In this week’s episode of GEAR UP with BigIron, Mark and Ron Stock along with BigIron Real Estate Agent John Stock are diving into the current land market, discussing the benefit of selling land via auction and the value of the full-service BigIron approach. Whether you’re a seasoned investor or a first-time seller, this episode will equip you with the knowledge to make an informed decision about your land sale. Tune in to find out more and how BigIron is your auction partner!
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Transcript:
Mark Stock 00:19
Well, hello everybody. Gear up with BigIron. My name is Mark Stock. I'm here with Ron Stock, and we've got our special guest, John Stock here with us today. We're going to talk about some real estate stuff. So for anybody that's ever thought about investing, buying or selling real estate, I'm sure John is going to fill us with all kinds of exciting ideas about what's going on in the real estate market, not only today, but what's been going on the last six months or so? So without that, John, why don't you introduce yourself to the crowd? I know you've been a been a farm kid all your life, and yeah, no longer a kid, though.
John Stock 00:54
No
Ron Stock 00:54
I remember John when he was just a little bitty kid. Actually, one of my first I remember you being a baby, your dad holding you, and I remember you attending our wedding, and you hanging out with the wedding party when Kristin and they went on in a vehicle. You were too small to be going with that group of men and women, but you still went anyway. Had a good time. But I remember John ever since he was a baby, so it's just awesome that we can work with our family.
John Stock 01:19
Yep, absolutely yep. John Stock here, born and raised Humphrey Nebraska USA, on the farm. We still have the family farm. Still my brother and I still do some hobby farming as well. So yeah, that's that's us.
Mark Stock 01:33
I think that's what's very interesting and unique about what makes you a very good real estate salesperson is because you're still out there actively involved with production agriculture.
John Stock 01:46
Absolutely
Mark Stock 01:46
You're running through the field with a planter and a sprayer and a combine and,
John Stock 01:50
Yeah, I think it's extremely important being in this business, you know, to have hands on experience and all those facets. I mean, like he says, we go out there, we're managing farms. We're selling farms. We can see, you know, we can talk to these buyers, we can talk to these tenants. We can, we know
what cost production is, you know, what seed costs, what chemical costs, rent costs. We know all that stuff. So it's, it's, it's definitely a positive to help you in the business. I
Mark Stock 02:13
noticed, you know, the last couple years Ron and John, you know, we've had a pretty good, sizable run up in land valuations because of high commodity prices and and the lack of the land hitting the market. And because of that, there have been a lot of people jumping into this space, and some of those people, they don't have any ties to agriculture at all, but they just seen Gee said, $10,000 Farm is 160 acres, $1.6 million and I think they get all excited about it. How do you talk to somebody that wants to sell ground and encourage them? That experience is the most important part.
John Stock 02:56
That's just it. I mean, would you trust you know, you're going to somebody that's a seller, potential seller. You know, they're 50 to 70 years old, roughly. And, you know, they inherit mom and dad's farm, and mom and dad worked their whole life to earn enough money to pay for that farm, blood, sweat and tears. And, you know, do you want to go to somebody that just got their real estate license, that really don't have the experience? Or do you want somebody that's got 20, 30, 40, years of experience under their belt? You know, the experience along with the marketing reach that we can bring to those folks. I mean, it's second to none in the industry. So
Ron Stock 03:28
Well, John, I've noticed that lot of these startup auctioneers, you know, they're probably following the lead. They see you and Jim being super successful at selling farms, but I don't know who. I don't know of anybody that works harder than you two guys do. I mean, I'll pop in here once in a while on a Saturday, Sunday, I always find one you guys here on a Saturday and a Sunday, when I stopped by to pick something up or stop in. So it's amazing the hours you guys put in, and it shows but when there's a new startup, what I've noticed is that young man or young lady who hangs their shingle out, I'm going to be a real estate salesperson. I took the classes, I passed the test, and then they'll go out and list the farm too high. They'll list a $9,000 farm for $10,500 And doesn't that ultimately hurt that farm?
John Stock 04:11
Yeah, it creates, it makes that farm shop worn when you overprice that property. It just, it just takes you out of the market. You know, part of having the experience on the farming side, having the experience on the sale sides. Our first two years, my first two years, was in appraising. So that's all I did. I traveled the whole state of Nebraska, appraising farms from one side of the other. So that gave me a lot of good experience to go out to how to find those comparables, how to research those farms and to put values on them. So that's why, when we come out there, we got a pretty good range of where those farms are going to end up at.
