Blog: R.E. Tales
(Hey, not every place is pretty...)
9/6/21 A Race Like No Other
Sam was getting older and the hunting properties he’d cherished were turning into a burden, so it was time to liquidate some of them. One in particular was a problem; neither of us knew how to price it. He’d ask me to get it sold, I’d ask him how much he wanted. And so it went for a couple of years. Finally this spring he made it clear he wanted it gone. So once again I wracked my mind to figure out the highest price that would be obtainable.
I do appraisals. Why was this so hard? Well, you see this was no typical property. 30 acres of woodland, but that’s where comparable stopped. Nearly every inch was steep. Power was 1/4 mile away, and the Right of Way in, while a once-paved abandoned Town road, was quite steep, not in good repair, and the final culvert was washed out, leaving a steep 6’ deep gully, 20’ wide. From top to bottom was a 300’ vertical rise. Though structurally sound, the cabin who been heavily vandalized and never had water, septic or public power. It hurt me to witness the increasing vandalism over the years as I like to think our area is free from such acts. It almost is.
But then there were attributes that added to the value, namely a series of waterfalls and swimming holes. Some of the falls were along 2 small side streams, but the one that got serious attention was in a creek which formed the western boundary. The main falls was over 100’ high and had a large plunge pool at the bottom. And was far prettier than your average 100’ falls. Because the water before the falls flowed some distance over flat rock, its water was unusually warm. During storms, it might be 3’ deep, falling 50’ wide. In drier times, a peaceful sight. In the winter, one can climb behind the falls and look through crystalline ice to the outside. Below the falls were a series of smaller falls and more swimming holes. Isolated yet so close to town, it enjoyed excellent cell reception. It looked like a State park in the raw; in fact the Town once considered taking it for a park. There is nothing like it that had ever come for sale.
So, knowing we had to start somewhere, I priced it at roughly $3000 an acre, reasoning that once in a while some land brings that much here. We could always come down if necessary. It turns out what I’d established was not the asking price, it was the starting price. This hit the market just as COVID-inspired sales began to skyrocket and prices all over the US began their steep rise. On my first ads, we had no clue of what was about to happen.
But we figured it out pretty quickly. The phone rang off the wall. Me and my salesman Pete could not keep up with the showings. I had to create a database to keep track of the offers. One day, I showed it to 10 parties, walking 6 miles and climbing over 3000 vertical feet in the process. The entrance along the road began to look like a parking lot. We did this for 2 weeks to give enough folks a chance to see it and to make their offers, then we would accept the one Sam liked best. That happened to be one of the very first parties to visit; they’d offered, cash, well over 50% higher than the starting price. Short and sweet, huh?
Well, it proved to be neither. It seems the buyers wanted a survey. No problem: we had not one but two of them. I need to interrupt and do some explaining. Back in the mid-80s, when Sam bought it, Edwin, the owner, said he had a survey, but at the closing had to admit he couldn’t find it.. No problem, Sam ordered a new survey.
That’s where the problems began. When the new one was completed, we learned there were 20 acres, not 30, and the missing land was the part that connected with the right of way and contained the foundation upon which Sam wanted to build a cabin. You have to understand, this was a very cheap sale. Lawyers don’t like to waste too much time on cheap sales where not much money is at stake for either party. And since neither Edwin or Sam were hurting for money, so they diid not push too hard for a resolution.
Finally, Edwin found his survey. It looked radically different from the new survey. His surveyor had died a number of years prior., so we couldn’t go to him for any answers. Things went along, with tensions between Sam and Edwin tightening slowly but surely. Edwin did not like to have his word doubted, but could not prove that he was right. The new survey was unassailable.
