Jonathan Goode- Land for Sale in West Alabama

Are you beginning your search of rural land for sale in Alabama? This article is aimed at providing some helpful resources to move your forward in your selecting the right property.

I deal with many first-time land buyers who are in the early stages of their search. As with many other things that you do for the first time, you have to learn as you go. Sometimes you don't even know the right questions to ask. So this piece is aimed at helping you have a decent starting point from which to begin your search.

1. What type of property you are looking for, and what features should it have? Sit down with a pad and paper and think through the reasons you are buying the property. Is it an investment for retirement? Is it primarily for recreation or hunting? Do you intend to build on the property? What features are non-negotiables? (ie... water, power, road frontage, timber, joining National Forest) It is frustrating for you and an agent to take you to several different properties before you even know what you want.

I had a prospective buyer call asking about land that was nearly 1000 acres in size. After we walked over a 78 acre parcel of timberland, he told me he would ideally like about 10 acres near a big lake. Well, nothing we talked about or looked at fit that bill. I could have helped steer him in a completely different direction if he had communicated what he wanted.

2. Who loans money for rural land, and what terms can I get? Typically we point people toward two companies that specialize in land loans: First South Farm Credit and Alabama Ag Credit. For specific loan information you should contact them directly. Generally they will finance property with 20% to 25% down and they can amortize a property out to 20 years. Interest rates are generally slightly higher than residential mortgage rates. You might also check with local banks or credit unions.

3. How can I educate myself on buying land before I actually go look at properties? There are lots of wrinkles to buying rural properties, and it is better to avoid getting an education in the school of hard knocks if possible. I would recommend visiting landthink.com to "Get Land Smart". This site features scores of articles devoted to providing information to buyers and sellers on a wide range of topics. These articles are written by professionals in many different disciplines pertaining to rural land.

Additionally, you should find a land professional in your area who can give you some good advice and steer you in the right direction. I would caution you to be aware if you call a listing agent on a particular property, that generally that agent is already working for the seller. This means that often the agent has the best interest of the seller in mind, and may not be able to provide the professional advice you desire. It is possible to enlist the help of a buyer's agent who will exclusively represent your interests. This is not required, but might prove to be helpful. In Alabama, a real estate agent should disclose to you at the first meeting how they will be working with you. (ie... seller's agent, working with you as a buyer's agent, dual agent representing both parties, or working with you as a transaction broker) This disclosure is required by Alabama real estate law.

General Advice about buying rural land:

1. Shop with an "exit strategy" in mind. Buy a property that you can re-sell if you need to in the future. Find a tract with features that others will find desirable. Many landowners I am representing today were not expecting to need to sell five years ago.

2. Educate yourself as before going to preview rural land; then while you are looking at land listen to what the agent has to say.  Don't feel pressured to impress the agent with how much you know about buying rural land. Ask questions, listen, and learn from the agent you are spending time with. If it sounds like the agent is "puffing" or trying to pressure you into something, find another agent you feel comfortable with.

3. Get your ducks in a row at the start. Abraham Lincoln once stated, "If I had eight hours to cut down a tree, I would spend the first six hours sharpening my axe." If you will do your homework early in the process, you will be ready to make the purchase when presented with the right property. You can avoid pitfalls that can be frustrating or costly down the road.

If you are searching for rural land in Alabama, contact me to see how I can be helpful. AlaLandCo has over 400 different pieces of rural land for sale across the state, so we can certainly help you locate the right tract.

Landowners did you know that the rules for the Federal Estate Tax are scheduled to change dramatically on January 1, 2011? If your estate is valued at over $1 million and you have not met with an estate planner or tax professional this year, you might want to stop reading and make that phone call right now. It could be worth hundreds of thousands of dollars to your family at your death.

As things stand today, any assets in an estate valued at over $1 million would be subject to an estate tax or gift tax of 55% at the death of the owner. Simply put, the first $1 million will be exempt from the federal estate tax, and anything beyond that will be hit at this painfully high rate. This is because tax cuts made in 2001 by President Bush are phasing out due to inaction by Congress this year in extending or permanently changing the estate tax.

It does not take much imagination to see how this could affect large farmers or those with substantial timberland holdings, but smaller landowners in areas with high property values are also in danger of facing the estate tax as well. If you own a nice home, have a modest retirement account, and own some rural land, you are likely to be affected by the coming changes. 