Mark Stock 04:43
Well, let's be honest, guys, we all went to real estate classes to take our tests, and I still don't remember too many conversations that involved farmland real estate sales. Most of all the education that's out there is geared around residential property. And Godspeed to all those people that love to sell houses. My hat, my hat goes off to you because, you know, that's that's an important job to be done.
We don't specialize in residential stuff. We focus on farmland. And you know, John, can you take us back to when was your first farmland sale? Do you remember what that was?
John Stock 05:21
Yeah, the first one would have been, alright, right in 2003 when I got my license, would have been a gravity irrigated farm in York County. Nice little old lady owned that. We sold that farm. That was the first private treaty land sale I had. And the first actual land auction we had was 80 acres of dry land crop ground in Polk County, Nebraska, the young lady inherited it from her grandmother, fell on hard times, and she needed to get it, get it moved, and get it sold. And we worked with her, and it was a it was one of those feel good stories at the end of the day they her and her mom was sitting in the front row of the auction just crying because she couldn't believe what that farm brought that day. So that was my first land auction experience, and from then on, it was Go, go, go.
Ron Stock 06:04
Since, since then, you guys have put together so many, so many successful sales. I noticed one thing I've learned from you guys sitting in with some listing meetings with you, but you've got a very nice testimonial book. If anybody wants some testimonials, you think about selling your farm, call Jim or John. They'll send you a whole list of satisfied customers. But I've watched where all you bring into that listing meeting. You don't pressure people. You just sit down there. It's a conversation. You know, people are scared when they're thinking about selling their farm, because it's a scary deal. It's millions of dollars, and I appreciate the way you treat them with kids gloves. You walk in there with a tri fold brochure that has nothing but testimonials, no pressure. And I've noticed, after they read three or four people, what they say about you and how do you you cared for them, that the next word out of their mouth are, when can you help me?
06:51
Yeah. Yeah, the testimonials were huge for us. I mean, we learned that way early on, when we started getting all these sales, and they were success after success, we figured we might as well, you know, expand on that and, you know, get it put to paper. So at first it was, it got started with, we always sent out surveys to the buyer and the seller after that sale was done. And then we started getting these nice comments. And they turned into testimonials. We morphed into getting video testimonials the last few years. You know, whether it be right after the auction is over with, if the family's there, a lot of them come out from outside the area. So, yeah, we got stacks and stacks and stacks. I mean, if you ever having a bad day, just whip out the file of testimonials and it'll, it'll pump you back up for the next day.
Ron Stock 07:35
Nice.
Mark Stock 07:35
So you've been in business for a long time, and you said your first sale was in 2003 and now we're, you know, 21 years later, what, what have you noticed has evolved in your tenure selling farm and land, farmland and ranch land, properties? You know, it a lot of it started. Most sales back then were private treaty sales. There weren't a lot of auctions back then. Now, obviously, what? 90% of them are auctions now, so that's one thing. When the auction started, they weren't online. Now, we're online. The amount of information out there, the - a lot of sellers do a lot more research ahead of time. So I would say that
would be a big a big thing. There's a lot more knowledge of the market. So to navigate through that and get them on the right path, because some people do their research, and everybody is their own expert, and sometimes they're not, so we got to get them back to the middle of the road and get them on the right track.
Ron Stock 08:33
The thing that I noticed about sellers who do a lot of research, their number one focus is commission rate, and we're not the highest commission rate out there. We're not the lowest commission rate out there. But I remember the time when you guys sold some ground in the Leigh area for a family. One brother sold - tell us about some of those examples where somebody used you and somebody didn't use you
John Stock 08:55
yeah,
Ron Stock 08:55
and left money on the table
John Stock 08:56
Yeah, that was, I mean, one of many examples. So that one there, the gentleman he hired, like you said, it was two two neighbors. One of them hired us to sell the farm. One of them did it on their own. And at the time, I believe it was about $240,000 difference they left on the table, you know. And back in think that would have been mid 2000s probably just the first example. You know, back then, $240,000 was a big deal. It's a big deal now, but back then it was quite a bit.
