Not every real estate licensee is qualified to help you buy or sell rural land. Their license may make it legal to practice, but their inexperience in land transactions could be costing you thousands of dollars.
WARNING: Some agents who primarily sell residential real estate and dabble in rural land sales will be offended by this article.
The National Association of Realtors (NAR) Code of Ethics and Standards of Practice states:
Article 11
The services which REALTORS® provide to their clients and customers shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage; specifically, residential real estate brokerage, real property management, commercial and industrial real estate brokerage, land brokerage, real estate appraisal, real estate counseling, real estate syndication, real estate auction, and international real estate.
REALTORS® shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or service, or unless the facts are fully disclosed to the client. Any persons engaged to provide such assistance shall be so identified to the client and their contribution to the assignment should be set forth. (Amended 1/10)
The point of Article 11 is to protect consumers and clients from hiring an agent that is not competent in specific areas of real estate. All real estate agents and brokers are not members of the National Association of Realtors, and that is fine. An agent does not have to be a member of an association to be a great real estate agent (so please don’t scream at me in the comment section below). The point of me quoting the Standard of Practice is to show that on a national level there is recognition that there are different aspects of transacting real estate, and that an agent should be competent in the field in which they practice.
Oftentimes I will have a satisfied client or friend ask me if I would be interested in helping them sell their personal residence. I immediately tell them what a horrible residential agent I would make, wearing muddy boots into their house, etc… I honestly tell them “no” because that is not what I do. I am not a residential agent. I have no expertise in that field at all. Listing a residence would possibly be an opportunity for me to make some more money, but I know that I can not provide the level of service my client needs. I want to leave them with a good taste in their mouth about me and my company.
Land Brokerage was recently added to this NAR list due to the recognition that this vein of real estate requires a special knowledge base and skill set to conduct transactions successfully. For instance, a few years ago I was representing a seller on a 32 acre tract and the buyers hired an agent to represent them. This agent was primarily a residential agent but was helping them sell their commercial building and they decided to use him to buy a rural homesite too. When we were previewing the land he wore his nice loafers and slacks, and decided not to walk the perimeter of the tract with me and his buyers. When we all met up again after seeing the property, the buyer asked me,”Will the property perc.?” I said a perc. test would need to be done. The buyers’ agent asked me, “What is a perc. test?” The buyer and I looked at each other silently with a mutual understanding that this agent was not very knowledgeable about rural homesites because he did not know how to gauge the land’s suitability for a septic system. He was accustomed to in-town transactions.
A landowner or buyer of rural property can put their assets or money at risk by enlisting the help of an agent that is not competent in land sales. Every business person has to make the best decision they can with the information that is available to them at the time. The job of a good agent is to bring all of the available information to the table so the buyer or seller can exercise good judgment in a transaction. Sometimes people entrust a friend or relative who sells real estate to help them buy land or list their land for sale. Unless they are experienced or uniquely qualified, I would recommend using a land specialist. You will usually come out better, and afterward you will still be on speaking terms with your friend or relative.
Readers may say, “Jonathan I think you’re exaggerating the number of problems in land sales.” I am a relatively new agent, only getting my license in 2008. But it seems like every land deal I have has some crazy wrinkle in it. I have had listings with 2 camp houses vandalized, a property with a registered sex offender next door, found marijuana planted, a survey that showed a barn on the wrong land that had to be taken down, title problems that killed a deal, a dead man found in a pond of one of my sellers that we had to disclose to the buyer, racist adjoining owners, and lots of other experiences that are funny now but kept me up at nights then. People who have been in the land business longer than I, have many more horror stories. Yesterday I sat in the living room of an owner that bought 100 acres that were distressed in 1999, and he spent the next 10 years in court fighting claims of adverse possession and lawsuits from surrounding owners. He had no title insurance and spent 3 times the price the surveyor quoted him initially to have the survey drawn. At the end of the 10 years he only owns 20 acres and has spent thousands of dollars on attorneys and surveys. It took such a toll on him personally and financially that it is visible how beaten down he is by the whole experience.
