The last five years has seen a trend developing in the real estate market for Okanagan orchards and vineyards.
RE/MAX REALTOR® Jerry Geen of ‘Team Geen’ says there has been a shift toward some farmers trying to sell their own properties.
“It began five years ago when the recession started, and has been growing slowly ever since,” says Geen. “I think the main concern is, first off, the idea of paying commission, and the perception that if they are saving the commission they will get more money in their jeans if they sell privately.”
In fact, the opposite is often the case.
“There are several dangers,” says Geen. “First of all, a very skillful buyer with good negotiating skills may well convince them to take an offer five, 10, even 20 per cent below the market value, and I have seen this happen a number of times recently.”
In one case, Geen saw a property sold well under the market value, and the owner sold well over $100,000 below the true market value of his property.
“You think you are saving money,” Geen says, “but the reality is, with all these private sales, we are seeing a lot of sales that are skewed away from the reality of the market, both on the high side and the low side.
“It could be a fair bit of money down the drain.”
Geen grew up on a farm in Ellison, and his family has been farming in the Okanagan for more than a century. The Geen family started farming in 1904, and continue to farm the area today.
Geen himself has been selling farm and acreage properties for 11 years now, and in that time has completed more than 140 transaction ends related specifically to farm and acreage.
I really enjoy dealing in farm transactions because it’s what I grew up with, what I know, and I really enjoy dealing with the farm community,” he says. “They are very grounded, genuine and friendly people, and it’s a big part of my enjoyment of this work.”
Geen’s combination of hands-on farm experience and the training of a licensed REALTOR® gives him a deep insight into the market.
“Dealing with farm and acreage properties is really a specialty product, and it’s important to work with a REALTOR® who understands the intricacies of that kind of transaction,” he explains. “It has all the complexities of a home sale, but with the added complexity of a commercial sale. You’re not just selling a property; you’re selling a business.”
For example, Geen says there may be an issue of who gets the profit from the current crop in the orchard, or pricing may differ because an orchard is planted in lower value apples, or because the irrigation system needs substantial work. For that reason, having a licensed REALTOR® navigating the deal can save both on dollars and on potential risk.
“There are always legal hazards in these types of sales,” Geen says. “If you unwittingly misrepresent the facts about your property, like maybe you forgot to disclose something, then a legal recourse could come your way, which could be very expensive, very time consuming, and very stressful.
“For both the buyer and the seller, having a REALTOR® knowledgeable about what you need, leaves you to do what you do best, which is growing crops. Whichever side you are on, you want a trained negotiator working for your best interest.”
At the buyer end, one advantage of working with a REALTOR® is market knowledge.
“They may know farms better than I do, but a REALTOR® dealing with a lot of farm and acreage sales understands all the nuances of the properties and is aware of what sellers are contemplating in the near future, which is not available to the general public,” Geen says. “REALTOR®s are aware of the current mindset of farm sellers and the other farm buyers, and it can be to your benefit to have that knowledge.”
Conversely, he says, “On the selling side is the extensive marketing that goes into marketing the property across Western Canada and even worldwide.
“In the 11 years I’ve been in the business I’ve learned a lot about marketing that I certainly didn’t know when I started.”