Ron Stock 09:22
I remember us figuring the commission on that deal, and that first guy that sold the farm himself cost himself 20% commission. It was crazy, and he didn't pay any commission. So folks, if you're selling a farm, please don't make the focus about commission. It's about the bottom line. What? What we can get you exposing that farm to the BigIron audience.
Mark Stock 09:40
Well, I always say it's not worth the risk. It's not worth the risk not using somebody that doesn't have experience. It's not worth the risk when you use somebody that doesn't have the over 700,000 registered bidders that we have on the BigIron side. It's not worth the risk when you have the eyes. On a monthly basis on our website, over 1.5 million different eyes. These are not the same eye looking over and over again. These are different eyes every month. So it's not worth the risk. And your point is, Ron Stock that when they sold to one farm and they paid us a fee, or Jim and John a fee to sell it, and the guy that sold it himself sold it for considerably less,
Ron Stock 10:22
Way less.
Mark Stock 10:23
So we're taking the less amount and divided about the amount that it actually sold for, and that's how we calculate,
Ron Stock 10:28
20% Yeah
John Stock 10:30
I mean, why wouldn't you expose it to the market? You know, the way our marketing experts in our company work, we're basically hitting it out there. The goal is to hit every demographic at least three times during that marketing process. You know, the younger generation, obviously, social media, the middle generation, you know, you've got the Internet, the older generation, we got the newspapers and the print media. So if we can hit, you know, that buyer pool and seller pool, everything a minimum of three times through that process, that that's the key to the success.
Ron Stock 10:58
A lot of times the sellers, too, I've noticed John, they always think that the seller that educates himself, which, Gosh, gosh, we appreciate people being educated about selling their farm. But it's, I'm on a tangent here. It's almost like doing your own surgery. Just because you read a book about doing an appendicitis surgery don't mean you can do your own selling your farm. Just because you think you can sell your own farm because you've done some research. I'm telling you, folks, there is a difference. And I've seen these guys do it again and again and again.
Mark Stock 11:25
Is there a good time now to sell a farm? I mean, that's always got to be of concern. Do you see a difference in if a farm is sold in the spring or in the summer, in the fall or in the middle of winter? Have you seen Have you noticed any trends?
John Stock 11:41
You know, traditionally, you know, back in the good old days, a lot of people waited till that November, December, time frame, that was just when harvest was done. That's when you sold it. Now, to be honest with you, the way the marketing is set up, the way we do everything we do, there really isn't a bad time to sell a farm. Obviously, when you're selling stuff in the middle of the year, there's different concessions. You know, whether we have to give up cash, rent or possession issues, stuff like that, which very easily workable, but the closing still in the fall anyway. So whether you're having that auction in summer and closing in fall, or having the auction fall and closing right away, it's entirely up to you.
Mark Stock 12:16
Possession is always seems to be an issue. Have you noticed if a farm that has a tenant in place, depending on the time of year, has that affected value?
John Stock 12:27
It could it depends on the cash rent or the rental situation, you know if, obviously, if that is extremely low, that's something we'll have to give into. There's plenty of ways to work around it, whether we do the concessions where we give up cash rent to the buyer or the seller. Another way to do that is subsidize a cash rent that wouldn't be quite be high enough. The biggest thing is, when we get through
these situations where there's a tenant in place, is to plan. You know, we have to plan throughout the year. That's why it's never too early to start planning. In Nebraska, for instance, we have to have September 1 notices to the tenant. Some states are a little bit different. Do your own research. Call one of the real estate agents in one of the other states, so we can get that set up for you. But in Nebraska, specifically, it is September 1. Notice.
Mark Stock 13:08
I've always noticed, in my experience, that one of the driving forces for somebody to want to sell a farm is because the tenant has been undervaluing the rent, and return isn't there? Yeah. So a landowner still looks at their property as an investment, and now with interest rates, you know, you can get 5% on a CD, and if they're only getting 3% or less, or 1% if you factor in the real estate taxes, yeah, that's their inspiration for wanting to sell. So I guess if you're a tenant out there, and if you want to make sure that you can secure your land to keep farming, it always be paying fair market rent. That's my comment on that. But Ron Stock, you had a question?
Ron Stock 13:51
Five guys, if you wrote down before a sale, if you had the seller write down the name of five people that they think going to buy their farm. Most of the time, it's not those guys, right?
John Stock 14:02
They might get lucky with one or two, but yeah, yeah.