Finally I tried to intervene. Going through the old deeds, I went back over the years, deed after deed, until 1920, when one of them appeared to be more accurate than the ones that had followed it. I copied down the description and tried to draw a map. I couldn’t, so took the figures to a engineer who ran them off on a computer program. It didn't close (meaning the starting and ending points were not the same, there was an error somewhere), but it came close enough to still encourage me. Playing with my copy machine, I changed the scale of this line drawing until it matched the 400 feet to the inch scale of my aerial photos. Then, I made a overlay on clear plastic and took it to Edwin’s lawyer. We taped the aerial to the window and then the over lay on top of it. Instantly the lawyer recognized what the problem was. He knew how to settle it.
It seems when Edwin had sold his farm a few years ago, the buyers had ended up with more than the farm. Mistakenly, they also got the missing part of the waterfall property. To be fair to the new owners, they never knew this, and had never considered that they “owned” this land. But now that they knew it was legally theirs, they didn’t want to let it go. This riled Edwin, as you might expect. For years, he had let them use his bulldozer whenever they wanted. He let them take hay, for free, from a field that he continued to own. Edwin held the mortgage on the farm and each year, he gave them back their last payment, saying they might as well have it as the IRS. And if they didn’t play ball and give it back, all this was going to end. Since it was steep, wooded land, land they had no use for and never thought they owned, they saw the logic in Edwin’s threats and gave in and the dilemma between Edwin and Sam was settled.
Back to the present. It seems the original survey had been housed with Edwin’s lawyer’s records. But a few years ago, the creek in town had flooded, wiping out many decades of records the firm had stored in their basement. The tax maps and deed descriptions were correct, but we could not prove it with surveys. A desperate search was made for another copy of the the original survey. We found a surveyor in another county who had in a roundabout way ended up with the original surveyors records, a pile 2’ or so thick. He did not find what we wanted and was too busy to make a concerted search.
What all this meant was the the new buyers had originally asked for a new survey but Sam said, “I gave them everything I had. The title is clear and the description accurate. If they want a third survey, let them do it.” But they wouldn’t. And this led to a 6 month-long stalemate, during which each party began to plead with me to get the other moving forward. I tied, but good nowhere.
Meanwhile, behind the scenes, buyers continued to call - despite me clearly marking it “UNDER CONTRACT”. They either hoped it would fall through or did not know what those words meant. Regardless, they kept calling. At times it was my most active property, if measured by inquiries received. My database grew to nearly 250 separate parties, some of which who had made backup offers, more than doubling the starting price. As time wore on, the pace of the inquiries increased. Some were savvy enough to realize that if it had gone this long without closing, there was a problems and they hoped to take advantage of this. Others were clutching at straws because there were so few other properties left on the market. And none of those had waterfalls. With each inquiry I carefully answered their questions and explained that it might or might not every reach the open market where they could seriously consider it. But I would let them know if it did.
By this time, my inventory was 20% of what was normal. I half-joked with people: “Yes, I am making a ton of money this year, but may find myself out of business next year.” A bit funny but way too likely. It is a seller’s market, something we have not witnessed in the 40 years I have been in real estate;
So finally Sam’s lawyer gave the other side a “time of the essence” letter, meaning “either close right now or withdraw”. This letter closely followed an offer from one of my new callers to buy them out (he offered them a very large incentive to withdraw in his favor - but they did not even consider this). That was evidence they really wanted the place and after a couple of days, Sam’s lawyer called to tell me a closing was scheduled.
Then he called to tell me of a new wrinkle. It seems Sam had formed an LLC for his various properties in New York and New England, a plan designed to make it easy on his heirs. We knew this but had just found out that Sam’s downstate attorney, who had done all that work, had never filed the deed in the LLC’s name. It was still in the old name as far as the State and County knew, which is what all the title documents and searches were based upon. Now, they had to repeat the process under the new LLC name. Since it was recent, the process would not be so time-consuming as it was before, but they were not ready to close as they’d supposed when they had drawn the line in the sand with the time of the essence letter.
So, when will it close? Hopefully, later this week. But we’ve heard that before. And then I have to inform 250 people to look elsewhere for their waterfall.
