Buying land from a large timber company

livemusic · July 02, 2019, 05:28:09 PM

Weyerhauser owns 160 acres of southern pine plantation next to mine that I would like to have. I'd buy between ten acres (that is contiguous to and part of the 160 but juts out from the rest of the 160 acres and joins mine) and all of it, depending on the price I could get it for, if I could get it at all. I have always tended to think it would not be possible to buy land from a large company like that without paying sky high price, but I note that a man bought a tract close to his and built him a house and cleared a pasture. I guess he paid enough!

They just clearcut this 160 acres, you would think that would diminish the value a lot. They also have not yet done anything else to it yet that I can see. I heard they plan to replant it this January. This land is not flat but does not have any big hills, kind of rolls a bit and has a hardwood draw that takes up about a tenth of it, acreage-wise. They haven't cut that yet, I guess they just left it. The draw is not more than about 140 feet wide down the tract. Their tract has good road access, there aren't any problems associated with it.

They also have another forty acres that is about 75/25 pine to hardwood that is in the next section. It's about a half mile from this other tract. I might would buy it, too, if the price isn't crazy high. Part of it is mature, part needs thinning. I don't care to own this forty as much as the other.

I also had a rural land realtor tell me one time that they would, indeed, sell land if the price is good enough... said something like if the price is such that a sale dollars up such that their ROI on the tract is x-amount, they are kind of like bound through duty to shareholders to sell it. Now, what that magic price is, I have no idea. I wonder would someone at their company be nice to me and tell me what it would take or be standoffish or what. Sure would love some comments on what you guys think.

Claybraker · July 02, 2019, 05:54:24 PM

I've bought land from a Timber Company (Ga Pacific) in the past. My partners and I bought it subject to a timber harvest, they left 10 trees /acre when they cut it, which is about perfect for aesthetics and natural regeneration. Timber companies buy and sell land all the time.

btulloh · July 02, 2019, 06:00:10 PM

X2 on that. Around here they've been unloading and it's been a buyers market. Find a seasoned appraiser you can trust.

nativewolf · July 02, 2019, 06:01:56 PM

Absolutely they will sell it. You need the local forester to be on your side because it's going to be his call in some ways. It will all be about price, look at what local cutover is going for in your area. They'll want at least that much. The hardwood is going to be part of a stream side exclusion zone, buffer zone, etc. Names vary but it means that it is wet and meant to protect water quality. Frequently this is the only hardwood around after the plant pine con game has come through a region. There can be $ in the buffer but harvest is normally limited to x % of biomass/year or something sometimes only a tree or two per acre. Don't give the hardwood any value in your negotiation with W though...call it all cutover.

livemusic · July 02, 2019, 06:51:02 PM

Quote from: btulloh on July 02, 2019, 06:00:10 PM
X2 on that. Around here they've been unloading and it's been a buyers market. Find a seasoned appraiser you can trust.

I don't know how to approach this but I could consult my friend, the rural land realtor. He sure knows more than me about this!
Regarding "find an appraiser you can trust," do you mean to just talk to an appraiser or hire him to get an 'official' professional appraisal? What does this approach/appraisal serve, is that just for my own knowledge or would I use that to make an offer? And show the appraisal to them?

WDH · July 02, 2019, 09:11:08 PM

I worked for Weyerhaeuser for many years and spent a lot of time in Louisiana, both in the north and south part. They have a land sales group there and I am sure that they will treat you nicely if you call and inquire about the property that you are interested in. They buy and sell a good bit of property each year, and I can assure you that they know the market and are professionals. That does not mean that they will sell this property to you, though. They have a process for determining what they want to sell and what they want to keep and grow timber on. Your property of interest might not be on the sales list. The only way to find out is to call them.

btulloh · July 02, 2019, 11:15:30 PM

Quote from: livemusic on July 02, 2019, 06:51:02 PM
Quote from: btulloh on July 02, 2019, 06:00:10 PM
X2 on that. Around here they've been unloading and it's been a buyers market. Find a seasoned appraiser you can trust.
I don't know how to approach this but I could consult my friend, the rural land realtor. He sure knows more than me about this!
Regarding "find an appraiser you can trust," do you mean to just talk to an appraiser or hire him to get an 'official' professional appraisal? What does this approach/appraisal serve, is that just for my own knowledge or would I use that to make an offer? And show the appraisal to them?

Your rural land realtor friend can be a good resource and help with comps in the area. Probably knows some appraisers too. To make an offer on cutover land you really need some guidance because so many things affect the value. Just being clear cut means it's at it's lowest value and will not provide any timber to the present owner for a long time. First determine if they are open to selling that tract as WDH said. I'd then make a fair offer but slightly below the appraised price. Maybe they accept, maybe they counter. The dance begins. Don't rush the negotiation.

barbender · July 02, 2019, 11:31:53 PM

Potlatch has been steadily selling off their timberland holdings in MN. As someone mentioned, one the property value hits a certain point, they get a better return selling it versus growing timber. Outside of Potlatch, there are a couple more large industrial forest owners- UPM Blandin, and MOLPUS Timberlands. UPM signed a huge conservation easement a few years back with the state of MN. They got a big cash payment to put all of their land into the easement. It can only be sold as one piece, no dividing, must remain open to the public for hunting, fishing, etc. and has to have a certain amount of annual timber harvest. Molpus is an investment group that purchased all of the Boise paper mill's timberland assets. I was told by one of the foresters that a lot of the money is investments from pension funds. I'm getting off topic I guess, just a little of what goes on with timberland in MN😊

WDH · July 03, 2019, 07:00:33 AM

I would not get an appraisal done until you find out if it is for sale. If it is not, you would waste your time and money.

