Proper preparation before marketing your ranch can ensure the desired outcome without heartaches along the way. Prepping land to be market-ready shouldn’t be an arduous task… But it can absorb large amounts of time, effort, and money if not navigated correctly. Before preparing your land for sale, look at Campbell Farm & Ranch’s tips to obtain a higher market value and, most importantly, close the transaction.
For a transaction to occur, a seller must provide proof of ownership and the ability to transfer the title to a prospective buyer at closing. If the parcel is not connected to public access, an easement should be deeded and recorded at the courthouse. Documents related to ownership are property deeds, access or easement deeds, power of attorneys, wills, trust or LLC documentation, etc… and each entity’s capabilities.
Minerals matter when selling land. Understanding the mineral ownership helps assess the total asset. A recorded deed will have language reserving or conveying any of the owned mineral estate from the previous owner. If all or part of the mineral estate did convey, then a Mineral Search will need to be conducted to prove the amount of ownership. This search requires professional landman services to research and interpret each deed back to the Texas Patent. Income-producing mineral owners may be able to locate some information from a revenue statement or their producing oil company. Producing mineral owners should always have their minerals evaluated by an oil and gas professional to obtain an accurate market value.
Understanding the “mineral situation” will assist you in accurately evaluating your parcel and marketing it appropriately. Some minerals have minimal value on the “Oil & Gas Mineral Market” due to lack of producible minerals, prior production, or minimal owned interest… but that same minimal mineral interest can hold a significant value when conveyed with the surface interest.
Consider using a broker or agent with experience buying and selling land with mineral rights, especially if you are unsure of your ownership. Landowners with only surface rights can also benefit from an experienced agent because they often have oil and gas leases and active production tied to the land. An agent can help present information from the current lease, acquire data from the Rail Road Commission on producing wells, offer insight on dealing with less than optimal lessors, and most importantly, know when to step aside and guide you towards an Oil & Gas Professional.
In most cases, a current survey will be required during the closing and transfer of a property to the new owner. Nearly all Third-Party Financing Lenders require an accurate survey under ten years old without any property, structures, or boundary changes. If a buyer purchases the property with cash or 1031 Exchange funds, a survey is not required to transfer the title but is highly recommended by Campbell Farm & Ranch buying agents. If you purchased a property with a survey but do not have a copy, check with the prior listing agent when the property was purchased or the title company you closed with to obtain a copy.
Any old or new survey must be provided in the designated time frame stated on the promulgated TREC contract executed by both parties. Buyers must also approve the new survey during the closing process. Fence lines are often incorrect. Some properties own to the fence line, while others own to the middle of the county road. River properties can add or take away large chunks of land due to how the deed reads and how the river changes. A property’s lack of legal access can often be discovered during the surveying process. The longer the land has been owned without a survey, the more reasons to obtain a new survey before marketing. Issues with access, fence lines, and boundaries are easier to navigate before being in a high-stress closing situation and on a timeline.
In previous years, the standard timeline was 30 days to complete a new survey and 45 days to close the transaction; In 2022, Campbell Farm & Ranch has been quoted up to 120 days for a survey and has had several surveys delay closings.
“Curb Appeal” matters with land too! Prospective buyers can see and feel a neglected property. Repairing fences, fixing gates, mowing and cleaning up brush around structures, organizing barns, and disposing of accumulated junk are the most common issues that dramatically hinder the ability to market a farm or ranch. Roads are needed to access the characteristics and should be drivable with a UTV without huge mud holes or overgrown trees slapping potential buyers. If a landowner wants to take it a step further, they can blade the perimeter to increase the ability to show the fence lines and access more of the acreage. Building ponds and grubbing mesquites improve the land for a return on investment but are not as necessary to market the land.
Some cattle producers and hunters have leased the same land for over 50 years. Many of the leases have never been written or recorded. Emotions run high when land is trading hands.
Lease terminations and the removal of cattle and equipment need to be discussed, agreed on, and written down before listing or marketing the land and again before contracting the property for sale. Calving season can be a factor, regardless of the lease, due to the inability to effectively remove cattle with new calves. Hunting season is yet another factor. Some hunters find new leases, while others choose to prorate per month and hope to make it through the season. Prorating creates a timeline to remove equipment either before or after closing. Other common issues are generations of old camper trailers and dilapidated blinds that many leasers do not feel responsible for removing.
Proper documentation will protect the land owner from taking on this burden.
Selling land should be an enjoyable “turning of the page,” with the closing being the climax ending of one chapter of life rolling into another. Proper preparation can ensure that the selling process produces the right results. Campbell Farm & Ranch advises hiring a local, knowledgeable farm and ranch real estate agent to assess your property as a listing in today’s active market and help you navigate the process with proven experience.
Written By: Boone Campbell, Broker (940) 282-5500 / email@example.com