Ron Stock 14:05
So most of the time, my point is, you can't, folks, you can't predict who's going to buy your farm. You say, Well, I mean, there's been a lot of times where people have sat us down, said, The reason BigIron is here because we think we want to bring the regional audience to your sale. And that really does work. Oftentimes, the investor is not the buyer, but he's the co-bidder that pushed the push the tenant to pay more or push the neighbors to pay more. So it's hard to predict what the sale price is going to be. Nobody can do it, except for the market.
Mark Stock 14:34
So you're leading us. A great segway, since I'm going to ask both of you guys been doing this for a long time. We have seen commodity prices dip. We have seen interest rates rise, but we still haven't seen from my perspective, land hasn't fallen out of bed yet. Will it?
Ron Stock 14:51
Well John and I were talking this morning, and he's got examples of it going down, especially as you go out farther east. In eastern cities, go ahead and comment. On that?
John Stock 15:00
Yeah, there. We're starting to see a couple spots that are getting a little softer, but it's gonna, I mean, commodity prices backed up quite a bit from a year ago. Interest rates are still high. You know, they're promising they might drop them a little bit here in the near future. But who knows about that? But, yeah, we're starting to see a few spots get a little bit lighter, but there's still the amount of so far, there's not a lot of land on the market. So I think that is what is really propping this up. So the quantity is not there.
Mark Stock 15:29
The flip side of that, if I was to do a little follow up, is if it has backed off from the peaks and the highs, if you sell it today, and it's a little bit less,
John Stock 15:38
You're still nowhere near where we were
Mark Stock 15:40
Not even close
John Stock 15:42
Three or four years ago.
Mark Stock 15:43
Still, it's still a good number, so you had a little bit of a correction. Plus you can also take that money and put it into something that might get you a 5% return and recover some of that five, six or seven or maybe 10% loss. After one year, you're back in the saddle again. Anyway,
Ron Stock 15:59
This is the same downturn. We've all seen the downturn from 13, 14, 15, then it went down. This would be my third downturn, because I lived through the early 80s. In the late 80s, I saw that downturn as a young as a young man. But basically it always happens the same. The land goes down. People call us up in droves, wanting to sell their farms. And they say, can you, John Stock, can you still give me $9,000 an acre? And you say, No, but I can get you over eight still, and we make you feel better about your decision to wait, because, you know, it could be, to your point, 40% less, which is what's five years ago, ground was 40% less than it is now. So backing off three or four or 5% folks, it's a good time to sell. Yeah, and it's a coming.
John Stock 16:43
Just because we're not at the peak does not mean we're anywhere near low. I mean, we are still at very, very strong values. Yeah.
Mark Stock 16:49
Is there anything a landowner can do today that will help their farm sell better? You know, like machinery. You can wash it, you can get the oil changed. What can you do to a farm to get it better?
John Stock 16:59
When we're when we're coaching people that, you know, rent out their farms when they build in those leases, make sure in the lease it's built in there that the tenant cannot remove this, the stover, the corn stalks or the bean stubble. That's one thing. But other than that, you know, just making sure the ditches are, you know, make sure it looks good, you know, make sure the ditches are mowed. There's not big weed patches everywhere, just little things like that.
Ron Stock 17:21
I can add something to that, I think too, besides making the farm look good, it's getting it out there for an extra two or three weeks, even a month longer, rather than sell it real quick,
John Stock 17:29
Longer on the market.
Mark Stock 17:30
My advice would be to let your real estate agent know well in advance, because what I've noticed is, if you have a video of a crop growing, it looks a lot better when just have corn stocks out there. So if you start way in advance, they'll drone the farm with corn coming out, or beans growing, or alfalfa nice and green, and then they'll show it when it's harvesting, and you'll make that little history. So that seems to help. I'm going to jump into the recreational side of real estate. You know, you hear a lot of folks that always say, Geez, we got this river front here. We got this pasture with a bunch of trees, and there's some big deer out there. What experience have you both had in selling recreational properties?
