Podcast Transcription: Top Tips For First Time Land Buyers
Speakers:
Billy McOwen Owner / Broker
Andrew Walters Broker in charge, Greenville office
Bryan Dehart Founding partner, Mossy Oak Properties Land and Farms Realty
Billy McOwen
Welcome everybody, This is episode number two of Find your Favorite Place. My name is Billy McOwen and I'm your host. I am joined today by Andrew Walters, our broker in charge from the Greenville office. How are you doing Andrew?
Andrew Walters
Hey Billy doing pretty good. How are you today?
Billy McOwen
I'm great. Thank you. I've got also with us today, Captain Bryan DeHart. Capt. Bryan was one of our founding partners when we got this mess started back in 2011. How're you doing Bryan?
Bryan Dehart
Doing good, man. Happy to be here.
Billy McOwen
Good. How's the trout fishing been?
It's been pretty doggone good dude, getting slimy every day.
Good, All right. Well, the purpose of this podcast today is we're going to be talking about all the things that we feel like a buyer needs to know going into this land purchase idea. Of course, you know, we're talking to buyers every single day. And we we always end up asking them a bunch of questions and having them think about things that they might not have thought of before. So let's go ahead and get started with the with the top 10 things that we think that buyers ought to be knowing and thinking about as they get started in their land search. So, the number one thing I had on my list was budget. I want to know what your budget is, and sometimes I need to get people realistic about that. I certainly have and I think all of us probably have had our fair share of people that come in, they say: Yeah, I've got $100,000 that I'm wanting to spend. And I think the next question out of our mouths is usually okay well, that's great, and then, how many acres are you looking to purchase? Well I'd like to get 100 acres, you know, for $100,000. Then, of course, that starts us off down a whole other vein of conversation that we're gonna be having. What's the number one thing for you? The first thing I asked him is: Get squared away on your budget. Know what you're capable of spending and what you're looking for out there. So, what about you, Capt. Bryan, what's the number one thing that you think?
Bryan Dehart
It has to be budget, because that's where it's all going to end up. I mean, it doesn't matter what else they want, or how many acres they want, or whatever. If their budget won't support their expectations, we're kind of dead in the water. So budget is by far the most important question. First question. Now, that might not be the first one as you are building a rapport with a buyer. But you got to get there pretty quickly. So make sure you're not wasting his time or your time.
Billy McOwen
Andrew What do, what do you do with somebody that says, Well, I don't really have a budget in mind?
Andrew Walters
Well, I've encountered that a few times. And it's pretty tough. I mean, it's nearly impossible to move forward without a budget. You've got to narrow it down somehow. So maybe you should just kind of segue that conversation into what their future use plan would be. So you can figure out what they're going to do with it. And then, once you know that, then you can narrow it down on a price per acre basis. And try to get a budget squared away..
Billy McOwen
Yeah, that's a good point. What are the questions you ask a buyer, when it comes to the their usage model, I mean, you're a lot different out your way, you're working in Wilson, Nash, Edgecombe County, out in a more centralized region than Bryan and I out here in the east. So the usage models for you may be different than they are for us. One of the things that comes to my mind is, the next question I ask somebody is, what region of the state do you want to be in? Because that's going to get tied to that budget number, right? Because the farther west we go, the higher dollar per acre value we're looking at, that's going to lower their expectations in regards to acreage, but it's also going to have something to do with what are you interested in doing? Well, I'm just looking for five or 10 acres, I can build a house and be close to Chapel Hill, because my grandson's going to school down there or, you know, I want to be no more than 45 minutes from Duke Medical Center. Right? Or, you know, I don't really care, we're just looking for a place that we can go and get away and have a little country hideaway or something like that. So what are the some of the questions, Bryan, you ask somebody about, their intended use?
Bryan Dehart
Well, mainly, with most of the land that I deal with, in the eastern part of the state, the primary reason people are reaching out to me and most of the land that I list is going to be for recreation, primarily hunting, recreation tracks. We do get some people that want to build a house and want to have a lot of elbow room or whatever, but I do get a lot of recreation questions that I kind of focus on, with those kinds of properties.
Billy McOwen
Can you give me some examples of some things like recreation? Where you and I live, it is a lot different recreationally than where Andrew is, for example. We have incredible duck hunting, incredible bear hunting, and you know that another big factor that we have out here in eastern North Carolina is the fact that we have such terrific inshore fishing. The access to the inlet, so you can get offshore, do some stuff like cobia fishing, mahi fishing, and all that good stuff. You don't have to have a 60 footer to run to the doggone Gulf Stream, you can go three, four miles offshore and get all the fun you'd ever, ever want. So, you know, it's different. Well, for usage models, what about things like questions about timber? I know that you list and sell a lot of timber tracks. Is that a question that you get?
