Selling Forest Land

[catvet]

It's been awhile since I've posted but figured there might be someone who could give me some suggestions.
Almost sold my forest land in Vermont but buyer ran into financing troubles.  It is a 57 acre parcel which hasn't been logged in about 50 years.  Mostly spruce, hemlock, some large pine.  Also has sugarbush with estimated 2000 taps. Obviously some of the maple could be taken but would reduce the possibility of sugaring which is the main reason the fella wanted to buy it.

Anyone have ideas on how I can sell the property for less money to my buyer and get some money after the sale with timber they take down, or some such thing.

Unfortunately we are probably looking at needing to get about $20,000 after the sale.  Seems like that would be a lot of trees to me.

Thanks for any ideas

[Tom]

There have been many land deals done around here with contingencies on crops, herds and trees.  I'm sure you could do something. Getting the money that you want from a harvest that affects another owner would be iffy.  I'll bet a forester could lead a lawyer through a contract like that.

[Cntrybo2]

well, first i would recommend having the the tract cruised to determine a base value of the timber as well as develop an inventory of exactly what you have onsite. Using this data, you can then determine whether you have enough timber to make up the difference and/ or approximately how many acres you would have to cut and of what species. If were you, I would make the buyer pay for the cruise and allow him to deduct this from the total sale price if you decide you harvest the tract. Being you are trying to finalize the sale, you should not be penalized for his lack of funds. This is just an off the top of my head solution. I will give it some more thougth, if i come up with anything more, i will post. Hope some of this helps!

[sjfarkas]

I believe here in California you can sell the land without the rights to the timber.  It would be like water rights, mineral rights, development rights.  so I'm sure there is a way. just do a little research online about retaining these rights.  even if the information is for timber it might pertain.

[Ron Wenrich]

I've always wondered why people sell land without having a timber cruise.  You wouldn't sell your house without having it appraised, yet you'll go out and sell your timber without an appraisal.  Realtors are the biggest problem in this regards.  They think they can appraise land by looking at past deed records.  They don't do it with houses and they shouldn't do it with land.

Get a cruise, and establish the timber base.  This will establish a timber base for you to base your land value.  The value of your property is the bare land value + your timber.  You may be able to actually get more for the combination of the two than trying to just sell it as is. 

If you cut the timber, then you may diminish the number of sale prospects.  If price is the problem of the sale, you may be able to negotiate the timber out of the price, and retain those timber rights for a specified amount of time.  If the landowner pays for the timber, he then has a timber basis to write off against any future sales that he wants to have.  Its a win-win situation.

Work from knowledge, not conjecture.

[SwampDonkey]

Up here, the owner of the land will usually cut the timber before the sale. Realtors have no idea of timber values and they are only looking out the car window to see it. They under value it and because the market is in the tank now it's even worth less in their eyes. I don't see timber value the same way as housing. There is more to it than lumber and pulp. Of course it's hard to sell asthetics and view sheds on the open market. :/ A typical realtor valuation on the trees is $50 an acre, they are only interested in the land. They tried to use that on dad's land he sold. There wasn't much for timber left, but it was growing trees and we got a lot more than $50/acre in the end for it. Heck some had $600 an acre in reforestation.

[catvet]

Thanks for all replies.  I do have a timber valuation from 5 years ago and no significant harvesting has been done since then. Certainly part of the value on the property is the timber and the buyer is hoping to recoup some of his investment by harvesting.  A main reason the buyer is interested is the sugar bush which he wants to work.  Once the pipeline goes in much of the timber will be difficult to access.
I'll keep researching.  Any other ideas appreciated.

[Gary_C]

I would suggest you consider selling on a contract for deed, but only if you trust the buyer very well. The obvious danger is if he removes the timber without permission or damages it in any way. You probably would need a downpayment equal to the value of the standing timber just in case they default and remove the timber before you can stop them.

[FFLM]

What part of the state is the land located???

[catvet]

FFLM,

Northern Vermont, Lamoille County, Waterville.

[John Mc]

I know of several instances here in Vermont where land has been sold, but the timber rights retained by the original owner - either permanently, or for a period of time. It can be done, you just need to have someone with experienced in this to draw up the documents.

[SwampDonkey]

Why would I buy land and allow someone to have ownership of what's growing on it or under it? Seems to me it would be called a lease or rental agreement, not a sale.

[Ron Wenrich]

Because you like the particular location of the land.  Lots of land in PA gets sold without mineral rights.  Coal, oil, and gas have long been sought after and those rights have been sold a long time ago.

I've seen timber rights sold for a period of 10 years.  Usually its associated with a diameter limit cut.  They buy it, cut it, then come back right before the lease is about to expire to get whatever has grown into the size limit. 

You can probably put on any type of deed restrictions as long as it is legal.  Conservation rights are a big thing in some areas. 

[WDH]

What Ron said both times.

[John Mc]

The concept is not really that unusual. Lots of people of land in various parts of the country where someone else owns the mineral rights. A conservation easement is a similar concept... the right to develop the land is split off from the land itself.

The instances I was referring to that I'm aware of in my area are when the land was owned by a timber company. Someone wanted to buy it to build their house on, and have the forest for recreation/hunting. The timber company wanted to keep their base of land for their operation.

[SwampDonkey]

It's not done here unless it's called a land lease, no transfer of title unless it's lease to own I suppose. I've seen a version of sorts of what you guys are talking about with forest land. But, the timber company formed a sub company, sold the land to the new company and they manage it but the parent company gets the timber. Basically a tax shuffle, but two different companies on paper. Mineral rights are owned my government here and royalties due on extraction, except rock quarries and gravel pits.

I still wouldn't buy it, just for that very reason, I don't own what's there standing.

[Ron Scott]

As stated above, land can be sold with reservations for the rights to the minerals, timber, wetlands, legal drains, etc. Much of the National Forest lands in the east were obtained with mineral reservations whereby the Federal Government ownly owns the land surface.

[240b]

I'd recommend you call John xxxxx in Randolf (999 999 9999) He is a forester and really sharp. I sure he could help you out.  good luck

Please use the PM system for personal information. It's against forum rules to post other people's personal information.   admin