John Stock 18:11
You know, there again, too, it ebbs and flows. The Market on recreational property right now is probably on a little bit of a dip as well, just because a lot of those guys that buying that ground are the investors. They are the city folk. They are the people that like to go, you know, the weekend warriors. And I think a lot of those guys are looking at the CD rates, and they don't, you know, they're, you know, how do you weigh that? You know, do I take the money out of the savings nest, or do I go buy a piece of hunting ground and make the wife not so happy? So you gotta, you gotta, kind of weigh those things right now. So that's what we're seeing on the stuff that we have right now. On the recreational side,
Ron Stock 18:47
I agree with him 100% you know, the when I used to be more into the managing the agents, they'd come to me and they'd say, the agents come to me and say, Ron, I just listed some Platte River ground for 6000 an acre. And I'd say, oh my gosh, I go, Well, you know, does it have income producing? Because it's got to have some income producing, if it's all river with grass and trees around it, without a plot of farm ground that can pay the taxes, at least. I mean, that helps immensely.
Mark Stock 19:12
People that they like to spend their dollars recreate. And say, if they go to a baseball game or a concert or football game, those tickets are expensive. And I've seen some folks, and we have helped many folks landowners lease out hunting rights. Because if you're going to go to a professional football game, a Kansas City Chief game, nosebleed tickets are going to cost you north of $200 a ticket. So you had two people, that's 400 bucks. If you go hunting for a couple days, you know, people have been putting out there 3-4-$500 a gun every day, and it seems they're getting it. Do you guys get involved with any of that?
John Stock 19:52
We do touch on it a little bit in the fall. I know you're more in depth than some of that stuff, Ron, but yeah, we do see a little bit. With that. If you want to talk about your experience.
Ron Stock 20:01
It's a balance. You know, the challenge with the whole thing is, you have some local hunters, some friends. We all have friends in every county around here, they go. One guy called me after I leased out some hunting rights in Wheeler County. Goes, Ron, you ruined my free hunting. Now my neighbor wants me to pay him, you know. So it is one of those things. But if you have some land that's got a lot of grass and trees, give us a call. We're willing to help you. It's not going to be our specialty at this time, but you know, it is definitely is some income producing.
Mark Stock 20:26
Or if you're looking for hunting,
Ron Stock 20:28
Or if you're looking for hunting property, what we'd rather do, rather than lease it to you. We'd rather sell it to you. That's what we'd rather do. So John, before we wrap this up, I would be remiss if I didn't tell you about ask you about your family Mindy and your kids. Tell us about your personal life a little bit.
John Stock 20:42
Yeah, no, everybody's doing good. I think, you know, everybody at my stage of my life is it's going faster than you like it to blink of an eye and those kids are growing more and more and more. You know, Mindy and I've been married quite a few years. We got three kids.
Ron Stock 20:54
How many years have you been married? Quick!
John Stock 20:56
Oh, 17, I believe this March.
Mark Stock 20:59
When is your anniversary date?
John Stock 21:01
April 15th
Mark Stock 21:03
What year?
John Stock 21:04
'07
Mark Stock 21:04
Mindy is so happy right now.
John Stock 21:09
So no, it's, it's busy. You know, the girls are in volleyball, one of them's in softball, Jake's in baseball and football. Already, it's a, it's a fun stage, but it goes, blink an eye. I don't know where the last 10 years went.
Mark Stock 21:23
Yeah, well, and I, I bet you still have some open dates, if you want to list some more farmland.
John Stock 21:27
Absolutely, we're meeting people right now all the time. We have a lot of proposals out there. We're saving dates for folks trying to plan for those late summer, fall auctions, winter auctions. So absolutely, give us a holler. Love to help you out. That's what we love to do, guys. We love to help families put put them together.
Mark Stock 21:43
And have you seen a shift to more private treaties over auctions or is still anauction the best way to go?
John Stock 21:49
Still auctions. Auction is still the king when it comes to maximizing the dollars that you want out of that farm,
Mark Stock 21:55
Especially when you expose it to enough people
John Stock 21:57
Absolutely correct.
Mark Stock 21:58
Any parting shots, John?
John Stock 22:00
Not really like I said, it's been fun working for the guys all this time. Been a great ride so far. Hopefully we can keep on keep on rolling.
Ron Stock 22:08
Jim and John Stock, your farm and ranch specialist helping you in all farms in Nebraska and surrounding states.
Mark Stock 22:15
There you go. You've got a Gear Up episode and a plug right at the end from Ronnie Stock. And tell you what. We have got some more exciting episodes coming down the line. If you like this podcast, please click that like button on your screen and tell your friends and your neighbors to find this podcast wherever you find all the information you're looking for that's Gear Up. Thank you very much.
