|Rising Tide Raises All Ships|
In today’s ranch and land sales industry, one of the most beneficial aspects is understanding when to reach outside your comfort zone to be the source of the source. This is one of the strongest aspects and benefits of being an active member of the Colorado and National RLI.
As our market is continually assaulted by what I call the box-on-box marketing companies, the companies scraping MLS systems Nationwide, the companies that can formulate comp data from like properties in like neighborhoods in like communities, formulating a value, and propagate that data to outside buyers, without ever understanding the market, the region, or the client. These companies are a direct and real threat to the typical realtor selling homes in such communities in similar neighborhoods etc.
Ranch brokerage has been a somewhat protected type of brokerage from these scrape and propagate industry disrupters. We who serve the ranch and land brokerage work daily with such a divers set of data points that no box-on-box comparable data will ever represent what ranch and land has to offer. The individuality of our profession is what protects our industry, and it is also what demands such a true level of professionalism. To protect and service this industry and these types of properties, the knowledge we put forth is crucial. Knowing and understanding just the basics in the ranch and land industry is typically enough to get you into real trouble. That is why knowing when you are out of your level of understanding is truly one of the biggest obstacles to being successful in the ranch and land sales industry. We are confronted by issues such as minerals, water rights, wetlands, zonings, weather patterns, moisture levels, historic water calls, migration routes, conservation easements, soil types, plant species, ingress and egress, accretion and evulsion, and today, new to our market, is the simplest of nightmares: septic inspections.
Both National and Colorado RLI truly drive a pursuit of education, and drive to raise the level of knowledge, understanding and concepts of land sales. These entities are part of the very few places as land professional we can search out others in our industry who either have the knowledge or have the pathway to the person or entity that can help us better resolve a host of issues on every deal we do.
Basically, Colorado and National RLI are a direct pathway to a “rising tide raises all ships.” Each of us has a great deal to learn and knowing where to go for help is by far our strongest asset. To me it is simple, and I believe what makes RLI the strongest in the industry is a personal push from our members to be ethical, to work hard, to learn more, to drive to be better, and most of all, being willing to check your ego at the door and help when possible and ask for help when needed.
Dan Murphy, ALC
|Annual Ranch Tour|
|The Chapter’s Ranch Tour held last month in the surrounding area of Glenwood Springs was a huge success! Many thanks to Joey Burns, ALC, who along with help from his family, brokers in his office and staff coordinated the event. Thanks to those brokers who had properties on tour: Jack Pretti, Rue Balcomb, Cheryl Chandler and of course Joey Burns.|
|September Meeting in Grand Junction|
Join us Thursday, September 9th for the Chapter membership meeting, marketing session and networking reception/Cowboy auction.
Book your hotel room nights for the September 8th & 9th at the Courtyard Grand Junction, $120/per night. Make sure to check and change the dates on the reservation for the nights you need. Last day to book your reservation is Monday, August 9th!
Friday, September 10th Education Session, 8:00 to 11:00 am
Do you run for the hills when you see or hear about environmental impacts, conservation easements or historic buildings on a property? Too often considered deal-killing liabilities, these issues have morphed to become profit-making vehicles that will foster deals and attract clients.
Learn the real scoop on how to handle environmental issues to protect the seller, buyer, and the brokers.
Historic landmarking can also be a bit intimidating but will unlock hidden pots of money. If you know how to advise your sellers and buyers, a ranch with historic buildings can provide great financial value to either the buyer or the seller.
If you are the one in the know on these three issues, you can provide the best service for your clients and turn a deal from lose-lose-lose to win-win-win!
|Dairy Cows & Technology|
|Quail Ridge Dairy, Fort Morgan|
RLI Colorado Chapter member George Harvey forwarded this article and thought it would be of interest to our readers. Much to my surprise when I opened it, I have been there! The dairy farm in the article is the one many Chapter members visited during our Agricultural tour held in July 2014! It was a first-class operation at that time, and based on the article it still is. Way to go Mary Kraft! Could an Agricultural tour be in the Chapter’s future for 2022?
|Thinking of Buying A Ranch?|
|Use A Conservation Easement to Effectively Reduce Your Purchase Price|
Thanks to a bill that was passed by the Colorado General Assembly in early June and signed by the Governor on June 30, 2021, landowners can get a much bigger reward for conserving their farms and ranches with a conservation easement. A conservation easement is a permanent restriction on how you can use your land and it typically prevents subdivision and restricts the amount of development that can happen on the land.
When someone agrees to make a gift of these restrictions through a deed of conservation easement, there are a handful of financial benefits they receive. The Colorado State Income Tax Credit is the most generous and it just got even better! If you buy a ranch that is worth $10M and you agree never to subdivide it and to only build one house and agricultural outbuildings on it, your appraiser may determine that you could only sell it for $6M after a conservation easement that limits its use. In this situation, you have given away $4M in value by making those restrictions ($10M value before the conservation easement - $6M value after the conservation easement restrictions = $4M conservation easement value).
Prior to this change that came about through Colorado HB21-1233, a landowner would have earned just over $2M in state income tax credits. Now, the same landowner would earn $3.6M in state income tax credits – a huge increase!
Once the landowner receives these tax credits, they have several options of what to do with them. First and the best one is to use the credits against their own state income tax bill. The credits are good for up to 20 years so it pays to talk to your tax advisor about how many you can use in the upcoming years. Second option is to get a refund of up to $50K in any years that Colorado declares a budget surplus. This has happened sporadically over the last two decades, but the projections say that 2021 is likely to be a budget surplus year. The last option and the one most people choose to use is to sell all or some of their tax credits to a buyer for cash. If a landowner sells through a tax credit broker, they will likely receive approximately 85% of the value of the tax credit. The buyer purchases at a discount and the broker fee is included in the 15% reduction.
HB21-1233 made a handful of other changes including allowing water entities to create conservation easements and streamlined the program so it is easier for buyers and sellers to use it. If you have a buyer who is balking at the price of a ranch or fell in love with one that is a bit outside of their budget, a conservation easement might be just the solution to help them to fund their purchase if the buyer never wanted to subdivide or densely develop the land anyway.
If you or a client if yours is interested in learning more about this program, don’t hesitate to call Ariel Steele and she’d be happy to talk to you about your specific situation. Her phone number is 303-827-5851 and email is email@example.com.
The nominating committee is currently seeking candidates who would like to run for the 2022 Chapter’s Board of Directors . If you are interested in serving on the board, contact Maggie and she will forward your information to the Nominating Committee.
Election of officers will take place at the Membership Meeting on Thursday, September 9th.