2010 is a year with 0% estate tax. This means if you pass away this year your estate is not subject to any federal estate tax. I have read in several articles that estate planners are speculating that some individuals will make decisions to suspend life-prolonging medical care such as chemotherapy or dialysis in order to try to save their families money at their passing. It is a shame that our tax code would be a consideration in the treatment of a medical condition.

 The change in the code could easily mean that long-held properties must be divided and sold to pay the portion due to the IRS. If you calculate the 55% estate tax, a real estate brokerage fee, and closing costs necessary to close many transactions, heirs may be left with only 30% to 35% of their initial inheritance.

 It is my understanding that there are options for protecting your estate such as trusts, limited liability corporations, and some types of family partnerships. You should consult an estate planner, attorney, or accountant for specifics on your particular situation. I am not a professional and do not offer any legal, accounting or other professional estate planning advice. My one suggestion would be to make that arrangement today. It is imprudent to believe that the tax laws will change, and you should act now based on the current guidelines. Your family will be grateful that you did.

 It would be great for common sense to prevail in Congress, and allow our citizens who have worked hard to acquire means to leave to their heirs the unfettered right to do so. In the meantime, there is an ominous tax man staring you in the face. Contact an estate planner or accountant today.

Are you an owner of rural land in Alabama who is considering selling your property? Do yourself a big favor and use a professional land agent.

I was searching for some rural land online tonight and came across the website of an agent who is advertising land for sale in Perry County, Alabama. This agent is obviously not an agent who is willing to get out on a parcel and walk the land. One tract looked interesting, and I wanted more information so I clicked on the link. There was an aerial and topographical map of the parcel (so far so good), and one picture. In the lower left hand corner of the picture you could see the side mirror of their SUV. It let me know they didn't even got out of the vehicle to snap a picture!

When you are selling rural land, you need to deal with a professional land agent. How well can an agent represent your interests if they are not willing to get out and at least walk the roads on your property? Buyers are not content to sit in the vehicle and hear about your land's features, they want to see the tract. Choosing an agent that specializes in land will help you sell your property faster and for the best price.

Marketing and selling hunting land, timberland, farm land, and recreational properties is very different from selling residential real estate. The National Association of Realtors recently declared rural land its own discipline; which means that an agent must be proficient in that field in order to engage in business in that discipline. I am a member of the Realtors Land Institute(RLI) because I feel it is important for my clients to know they are dealing with an agent that specializes in land.

There are many great agents who sell both residential and rural real estate. I just hate to see a landowner get less-than-excellent service by using an agent that is not capable or not committed enough to get out and do what is necessary to sell a rural property. I would personally make a horrible residential Realtor. My wife is constantly mad because I get our floors dirty; tracking mud into a client's home would be unforgivable.

AlaLandCo specializes in selling rural land. We do one thing, and we do it really well. We work hard to be the best in the state of Alabama at marketing and selling rural properties.  The bottom line is choose an agent who specializes in rural land transactions. You will be glad you did. If you are considering selling your rural Alabama land, please contact metoday to see how the AlaLandCo team can help you.

What does a "Buyer's Market" really mean in today's rural land climate?This past week I had the opportunity to present offers on two different tracts of rural land in Alabama. Both of these offers were submitted by buyers that had been following the market for a while. It is my understanding that neither of these people had ever met, but their strategies were nearly identical. Buyer #1 was represented by a buyer's agent and I worked with the other as a transaction broker.

Both of these prospective purchasers made an initial offer of roughly 2/3 of the asking price of the properties. It was their plan to "test the water" and "just see" what the seller would say. Neither offer resulted in a successful contract, and in fact one received quite an undesired response. The first seller asked me to convey that he would not be making a counter-offer and that the offer was so low that he felt like the potential buyer must be suffering from some disorder. He instructed me to inform the other agent that his client was not to set foot on his property again!

I feel sure the original intent of buyer #1 was not to grossly offend the property owner. Buyer #2's offer did receive a counter-offer, but we were not able to get close to a meeting of the minds.  I was not thrilled at having to convey the low offers to my sellers and absolutely hated telling my fellow agent his client was not to come back to this tract.

