Discretion is a hallmark of large business transactions. Think of all the NDA signings that occur on a daily basis on large transactions. Even in commercial real estate, very few people know what properties are changing hands and to whom. It’s extremely uncommon for a commercial broker to brandish their past deals and successes. These are all held closely on private platforms and kept quietly locked down in a small network of people. Your average person doesn’t need to be able to call and tour a ten story office building.
So why are large ranches any different?
Somewhere along the way, ranches got lumped in with residential real estate. For many parcels, that’s just fine, and they need exposure in the more common streams. But think about properties (of which there are many) that exceed $5m, or even $50m. They show up on the MLS or Lands of America right alongside the small stuff. Does that make sense? To us, it does NOT.
Re-thinking this level of property
Most land and ranch brokers are stuck in a few basic marketing channels. There are Lands of America (also Lands of Texas, they’re the same thing), MLS, a broker’s own website, social media (for a few), and a glut of magazines. That’s it. It’s not refined, it’s a scatter-shooting effort that’s as broad and unfocused as potato-chip marketing. The net results are pretty negative.
- Tire-kickers. People who are not pre-qualified can have their agent call, and they can come tour your ranch. I don’t know about you, but that can get old after 5-6 times.
- You’re commoditized. People just see a few pictures, acreage and a price. There’s nothing special or unique about your property because it’s lumped in to the same basic template as everything else. There’s no room to tell a unique story.
- You have to put a price on it! In commercial real estate, people come in and make reasonable, market-related offers. Sure sellers provide a range, sometimes, but it’s more about a meeting of the minds than spitballing values. In the end, you will both develop appraisals in sync rather than starting a bid-war or flip-flop negotiation. One of the best ways to kill momentum on a property is to throw out a high price, then start backing down. People assume there’s something wrong with it.
There’s a new platform that we are on the ground floor of testing. Landright.com is an off-market, private listing platform for people selling ranch land in excess of $5m. The goal is to limit the traffic to just highly interested, highly qualified prospective buyers. We want every property to have its story told in a more full way, and a value to be created out of realistic market conditions rather than just conjecture.
Prequalification on both sides
Every prospective buyer is screened. Their broker is screened. They are required to sign an NDA for the majority of the properties. Interviews occur on our end before we even think about planning a tour. In short, we don’t want a bunch of traffic on the ranch. Ideally, it would be only one to two ranch visits in total before a transaction is in process.
Every Piece of land is screened as well. The goal is to have a repository of the finest properties in Texas, so people know that when we have something, it’ll be good. In some cases, we will even help the owner identify ways to modify, update or improve the property to meet our criteria. This is all about quality, not quantity. It’s a perfect fit with our purpose, high character people connecting to high character property.
No pricing, yet
We don’t require a list price. We’ll talk about the acreage, the nature of the land, the amenities and improvements first. These are the important things. We can keep a hidden “price” in the back of our minds, but we want to create interaction first with people who really usually don’t care about price, they are looking for value. So that’s where we start, what’s the value. Then from there, once there is traction, appraisals and comps allow the buyer and seller to sit much closer to the same side of the table as they discover a real market price based on value.
The “right” exposure
Add these together, and you have something that’s not for everyone. But that’s what these properties are, aren’t they? These are supposed to appeal to very specific, sophisticated buyers who have the means and vision for this level of a transaction. Large land exchanges do not need to be exposed to the public eye. They need to be quietly delivered to a small group of engaged and likely buyers. Our past experiences have already done a lot of this work. Each of us who have engaged ranch brokerage at the higher levels has a powerful list of potent clients. Combine these lists together with few other high character people on the Landright network, and you’re shooting new listings to only the right people. For this level of transaction, this is the perfect amount of exposure, and no neighbors calling with lowball offers when they see the sign go up. In this situation, there are no signs, no MLS, no tire kickers, no lowballers. It’s land done right! We agree!
This isn’t for everyone. There are still plenty of properties that benefit from a traditional marketing approach, and it’s good to be in those channels, practicing the moves that help us stand out amidst the noise. But it’s a nice thing to have an alternative. It’s essential to be able to offer something of value to our clients, and this is one of those services that continue to excite us all. A major thanks to John Gould and Marc Schmid, partners in Landright, for taking the time to paint the vision for us. It’s been an incredible conversation and we are currently working on rolling out a few properties now through this platform. We’ll be reporting back with what we find!