Bryan Dehart
Hey sure. I mean, it's great for anybody that can purchase a piece of property that has some immediate or future return. A lot of people look for that. That's part of the questions they're asking are, can I have any income, is there any income potential on that particular piece of property, and, you know, it's our job to make sure we know what all of those income possibilities are. Because some people when we get back the budget, their budget may be tight. But if there's a situation where the property can help support the purchase, that's a big deal for a lot of people. The timber market is not great right now. It's actually pretty poor right now but it is something that we all know is going to be there. And, you know, farming provides income, hunting lease, you do get a few people that have bought a piece of property and will continue to lease it out, because they don't care to hunt it themselves. But that's part of the benefit of an income model that helps support a purchase and helps somebody increase their budget a little bit. They might afford a $120,000 piece of property with some income, where they can only afford 100 If there's no income attached to it.
Billy McOwen
You know, one of the things I think all of us have begun to see in the middle of this COVID crisis around the country is that my phone rings off the hook from folks that are wanting to move here to the sunny south. They're looking to get out of the big cities, primarily in the north. I mean, you know, a lot of folks from New York, New Jersey, Connecticut, Massachusetts, Ohio, Pennsylvania, they're looking to get out of the North, the crowds. And you need to move to find a little hideaway, a little place. And what I mean by that is, you know, we're not talking about 25, 30, 50, 100 acres. They're looking for 10 to 15 acres that they can have with just enough room for house little barn. They maybe they want some chickens, and a couple of goats or in a place that they can have a little farmhouse and live relatively inexpensively and have good taxes like we have here in North Carolina and Virginia. What do you see in there Andrew, I mean, you and your region of the state?
Andrew Walters
Sure. So where I'm at is I get a lot of people that come from the Raleigh area, and they're looking to build a house and commute to work. But at the same time, we have people who are perfectly fine with where they're at, they're looking somewhere that they can go spend, you know, an afternoon or go hunting and fishing and something along those lines, maybe even put a camper up. They don't want to have to spend the night they don't want to have to, you know, have a cabin on the property. So they're looking somewhere they can get to and from in about an hour's drive. And a prime example of that is last year, I closed on a property. It was only 10 acres. It's a little peninsula right there outside of Wayne County, Goldsboro in Wayne County, and it was on the Neuse River. And the guy that bought it was from Raleigh, and he was looking just for property that he could take his daughter fishing. She's about 10 years old and loves to catfish. And that property had a sandbar. I mean, it was perfect for them, they bought it and closed on it. Couldn't be happier. Sent me some pictures not long ago, of her holding some catfish. So it's not always large tracts of land. It's not always home sites, I mean the little tracts do really well. And that's been exemplified here recently with the COVID crisis.
Billy McOwen
You know, I'm curious to know this: how often do you guys find that you are telling clients that they don't need as many acres as they might think that they do. I'll get a first time buyer that will come to me and he'll say I'm gonna need at least 100 acres. And I'm just not sure sometimes if they realize the amount of work involved that's gotta go into maintaining 100 acres of land, and I'm talking, not just a block of woods with a four wheeler path in it. But you know, something that's got some pasture land, maybe some cleared land for some food plots, just not just one big block of woods with one path, going in and out of it. And so, what are some of the conversations that you have with folks to sort of educate them? I mean, we, all of us, we all belong to the same hunt club, right? And each one of us has probably our favorite spots, you know, that we like to hunt. And I'll be honest with you there's probably about, of the 3300 acres over there at the at the lease, there's probably 5 acres that I like to hunt. So here's the question, let me pose this question to you guys. Does a guy need 100 acres to be able to kill a big rack deer and a nice turkey and really have a nice place? Or can he do that on 25 or 35 to 50 acres and get the same thing accomplished? With a little bit more expense, and a heck of a lot less work on the weekends?
Bryan Dehart
Yeah, I think the problem with the 100 acre scenario like you're talking about is I don't realistically think that it's a great pipe dream for a lot of people, you know, that they want a lot of acreage. And I think they really don't understand, like you were saying, how much work can be involved in maintaining and managing that, you know, larger tracts of land. And, man, there are people killing nice animals, you know, killing bears. Plenty of nice deer, a turkey, no problem on 100 acres, but you know, you can start to size that down. And if you manage it, well, you can do a lot of really neat stuff from a hunting standpoint. Andrew, you're a wildlife biologist, so you understand what I'm saying, you can do some really cool stuff on a smaller tract. And if you discount a 73 acre tract in a really good place with really good potential, because you want 100 acres, you might be missing the boat.
