14 Feb Career Spotlight: Agricultural Real Estate Agent
If we really want to get to the root of agriculture, we must start with the land. From the first domestication of crops and livestock to present day and undoubtedly into the future, producing food requires land. This need is found in cultural references to our agrarian history. It conjures images of purple mountains and fruited plains. Representation of land can be seen on emblems and symbols in corporate logos and organizational materials. Some even believe the founding phrase “life, liberty, and the pursuit of happiness” was derived from John Locke’s treatise on government referencing life, liberty, and estate. As our population has grown while land volume has remained fixed, the economics behind the ownership of real property has grown more complex. Buyers and sellers of rural property can rely on an agricultural real estate agent to help them navigate the myriad of steps necessary to complete their transactions.
NOT ALL REAL ESTATE IS CREATED EQUAL
We could do an entire series just on the brokerage of real estate, but it is worth noting that agricultural and rural real estate is unique. Our economy has shifted first from predominately agricultural to industrial concerns and now to service. Urban sprawl has reduced the amount of arable land available for production. Much of the land farmed in the United States currently is owned by people who are not directly involved in production. This week’s Future of Agriculture podcast with Dave Myers of Bird Dog LLC contains some fascinating statistics and discussion of farmland ownership and cash rent, as well as the issue of bringing producers and landowners together in a profitable way.
The production landscape has changed, and along with it the land. Now more than ever, buyers and sellers of real estate must be diligent in making sure that property deals are carried out carefully and efficiently. Enter Craig Bowen, Managing Partner and Broker of Record for Plateau Land Group. Plateau specializes in the brokerage of rural properties in Texas, and Bowen maintains that the key to their success is specialization. “When we set our company up, we drew a hard line in the sand and said, ‘we will not have a residential component to this company until we’re big enough to hire a residential team…’ because they are two different businesses,” he says. Not to say that Plateau never deals with houses, but they are usually part of a larger property deal or are referred on to residential specialists.
A great deal of work goes into closing on a property between identifying a new client and signing on the dotted line. Bowen lists mapping, land evaluation, valuation based on comparable properties, identification of easements and mineral rights, and marketing to name a few. He and his team of agricultural real estate agents use the acronym L.A.S.S.I.E. to help them move through the steps. It stands for location, access, size, shape, improvements, and easements.
FROM GRAZING STOCK TO THE AUCTION BLOCK
Of course, not all agricultural real estate agents rely solely on showing property to potential buyers one at a time. As we explored in our segment on auctioneers, the auction method of marketing can be an effective price discovery tool for many classes of assets, real estate included.
Merton Musser runs the Billings, Montana office for Musser Brothers Auctions and Real Estate, a sixty-one-year-old family run business operating across four states in the Northwest. While the company deals with everything from agricultural equipment to business liquidations, real estate remains an important part of its overall portfolio. “We do more auctions of [other] assets than we do real estate; however, the real estate dollar volume is considerable…,” Musser says.
Musser agrees that real estate transactions, whether brokered sales or auctions, involve multiple considerations. Aside from the typically high cost of larger parcels of land, buyers must factor in encumbrances, water rights, and production value (i.e. number of animal units the land can carry). Plus, he adds, it can be more difficult to obtain financing for agricultural land compared to residential property.
All these considerations can add up to a significant marketing challenge. “Understanding where your buyers may be coming from and then how you reach those buyers…is challenging,” he says. But, he adds, opportunities abound in agricultural real estate. “If [real estate investors] buy a farm as an investment, they’re going to get a better return than they would if their money was sitting in a bank, and it’s secure. So that intrigues investors.”
Both Bowen and Musser agree that technology has been a huge factor in how the real estate game has changed. Musser Brothers has gone almost exclusively to online auctions in their business (with the exception of large parcels of land), and Bowen is working to adapt systems traditionally reserved for other types of property in his business.
Much of Plateau’s core offering is hunting and recreational land, and Bowen points out that interacting with parties as a rural or agricultural real estate agent means understanding the unique motivations of each. Many of its sellers are savvy, older producers who are looking to divest due to a lack of heirs interested in inheriting the property. A typical buyer might be a successful entrepreneur who made a considerable amount of money in technology or energy. The different goals of each gets to the crux of why a knowledgeable real estate professional can make for a smooth process. “Buyers are very receptive to that kind of information and … [are] happy to have somebody like my team that can help them understand what they’re getting into…That’s part of the joy of our jobs, to make sure that this rural land is passed on to people who are going to appreciate it,” he says.
Musser, too, derives fulfillment from working with people in agriculture. He calls them “the core people of the country,” pointing out that farmers and ranchers are “honest, [have] integrity, and they work hard.” He cites putting the customer first as the foundation to a successful career in real estate, wisely sharing the adage that it can take years to develop a good reputation, but that same reputation can be destroyed overnight.
As far as launching a career as an agricultural real estate agent, knowledge of land practices and continuing education are paramount. Bowen studied wildlife management in college and began his career with Plateau advising landowners on conservation practices. After thirty-five years in the business, Musser is always seeking new information related to real estate and auctioneering. As far as educational requirements to get started and what the future holds for the industry, check here, here, and here for more information.
Do you have a love for rural America and a passion for land? Perhaps crossing the fence to a career in real estate is right for you. Send us your resume, and as always if you have questions about this or any other AgGrad career profile, contact Logan West at firstname.lastname@example.org.
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