This experience prompted me to share some thoughts with would-be-buyers about what a "buyer's market" means in rural real estate and how it is often misinterpreted.  The aim is to help you set realistic expectations and be as educated as possible to help you identify and purchase the right rural property.

1. Not every seller is in a crisis. As a matter of fact, almost none of the clients I represent are in crisis. They would like to sell, but they are not in danger of foreclosure. Rural land in Alabama is not like the national residential housing market. There are very few foreclosures comparatively, because owners often inherited the land and own it outright, have sizeable equity positions, have higher incomes and can afford their land, or they have other assets that help keep their rural land afloat. A lender with Alabama Ag Credit recently said that in his 31 years in the business, he has only seen 4 rural properties go into foreclosure. That is vastly different from the residential real estate climate we are seeing today.

You should inquire about a seller's motivation before throwing an offer out there. The number of days on the market, at least in Alabama's land market, is not necessarily correlative to a seller's motivation. Hunting and recreational properties are taking longer to sell at the present time. Don't assume that a tract that has been on the market for a year can be bought for pennies on the dollar.

2. Study comparable sales. Contact land lenders such as First South Farm Credit or Alabama Ag Credit to find out what land is selling for in your area. Don't just throw a number out there "to see", but make an educated offer. They are usually happy to share general information about recent land transactions, which can give you a more up-to-date snapshot of what is actually happening in your area.

3. Explain your offer to the seller in a letter. I find this to be a helpful tool in negotiating a contract. A relative recently used this tactic in negotiating a contract on a bank-owned home and acreage in Georgia. He made a list of all of the repairs and improvements the property would require. He was able to convince the bank with his logic that other buyers would see the deal the same way and that they should accept his offer. When I walked through his house last weekend, I have to say I was quite impressed with his purchase and how well his idea worked in securing a low price.

4. Price and Value are not necessarily synonyms. One trap first-time land buyers stumble into is feeling like they should buy land with the lowest per-acre price. I believe it is better to pay a little more money for a quality property than buy a dog just because it is cheap. $800 per acre properties are fun to tell your friends about, but spending large additional sums to make it usable may not be the best value in the long run.

Ask a land agent for information about the best buy they know about. I have a short list of tracts I believe are really good values for the asking price, and will show those even if they are not my listings. Otherwise, you are probably going to see the properties you specifically call and inquire about.

5. Cash is King. Dave Ramsey says it. Your grandparents preached it. Cash money has advantages when a seller is really in a pinch. Being able to deal immediately with no contingencies is worth a lot to sellers who are desperate. I recently saw a seller knock $70,000 off a $190,000 property because he received a cash offer with no contingencies to close as soon as the attorney could do the title work. These are the instances when having a mattress full of money gives you leverage in negotiating a good buy.

Be patient and have a punch-list of traits you want your land to have. When you identify the right property at a fair price, be ready to pull the trigger and make an educated offer. I see prospective buyers drag their feet and waste valuable time over-analyzing great buys. Due-diligence is imperative, but be educated enough to jump on an opportunity when it arises. You can always have contingency clauses put in your offer to purchase that give you an "out" if the deal isn't as sweet as you originally thought. Have a network of professionals such as foresters, land agents, surveyors, or cooperative extension agents that can help evaluate and offer advice when you do locate a candidate.

If you are going to make a low offer, make it easy for the seller to say "yes" by offering to pay closing costs or making other concessions. In business, for the long run, it helps when everyone is a winner. You will find doing your homework will have paid off when you are sitting at the closing table pleased with your purchase and a seller across the table that is a winner too.

Truett Cathy, founder of Chick-fil-a, describes the important role living on a farm played in his life and that of his family in his book "Eat More Chikin, Inspire More People."

Chapter 5 of his book is entitled, "Out to the Farm". In it he recounts purchasing a 262 acre farm along the Flint River in Clayton County, Georgia in 1956.  As his restaurant became more successful, it began to require up to 12 hours a day of his time. Mr. Cathy said, "Of course, I loved that aspect of my life, but when I went home, I needed peace and quiet, and I wasn't getting that in the city."

He immensely enjoyed his time with his children out on the farm, and the chores helped him unwind from the daily stresses of running his business. He says, "I found it to be just what I needed after working with the public all day in the confines of a restaurant. I could go out and put up a fence, Bush-Hog some brambles, or feed the cows and horses we acquired over time."