This is something I have learned the hard way: keep your practice local. Well, relatively local. Every so often I run across a property that is definitely not local. Maybe the owner has met me , likes the way I do things, and begs me to take the listing on their property even though it isn’t nearby. Maybe it’s a friend who lives out of the area. Maybe the price is so low I think I won’t have to make too many long drives to get it sold. Though I should not admit it, I can be easily swayed by opportunity. I learn the lesson again and again.
My first year at this, I listed 2 properties located 3 hours to the Northeast and another which was 4 hours to the northwest. I remember the trip well as when I got to Saratoga, my exhaust manifold broke and I sounded like a race car driver for the next two days, amazed no police hauled me in and impounded the car. Hardly anyone called on the places and I only showed the two once. At least I did not tie them up in an exclusive contract, so no owners got made at me for such poor performance.
Also early in my career, we took on a salesman from the central and lower Hudson Valley. He went right out and got several good listings. Well, they were good for everything but price. Compared to property in this area, they were double in price. Compared to properties around them, those prices weren't bad, so it seemed to Mort, my broker, that we ought to be able to nip off a few of these. They were obviously nice farms. Only no one called. And this went on for a very long time. I drew the conclusions, probably perfectly correct at the time, but less so today, that most of our buyers then didn’t care where they lived. They cared about the land, the buildings and the price. And the price on these places scared them off. In the very few opportunities I had to speak with folks who called on them, I’d explain they were in a very different area, where prices were far higher. But the milk price there was only slightly higher than ours and they could not see it working, not when they could get a similar place here for half the amount. Those farms just did not look good in comparison with the others we offered. Folks here were underselling them.
Finally, I got a call on one. The fellow wanted a particular place and I quickly returned his call Was this my opportunity for a big commission? Talking to the buyer, I got brought back to earth quick enough. He sounded young and naive. Then I found out he had almost no money. “Then, why did you select such an expensive farm?” I asked, genuinely perplexed. “Oh, I thought I’d might as well start at the top”, he said. This was taking naivete to a new level.
He had not given a thought on how he could pay for the farm. It was the most expensive we offered then and he’d assumed it was the best, for that reason alone. He’d never thought how it could be financed. No bank is going to loan 100% and they are not going to loan to someone who is wringing wet behind the ears.
I had a friend from Hawaii list his place with us informally. We’d made arrangements for a local broker to do the showing and to keep us legal as we were not licensed in Hawaii. I had no idea how that was going to work out, but we did get calls. No showings of course. But it sold right away. Then one of my customers asked me if we could help them sell their place in northern Maine. If it would sell, they could buy down here. I explained that this was way too far for us to show and we made arrangements that we would get a straight advertising fee upon sale, not a commission. I asked lots of questions of them and received lots of photos so I could field calls intelligently. We had a few calls and one showing, which went poorly. Then by mutual consent we gave it up.
Years later, I got a listing call from the Castletons, who had very large farm near the Canadian border. I talked with them for a good while and decided I’d take it on. It was interesting and I wanted to see if I could pull it off. I went up there, visited everything, took copious notes and tons of photos. Then they gave me a price. This was a truly beautiful place, impeccably kept, and very large, but they were overpriced by a factor of 2. My mistake was not establishing the price before I went up; by coming there I’d kind of committed myself to the effort. Try as I might, I could not make them believe that just because their name was Castleton (they were respected locally, as they deserved), it did not make the farm worth more to anyone else. Sighing to myself, I figured this one would be for the long haul as they were people who had to learn by experience, not from advice I could give them. Since it was so big, we got a pleasant number of calls and many of them resulted in showings, eight hours of driving each time I made the trek. It took another 4 hours to show the property. But the buyers were not dumb and they kept their hands in the pockets with their checkbooks carefully hidden. The Casteltons eventually lowered the price - over a year later - but not by much, Then, with more time, they lowered it again. Then the bank foreclosed and a neighbor bought it for cents onto dollar. A firesale price. Their pride cost them dearly; I could have saved some of their equity had they been willing to listen to reason.