Billy McOwen
I gotta tell you, Bryan, I had that happen to me right out there in Wilson County that tract over off of Smith Church Road. So 60 acres, you remember walking that tract, my gosh, and had a guy out of Raleigh, 37 minutes to Raleigh to get to that tract. And the guy didn't buy it. And he had a half a million dollars to spend, Captain Bryan, had half a million dollars. But he was stuck on this 100 acre thing. And he's like, look, I'm going to need 100 acres of hardwoods, you know, within an hour and a half of Raleigh. But anyway, so you're right. And I like what Bryan said is the fact that you can get hung up on thinking that you need more than you do, and you can, you can really have a terrific piece of property without having to have all the acreage attached to it. So another thing that I ask people, once I figure out what their budget is, you know, and we determine how many acres we can use based on their usage model, and all of that is figuring into what part of the state they want to be in, and then carving that up as we need to to make that happen. How close do people need to be to civilization, right? Do you really want to get off the grid and, you know, get out there and get away? Or do you need to be within reasonable distance of a of a hospital or big box retail? You know, how does that fit into some of your models? Andrew, you're over there in a bigger populous area that most of us.
Andrew Walters
Sure, so a lot of people think they want to be off the grid, but they don't want to be that far off the grid. So I had a tract that was in Jones County. And you lose cell service, there's no contact with the outside world, you might as well be on the Dark Side of the Moon. And there was a little cabin there, and you know, solar off the grid, and you go there, and you're out there and people you know, we finally closed on it, we had that on the market for a while even at a good price. And the feedback we had was we love the property, but we don't want to be that off the grid. So really what people are looking for is somewhere they can get to where they need to be and do what they need to do. And they don't want to have to see their neighbors, but they probably don't want to be any more than about 15 to 30 minutes from where they need to be.
Billy McOwen
And when you say they need to be, you mean like a Walmart, Home Depot?
Andrew Walters
Hospital, something along those lines.
Billy McOwen
That's good. What about here on the eastern, east of I95? Bryan, what are you hearing there?
Bryan Dehart
It's pretty comical when you have a conversation with somebody that's coming from a more populous area, and they call you about a specific piece of property and invariably that comes up, you know, where, how close are you to shopping, hospital, whatever. And you know, you've got something listed in Gumneck. Look, man, if you come to Nags Head, there's a hospital down there. Or they closed the one in Belhaven. But how about, so you got little Washington, and they look at you like, well, how far are those places? I'm like you're, you're an hour to a hospital. And about the same to Walmart, and it freaks them completely out. How is anywhere in America actually an hour from Walmart? Well, welcome to eastern North Carolina.
Billy McOwen
Yeah, well, you're exactly right. And so you know, how much are you having to navigate people around that? Do you find that that's a difficult thing for most folks to overcome Andrew, or do you find that most of your buyers are okay with being 30 minutes to an hour away from most of these conveniences?
Andrew Walters
The area I work, you're usually not that far from a hospital, usually about 30 minutes is the max. So they're okay with that. Now, I can't say they would be okay with an hour's drive. I'm not so sure I'd be okay, with an hour's drive. So...
Billy McOwen
I understand.
Bryan Dehart
But the funny thing is, is there is a certain contingency that's like, hallelujah, that's exactly what I want. Oh, yeah, get me as far away from that mess as I can get. And, you know, that's what they're looking for is that kind of isolation and seclusion, but it does get a lot of people off guard.
Billy McOwen
I got you. Well, the next thing I add on here is we're in a pretty fast paced market. I mean, we're doing 350 transactions a year, we're doing a closing about every day almost, and things are flying off, you know, flying off the rack. Right? So, one of the things I like to ask somebody is like, you know, what is your timeline to purchase and how quickly can you be available for a showing, because if we get a really nice piece of property on the market, and with our marketing platform, and the way that we can get that exposure out there it's not going to last a long, a very long time if it's out there past a certain period of time. Then we usually need to make some adjustments, but we have a weekly property update, that we let people sign up for it, it's an email blast that we send out all of our new properties and the things that change, you know, when something's reduced or sold, or put under contract, and things like that. One of the things I try to do is, you know, direct them to the bottom of our webpage, and say, sign up to receive our free property update, so that you can be up to speed with everything that's new that's coming on the market. And something you might have had your eye on, you'll see if it gets sold, or put under contract or as the price reduced on it. So that's just one thing that I try to do. You want to keep them in the fray, and keep him interested, but at the same time, too, I also try to set realistic expectations about whether or not what we have available now will be available then. What happens to you, Bryan, in those situations?