I had the pleasure of meeting Mr. Cathy on an elevator in Atlanta several years back. He was very gracious to talk with me, and ended up popping into a conference I was attending to address the young men present and hand out copies of his book, "It is Better to Build Boys than Mend Men." I have appreciated Chick-fil-a, the Cathy family, and their WinShape Foundation. In fact it is my favorite restaurant. In 2004, I ate at Chick-fil-a around 250 times. The Chick-fil-a family has been really good to me.

I also have the privilege of raising my children on a family farm, and can attest to the joys of sharing the work and fun associated with living in rural Alabama. If you are looking for a getaway place or country homestead close to Tuscaloosa or Birmingham, please contact me. I can help you locate the place for you to find just whay you need to help you get the most out of life.

"Who should I list my land with?" is a question I was asked this week by an owner in Mississippi. Since this owner was out of my area, I had to do some digging before I referred him to a top-notch land agent. Many landowners are faced with this tough decision once they have decided to sell their land and do so using an agent.

All licensed real estate agents are not equally good at helping you sell your rural property. If you owned an exotic car, you would not take it in for maintenance to a small engine shop for repairs. Listing your hunting land or farm with a predominantly residential real estate agent can be a mistake as well. Landowners need to choose an agent and a company that can market and sell their rural property in a way that meets the sellers' objectives.

Since all real estate agents are not equally knowledgeable and skilled at selling land, how should you select the right agent? Here are a few suggestions from a land agent's perspective that I think are fair and will help you choose a professional who can help you get the deal closed.

1. Ask your friends and family. Ask people you know who they have used to sell their land and if they would recommend them to you. This is usually one of the natural steps and most effective ways of finding someone you will feel comfortable with.

2. Google search for relevant terms like "Land for sale in Perry County, Alabama" or "Alabama Land Agent". If you are an out-of-state or out-of-area landowner who wants to sell their rural property, but you do not know anyone in the area this can be a helpful tool for identifying potential agents. Notice I said "identifying potential agents" because this is a preliminary step in the selection process.

3. After identifying potential agents, research how they market their listings. Pay close attention to how well an agent markets their listings online. Recent statistics show that over 80% of buyers preview properties online before getting in their car and driving to look at land. You will get an idea about how much effort an agent will put into advertising your listing. Will your land be visible to potential buyers? It needs to be in this market so that ALL possible buyers are aware that you have a quality piece of land for sale.

4. Professional Designations associated with agents who specialize in land. Look for agents who are members of the National Association of Realtors, a local board of Realtors, Realtors Land Institute(RLI), and have earned the title of Accredited Land Consultant. These agents are demonstrating that they take seriously their commitment to excellence in their profession. Having these designations may not mean much to potential buyers, but it does show that they have worked hard to gain knowledge and proficiency in the discipline of land. Agents that are Realtors have agreed to operate by and be bound to a Code of Ethics, which helps protect landowners in land transactions.

5. Ask a local real estate attorney. Contact a local real estate attorney in the area where you own land and ask them if they recommend an agent. These attorneys will know who closes deals and can help steer you in the right direction.

6. Interview several agents from multiple companies by phone or in person if possible. Talking to someone over the phone or meeting them in person will help you get a better feel for someone than by merely emailing. I recommend having a list of questions prepared when you meet. The two most popular are always: "What is your commission?" and "What is my land worth?". I would also recommend asking how they market land, what is the average time for land to sell, what are the most recent comparable sales in the area, how has your business been lately, and is there anything I can do that will improve my chances of selling my land.

Once you have spoken to several agents and feel comfortable with one, ask them to take a look at your property, with you if possible. You never want an agent to give you a specific figure of what your land is worth without them seeing it. They should be able to provide a fairly close price range of where you should list it, but each property is different and has characteristics that will distinguish them from other properties on the market. List your property with an agent that is not afraid to get out and walk the boundaries and trails on your land. An agent sitting in the car and pointing out features to prospective buyers seldom helps an owner sell their property.

7. Once you feel comfortable with the agent, sign the listing agreement. For rural land these agreements typically run for a longer period of time than residential properties. Listing agreements may last 3 to 12 months, and in this market it may take 12 to 18 months to find a buyer for your land. Particularly if you own a large tract of land or if it commands a high asking price, you can probably expect it to take a while to sell. Here is a link to an article about what to expect at a listing appointment.