At the same time, I listed 2 smaller farms in the next county west. We were to do the advertising, vet the customers, provide information to them, set up showings for the owner to do. We’d also do the contrast and keep the legal work moving forward. It didn’t take long for the owners to get tired of showing their farm and not getting a sale. They’d have to rearrange their personal schedule to accommodate the customers, wait for them to arrive and deal with a few who never arrived yet never told anyone they’d changed their minds. I actually got a buyer for one farm and then - you can’t makes this up - the guy decided to buy a home the owner’s mother wanted to sell. A house in town, not a farm. So he never got his place sold and I never got a commission. But the buyer got a house. Whoopee.
A year later, I learned of a property that sounded to too good to be true and made arrangements to visit it, over next to Lake Champlain. Well, it wasn’t as nice as I’d been led to believe but even so, it was a great buy. The land was nice enough but there were suspiciously few farmers in the area. I wasn't sure what to make of that. Pressure from vacationers? We listed it - only to learn two weeks later that they listed it exclusively with a local agent. How could they forget this? It made us look terrible, it’s a total breach of protocol. The other agent was really nice and offered us a Co-Exclusive on it. We found a cash buyer right away, someone I’d worked extensively with a few years prior. He’d seen an ad, called me, then drove up from Florida to see it. The sellers hemmed and hawed, then sold it to someone else, someone they knew. We didn’t make a cent - I don’t know about the other broker. I learned a year later that their deal did not work out (it involved some sort of rent), but by then, I’d had enough of that place and thought I’d never see that town again.
That lasted a few months, then Paul Brion called. We’d been talking about property over this way for a while. He asked me to list his place. Like a fool, I went up to visit and decided I could sell it. He owned 100 acres, but cropped 1000, all of it totally rent free. Paul is a good farmer - you could tell it was land he used just by looking at it. Better crops than any neighbor’s. He had good markets for his feed and was making a lot of money. That brought customers in and I showed it quite a few times. Then Paul recognized he’d never made more money anywhere else and decided to stay. Disappointed, I couldn’t blame him, he really was best off to stay.
Then Jake Calhoun called, wanting a place. We found him one and he asked us to sell his property for him. Only he was in St. Lawrence County. I went up to look at it. He’d made a local reputation for the quality of his beef and he wanted more of a farm, and in a more affluent area (which St. Lawrence County most decidedly is not). The “farm” was barely worthy of the name, a lot of woods and just a bit of wet and rocky pasture. But a nice home, frontage on a great river, and a reasonable price. He would do the showing and we’d do everything else. He also listed another property with us - a freestall, a bit run-down, on 14 acres, on a major highway, with ho home. Who is going to want something like that? To my amazement we found a cash buyer for that right away and the sale went like clockwork. But no one would call on the farm and Jake finally gave up on us a couple of years later. I think he’s still there. It’s just the wrong area for our customers.
When a place is closer, we save a ton of travel time and gas. We know the local market, who to recommend for services (lawyers, inspectors, banks, contractors, feed dealers….) and we know the ins and outs of life here. We can answer customer’s questions and help them after the fact. We know what the good buys are here and can make useful recommendations to both clients and customers. We can authoritatively field concerns about weather, jobs, schools, zoning, shopping, hospitals, all that sort of stuff. We know who the good lawyers are and who to avoid. Buyers can come to us and see several places in a day, not just one. When you work out of the area, none of this is the case.
There were several others I could mention. I’ve told you about every single sale I made out of the area, all one of them, the lucky one for Jake. Go too far from home and you just handicap yourself and don’t help anyone else. On the other hand, my everyday local area is 5000 square miles….
What gives land (not buildings) its value to people? Here’s what is most commonly valued, based upon the order I think of things. You may order them differently - and should.
WHAT ADDS VALUE ?
1) A mixture of open and wooded land
3) Water (steams, rivers, farm ponds, lakes – generally, the bigger, the better)
4) Green open fields, or fields growing impressive crops
5) Privacy and quiet (which are not the same thing)
(Your experiences with this huge firm may be quite different than my own... I hope they are.)