Bryan Dehart
You know, you do get the calls, where people are just starting, especially now on all the land.com platforms, and Mossy Oak, I mean, you meet with people, or they're just scrolling through 10-11 o'clock at night, five o'clock in the morning, when they get up, and they're able to just send you a quick email that they have some interest in a particular property. And you reach back out to them and you know, start that dialogue, and you learn that a lot of them are just starting, they're just starting the process. And so in doing that, I don't think, Billy, that they really know exactly what they want. And so you kind of got to help them walk through that. And it may take you till September, with dialog, with emails or whatever to help somebody figure out where they want to be and what they want. So, you got to keep up with them, but it is a situation where if they're that far out before they're ready to make a purchase, then what they contacted you on today, probably isn't going to be there.
Billy McOwen
Yeah, it's probably not, so I think it begs to ask the question on the motivation level, like what is your timeline for the purchase? You know, what is your budget? How many acres are you looking for? What is your intended usage? What region of the state are you in? How close to a hospital big box retail do you need to be? How quickly can you be available to come for a showing? Should we be able to find the right piece of property for you? And what is your motivation for your timeline to purchase? Right? How quickly do you want to be able to move on these things? And the next question I usually ask folks is, is this going to be a loan or a cash sale? Right? So what do we know about land loans? I mean, there's some big banks like Wells Fargo, Bank of America, some places like that, that, you know, they just don't do them. I mean, it's not part of any of their offerings. You know, we we use southern bank, of course, and AG Carolina, but southern banks, really our number one go to for our community bank, land loans are done through a community bank, with personal relationships with people, and we find that that's usually the best way. But here's what's astonishing to me. And I think I'd be interested to hear what you guys run across, you know, somebody says, No, I'm on, I'm going to need a loan for some of it, I'm gonna, you know, put some money down and then we'll probably need a loan. And the next question I asked, which is uncomfortable question to ask, but, you know, what, what kind of down payment do you have, because most land loans require 25 to 30% down? I mean, do you run across that, Brian, what happens when when that cover goes on?
Bryan Dehart
Oh, it ends a lot of conversations, or it adjusts what they're actually able to purchase at that time. You know, it goes back to that budget we were talking about, but it freaks people completely out, when, you know, when you're going through the process. He said, Okay, so $100,000, it's going to take about 25 or $30,000 in cash at closing, to close this loan, with other fees and everything, you know, are you comfortable with that? Are you capable of doing that? And man, a lot of time you hear him take a deep breath, if they don't swallow your telephone, and go oh, wow, you know, the last loan I got was, for my single family home inside the Beltline, and it was 5%, down and 30 years, but that doesn't work that way in the land world, you pay cash, are you gonna put 30% or 40%, down, you know, 25 to 40% down in it, it checks up a lot of people, when it comes time to make the decision on a piece of property they want.
Billy McOwen
You know, there's never a good time to talk about that, you know, there's never a good time to talk about money, there's never a good time to talk about down payments, and I think, you know, we as as land brokers, we have to be comfortable to ask those difficult questions, and look, you were talking to somebody and I mean, most of the time when somebody is going out to make this purchase, this is a big dream of theirs. And I'm not that guy that wants to be this dream smasher that says if you haven't got 25 or $30,000 cash then your dream of land ownership. So a lot of this is us, really listening to what our clients are saying and making sure that knowing when they get to this place, you know, when we start to talk about this topic of loan, that, you know, eventually we're going to have to talk about, you know, down payment and those types of things, if they are going to get a loan, that's not always an easy topic to have. Andrew, how does that happen? You know, with you? Do you find that, you know, most people are cash buyers? Or do you think most people you know, are going to get a loan?