8. Lastly, check them out on Facebook or other social media. It is amazing what information you can find about someone on their social media pages. Many employers are using this as part of their vetting process for job applicants. You might find that you share common interests with the agent or that you are not fond of what you see on their page. This gives you a closer look at their personal life which can be useful information for you.

I hope you find this information helpful as you look for an agent who can help you sell your land at the right price, in a timely manner, and as smoothly as possible. By spending time researching and choosing the right agent on the front end, you can save yourself a lot of grief and disappointment in the long run. If you would like information about listing your rural land with a land professional in Alabama, please contact me.

"Who should I list my land with?" is a question I was asked this week by an owner in Mississippi. Since this owner was out of my area, I had to do some digging before I referred him to a top-notch land agent. Many landowners are faced with this tough decision once they have decided to sell their land and do so using an agent.

All licensed real estate agents are not equally good at helping you sell your rural property. If you owned an exotic car, you would not take it in for maintenance to a small engine shop for repairs. Listing your hunting land or farm with a predominantly residential real estate agent can be a mistake as well. Landowners need to choose an agent and a company that can market and sell their rural property in a way that meets the sellers' objectives.

Since all real estate agents are not equally knowledgeable and skilled at selling land, how should you select the right agent? Here are a few suggestions from a land agent's perspective that I think are fair and will help you choose a professional who can help you get the deal closed.

1. Ask your friends and family. Ask people you know who they have used to sell their land and if they would recommend them to you. This is usually one of the natural steps and most effective ways of finding someone you will feel comfortable with.

2. Google search for relevant terms like "Land for sale in Perry County, Alabama" or "Alabama Land Agent". If you are an out-of-state or out-of-area landowner who wants to sell their rural property, but you do not know anyone in the area this can be a helpful tool for identifying potential agents. Notice I said "identifying potential agents" because this is a preliminary step in the selection process.

3. After identifying potential agents, research how they market their listings. Pay close attention to how well an agent markets their listings online. Recent statistics show that over 80% of buyers preview properties online before getting in their car and driving to look at land. You will get an idea about how much effort an agent will put into advertising your listing. Will your land be visible to potential buyers? It needs to be in this market so that ALL possible buyers are aware that you have a quality piece of land for sale.

4. Professional Designations associated with agents who specialize in land. Look for agents who are members of the National Association of Realtors, a local board of Realtors, Realtors Land Institute(RLI), and have earned the title of Accredited Land Consultant. These agents are demonstrating that they take seriously their commitment to excellence in their profession. Having these designations may not mean much to potential buyers, but it does show that they have worked hard to gain knowledge and proficiency in the discipline of land. Agents that are Realtors have agreed to operate by and be bound to a Code of Ethics, which helps protect landowners in land transactions.

5. Ask a local real estate attorney. Contact a local real estate attorney in the area where you own land and ask them if they recommend an agent. These attorneys will know who closes deals and can help steer you in the right direction.

6. Interview several agents from multiple companies by phone or in person if possible. Talking to someone over the phone or meeting them in person will help you get a better feel for someone than by merely emailing. I recommend having a list of questions prepared when you meet. The two most popular are always: "What is your commission?" and "What is my land worth?". I would also recommend asking how they market land, what is the average time for land to sell, what are the most recent comparable sales in the area, how has your business been lately, and is there anything I can do that will improve my chances of selling my land.

Once you have spoken to several agents and feel comfortable with one, ask them to take a look at your property, with you if possible. You never want an agent to give you a specific figure of what your land is worth without them seeing it. They should be able to provide a fairly close price range of where you should list it, but each property is different and has characteristics that will distinguish them from other properties on the market. List your property with an agent that is not afraid to get out and walk the boundaries and trails on your land. An agent sitting in the car and pointing out features to prospective buyers seldom helps an owner sell their property.

7. Once you feel comfortable with the agent, sign the listing agreement. For rural land these agreements typically run for a longer period of time than residential properties. Listing agreements may last 3 to 12 months, and in this market it may take 12 to 18 months to find a buyer for your land. Particularly if you own a large tract of land or if it commands a high asking price, you can probably expect it to take a while to sell. Here is a link to an article about what to expect at a listing appointment.