The point of this article is for consumers to select the agent who can best help you conduct your land transaction smoothly with your best interest in mind. Look for agents that in addition to being licensed have some professional experience or designations that will be of use to you in your deal. Agents with a long history of land sales or a background in forestry, geology, soil sciences, a long-term farmer, or are members of the Realtors Land Institute are all good things to look for. Check them out before enlisting their help. When you use an experienced land professional, you are increasing your odds of enjoying a smooth successful transaction. Let your land agent spend the sleepless nights; that’s what we get paid to do.
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Jonathan, this is a great article. I’ve had countless similar experiences as those you described. I’ve encountered real estate agents unfamiliar with perc tests, different types of easements, and regulations/restrictions regarding protected natural wetlands and Army Corps lake property, etc. Buyers and sellers of rural land that don’t seek the guidance of an experienced land agent are doing themselves a huge disservice. Land transactions are more difficult and complex than transactions for an existing home.
AMEN! I always get a kick when buyers come to look at land with “their agent” and he shows up in dress slacks and loafers or she is wearing a skirt and heels to walk rural land.
There is a time and a place for loafers and heels, but they be more suited for the closing table than a showing.
The point here is not to downplay the importance of residential agents, it is to point out that every field of real estate requires special knowledge and skills. I would be afraid of being sued repeatedly for being a horrible commercial or residential agent, because it isn’t what I do.
So to all of my fellow real estate agents out there, whatever your specialty, do it well. We serve our customers and clients best when we do what we know and work to be more competent in our profession. I’d be happy to take any referrals for rural land sales in west Alabama.
Good article Jonathan. I wish I had your knack for writing.
Ya think some of them shouldn’t be in the business ??
My guessamate is over half are inept and incompendent. They just don’t understand the process.
“Time is of the essence” ~ HUH??
Communication between parties is essential so whether it goes through one broker, two brokers or NO brokers, all must be in cadance. Personally I prefer dealing with NO brokers just a fair & honest seller.
We deal in farmland in the midwest and the Great Plains. We always try to talk with the tenant/operator to get the facts. Brokers cannot present the facts – they don’t know how !
We have a complaint against a “buyers” broker in the Kansas Reg. Dept. He withheld discovery statements prior to closing which were contrary to the purchase agreement and affected the possession of 40% of the acres. He says “SUE ME”.
TOMY,
There are a lot of dishonest land brokers out there trhat claim to be “specialist”. I hope you continue to report those agents that are unethical and/or incompetent, however, I don’t think it is fair that all brokers are lumped together. At Mossy Oak Properties we have an in depth Certified Land Specialist program that all agents go through. In Illinois, where I own the Mossy Oak Properties AgriRec Land & Auction offices, I pair all inexperienced agents with an experienced agent until such time I feel they have the knowledge to be on there own. Many brokers only focus on the dollar instead of representing their clients needs, those people shouldn’t be in the business. Finally, Jonathan excellent article!!!
Great points. Even after selling 300+ new homes and working with new home builders and developers I still continue to refer residential properties out because even then my previous expertise was with new construction not existing homes. And now, I would still refer a new construction sale because things are always changing. Even with past experience if you do not stay up on the industry and market conditions you can quickly become out of touch.
It is important to also note that even within the land market there is also specialization. For example, I always refer commercial land transactions to other more qualified agents because my expertise is more rural not commercial.
Unfortunately, in very rural areas sometimes folks think they do not have a choice expect to go with the locals. As long as someone is licensed in the state if they have the property type expertise it is usually better for the seller to use a non-local professional with property specific knowledge. I have sent out referrals on unusual properties such as a bed and breakfast to an agent in another state (also licensed in our state) that was able to help them because their expertise was selling bed and breakfast resorts.
As always Jonathan great article and information for land buyers. Best Wishes!
So true, Marisa!
Chris- Thanks for reading, and I sure appreciate you sharing the articles with other folks too. I’m glad it helps.
Tomy- Sorry to hear you’ve had some bad experiences with brokers up your way. There are some good ones there too, I’m sure. Best of luck resolving the issue.
Marisa- Holy Cow! 300+ homes. I didn’t know you did residential at one time. That’s a bunch. I agree about finding the right agent who knows the specifics of “your” deal. That can make or break the client in the long run. Thanks for chiming in. Happy Thanksgiving.
