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Buying & Selling Timberland in Alabama & Mississippi

Our goal at Canebrake Realty is to help our clients find, buy, sell, and evaluate land and property in Alabama and Mississippi.  We have people come to us all the time looking to buy land for all sorts of reasons.  They want their own place big enough so they can hunt all they want.  Others want to build a cabin and get away, while others want property to build a forever home.  And yet still more folks are looking for more land for farming.  We help a lot of clients who need to invest in land as a tax shelter, the timber business, or even retirement savings.  In other words: we help people find the right piece of property that suits their needs, budget, and wants.

 

You’d think it’d be easy – land is everywhere on the planet that isn’t covered by water.  The reason we’re in business is because not all land has been created equally.  Some are simply more valuable than others because of what’s on it, what runs through it, what the land butts up to, etc.  There are tons more variables that go into land valuation so choosing the right place, in the right place can be tricky.  We pride ourselves on making it easier for our clients.

 

Today we’re going to some of the specifics where we specialize: buying and selling timberland.  Timberland is special because it has more inherent value than the dirt on the parcel.  It’s not mineral rights, it’s not lakefront or oceanfront property, it’s a spot on a map with a value that can vary (obviously) because of the trees growing on it.  Is it full of hardwoods?  Pines?  Sweet gums?  Can you harvest the timber easily or will it take a lot of expense to even get started?  What types of hardwoods are there?  How old are the pines?  How valuable is the timber on the property, and how much would it cost to harvest it?  How dense is the forest areas compared to the open areas?  How many acres of what types of trees are there on the entire property?  When’s the last time it was clear cut?  Heck, was it ever clear cut and what was the value on the timber then?

 

Sorry to play 20 Questions but we’re actually just getting started.  These are just some of the questions we ask ourselves, and each other, when evaluating the value of land for sale with timber on it.  If the piece of property for sale is in Mississippi, we review other recent sales and current listings for value as well.  Those comparables (comps) can vary between states because the prices and values could be different in Alabama for the piece in MS.  That’s because the market for the wood harvested can differ depending on location.  It can even vary in differing parts of the state so knowing the current market for the land, and what’s growing on it, is vital to evaluating property.

 

The reason we’re harping on evaluation so much is a lot of people simply want to “buy some land” – we listed the possible reasons and there are hundreds more.  Don’t just buy some land because of acreage or location, buy land for its full value and potential value.  Harvesting land today can pay dividends today, and in future generations when it’s replanted and nurtured and maintained.  Consider the total value, as well as possible expenses.  Are there enough roads already?  Is there easy access?  Is there a mill nearby and what’s the going rate for lumber at that mill?

 

Again, more questions to evaluate when buying.  We can talk all day about timberland for sale and what all goes into it.

 

So what about selling land? Suppose you’ve got land you need to sell and you’re looking for the max sale amount?  We ask a lot of the same questions because we want clients to understand their land is a finite commodity.  The land that isn’t under water is all the land there is, so it’s highly valuable.  You have to get the best evaluation possible for the land and all the timber on it, so you can list it and get the max value.

 

But even if you know the full value, the total all-in value, you’re still at the mercy of the market.  Some land in Mississippi that is very similar to land in Alabama can be priced completely different.  Selling your land at the right time, at the right price, is a complicated process and we take pride in helping our clients navigate it as easily and smoothly – and profitably – as possible.  Ultimately land is like everything else – its max value is what someone is willing to pay.  So finding that special value for sellers is what separates us, we want you to make as much money as possible on your listing for sale.  That’s not a selfish desire, it’s an honest one.

 

The most important aspect to selling your land and the timber on it is getting the value and price right.  The second most important consideration is finding a buyer!  You can have the best piece of property, fantastic hardwood to pine ratios, great rates in the lumber industry, comps that are spot on, a seller’s market, and every other possible helpful features to your property but if nobody can buy it – you can’t sell it.  Finding buyers is the key to selling.  This is because buyers drive the market and the rates per acre, no matter the land use.  The more buyers there are, the higher prices become because land is so limited.  They’re not making more of it at a factory, they’re not pumping it out from under the ocean.  So if there are lots of people looking to purchase it, prices go up and sellers tend to make more money on the land and likewise more money on the timber on it.

 

We’ve covered a lot of ground today with this post.  We simply wanted people to be more informed in making land buying and selling decisions, especially when it comes to land with timber on it.  Remember, the value of the land today and the timber on it, plus future timber revenues are important in finding your sales figure.  Next, finding buyers for your property is what’s most important.

 

Feel free to ask us a question about anything here, or some property you’re looking to buy or put on the market.

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Selling Timberland in Alabama & Mississippi

 

There are about a million things to consider when selling your timberland.  We sure won’t cover them all here but we will touch on some of the important things to keep in mind. Our hope is you will be more informed when getting ready to sell your timber and keep your land, or if you’re selling the land and the timber that’s currently on it.

Get An Appraisal

Yes, get a timber appraisal for the timber on your land from a Registered Forester.  Be sure and use a State Certified Land Appraiser to give you a land appraisal.  At Canebrake Realty, you will have the opportunity to work with both.  Way too many sellers (usually first-time sellers or people that have inherited land) don’t get a professional appraisal for the timber growing on their land.  Sometimes they take someone’s word for it – to determine a value – other times they’re just misinformed and it costs the seller thousands of dollars.