8. Lastly, check them out on Facebook or other social media. It is amazing what information you can find about someone on their social media pages. Many employers are using this as part of their vetting process for job applicants. You might find that you share common interests with the agent or that you are not fond of what you see on their page. This gives you a closer look at their personal life which can be useful information for you.

I hope you find this information helpful as you look for an agent who can help you sell your land at the right price, in a timely manner, and as smoothly as possible. By spending time researching and choosing the right agent on the front end, you can save yourself a lot of grief and disappointment in the long run. If you would like information about listing your rural land with a land professional in Alabama, please contact me.

Alabama has the lowest property taxes in the nation according to a 2009 report from the Washington-based Tax Foundation. 

The report was based on information gathered in fiscal year 2007. According to the report, Alabama landowners paid an average of only $455 of property taxes, ranking us #50 in revenue generated by states through property taxes. (This information is also cited in an October 2008, article on Landreport.com).

Low property tax is one very good reason to invest in rural land in Alabama. If you were considering a piece of rural land in Perry County, where I live, you would be looking at a low millage rate of 47 mills. That means for every $1,000 of assessed value, you would only owe $47.00 in annual property taxes. (Assessed value is very different from fair market value.) If you owned a piece of property that was assessed at $100,000, you would owe $4700 in taxes.

How Alabama Property Tax is Calculated

According to the Alabama Department of Revenue, Amendment 373 of Alabama's Constitution, "provides that all real and personal business property will be assessed at 20% of its fair market value". So if your business owns a property that has a fair market value of $100,000, it will be assessed at $20,000 ($100,000 x 0.20= $20,000). 

To calculate the annual ad valorem ("according to value") tax, one must multiply the millage rate by the  assessed value. For instance, if your business owned some land with a fair market value of $100,000 in Perry County, property taxes would be assessed at $20,000. The millage rate of $0.047 would be multiplied by the $20,000 assessed value for an annual total ad valorem tax liability of $940.

Assessment rates for individual owners can be as low as 10%, depending on the classification of the property. Much rural land in Alabama is Class III, which is defined as "All agricultural, forest and single family, owner occupied residential property, including owner occupied residential manufactured homes located on land owned by the manufactured home owner, and historic buildings and sites".

This means your personal land in the scenario above that had a fair market value of $100,000 would be assessed at 10%, or $10,000. Your ad valorem tax liability would be reduced to only $470. This is extremely cheap compared with other states. MSN.com has an interactive map that lets you compare the property tax levels by state.

Alabama Timberland Taxes

Alabama timberland has a special tax of $0.10 per acre. Additionally, property taxes for timberland (agricultural Class III) are calculated on current use values.

Alabama is unique in that tax calculations are made based on the current use of the property and not fair market value. Fair Market Value is defined as "The estimated price at which the property would bring at a fair voluntary sale." Current Use Value is defined as "The value of eligible taxable property based on the use being made of that property on October 1 of any taxable year; provided, that no consideration shall be taken of the prospective value such property might have if it were put to some other possible use."

Allowing rural land taxes to be calculated on Current Use Value and not Market Value saves most landowners considerable money on property tax. This way, you are paying for what your land is actually used for, and not the highest and best use (HBU). Basing taxes on HBU or market value would force many owners to pay substantially more in taxes or sell their land.

Alabama Department of Revenue Website

The ADOR website offers lots of helpful information for landowners pertaining to understanding and calculating property taxes.

 Millage Rates- This link offers a break down of millage rates for every county in the state, including the municipality millage rates.

County Appraisals and Assessments- This interactive map links to all Alabama County Appraisal and Assessment offices with online records. The counties typically use Emapsplus, Flagship GIS, or Delta Computer Systems. All but 13 Alabama counties have some tax assessor information available online.

Land and Tax Delinquent Property- For anyone considering buying a property at a tax sale, you should first consult this page about Alabama's guidelines on tax delinquent properties. Alabama has a 3-year right of redemption, so investors need to be certain about what they are purchasing before jumping into one of those deals.

 Tax Assessor Mapping- If you have ever wondered how tax assessor maps are derived or how a parcel number is generated, here is a link to some faq's about those maps.

Alabama has some of the cheapest land and lowest property taxes in the nation, making this a great place to own some rural property. If you are considering purchasing rural land in Alabama, please contact me and let me know how I can be helpful.