Andrew Walters
Roughly 50% of my buyer clients are cash buyers. So you know, I don't know if that's more or less than what you guys deal with. But just to piggyback on what Bryan was saying, if they don't swallow their phone, when you tell them 30% down, tell them how long they finance it, because I've seen anywhere from 5 to 15 years, and then if that doesn't do it, you hit him with the final blow, which is they usually don't do the 2% and 3% It doesn't matter what the the residential mortgages are doing. Usually, I'm sure you guys would agree, we see it between 5% and 7%. So what we're looking at is a larger down payment, a shorter term and a higher interest rate. So it's a little bit tougher to deal with, then most people realize,
Billy McOwen
Yeah, so you know, one point, I think, is it our responsibility to make sure that we're informing these people of this right up front, you know, because this is probably not the thing that they're thinking about. I mean, they just watch a hunting show, they get tired of the hunting lease, and they don't want to deal with that anymore, and they're ready to strike out on their own. Again, you know, it's how do you be a dream weaver and not a dream smasher? You know, for them and manage it. When is the best time?
Bryan Dehart
I may give you a fishing metaphor. So it's something I dealt with for years when I was doing a lot of fly fishing. Fly Fishing was the cool thing to do and people were coming in from Piedmont or Western part of the state are coming out of Northern Virginia and they bought them a saltwater fly rod and they come down to the Outer Banks. And they're not used to it blowing 20 out of the Southwest and afternoon, and they can't cast the length of the boat. And they get upset with me, because maybe they didn't catch any fish. Well, what I explained to people like you is, typically what happens is, their expectations outweigh their ability. And that's the same thing that happens in the land purchase. A lot of times you're talking about smashing somebody's dreams, you got to let them down easy, but most of the time, the expectations of a new land buyer, a rookie buyer, far outweighs their ability to make the purchase and so you got to be careful, because you want to help them, that's what you're doing is what that's what we're there for, we were trying to help people be able to, you know, acquire something that they've been dreaming about, for however long, you don't ever know. You got to sometimes just rein them in and say, look, we got to have this conversation, it's hard, but your ability does not match your expectations, and we just got to deal with that. So if you massage it, and you go through the process with them, you end up with a happy client, but it would be easy to turn them away and say, you know, and I think a lot of people probably do, they turn away, say, You know what, you can't make this purchase, you know, go home, figure out what you can do and come back and talk to me, you never hear from him again.
Billy McOwen
Yeah, and we see that happen. And so, we feel like you know. I think I get what you're saying. It's our responsibility to do everything we can to instruct and form and assist in helping people accomplish these dreams. And the only way we can do this is to have real world real time conversations with them about these top 10 topics that we're discussing here today. So just to recap, number one is budget, you got to sort of know what your budget is, and with that, you know, what region of the state you want to be in can determine the acreage that we can help you with with that budget, and also what your usage models are like, What do you want to do? Is it hunting? Is it development? Is it residential? Is it purely recreational - figuring that out, figuring out how far away from mainstream, big box, retail interstates, things like that can also help us in the country, we get, you know, the cheaper things can be, as we will know, how quickly or how motivated are you? And how quickly can you be available to come and see a showing based on the traction these these listings have and how quickly they move off the page, if you will. The other most important thing is, you know, getting you hooked up with a lender, if you do need to get a loan and what to expect in terms of your down payment that's going to be required, usually 25 to 30% I think we're seeing interest rates somewhere around the 5% mark nowadays, which is still great. Still being able to do that. And being able to get them in front of that lender and make sure that that lender is is one that we've dealt with, that we're accustomed to, and that we know will treat them with the same dignity and respect that we do. And then talking to them about income potential for a property, you know, about timber management, farm, cash, rent, other things like that, that can help them supplement things. So let's just take a few minutes here and talk about a couple of ancillary things that are also, I think, really important. Like legal access, right? I know that as a practice, ordinarily, our firm will not list a piece of property without deeded access, because we've been through the horrors of that. So what happens, let's say, Bryan, you've got a client and you're selling somebody else's listing, and it doesn't have deeded access, and you take it to a bank, and you've gotten all the way out. Of course somebody says, Oh, no, it's a deed to that. Oh, yeah, that little path there. That's a deeded access that oh, yeah, you know, we've been using that for years. Right and not that famous last words. Oh, we've been using that path to get in there for years. Yeah, that's absolutely, that's the access. So what happens, with a bank or a loan or something like that without a deeded access to a piece property?