I have this perennial fear of mortgage brokers and the kind of banks who advertise in the Sunday papers. They are set up to do home loans, not farms and property with acreage and have so often led my buyers down the rosy path.. a rosy path to no where. But JR wanted a place we had with only 2 acres and he wanted a starter home. He was already pre-approved by Wells Fargo, so naturally, I steered him in their direction. The place he wanted was not a place with acreage like we usually deal with, so why not give them a try?
If you’ve been out with me, you’ve seen that big Samsonite briefcase that I lug around. I’ve had it more than 30 years, have worn the skids off the bottom, and now there’s even a small hole in the bottom. If I act like it’s heavy, that’s because it is. What’s in that darn thing?
If you drive along the Jordanville Rd, you will no doubt notice a beautiful red and white barn that sits by the roadside. Part of the bottom floor is made from beautifully laid stone and the rest is carefully done, but modern and neatly kept. It is an eye-catcher. If you slow down to look at it, you may see that there is a red pipe gate that is closed and locked at the driveway. No one around here gates their drives. Well, almost no one. I do know of another and find it plain weird. But look deeper here and you’ll see something else. There’s a house, hidden by low-hanging trees and bushes. It appears to be an old house, not nearly as well-kept as the barn or the grounds, but it’s hard to tell, it is so obscured by the greenery. You wonder if it is ever lived in.
(Later... You did read Part I, didn't you?)
Well, the day of the formal eviction arrived, the day the poor tenant is literally thrown out in the street. I had lined up to come: a Deputy, the Rent-a-Center guy, a helper (the law says I have to move her stuff out while the Deputy watches), my attorney, and a locksmith ($125 just to come). While waiting for the locksmith, my helper (my carpenter – $25/hr) couldn’t believe we could have a key for the door and not be able to open it. So I unlock the door, open it 2 inches, and the security chain she’d installed pulled tight. We jiggle it a bit and it just falls away. What? It turns out that she installed it backwards; instead of tightening when it gets pulled tight, it slips off. Now, it was just a matter of pushing away the sofa jammed against the door. All this time, I am thinking about the locksmith, now on his way and counting his dollars already. He actually was disappointed to arrive and find he had no work to do – and he was worried that I’d stiff him. I didn’t of course.
This woman knows all the tricks of the trade. More than me. She came to me in November in response to an ad I had for a 6 month rental on a place I didn’t want to sit empty over the winter. Barb (not her real name) proved to be a thin gal, probably in her 40’s, good-enough looking except for the bad teeth. She drove a pickup, which is always neat. The story was that she had 2 horses and a donkey and needed to rent a place where she could keep them herself and not have to board them My property had a barn and it had several box stalls, so was perfect for her, plus it was closer to work. She wanted a written lease, something I did not have in mind. But that’s OK; it’s only good business and protects both parties. I insisted upon getting references and a security deposit that was more than double the rent. I checked her references, 2 work and one personal. They all said that she worked hard (as a night-time office cleaner), was on time, had no bad habits of which they were aware, was neat and clean at home as far as they knew, and paid her bills on time. What more could a landlord want? A red flag – only one, the personal reference who was her last landlord, seemed to know her very well.
(Note: this was written before 2019, when I succumbed like everyone else, not because i wanted one, but because my land line had become unusable. Now, after a couple of years of use with my omnipresent always-on cell phone, I decided that I still would prefer a land line,)
People are often shocked, just shocked when they learn that I don’t have a cell phone. What kind of real estate agent am I anyhow? There’s a couple of answers to that question, but the one I prefer is to think, “The kind of agent that you will remember”. A Luddite.
Some are merely amusing, some can be an immense help. All are interesting.
After 40 years, I've learned a lot, & acquired unforgettable experiences. Follow these long enough and you'll eventually get the whole book. (Names probably changed, for obvious reasons.)