Valuing timberland can be tricky due to the variables involved.  The dirt is one value, mineral rights are another value, the trees growing on it is a separate value.  Be sure you get an appraisal for the timber, and one for the timber AND the land.  An appraiser will give you a detailed appraisal, one for the timber (assuming you were to cut it) and one for the land (bare dirt) value or both timber and land value.  This way you will have very clear understanding as to the value of your land, and/or the timber currently growing on it.

A timber appraisal may cost you a little bit up front, but imagine the savings when you have a sure-fire understanding of what your timber is worth.  If you are concerned about your upfront cost, you can often times find a qualified professional willing to role all up front costs into the commission of the deal.  Thinking the value is one thing, hoping the value is another, but knowing the value is what’s important.

A certified land appraiser is the only one in the State of Alabama and Mississippi that can give you a land value that you can take to the bank.  An experienced Registered Forester is going to be your best bet in your timber valuations.  Many people think they know timber and land values, but we strongly encourage you to use professionals bound by a code of ethics.  Realtors, State Registered Foresters and State Certified Land Appraisers are all governed by a governing board and are therefore required to act in a competent, professional and ethical manner.  If you suspect you have been mislead by someone, you can always contact the board for guidance.  That is the benefit of working with professionals.  Dealing with others may leave you left holding the bag.

Alabama Forest

Find A Broker

Find a broker for your timberland, yes like us at Canebrake Realty, or someone else.  But be sure to reach out to experienced professionals that make a living in this industry.  Just because you know someone that owns a chainsaw and a tree service doesn’t mean they know the value of land growing hardwoods and pines.  Likewise, because you know someone who sold their land a few years ago doesn’t mean they know current market timberland values.   You need to talk to an experienced professional in this specific industry that can help guide you through the process of buying or selling your timberland in West Alabama or East Mississippi.  As you know, markets vary based off location greatly and dealing with someone in your specific area is critical.  It’s not as simple as you might think and having someone in your corner is well worth it.

They may have a fee for helping you.  The small price is well worth it so that you have someone helping you, guiding you, and is an advocate for you.

Compare

Look up other timber, land, agriculture properties that are currently for sale.  You should find at least 3 comparable properties for your own understanding of the value of your land.  Try to find places that are for sale now that have similar size and features, and if you can find out the timber percentages (% hardwoods, % pines, acres, road frontage, age of timber, etc.). You will need to self-educate to some degree so that you’re not relying on anybody for some of the info that you’re needing to make a decision on selling your timber.  Your competent land professional should be able to assist you in this matter.

Now You’re Ready

Now that you’re ready to sell, there are a whole new list of considerations.  You’ve got the value of your land, you’ve got the value of your timber, you’ve done your own research, you’ve talked to the pros, you’re ready to sell and make some money – now what?

Great question.

You need to talk to a broker again, yes – just like us here at Canebrake Realty.  If you’re wanting to sell your land with the timber on it, you want max value.  You want to make the most money for it and someone like us can guide you through the sale process.  You don’t want to get ripped off and having a broker in your corner will help ensure you get the most for your sale.

It’s like selling a house, there’s a % commission for selling your listing, so getting the maximum $ amount is our incentive.  Even if you choose another listing agent, that person’s goal is to get you the most money for your property.

Once you get listed, it’s pretty typical as you might expect.  You’ll get offers, you’ll negotiate, accept or reject, sign and close on the property.  So long as there aren’t any liens on the timber or property you should be good-to-go pretty quickly.

A good listing agent can close your property in 2-4 weeks of agreement to terms.  Some people think it takes more time with a bigger purchase, but the truth is it’s just like any other real estate sale.  Except it’s probably more expensive since the land comes with incredibly valuable trees on it – a renewable resource that grows without the need for annual farming.

Pine Trees

Selling the Trees?  Or the Trees + the Land?

If you’re only selling the trees then you’ll need to find the right logging companies.  First and foremost, you will want to locate a Consulting Forester.  Many loggers have all the equipment necessary to pull every tree off your land and get it to a mill.  Most will organize the hardwoods vs the pines and only take the mature trees that are valuable.  You will want your consulting forester overseeing this whole process to make sure your timberland is harvested in a sustainable manner.

Do you want your woods thinned?  Or clear cut to get all the value?  If so you’ll definitely need to budget in replanting so in the future you can harvest again.  These are questions you can go over with your consulting forester.  Many times they’ll get you in touch with people at lumber mills or paper mills and those will be the ones buying your cut trees for processing.  Your forester will make sure you are taken care of and your timber return is maximized while minimizing your expenses.

A piece of advice – be there when they’re taking truckloads out so you are sure you get paid for all the loads taken from your land.  We know people that lost thousands upon thousands of dollars in loads taken but never credited to the right seller.  If you’re not there to check, many times it’s difficult to prove lost value.  Again, a Registered Forester at Canebrake Forestry can assist you in any of these matters.

Good Luck

Best of luck to you in you selling adventure!  We’re obviously huge fans of this industry – we eat, breath, and sleep the selling of timber, agriculture, and hunting land in West Alabama and East Mississippi.  When we aren’t assisting landowners buying and selling land, we are managing timberland.  We do it every day.

Forest timber pic