Bryan Dehart
Well, obviously the lender wants deeded access the title company requires, you know, deeded access in most situations and so, you have to take a look at it from a broker standpoint and advise them the best you can, you know, if you see any potential issues down the road, and I had to have this conversation with a buyer the other day and I'm like, Look, you gotta understand one thing. You never know what your next door neighbor is going to do. So in real estate, it goes on into perpetuity. And whatever looks like the situation is gonna be today, it can change overnight. And so the guy that's granting you legal access now and letting you use that path, you know, he may sell that tomorrow, and the next guy may not recognize your legal, you know, your access. And then you end up in a court system, and it costs a lot of money to go through that. I mean, obviously, you can't be landlocked in North Carolina. But there you have to go through the court system to acquire access, it can be expensive to build a road to fight for the road you're using, or whatever, but a lender and a title company, I mean, they require 9 times out of 10 you're going to have to have legal access for a lender to lend any money.
Billy McOwen
Well, I mean, how many times early on in our careers, did we, you know, take that for granted? Thinking that this path, that you know, the seller told us? Oh, no, there's the deeded access, and early in our careers, you know, we're green is grass, and we're telling a buyer, well, the seller told me that that's the access road, and then you get to the title search, and the attorney calls you and says, Hey, man, you know, there's historical precedent there because the farmers have been driving their tractors down there for 22 generations. But no, that's not a deeded access. Boom, that thing will blow up. So establishing that my point is that to establish the deeded access initially is paramount. You know, we don't list anything without deeded access. We've been down this road many times. So, you know, everything that we've got on our website, this list that has deeded access, or, you know, we won't mess with it. But as buyers are out looking around, if they're not talking to one of our guys, they need to be asking that question is, you know, what's going on with the legal access here? And so, the other question that a lot of people don't know much about, and are actually a little scared about are conservation easements. Now, you know, Bryan, you and I had a conversation over the weekend about a beautiful piece of property, two pieces of property located in Tyrrell County, just west of us, that has a phenomenal opportunity on it for conservation easements to actually end up actually purchasing the property, but there's two ways to look at a conservation easement. If you're buying a piece of property that has a conservation easement on it, what does that mean? And secondly, what does the income potential of a conservation easement that you could attach to it after you own it, what does that mean? So, let's say CREP program, which is a conservation program to take farmland out of production and put it into trees. You know, what, what does a conservation easement like that do in terms of what type of encumbrances or restrictions it would put on a piece of property?
Bryan Dehart
So, the interesting thing about most of the conservation easements, you know, that we are going to use or run into, interact with, down this into the state is, a lot of it is all watershed protection. It's either something to do with Watershed Protection Program, or taking marginal farmland out of production and putting it back into natural habitat. And those are really great for certain situations. And they are in a word encumbrances, is what you used a while ago. They can become an encumbrance. I mean, they definitely restrict some uses and some things you can do with a piece of property. So those are deeds, those those easements, are recorded deeds in a courthouse. And if anybody you know is looking at a piece of property with an easement on it, you can get that, you can read through all the restrictions. Most of them are boilerplate situations, and he got through and read through it so you understand what you're getting, but a buyer needs to understand if he's buying one with an easement already in place, what his restrictions are, because it could crush to be able to explain all that to him because it could crush what he wants to do with it. And on other side, that is, like you and I were talking on over the weekend, is there are conservation easement programs that provide pretty doggone good income opportunity, on on that can help with the purchase. It's short term and long term, and they really don't restrict you that, if you're going to buy a piece of property for hunting, and it's the easement that you're looking to put in place is going to enhance the hunting, and you're going to get paid for it. Man, it's kind of a home run. But I got a good idea that somewhere along the way, we'll probably do a whole podcast on easements because there's a lot out there.
Billy McOwen
It's, amazing. And, and I think we'll move on to the next question. That people need to know that there are different time constraints with easements or 15 year, 30 year and perpetual, a perpetual being that it's there, it travels with, runs with the land. It'll run with the land for they all run with the land. But you know, this one is forever. So a perpetual easement and stuff like that. So the other thing that I think that most people don't understand, and which can be very expensive is, do you need a survey? You know, and, should I get a survey when I'm buying this piece of property? There are lenders that we work with that absolutely require one. AG Carolina, if you're going to work with them, they're going to require you to go get a survey on a piece of property. Now, let's say that tract there in Tyrrell county that you and I were talking about, I mean, look at that eastern border, that's all along the Scuppernong River. What do you think, surveying and a tract like that would cost because 25 - $30,000, It'd be a great chunk of money. Now, going and getting a $5,000 survey is one thing, but you know, you get up next to having to do a 15, 20, $25,000 survey that can be a deal killer, right? And stuff like that. So how do you know the right time? I mean, whenever I've got my Mossy Oak properties hat on, I tell people that a survey is a really good idea. But so the question I have to ask is, do you find that is something you can negotiate? I mean, is this part of a deal that you can work out? Is it the buyer, the person that is always responsible for the cost of the survey? Or is this something that you could work out with with a seller if you don't have a survey?