Well said everyone!I too, frequently encounter agents selling a land parcel they haven’t even walked – it’s critical to do so because how else can you find out about the special features or potential issues? A 40 acre piece I’m selling has the largest Ash tree in the state and the seller herself wasn’t aware of it!
Great article Jonathan (and the comments too). I applaud you for starting the article with Article 11 of the NAR Code of Ethics. Unfortunately the guilty agents/brokers will most likely not be reading this article. Like Marisa, I constantly refer residential listings to residential brokers but I have yet to have a residential broker refer a land listing to me – although they continue to list them even though they can’t even find the property lines. Maybe one day, I’ll keep hoping!
Rick…Good point – I haven’t received referrals from non-land agents either.
Great article, Jonathan!
This applies to so many specialty areas of real estate.
Tom- You’re right. The reason I write so many articles about how to choose a land agent is to help consumers find good ones, and not more people that are killing the repuation of all land agents. I would love to go through the Mossy Oak course sometime. Put every tool in the belt possible.
Richard- Getting on a tract is so essential! You never know what a particular property is like until you see it. I tell landowners that I never like to give an estimate of what their property is worth without seeing it. Each tract is unique.
Rick- That is pretty telling that you aren’t getting the reciprocal referrals. Agents in my area like to do a little bit of everything, so I don’t get many land referrals either. I hate seeing land listings in the MLS with one picture, a lousy description of timber, and inaccurate info about the size, etc… It is disheartening sometimes. Thanks for reading.
Spring- You’re right about their being many niches in real estate. Thanks for reading.
Great article. More agents need to pay attention.
Thanks for the good article. It’s a common problem. I consistently refer residential listings and BPO opportunities to a couple great agents in the area, but we don’t get many land listings from other companies.
I offer a generous referal fee to these folks for their land listings and those that do pass the deal along to us have had a good experience. I wish, for the sake of land owners, more of them would do it.
Just recently I saw a local residential company listing a 150 acre hunting tract with no pics, no descriptive information and a HAND DRAWN ( I said “hand drawn!”) map of the tract. Man, that hurts my feelings.
Keep up the good work and keep David straight. 🙂
Kay- Thanks for reading.
Pat- The hand drawn sign has made an appearance in Alabama as well. It is a shame. I checked out your company site, and you guys do a great job marketing land, because “All you do is land.” I like it. You say what you’re going to do, and do what you say. That’s the best way to stay in business. And Dave is a great guy to work for, and he keeps me straight. We’ve got a great team of agents in our company. 80% of the deals I have done in 2011 have been with agents in my company that have helped on one side or the other. That speaks volumes. Thanks again for the good comments.
I always feel slighted losing land listings to residential agents, usually to the large franchises as they are “above the crowd or whatever”. I am a land broker, Sc Registered Forester and have sold land since 1988. As a corporate forester and forestry consultant I have been involved in the managemment of millions of acres. I probably have had something to do with the planting of 10-15 million trees. Yet many times the BWM driving and cannot begin to use a compass to find a property line agent gets more land listings that I do.
I have specialized in land, rural residential, farm and ranch, and horse properties for years. Greed is the only reason that Residential Realtors don’t refer to experience specialists when they have Buyers and Sellers outside of their normal practice.
Great article.
John Knipe – Ranch Broker
Certified Land Broker – CLB
Accredited Land Consultant – ALC
Idaho – Oregon – Montana – Nevada – Washington States
Great article Jonathan.This should not only be advice for buyers but for sellers as well. Align yourself with an experienced land agent, even better, one that has acquired the Accredited Land Consultant designation from the Realtors Land Institue. This highly coveted designation is a sign of experience and excellence in the field of land sales. Sellers should be just as cautious about who they list with as buyers are when choosing representation.
Once again, Jonathan hits the mark. What is it about specialization that is so hard to understand?
Our Code of Ethics is clear. Either you specialize and stay within your field of excellence, or employ the assistance of one who does. It has never been more true than in the land business, and it’s time we called out those who violate their client’s trust!
OH MY!!! I actually LOL when I read the Buyer’s Agent’s question…”What is a perc test?” Thanks for this article…I’m sending it along…
Where would one go to find a qualified land agent in his own state?
