and it may not be called by the same name – but ask the realtor for a copy of anything the owner may have provided that discloses information about the condition of the property, taxes, location of the property, current survey availability, etc.

To clarify for those who may not be familiar with the term, a “listing” is an agreement between a realtor and the owner of a property; it lays out the legal description and location of the property for sale, asking price, and other pertinent information such as how the realtor will be paid if the property is sold – usually the realtor is paid by commission based on the final sale price of the property.

The realtor representing the owner may legally, depending on state laws, be allowed to help the buyer in completing a written offer to the owner for consideration. If the owner accepts the offer, this written offer usually becomes a “contract for purchase”. However, again depending on state laws, the realtor may then be placed in a position of “neutrality” for the duration of the sale and only allowed to pass information back and forth between the parties – but no advice could be dispensed to either party. If both the seller and the buyer are knowledgeable about real estate transactions, this situation may be acceptable to them, if not, it is best that each party – the seller and the buyer – have their own realtor representing their separate interests in the sale. Keep in mind, real estate sales are no less a “buyer beware” industry than the used car business!

Now, what I am about the write may not make me popular with realtors, but so be it. When dealing with realtors, even a realtor you have engaged to represent you in a real estate transaction – be circumspect! Do not engage in banter about your personal affairs, don’t “gush” over a particular property – don’t reveal any information that you would not want the opposing side of the transaction to know about you or your finances. Believe me, this is “intel” that may influence the terms of the contract. All the realtors should be concerned with is the transaction at hand – what property is being purchased, the price and how will it be paid for, the specific tasks to meet the contractual requirements, and when the sale will be closed and they get paid – period!

You have the right to have inspections done on structures – home and other buildings; you can also have inspections done of the septic system, the water well, and perform soils tests. These things must be included as written requirements with the offer to the owner.

The realtor listing the property for sale should ensure the person signing the “listing” agreement has the authority to place the property on the market, either as the owner of the property or the owner’s agent. If there is a discrepancy between the name on the listing agreement and the name on the appraisal district rolls as the owner of the property – question the discrepancy. This may avoid a lot of confusion later on in the process.

When dealing with country property, there are many things you must consider, such as water and mineral rights – for example, has any of these rights been sold separate from the property and what is the potential impact of buying a property in this situation?

Are there current leases on the property, such as leases to drill for oil and gas, grazing, farming, mining, timber, etc. – if so, what are the terms of the leases?

Is there a current survey on the property – if not, what is the cost and time frame for getting one in hand? I do not recommend purchasing any property without an acceptable survey – you need to ensure the property you think you are purchasing is in fact THAT PROPERTY! People have bought property thinking they were buying 100 acres, but when the survey was completed this was not the case. Financial institutions will not make loans on real estate without an acceptable survey.

Are there pipelines, utility lines or other “right-of-ways” running across the land that will prevent certain areas of the property from being fully utilized?

Are there any federal, state or local regulations or ordinances that impact usage of the property, for example, remodeling structures? Are there known endangered species living on the property or wetland areas that cannot be developed by law? Are there parts of the land that cannot be utilized due to seasonal flooding or extreme geography?

Are there current local tax exemptions on the property, such as agriculture or timber exemptions – will you be able to maintain these exemptions after purchase and if not, how will this affect your property taxes? Keep in mind if the owners are elderly or disabled, there may be tax exemptions on the property that you may NOT be eligible to maintain and will definitely affect your taxes!

How is the property accessed? You will occasionally find country property for sale that is “landlocked” – no legal access to the land exists from a public roadway? If access is not via public road frontage, is access provided via someone else’s property? Are there restrictions on using this access? Must you purchase additional land to be able to access your land? Just keep in mind, if there is no legal access, you can be cut off from accessing your land at any time.

Are there crops, equipment or livestock that must be considered in the sale and if so, how will these issues be handled as part of the sale?

These are some of the considerations when purchasing country property - buying country property can be more complicated than purchasing property in the city.

Some advice I will pass along, 1) be on-hand for ALL inspections and 2) as the buyer you have the choice of which company to handle escrow deposits and closing documents for the sale of the property; chose an office within driving distance of the property. Arrange with your realtor for you both to do a "walk-through" of the property at the shortest possible time before closing. Your realtor should inform the seller's realtor of the intent to do a "walk-through" prior to closing - it does not matter if it is just raw land with no structures - do a "walk-through" prior to closing. This puts the seller on notice! The goal is to ensure the seller has done what was laid out in the contract with respect to removal of items from the property prior to sale or requested repairs have been made satisfactorily, or that they have not removed or damaged something that was part of the contract for sale. Believe me, some people can be quite naughty about meeting contractual requirements and a last minute "walk-through" may save you from closing before contractual requirements have been met. Failure to comply with contractual requirements constitutes a breach of contract! If this happens refuse to close on the property until the seller has complied fully with the contract. DO NOT CLOSE AND THEN EXPECT THE SELLER TO COMPLY!

Take your time, do your homework, and get someone knowledgeable to help you find the right piece of property and negotiate the sale if you are not experienced in country property purchases. It can save you a lot of heartache and a negative impact on your bank account!

How to Reduce Stress While Improving Your Ranch's Bottom Line

Folks, ranching is a business – a tough business - to be a success it demands time, physical strength, and intelligence with a good dose of common sense in the mix; it can at times definitely increase stress in life, between operational decisions, the fluctuating prices in the cattle market, and the vagaries of Mother Nature. Successful ranchers analyze their operations and are willing to try different techniques or ideas to improve operations and the ranch’s bottom line.