Andrew Walters
Well, I recently closed on a property that was in Cumberland County, and we had to negotiate a survey out, and what happened was, the buyer needed a survey because of his loan. But at the same time, we spoke with closing attorney and the closing attorney said that the deed restriction was so old, it was a property that they inherited, that they certainly needed it no matter if the buyer did or not. So both parties needed that survey. So in which case, they came together and they split it equally, which was more than fair. So you know, it's not always the sellers responsibility, nor is it always the buyers responsibility. I mean, that's really kind of a case by case basis.
Bryan Dehart
Billy, have you ever gone to a seller you know, in a listing scenario, and it's been ambiguous enough, you know, read a deed description, you look at the GIS lines, it doesn't necessarily match up and recommended. Now you know, heir property here rarely ever goes and gets a group of heirs to provide you a survey, but somebody that is capable I recommend every now and then. I have a situation where I recommend somebody get a survey because it it helps everybody just go ahead and knock that out right out of the gate.
Billy McOwen
Well, you know, it's great because it just happened to me this past week. There was a piece of property I just listed up in Currituck County. It stretches from the Currituck highway all the way to Coinjock Bay. Of course you know those big powerlines, right? They go right down through, they cut and the belt comes right across the center of that property. Well, the easement, the power line utility easement that goes across those deed docks right that you said were recorded, but I asked him for a survey because typically and particularly with big utilities where these are, those are massive power lines, you know, this is major league. And on that survey, it would show where those boundary lines are. Now think about that - that easement is a completely different price property. I mean, what can you do in a utility easement? Bryan, you know, as well as I do, you can't put a house in a utility easement. You put a driveway across it, right? He can turn that into greenspace or whatever. No, you plant a crop underneath; that's about it. But you know, you're not going to build a house or a barn or stuff like that, right? You're not gonna plant trees in there and do that kind of stuff, either. So, you know, it's different. But in this particular case, these people did have a copy of a survey with all of that on it. What a lifesaver, you know, because you got to remember, I had 50 acres of this tract, you know, borders. There's two parcels, borders going Coinjock Bay. Now, anything it's done along those waterfront, that's tough for the surveyor, to get out there and do that, you know, and so it's not easy, and that's what drives the price up and all that kind of stuff. So, asking somebody right out of the gate, do you have a copy of a survey? Or was there a plan ever done or anything like that, and then getting online and do a little bit of research is always a really good idea. But you know, what do you usually tell somebody, when they ask, well, how much is the survey gonna cost?
Bryan Dehart
We've got to get a quote, because there's no rhyme or reason anymore, depending on how busy somebody is. Or did have to survey the run of a swamp, which is in most of eastern North Carolina. Then they're going to have to survey the run of the swamp, and they're all busy, all the surveyors are busy. And so if you want it right now, then it's gonna cost you more money. Yeah, we got to get a quote. I can't. I used to be able to do it. I used to be able to have a good indication of, you know, this 37 acres in that county is gonna cost you this much. I have no idea anymore, because I've seen survey prices all over the place.
Billy McOwen
Oh, my gosh, it's crazy. You remember that one that we did in Tyrrell County a couple years ago? I'm gonna be kind. I'm not even gonna mention this guy's name, but it was 10 acres. You remember, it was right off highway 64. And I think Bryan, and I could have probably crawled on our bellies, and got around that tract in about 30 minutes. And that was a $3,500 survey that just evaporated the deal. It was, it was crazy. So once again, finding the right survey or having the right connections, advising your clients of the best people to go to. Fortunately for us, we know the ones that are going to be busy and are going to be too expensive. And we also know the ones that, you know, are not reliable, and other things like that, just like anything, right? So, you know, bringing people to the right vendors to help them with these things is important. So, a couple of other things here real quickly is, what about land enhancement? You buy a block of woods, and the first thing that I'll get somebody saying is: Well, Billy, do you know anybody that can help us cut paths and help us to open up a little area for a camper or a cabin site, and things like that. Do you know anybody that can can give us a hand with that?
Bryan Dehart
You know as well as I do that I'm a big fan of the seller doing some enhancement prior to listing it, and certainly we all know people that can help the buyer on the backside of the purchase You know, one of the first properties I remember you selling in Halifax County, you know, years ago with what Frankie did to that place. I mean, he just turned it into a showplace.
