All real estate begins with the land. Today’s episode features two guests who are experts in land sales. Jeramy Stevens (Arkansas) and Justin Osborne (Colorado) are both members of the REALTORS® Land Institute (RLI) and join Monica on the show today to talk about how land sales differ from residential sales. They discuss the different types of land and the certification that’s available for land agents, as well as some of the important things to note about land sales in the East and the West.
Jeramy Stephens has been in land and real estate for many, many years. He is currently the president of REALTORS® Land Institute (RLI). RLI is part of the NAR family and provides expertise, camaraderie, and resources for real estate professionals. It also offers the Accredited Land Consultant (ALC) designation.
There are several different types of land: agricultural land, timberland, recreational land, and transitional land. The RLI promotes education to understand different land uses and purposes for these types of lands. Just like in other facets of real estate, there are different specialties in the land business, and they each have their own rules.
There are six required courses to get the ALC designation and 104 hours. The three core classes are Land Investment Analysis, Land 101, and Transitional Land. In addition to these three core classes, there are “elective” classes, depending on where your interests lie. A portfolio of $10 million is also required.
When looking at the value of land, it’s important to consider what it’s being used for or what it’s been used for in the past. As a residential agent, if someone comes to you with a piece of land, you can ask questions to determine its highest and best use. Then you can direct your client to an expert in one of those areas, who can appraise or assess the land appropriately. Some land properties are comped regionally, so they are compared with other similar properties in neighboring states or regions. When it gets to a specific activity, it needs to be priced as close in proximity as possible.
Jeramy’s passion is farmland, which tends to be a little bit easier to price than some other types of land property. Despite some of the struggles farmers are facing, the demand for ag land is still quite strong. Farm and ag land are also a potential investment opportunity. There is a lot of due diligence required for farmland, so it’s important to know what to do and who to ask when you need help.
Residential real estate agents and land agents can work together to meet their clients’ needs. If you’re not the one to help them, be the one to get them another agent. You want to make sure that as a Realtor®, you are operating in your area of expertise, and referring your clients to someone else when it’s not your area of expertise.
Jeramy is also interested in developmental or transitional land. This is taking raw land, usually on the outside of a growing community, and figuring out zoning, sewage, water, taxes, etc. This process can take a long time and varies from state to state. These properties can be a win-win for the agent and the community, but it’s important to make sure it’s done right so everyone benefits from it.
There are some new developments in technology in land sales, including better maps and more complete data. Having all of this technology makes things work a lot faster and smoother. The company Jeramy works for offers 360-degree land tours of properties, so clients can see properties on their computers before seeing the land.
In the Eastern United States, one of the biggest things to consider is wetlands and water rights. Mineral rights are also important, though maybe more so in the West. There are also many areas in the East that are developing and bringing more people in, and this is especially important for agents who work with transitional land.
Jeramy’s final word is to remind and encourage REALTORS® that we’re all professionals in what we do. Know what you do, what you do well, and what’s best for your client!
Justin Osborne is joining us from Durango, Colorado. He is currently president of the Colorado chapter of the REALTORS® Land Institute and an RLI instructor.
One of the biggest challenges in land real estate is figuring out how to price it. It can be on the market for a couple of years, and sometimes they have to travel over 200 miles to find comps for a similar piece of land. The potential market is pretty vast in the West, but Justin tries to remain within the same state due to changing property values.
As a buyer’s agent, it is important to do due diligence on a property, including inspections on the property and the infrastructure. Properties need to be brought up to code before closing or handled properly after closing. The permit process in Justin’s area is relatively easy, but all the different landscapes will affect how long it takes to get the property ready. Sometimes large transactions get held up because due diligence was not done before the property was listed. When the proper due diligence is done, those listings normally sell for higher than the listing price.
Recently Justin has noticed people coming from Arizona, California, and even Florida to purchase these large parcels. Location is important — people tend to want properties that are closer to national hubs.
In the West, especially, water is key. Just because water is on your property, you don’t necessarily have the right to it. It’s important to make sure you’re working with someone who understands water and the rules surrounding it. Mineral rights are the same way. The state of Colorado has a lot of laws in place that protect the property owner.
With the large tracts of land out West, there are cases where they are downsizing to make the properties a little smaller and more affordable for some investors. It is important to realize what your clients want, especially in terms of privacy, to determine which size property is best.
In the West, there are also several National Parks to consider. It is a risk to own a property that is sitting on leased land. Buyers should do their due diligence on the risk associated with ownership of this property before buying or developing that land.
Out in the West, there is a lot of opportunity for things that are hard to put a value on. Many buyers are looking to establish some type of family legacy, or find a place where they will be able to go and unplug.
Similar to what Jeramy says, Justin encourages REALTORS® to be prepared and know where to go to get the right information. If you don’t know, offer to find out or provide an additional resource for your clients. Don’t be afraid to be the source of the source.
About Jeramy Stephens
Jeramy Stephens is a Partner and Managing Broker at National Land Realty (NLR) where he oversees the company’s Mid-South region office in Little Rock, Arkansas. Jeramy is an Accredited Land Consultant (ALC) with the REALTORS® Land Institute (RLI) and currently serves as the National President for the organization. He has also held several positions at RLI as Vice Chair for the Education Committee and Arkansas Chapter President.
Jeramy has over 20 years of experience in the real estate business, working in the Farm Credit system and land industries. He is a three-time winner of an Agent of the Year award for a National Real Estate Company and was recently named National Land Realty’s Arkansas Top Producer for 2016, 2017 and 2018.
He is an Arkansas native and graduate of Arkansas State University where he earned a Bachelor of Science degree in agriculture business with an emphasis in Farm Management and Ag Marketing. Jeramy is licensed in Arkansas, Louisiana, Mississippi, Oklahoma and Tennessee where he specializes in selling agricultural, recreational properties (specializing in duck hunting properties), timberland and commercial development properties.
About Justin Osborne
Justin Osborne has been selling Real Estate since 2002 when he was still in college. He attended Fort Lewis College where he received a degree in Business Administration with an emphasis in Marketing and a minor in Agribusiness.
He is with The Wells Group in Durango Colorado and has consistently been a top producer in both volume and total number of deals closed. He was just recently awarded the Colorado Land Realtor® of the Year by the Colorado Realtors® Land Institute for 2016.
Due to selling more vacant land than any other broker in all of Southwest Colorado the past few years, and his sincere passion for the outdoors, Justin is currently the president of the Colorado chapter of the REALTORS® Land Institute. Justin is also involved in the REALTOR® Land Institute at the national level, as he is currently a board chairperson of both their Future Leaders Committee as well as their Chapter Development Task Force. He is also one of their instructors.
His community involvement includes being an assistant coach for his son’s DYSA competitive soccer team, recent past president of the Durango High Noon Rotary Club, and past area chairman of the La Plat County Ducks Unlimited. He is also a certified PSIA Cert 2 ski instructor at Purgatory in both alpine and telemark skiing.
Justin sells residential, commercial, vacant land, farm and ranch, and recreational real estate.