RG, what state are you in? I can send you a few places to look. If you’re in Alabama, you are in luck.
Minnesota
Here is a link to lists of land professionals who are members of the Realtors Land Institute in Minnesota. This is a good place to start. You can also do a google search for land agents or land companies in your geographical area. Find some people on the list, check them out online and then interview a few of them by phone. Good luck.
Fanastic resource, I already made a contact this morning. Thanks for sharing!
RG, glad it helped. Thanks for reading, and share Landthink with your friends up in MN. We need some more readers in that area.
Where can i find a good land agent for West Virginia? Im so confused by terms like recreational, residental, hunting, etc.. can you only build on residential land or do the other terms just mean they havent been developed YET? I just want a nice shack in the middle of nowhere to raise my kids.. ::sigh:: Help?
Where would I find a knowledgeable and qualified land and farm specilist in central florida(sumter,lake,polk,osceoal,citrus,hernando,pasco county)
THE TRUTH!
I am interested in purchasing small pieces of remote land for my grandchildren. I found several land sale cites on the Internet. I won’t mention their names. I found a five acre lot in Nevada. The advertisement’s information and map was not able to tell me specifically where the lot was and even said that the accompanying photo was not the actual lot. I called the US Bureau of Land Management (very helpful) which informed me that the location specified in the advertisement was actually an entire section–about 600 acres. So, NO ONE, it now appears, especially the real estate agent advertising the lot knows where the heck it really is. Disgraceful! But wait, there’s more. The agent’s web site gave me the opportunity to submit questions. I did. No answer. So, I telephoned him at the number given. No answer. I had to leave a message. I did this twice. Nothing! The web site also enabled me to send an e-mail to the actual owner of the lot, which I did. No response. Accordingly, in my judgement this is either a scam or incredible incompetence. And it certainly harms those in the industry who are honest. Further, there was absolutely no information on the settlement procedure itself, warrant deed or quit claim, title insurance, etc. Now, I won’t touch any on-line deals because there’s no way to verify the seller/agent’s legitimacy, and to feel that such verification is indeed sufficient. Clearly, with on-line land sales, the industry needs to do a lot more to police itself. A suggestion, as a former senior executive in the Commerce Department. Assemble the honest and competent people in your industry who sell on-line property and set up a membership fund to reimburse buyers who fall victim to unscrupulous land sellers, like issuing your own bonded title insurance. A code of ethics without penalties is not enough. Much better leadership is necessary in the on-line land sale industry. Best regards, Jack (Maryland)
Hello Jonathan, I recently earned my AL Salesperson License and will be working for a small town rural broker. Since I am an avid hunter, she is allowing me to find hunting property for my first client. I have already went and checked out the the 1st property to make sure there was a water source for deer,etc and also good places for climbers, tripod stand, etc(going to try and walk the whole fence line before ever taking client out there which is a feat since I walk with a walking stick but I don’t let it slow me too much during untying season(;). I have snake chaps and boots, do you think is would be appealing or appalling to my client if I provided a set of knee chaps for them also? I want to make a great 1st impression especially since i am female and some males have it in their mind that women may not know “what to look for”. Also, the Large Land Companies that have their own websites for large tracts of land, are they only available to be shown by their agents only or can other agents call and work with them. Do they do any referral type work? Thank You for the insightful article and for you help with my questions Sincerely, P.R.
I am looking for land to buy, I am a first time buyer. I love your article and found it extremely help. As result I looked up perc test and how much it cost and the cost of digging a well and putting in a pump. Also the cost of a septic. wow, it’s a lot. But I wouldn’t have known any of this without your very well-written and informative article. Thanks.
I have had a hell of a time finding an agent that is actually good at handling raw land. I keep getting told they are “experts” at it, but when we find a piece of property, they basically just leave me on my own to try and find out everything, and some times I don’t even know where to start.
I am an agent AND avid Hunter so I would never show up to a land showing without boots and snake chaps (which reminds me, I need a second set for my clients who don’t have any). I would Love to list more raw land but I find sometimes sellers don’t think a woman would know how to show and sell raw land…I’m hear to tell you the right one definitely can.
You are right on target with this article. Thank you!