Billy McOwen
oh my gosh, yeah, I mean, that was Ryan. That was nothing but a cattail plantation, that was with mixed in pines, right, in full of briars and he got Connell Purvis, you know, to come down there and just made it into an absolute state park. It was just beautiful. We have some guys of course, you know, DJ with Holy Ground Earthworks, does a fantastic job.
Bryan Dehart
Yeah, there's some good guys in that business. With sellers, it's hard to get them sometimes. it's like a survey. A lot of times they don't want to spend that money, they'll wait and see if it's required. Connells the one that I was talking to about this years ago, and I think there's a threshold that if for every $1,000 of sellers willing to spend on smart enhancement, I believe we can get him $4,000 return, and that's the number that I typically use with sellers, if you'll spend on improvements or enhancements, you know, $1,000 which is about a day's work on one of those machines. For every $1000 you spend I'll get you $4000 more, but you get to a place where you can go overboard in that capital improvement, and your return starts to shrink a little bit. So this goes back to a really neat situation. Most people, and both y'all notice as well as I do, most buyers don't have any vision. They might think they know what they want, but you take into a piece of property, we see the potential there, but they don't, when they show up in, you know, in slacks and penny loafers, and you try to tell them, if you do this, this, this and this, this property will be spectacular. They don't see it, they can't see it. But if the seller will do A, B, C, and D, so when the buyer shows up in a penny loafers into slacks, and they go wow, this is exactly what I've been looking for, I think is huge. Land enhancement and improvements is a big deal. On the seller side.
Billy McOwen
Well, let me ask you a question then about the buyer side. Have you ever written contracts and assisted buyers when they're doing this purchase to say, "Look, I'll buy this, but I want the seller to go in and mow a path, I want the seller to go in and clean up the existing paths" or, you know, most of these properties that you and we are selling have passed throughout them, but they haven't been kept up and they haven't been mowed. And, you know, a little bit of that, do you? Do you ever use that as part of a bargaining chip? You know, for a buyer being disappointed as a buyer, having to just take it as it is? Or can they? Can they actually negotiate the possibility of having somebody come in there and, and do something if they're willing to pay X? You know, for a for a piece of property? Is that something that you work on?
Bryan Dehart
Yeah, it's that's certainly a potential there. I don't do that often, but what I will not have a problem doing is asking for an allowance for improvements at closing. So if I can tell a buyer, you know, I can show him on a map, man, we want to put a star here, we will put a stand in here, food plot here, this is what this property can look like. And I know how to do it, and another people that can do it, but it's gonna cost you probably about $12,000 to do what I'm talking about, then let's look at trying to get an allowance to do part of that work. You know, because I would rather get the allowance to ask the seller to do it, then didn't ask the seller to do it and the buyer not buy it?
Billy McOwen
Well, you're right. And I mean, think about it in the residential market. I mean, how many times do you see when you sell a house and you get an allowance for carpet and paint, and other things like that? It's really no difference because it is cosmetic. I mean, you know, some of it like a carpet in a house is utilitary. I mean, it has a utility value to it. But most certainly we can do path work and things like that. It's really no different. So, I guess what I'm saying is that if you're working with a really qualified land specialist, somebody that has been down this road that you know, that understands all of these things, this is something that you can be asking for in this process. And the land specialists that you're working with can have this knowledge base and be asking about these things, you know, in advance or assisting you if you go to make an offer that you can ask for these things. Are you going to get anything you don't ask for? Not at all. So you got to ask for it if you want to get it. I think we've covered a lot of good stuff today guys, and I appreciate you coming in again today. My guests have been Andrew Walters, our broker in charge from the Greenville office and Captain Bryan DeHart one of our founding partners here with Mossy Oak Properties Land and Farms Realty. So I appreciate you guys coming out. Don't forget, if you have any questions, go to our Facebook page, just get into Facebook, it's hashtag 'Find your Favorite Place.' Ask us the things that you want to know about. I don't care what it is how it is, you know, we're glad to do this Q&A each week. We're glad to take these questions and answer them for you. We certainly want to provide you with all the information we can to make a successful purchase. If you're interested in buying or you're interested in selling, don't forget, you can contact one of our land specialists. They'll be happy to provide you with a free market analysis of your property. If you're just wondering, you're a seller, you're just wondering what's my lands worth? Contact one of our agents. They'll be glad to do that for you free of charge and assist you in any way, whatsoever. So this is going to wrap up episode number two of Find your Favorite Place. Peace out everybody. We'll see you next week.
Transcribed by https://otter.ai