Skeans1 · July 03, 2019, 07:43:07 AM

One thing we were told with Weyco is everything is up for sale or trade and right before the end of the year is the best time to buy from them.

nativewolf · July 03, 2019, 08:06:18 AM

Quote from: WDH on July 03, 2019, 07:00:33 AM
I would not get an appraisal done until you find out if it is for sale. If it is not, you would waste your time and money.

Absolutely, frankly I don't see the need for an appraisal- in fact I view them as less than helpful. Either they are selling or not. If they are selling they know what price they want, they may ask a bit more and maybe a bit of haggle room but the price they want is going to determine the OP ability/willingness to buy. Appraisers at this point hurt sales more than they help sales because the OP already knows he wants to buy. The question is only, can he afford it. Good news, it is likely for sale.

btulloh · July 03, 2019, 08:28:13 AM

Nativewolf has a good point. In the end, it only matters if they want to sell and at what price. The price you're willing to pay may be higher or lower than market. That's why market prices change and previous sales are not the driving factor. I would want to know the market value though, even if I was willing to pay more. The realtor friend may be all the help you need. It all starts with the timber company though like WDH said. Keep us informed and good luck.

Texas Ranger · July 03, 2019, 11:14:06 AM

From my limited experience in Texas with company land sales, there is no negotiation. Their way or the highway.

livemusic · July 03, 2019, 04:21:58 PM

Since I adjoin their land, do you think I should inquire or should I get my realtor friend to inquire? Do you think they would jack it up on me since I adjoin them? A tract of 160 acres means NOTHING to them. They own 13 million acres! They certainly don't care if 160 acres gets sold or not.

Down here, they "bed" pine land quite a bit and that ain't cheap and they haven't done it yet, and they have not replanted. So, now seems the time. I heard they were going to replant in January. I don't know when they would bed it if they are going to.

btulloh · July 03, 2019, 04:30:00 PM

That's a good question. My opinion is that it would be better for you to inquire. I'm curious what others will say about this.

btulloh · July 03, 2019, 05:03:18 PM

Real Estate :: Weyerhaeuser

Looks like they encourage contact. Says land sales are through local brokers. In that case it may be better to have your friend involved. Since there will be a commission involved, he may as well get half of it.

btulloh · July 03, 2019, 05:26:16 PM

Since they have a mechanism in place, I would bet that submitting the form on that link would go pretty quickly to the broker for your area and that broker would respond to you (or your broker friend) by Monday. It shouldn't take too long to figure out if the tract was for sale. In any event, the broker would make contact because he smells a potential sale. Just my guess. :D

Hooterspfld · July 03, 2019, 06:54:07 PM

As a part time real estate agent, I would make sure you and your real estate friend are on the same page as far as commissions go. If you are asking him real estate advice be aware that, that, is his profession and commissions are the only way agents receive compensation. I often times have friends ask me questions during the purchasing process even though they are working with another agent. I usually help out as much as I can, but all the while I'm asking myself if they want my professional advice why are they working with another agent. My advice would be to discuss the property with your friend in a professional setting. If he handles very many land sales, he should be able to sit down with you and provide you with comparable sales in the area. With that information available you can decide on an appropriate offer to bring to the timber company. At that point if they accept, you will feel good knowing that you paid a fair price in your area based on prior sales and if they comeback with an astronomical figure you can pass, knowing they're not going to get rich off you. Your friend will receive a commission on the sales price for the information and work he will be handling on your behalf. (I would make sure that when your agent provides you with comps, that they are truly comparable. You have a strong knowledge of timber value, make sure he does as well considering that represents a considerable portion of land values.)

WDH · July 03, 2019, 08:45:32 PM

The local "brokers" are actually employees that have their real estate license. On the Company end, there is no commission to be paid. What Parish are you located in?

Hooterspfld · July 03, 2019, 10:03:49 PM

WDH what you are referring to is a situation called transaction brokerage. A transaction broker does not represent the buyer or seller. Instead, s/he acts as a neutral resource to help both parties complete a sale. In this case that "local broker" is being paid by the lumber company through a salary.

Dealing with a transaction broker does not preclude the buyer from retaining a buyer's agent. A buyer's agent is a realtor that represents the buyer in a single agency. This brings back the fiduciary relationship and the interests of the buyer in their best interest. I would highly advise discussing these different relationships with your realtor friend and then decide if you want to proceed without an agent or if you want to depend on a buyer's agent to help you negotiate the transaction.

At least that's how it would work here in Missouri where I practice real estate.

timberking · July 05, 2019, 12:49:49 PM

Davis-DuBose from Little Rock is handling their sales in Ark. and may know something for La. Did find they were holding timber deeds on any stands 20 yr. old.