The Importance of Land Brokers in a Volatile Land Market

The demand for land continues to grow and evolve in a variety of ways. More and more variations of buyers are entering the marketplace, and the value of a given farm or property has more volatility because of the variables.

These variables can range from aspects with a longer history, such as the production perspective in regard to soil quality, ease of farming, maintenance history, drainage, timber value, etc. But in the past several years, further speculations have gained weight in the land valuation process such as alternative energy potential, powerline access, local grid capacity, and more.

This is where our team can bring clients the most value. Having experience in brokering land deals of all types allows us to analyze the client's asset and determine the best approach. We do not operate under any type of boiler plate process. It is critical to create a unique approach to each and every property, because every single one is different.

Auctions typically occur in a six-to-eight-week marketing process with no post auction due diligence period. With that said, fluid markets such as the agricultural land market tend to perform best at auction, because the fluidity creates heavy competition. Agricultural land also is now very streamlined in regard to the financing process, also helping it perform well when offered in an auction setting. The transparent market that auctions create can bring comfort and clarity to both buyers and sellers alike.

On the flip side, land with energy and alternative development use upside is better coordinated through a private transaction setting. These deals are often traded at a much higher dollar/acre amount than agricultural/recreational based uses, and a longer due diligence period for the buyer is required. Amongst various other details, such as utility scoping and grid capacity research, it is common that city planning and zoning meetings must occur and approve these projects which buyers like to see done before closing on a deal.

"Our experience across a wide range of transactions has given us insight into evaluating what the likely highest and best use for a given piece of property is", says Luke Schrader, Senior Vice President of Schrader Real Estate and Auction, Inc. "If the highest and best use for a piece of land is production agriculture, then that's okay because there is a lot of demand there and values continue to hold steady. But you don't want to be the individual that leaves money on the table if your asset could fit alternative uses that put more money in your pocket and benefit the local area."

Of course, some landowners prefer their property(s) stay undeveloped even if the demand is there, and that's great too. Schrader has a network to help individuals put conservation easements in place ensuring land continues in the use desired by the seller, and often owners can be compensated for the easements through tax credits.

If the highest and best use for a piece of land is production agriculture, then that's okay because there is a lot of demand there and values continue to hold steady. But you don't want to be the individual that leaves money on the table if your asset could fit alternative uses that put more money in your pocket and benefit the local area.

"Our vision has never been to be the biggest company in the industry", says Schrader. "Rather, we want to be focused on creating an individualized transaction strategy for each client we work for." This mindset has allowed Schrader to scale its company organically as they have added like-minded personnel to their team in different regions of the country ranging from Colorado to Ohio. Joint ventures have also proven valuable for the company as they have commonly teamed up with non-real estate industry specific experts on a variety of non-common transactions.

What sets Schrader apart from the competition is our exposure to these widespread ranges of transactions, and ability to help sellers and buyers alike navigate them. Schrader deploys different personnel and creative processes tailored to the highest and best use of the asset combined with our clients' desires, versus taking an assembly line approach. This has allowed Schrader to be a leader throughout the land auction and brokerage industry.

Copied from: Agribusiness Review

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