Ensuring that a ranch, farm, or recreational property sells for top dollar takes an experienced broker who can help landowners position their property for success before it ever hits the market.
Tate Jarry, Associate Broker at Live Water Properties, Licensed in Idaho, Wyoming, and Montana
“Rural real estate transactions involve intricacies that you don’t encounter in residential real estate,” said Tate Jarry, an Associate Broker for Live Water Properties based in Driggs, Idaho.
In the case of working ranches and farms, there are commodity markets, water rights, production costs, productivity, land leases, and carrying capacity, just to name a few important variables. Recreational ranches can involve fisheries management, stream reclamation or enhancement, wildlife management, hunting units and regulations, and a host of other things.
“It is important to have an experienced Broker who not only understands the business of agriculture, when that’s applicable, and the lifestyle of the West, but can see a property’s untapped potential,” Jarry, who has been selling the Western lifestyle for 20 years as part of the LWP team, says. “My strength is evaluating the land and its potential.”
He recalls a ranch that he sold in late 2022. Throughout its history, the owners’ sole focus had been livestock, but the ranch sat in the path of a major flyway and had a rare untapped asset—winter water that could be used as the basis for waterfowl habitat. Identifying that resource broadened the pool of potential buyers. The land sold to avid hunters, who developed the water and habitat and now specialize in attracting waterfowl.
“I view each property as a blank canvas and ask myself, ‘What is the potential on the landscape?’” Jarry says.
Selecting a Ranch Broker
One way to ensure that a property brings top dollar is by getting it in front of as many potential buyers as possible. Different brokerages have different marketing abilities and reach.
“Hometown brokers often specialize in hometown buyers,” Jarry says. “While most sellers know their local buyers, a national marketing campaign, like what we, at Live Water Properties, can offer, not only expands the pool of potential buyers but also leverages negotiations into true market value.
“A local broker or a newly licensed friend of the family may not have the network or the experience to deliver the best outcome.”
On top of orchestrating a well-thought-out, far-reaching marketing effort, the selected broker should have a track record of success. To that end, sellers should examine the candidates’ overall experience in rural real estate as well as their knowledge of the area and the specific product they are selling. Finally, the selected Broker needs to be someone the seller enjoys working with and trusts implicitly.
“Whether you’re selling an investment property or legacy ranch, it’s an intrusive process that can span some time,” Jarry says.
Strangers come onto the property and examine it from top to bottom. They and their representatives ask all kinds of questions and request all kinds of information.“As the Seller, you have to be comfortable with the Broker as a person and be confident that they are using the information you’re providing in your best interest.”
Jarry says pre-listing negotiations can provide a real-time test of the Broker’s mettle.
“If in an interview, a Broker can’t negotiate a listing contract that is beneficial to the firm and to the Seller or can’t convince a Seller to do necessary clean up or list the property at an appropriate price, then the Seller might want to question how well that person could handle negotiations when they’re in the hot seat with a difficult Buyer,” Jarry says.
Pricing a Ranch Right
Ensuring a ranch is listed at the correct price from the outset is imperative to achieving the optimal sales price in the least amount of time. Unlike residential real estate, which has readily available comps and in many instances “cookie cutter” neighborhoods, there is no one-size-fits-all for farms, ranches, and recreational properties. The price is set using regional comparisons and the Broker’s knowledge of the market and the potential buyers.
Jarry says that it can be helpful for landowners to have their property appraised ahead of time so they know its true value. This is especially important in the aftermath of the “off-the-charts” market prompted by COVID, which has left many Sellers with unrealistic expectations.
“It may seem counterintuitive, but listing a property too high in a given market may actually cost a Seller money,” he says.
If a ranch’s price tag is too high, whether it’s because of market conditions or because of what the property offers, the property will sit on the market and get stale. Stale properties mean price reductions, which bring out the bargain hunters.
“Sellers enjoy a better outcome when they price right and take advantage of the broad, competitive interest when a property is fresh on the market,” Jarry says.
Getting Ready to Sell a Ranch
To get deals done efficiently, Jarry does a lot of research and troubleshoots any problems before taking a property to market.
“My approach is understanding the property before I list it,” he says. To that end, he’ll conduct preliminary title work, review water and mineral rights, and explore access issues.
“It’s in the Seller’s best interest to identify any issues and correct them before the due diligence period because at that point gets tight,” Jarry says. “I don’t ever want to lose a qualified Buyer at the table because we didn’t do our prep work and ran out of time to fix things that could’ve been handled on the front end.”
He also identifies fixes that add visual appeal and value. Deferred maintenance is the one issue that crops up time after time. It runs the gamut from accumulated junk or brush piles to derelict fences and gates that don’t swing easily.
“It may not seem like a big deal to people living on a place every day, but to a potential Buyer, it’s a visual indication that the owner hasn’t put time and effort into the property,” Jarry says. “More times than not, the Buyers will use it against the Sellers in negotiations.”
For instance, if the fences are worn out and need to be replaced, a savvy buyer may get repair/replacement estimates and try to negotiate the sales price down to reflect that upcoming cost.
To that end, Jarry says the best place to invest any money immediately prior to sale is in infrastructure that affects the property’s day-to-day operation.
“To get a return on your investment, put your money into things like replacing fences or fencing out riparian areas so potential fisheries clear up,” Jarry says. “I don’t advise investing in improvements because they reflect personal tastes and choices—and you can spend money that you won’t get back.”
Jarry also suggests that sellers work with their Broker to identify what records might be necessary in the sales process. Gathering the information and having the records readily available will facilitate answering questions and moving the transaction toward its conclusion.
“Plus, in the case of a working farm or ranch having all the pertinent production records allows the buyer to proceed with a level of comfort that comes from knowing the land is priced properly according to its productivity,” he says.
Landowners, whether they are selling legacy or investment properties, also need to contend with the intangibles of emotions and lifestyle that are tied to their land.
“The sale of land is a business deal with an emotional component,” Jarry says. “I know it’s easier said than done, but emotions need to stay out of it.”
In the case of a legacy property, the Sellers should ensure that every family member who has a stake and say in the property is ready to sell. He’s witnessed situations where four of the five siblings were prepared to let the property go, but the fifth one derailed the process for everyone. He refused to sign a listing agreement for anything less than $15 million, even though the ranch’s true value was only $10 million.
Jarry says that families who have special requests should let their Broker know ahead of time, so they can be addressed during negotiations. In several cases, Jarry negotiated annual visits to a family cemetery on a ranch. In another, he negotiated a provision allowing an elderly widow to exhume her husband’s grave on the ranch and have his remains relocated within one year of the closing.
“A lot of Buyers may not have grown up on the land, so I have to explain the emotional attachment to them,” Jarry says. “For some families, dollars and cents may not be as important as the right to visit a special place on the ranch once a year. These things bring a very human element to a business transaction.”
For those selling an investment property, Jarry suggests amassing a collection of photos that highlight how the property lives. Emotion sells, and a lifetime of memories showcases life in a way that helps buyers envision theirs on the property. Another strategy is keeping “before” and “after” photos that tell the story of an individual’s stewardship through the years.
His best advice for investors, though, begins on closing day.
“Plan your exit strategy,” Jarry said. “Enjoy the property every day and in every way while you have it, but never lose sight of the exit.”
For instance, while a 12,000-square-foot home might increase the value for the current owner’s family, it could be an impediment when it comes time to sell the property. Building less may be more valuable in the long run.
While every deal is different, Jarry’s best advice for sellers is simple.
“Know what you have and know what you want, but be willing to listen to and work with your Broker—together, you’ll achieve real-world success.”