I often hear ranchers lamenting they don’t have time for vacations, they are losing calves, they are losing money, and on and on. Yet many ranchers ignore one of the best tools available to them – a controlled breeding program. Basically, a controlled breeding program is a plan for when the cattle breeding season will begin and when it will end. The ability to control the “breeding season” is an important aspect of ranching and one that I often see overlooked by ranchers – even ones that have been raising cattle for decades!

A controlled breeding program is a very cost effective practice; it enables the rancher’s dollars to be focused on nutrition at specific times to ensure a successful breeding season for mature animals and good weaning results for the calves. It also enables the rancher to predict when and if additional labor will be needed to assist with specific operations and plan accordingly.

A controlled breeding program helps the rancher focus on one major operation at a time which greatly reduces overall stress for the rancher. For example, the cows will all be giving birth within a specific window of time, this enables the rancher to closely monitor the cows for calving difficulty and respond accordingly to increase the survival rate for both the cow and the calf.

The calves in turn will be uniform in age allowing for veterinary tasks to be administered in total on given dates which saves the rancher both money and time. And the calves will be more uniform in weight when ready for sale; they can all be sold together when a weight is reached that the rancher determines will bring the most income.

A controlled breeding program helps the rancher identify cows that are not reproducing and thus not adding value to the herd. These cows can be then be culled to make way for more productive animals. Additionally, knowing exactly when the breeding season will begin the rancher can determine whether or not to replace or maintain an existing herd bull, schedule a “lease” a bull for the breeding season, or to utilize artificial insemination (AI) to achieve specific breeding goals for the herd and make plans for this.

One of the biggest and most stressful mistakes we made when beginning ranching was to allow our bull to run full-time with the cows for two reasons - 1) bulls can be very destructive and 2) you cannot control the “breeding season” if the bull is constantly present in the herd.

We started off with 11 heifers and a registered Angus bull with a 22 letter name that we shortened to “Buddy”. Since we were new to raising cattle we emulated what local ranchers did – let Buddy run with the heifers full time and unknowingly set ourselves up for a tough year. Buddy, the Bulldozer, dug holes – some of them as much as 8 inches deep and two feet in diameter all over the pastures when he wasn’t fighting with the neighbor’s bull and tearing the fencing down. If you have never driven a tractor through one of these holes that you couldn’t see coming for the high grass around it – believe me this is an experience you can do without!

Now, when Buddy wasn’t going at it across the fence line with the neighbor’s bull or digging holes, he was doing the job we “hired” him to do. All the heifers were bred and the calves were on the way – and on the way – and on the way! That first calving season seemed to go on forever! Because the calves, in some instances, were born many weeks apart for a protracted period of time I was up at all hours of the day and night checking on those heifers, needless to say I was pretty tired and stressed by the time the last calf was born.

A few months later as weaning time came around, we had some calves and their Mommas bawling day and night for three days in a row, then quiet (Blessed be!) and then it would start over as the next group of calves reached weaning age! When it came time to sell the calves as a group they were all different ages and weights and although we did make money from the sale the time of year to get best prices had passed.

When the trailer hauling the calves to the sale barn pulled away, I was both relieved and disappointed overall in how the year had gone. I knew there had to be a better way and since we had emulated the local ranchers’ operations that first year with one exception, we needed to search elsewhere for ideas and solutions.

After some research, we found and attended a pasture and livestock management school provided by Texas A & M – it was 3 days long – and was well worth the time and money we spent on travel and the class because we walked away on the last day with a lot of valuable information we could utilize to improve our entire operation.

One of the our goals was to develop a “controlled breeding program“ – we had to determine what was the most advantageous date each year to open the gate and allow Buddy to join the cow herd.

Our approach to a “controlled breeding season” - 1) one of things we discussed in the school was “Body Condition Scores” (BSC) – BSC is the necessary weight of the cow to elevate the chances of successful breeding within a specified time period. All the cows needed to be a minimum of BCS 5 at the start of breeding season, 2) we set a date when we wanted to the calves ready for sale and using this date backed up the calendar to select a “breeding season” and a “weaning season”, 3) Buddy was placed in a pasture of his own that connected to a big stall in the barn to provide shade and shelter from inclement weather with plenty of hay and other goodies a big guy must have to remain happy and healthy, and 4) Buddy would be allowed to run with the herd for 45 days continuously in order to breed the cows, and then he would go back to his pasture. Any cows that did not breed back would be culled.

The desired outcome - the cows would all be in good condition at the time of breeding, and bred within the 45 day period of time, they would calve within a 45 day period, all the calves would be of an age that they could be weaned together as one group, veterinary tasks completed on the group at the same time, and sold together as a group making life on the ranch much easier for all involved and more lucrative. Additionally, we wanted all the calves “on the ground” at an optimal time of the year based on our schedule and feeding requirements for the cattle – maximizing when the pastures were at their most productive. Since Buddy was not roaming free all the time, there would be less pasture and fence damage!

A 45-day breeding season is pretty aggressive, but we felt since we were dealing with mature cows that had all calved before, and all the cattle, including Buddy were in good health, 45 days was doable. And it was; all the cows were bred back within that time frame. Kudos to Buddy!

It took two “breeding seasons” to get everything synchronized to the most desirable dates, but with the calves all coming in close succession, we did not feel tied to the ranch for weeks on end awaiting calving time to be over, and we had more control over the optimum time to sell the calves.

A controlled breeding plan is a valuable tool that every rancher should use to his or her advantage; it should be designed specifically to meet his or her goals and time frames. For example, a rancher may decide to have two “breeding seasons” a year – one in the spring and one in the fall. The season may be of a different length of time – instead of 45 days, it might be 60 or 90 days. The point is that a controlled plan is not set in stone – it can be adapted as necessary – but having a plan can improve the ranch’s financial outcome each year and make life much easier for the rancher and his or her family!