Questions To Ask When Buying/Selling Farm & Ranch Property

I got a call last week to look at a farm piece of ground that they’re thinking of potentially selling. Here’s what questions I asked, and here’s what property research I’m going to be doing today.

Do you own any minerals? And if you do, are you wanting to retain all those minerals? Are you wanting to list it as surface only?

Is there any power on the property? If there’s not any power, where’s the nearest power source that somebody could maybe get an easement to run power to this property?

Is there an irrigation well, a stock water well? And if there is an irrigation well, what is it? Is it natural gas? Is it electric? Is it diesel?

Are you owner-occupying that piece of property? Meaning, are you farming it yourself, or do you have a tenant?

If you have a tenant farmer, what’s the lease? Can I have a copy of the current lease? Is it cash rent or is it share crop? Talk to me about that. What is that farmer paying you annually, and when does that renew?

So, I definitely want a copy of that lease.

Is there another lease for hunters?

Are there any pipeline easements that run across that property? Any power line easements?

Do you have any clue about how the farmer has been doing on the property? Do you have any yield information for them?

Do you know any of the government payment programs that you qualify for, and any sort of PLC payment?

The reason that you ask these questions is because it is a piece of farm ground. It is an investment property for somebody to purchase, whether it be another farmer who wants to farm it or an investor who wants to purchase an investment property that is income-producing, similar to somebody who wants to purchase a rental home.

So, I’m going to walk into the office here, and I’m going to start doing some more in-depth research.

I’m going to look at the mapping. I’m going to see if there’s any easements across that property that are showing up for pipelines, electrical, or transmission lines, and see if any of that is on the property.

Without going and putting my eyeballs onto the property, I’m going to pull every single document that I can find filed of record for that particular piece of property because sometimes absentee owners don’t know the answers, or people who inherited property don’t know the answers either.

So, I’m going to go search the deep records, see if there’s any easements filed of record, maybe road easements.

The reason that you ask these questions is because you’re going to have to put this narrative together for a potential buyer.

You give this factual information to a potential unrepresented buyer who’s wanting to purchase it as an investment property, or you’re going to give it to a buyer’s agent.

Because the goal is to have all the information out there and available for them to make a decision and determine if it’s going to be a good investment purchase for them.

Every single one of those details is going to play into the value that I tell this owner that the property is worth, how long it’s going to take, who the potential buyer is going to be, who we’re going to be marketing to, yada, yada, yada—all of that.

Hope this helps. Have a good day.

@cori.radley

What questions should I ask when buying farm and ranch land? What questions should I ask when selling farm and ranch land? #TexasLand #FarmAndRanch #texasrealestate #farming

♬ original sound – Cori Radley | TX Real Estate