1. Marketing Fundamentals  By understanding the critical characteristics of the market place, the agricultural land professional can create the most effective property presentation. 5-1

2. Objectives  Systematically study a property’s attributes  Main categories of agricultural land use  Difference between a market analysis and appraisal  Reading and interpreting property’s legal description  Using mapping resources to analyze property  Data needed to properly analyze property 5-2

3. Systematic Property Analysis  Land market professionals increase market efficiency  Traders need only to have access to information  Professional land broker save time, money, and reduces risk  Land uses vary from farming to grazing  Broker must refine list of potential uses  Uniform Standards of Professional Appraisal Practice (USPAP) 5-3

4. Typical Agricultural Land Uses  Dryland Farming  Irrigated Farming  Grazing  Horticulture (orchards, etc.)  Timberland  Recreation/Conservation preserves 5-4

5. Group Activity 5-1 5-5

6. Potential and Limits  Good and bad features of its location  Location fixes land  Constrains the physical potential  Impacts practical land uses  Social influences further define property  Effective broker anticipates questions 5-6

7. Potential and Limits (cont.)  The broker focuses on the most prevalent uses  Farming and ranching practices vary widely  Shifts occur infrequently  Broker must know technical aspects of farming  Broker must know technical aspects of ranching  The quest for expertise is never ending 5-7

8. Potential Limits (cont.)  Participants search the market  An analyst must monitor sales  Identify important aspects of properties sold  Generate an estimate of income producing potential  Ignore income potential from recreational operations  Must know about agricultural productivity 5-8

9. Potential Limits (cont.)  Must know about government programs  Must know about potential wildlife habitat  Convert physical and economic factors  Consider the cost of improvements 5-9

10. Property Identification (Legal Description)  Unique legal description  Rectangular survey system – System of perpendicular survey lines – Territory divided into townships  Metes and bounds system – Describes the tract in distances and directions – Many contain small flaws 5-10

11. Example of Metes and Bounds 5-11

12. Group Activity 5-2 5-12

13. Organizing the Facts  Maps are essential to analysis of property  Physically inspect the property  Inspect improvements  Obtain attractive photographs photographs  Locate and note condition of drain tiles  Cover all physical characteristics 5-13

14. Organizing Facts (cont.) ò Acreages of: á All soil classes (I-VIII) á All dedicated uses (cropland, grazing, etc.) á Typical crop rotation (wheat, corn, soybeans, cotton, peanuts, etc.) á Easements or other land use limitations á Varieties of orchards or vineyards  Timber in each stage of growth 5-14

15. Organizing Facts (cont.) ò Buildings and their conditions á Improvements to the land á Installed drain tiling á Terracing á Roads  Lakes  Mineral rights and water rights 5-15

16. Organizing Facts (cont.) ò Proximity to important services á Schools á Cities and towns á Agricultural markets ò Property financial data á Income information á Government payments received á Lease terms (right of first refusal?)  Normal property tax and potential for a roll back 5-16

17. Organizing Facts (cont.)  Maintain specific property-related data  Maintain general property-related data  Assessed values and tax rates should be monitored  Farm Service Agency (FSA) local historical production  USDA Economic Research Service (USDA/ERS)  Monitor breaking new through periodic publications 5-17

18. Module 5 - Review  Understand how to systematically study property attributes to establish its potential ò Potential property uses ò Constraints on property ò Anticipate buyers wants ò Monitor sale prices, income potential, and costs 5-18

19. Module 5 - Review  Know the main categories of agricultural land use ò Most agricultural activities fit into one of six main categories 5-19

20. Module 5 - Review  Explain the difference between a market analysis and an appraisal ò State licensed professional appraiser ò Uniform Standards of Professional Appraisal Practice (USPAP) 5-20

21. Module 5 - Review  Understand how to read and interpret property legal descriptions ò Rectangular survey ò Metes and bounds 5-21

22. Module 5 - Review  Know which mapping resources will assist in analyzing the facts about a property ò USGS ò NRCS ò FSSA ò Local assessor's office 5-22

23. Module 5 - Review  Understand what kind of data is needed to properly analyze the property ò Soil types ò Physical features ò Establish tax-related issues 5-23

24. Self - Assessment Questions  The major categories of agricultural land uses include all of the following except for  Important property use-defining physical attributes include  A legal description that refers to the NE 1/4 of the NW 1/4 of the SE 1/4 of section six 5-24

25. Self - Assessment Questions  A metes and bounds legal description  GIS, DeedPlotter, and ESRI  Data required for a complete market analysis includes 5-25