Distrust, and Verify

  • By Jason Cochard for Land Academy

                 On my first mailer, I got a willing seller for a very large acreage property that was an island inside a larger ranch. It was too expensive for me to buy, it was too rural for me to be confident about sales price, it had been acquired by the seller at a tax auction, and it seemed to be landlocked with the only logical buyer being the owner of the neighboring/surrounding ranch. Everything being against me, I didn’t even know enough to walk away from the deal, so I optioned it and started to find a buyer for it.

                 On the first call with the seller, he told me that he had already spoken to the neighbor, and had found out that she didn’t have the money, so it would be no use if I tried to contact them.

                 So I didn’t. Instead, I started down the path of marketing it directly to the public. I made an epic drive from Los Angeles to Wyoming and back, to take some drone photos myself. Part of what attracted me to this business was finding cool gems in places I would have never traveled to otherwise, and since I’m already a filmmaker, shooting my properties is something I can do myself, whenever time permits. On this one, I knew it was a long shot — the most logical buyer couldn’t afford it — so I wanted to make the visuals really good. Shooting at dawn netted a few really nice photos, and I was pretty happy.

                With the photos I made, I put it on my own website and everywhere I could think of on the internet. Craigslist, Landwatch, Landandfarm, Landpin, Zillow, of course the blitz included an eBay auction. The results were my first exposure to fraud, when someone made me an offer on eBay which I accepted. After a purchase agreement was signed, the scammer proceeded to quickly reveal that s/he isn’t really going to buy.

               Undaunted, I did a paid campaign on LinkedIn and Facebook. LinkedIn is very expensive per click, so I stopped that pretty quickly. That left Facebook is full of trolls who love to spoil your campaigns when your wording is ever so slightly wrong. I had described it as “huge,” but I also used the word “ranch,” which didn’t rub anyone the right way since the property was only 120 acres. My payments to Facebook for boosting the post only resulted in some comedy at my own expense.

               The option was very close to expiring, and I was beginning to lose heart. I had been so excited a few times when people were interested (who ended up being tire kickers if they weren’t scammers), but got very frustrated with no real sales interest after 3 months of marketing the property.

               Then I remembered that the last person I never contacted was the neighboring property owner, since I was following the advice of the seller who said the neighbor couldn’t afford it. About a week after the option expired, I mustered some energy and found the contact information for the neighbor on Facebook and sent her a message. Knowing that the parcel may have been owned by her or a relative at one point, and knowing my seller had already spoken to her, I was very cautious with my wording and explained that part of my business involves trying to help ranchers piece together parcels that they may have lost. She immediately replied with interest to buy, and explained the real history of the property:

               Her father owned the property historically, but sold the irregular parcel in order to raise money during hard times. He then sold the ranch to her, and meanwhile the new owner of the small parcel had died and it went to auction but they didn’t know about it. My seller picked it up for $250, and immediately went to her, told her about what he bought, and offered to sell it to her for $400,000 for the deed. Having just gotten an appraisal for a different 1,100 acres of range land for $250,000, the rancher obviously declined and refused to talk to my seller who was trying to price-gouge this 120 acres for 14 times the appraisal.

              He had been holding it for 9 years when he got my offer. No wonder he thought they “didn’t have the money.” And, no wonder he hadn’t sold it — he burned his bridge with the only logical buyer. We ended up doing the deal and I doubled my money at a price point that probably should have been evaluated for dollar return rather than percentage.

              The moral of the story is that I will never trust anything a seller says ever again, and will always follow through with a logical buyer despite a seller saying I shouldn’t. I will always distrust and always verify anything that comes out of a seller’s mouth. The seller probably has no idea his little comment almost cost him the deal and that 5-figure ROI unnecessary on this deal because it took me about 5 minutes on Facebook to contact the buyer directly, and another 45 minutes for her to reply, salivating. The waste was 100% attributable to the fact that I trusted and did not verify the seller’s words. I’m glad it happened so it never does again.