Saturday, November 21, 2009
When Ron called, I was surprised. His name was one that I certainly recognized, but I had never met him and wasn’t even positive which farm he owned. But I always respond immediately to any inquiry that might result in a listing, so it didn’t take long to meet him. He turned out to be an interesting fellow, a good dairyman, cautious and careful, a fellow who thinks things through before making up his mind. And, from what I could see on the farm, the choices were very well made. The property was also very well cared-for. We did some internal analysis, within the company, to give him an idea what he could expect to receive for the property. He also did his own due diligence, consulting with others, including his banker. All of us were reasonably well-centered on what we thought it was worth and were comfortable with the price we settled on.
At the time I told Ron and his wife that this was going to create a great deal of interest as there just were not many well put-together farms like this on the market. Some folks, I knew, would reject it, because the land, while good, did not quite measure up to the quality of his buildings. But I have learned many times over the lesson that while land attracts, buildings sell. I can think of only two customers I have had in these 30 years that truly insisted on top notch land and would not compromise in order to get buildings they wanted. You’d think this would be a far number as buildings can be changed, while land cannnot. But it doesn’t work that way and I knew his land would be acceptable to nearly everyone. I predicted that there had to be some pentup desire for such a place and that we would have lots of initial inquiry, and after that it would settle down to a slow pace.
Was I ever right! In the first 30 days, here is what happened. I counted 17 showings. That was more in these depressed times than I have had in far more time on all other places together. I spoke by phone to over thirty folks. And many others emailed. That represents an outstanding “yield” of showings to inquiries. We got a full-price offer in the first week, a superlative buyer who had his own farm under contract and was ready to close on it. He had a reputation for good management, kept his own place in showplace condition, and had a high herd average. He had all his cows and machinery and only had to borrow $200000 to make the deal work. He’d give us $50000 to hold it when his farm closed next week. Furthermore, he had been assured by another branch of the bank that he would have no problem getting the needed money. When he applied, we were all surprised when he was turned down. After you are n the business for a while, you know who can get the financing and who can’t. Unheard of for such a quality buyer! So I made discrete call to the bank. What maximum debt were they recommending these days? (Milk prices, once again, had slipped to record lows.) “Zero”. Zero?, I asked, He confirmed it. What a sourpuss that banker was. I mentioned in passing that they could not stay in business by not making loans. He wasn’t worried, they had enough income from the loans they had out now. Crazy.
So we sent this guy to another bank, one who was delighted to see him. I guess there will be one less bank we can recommend to our buyers now. But all this took time and people kept calling and looking.
In the very beginning, I had taken brochures on the farm over to a few of the closest Amish, They have been buying in the next town over and, though a few miles n the wrong direction, maybe this one would interest them. I had no idea who among them might be looking, but I knew there is no grapevine better than the Amish one and that it wouldn’t take much time for the word to get around. Soon enough, calls started coming in from folks with that peculiar accent that they have. One fellow, from Pennsylvania, was VERY interested from the get-go, but he couldn’t come up for a few weeks and, though he didn‘t say so, was clearly worried that someone else would beat him to it. I sent him a packet of pictures and details. He called back and set up an immediate appointment. He wanted to see other places that day as well, so I set up things and we met as scheduled, going to Ron’s farm first.
He was thorough, walking the land and seeing everything carefully. By “thorough” I don’t mean slow; he was efficient. But it took a few hours. When I was ready to take him to the next place, he said not to, that he wanted this one. So we went back to his buddy’s where we had met, and I wrote out a contract by hand, all three copies. He signed, gave me a $20000deposit check then and there and suddenly I had 2 excellent buyers on the place. Like the first guy, he offered full price.
Other details of the deal were a trifle different and Ron carefully considered all of them, then asked me to go back to both guys and see if one would not up his offer to get things off dead center. The first man refused to pay more than the asking price, but my Amish guy upped his by $5000. That was enough, and I prepared a set of documents to deal with other details, plus the new price.
But the plot thickens, the deal’s not done. I get yet another call. This guy wants to see it in 2 hours. Fortunately I was free, but I told him up front that we already had two offers at full price and above and that they owner was ready to accept one - could he make up his mind quickly enough? He could, he said. So we met.
He was a very quick looker and half an hour after arriving, I found myself in his truck, talking business. He wanted to know all about the other offer. Of course, I would not tell him; this was not an auction I was conducting. Just make your best offer and let the owner decide. He did, $25,000 above the asking price, a cash offer with no contingencies, not for selling anything, not for financing, no inspection, nothing. And then he wrote me a check for $50,000. In thirty years, I have not seen this happen before. I have never seen a person make such a momentous decision so quickly and decisively.
I went into the barn. Ron was still on his riding feed cart. I told him not to get up, that he needed to be sitting down. Then I relayed the offer. To my amazement, he didn’t jump up and sign it then and there. I would have, quick as I could. He wanted to talk things over, then study them first. And what should we do with the Amish guy, shouldn’t we give him a chance to counter? I didn’t want to let this other fellow cool off, but agreed that that would only be fair.
So, I called him. He took it pretty well and of course wanted to know what the other offer was. I gave him the same story and told him that I wouldn’t tell either of them what the other offers were, just to make his best proposal. Could I wait a few hours? Of course. That is too big a decision to make on the spur of the moment. I want my buyers to be satisfied with their choices. He called back when he promised and raised his offer to $50,000 over the asking price. Would that do it? By now, I knew enough about Ron not to answer “Yes”. I only said that I’d find out.
So there was an instant replay of the barn scene and Ron didn’t jump at this one either. Good grief, was he going to get greedy on me? Was I going to lose all of them? I was nervouser than a long-tailed cat in a room full of rocking chairs. Ron asked me to give the third guy the same chance that we gave the Amish man. I hate doing this, but did, right away.
Now, I need to explain something about this other man. He is a Menonite and is representing a church group of farmers who are getting established in this general area. He wasn’t positive which one of them would end up with the farm, but he was fairly sure of one fellow. It turned out this fellow was one of those who had called me and he in turn had asked this buyer to look at it for him. This was Saturday. Could he bring the other fellow up on Monday? Fine, I cringed, we’d delay yet another 2 days. Much can go wrong in that time. But you can’t say no to a reasonable request. On Monday, everyone showed up and the Menonites saw the inside of the home for the first time. If you are a real farmer, the fields and the barn are far more important then the home. The gist of this visit was that they wanted 24 more hours to decide if they wanted to up their offer, another reasonable request that only served to make me worry more. As you might expect, the Amish guy was nervous too, but he was nice about the delay. Finally, time passed and the Menonites called. They had considered raising the price $125-$150000 over the asking price, but finally realized that this farm, though everything they could ever want, was too far from their schools and churches to go any higher.
Ron was satisfied that everyone now had a fair chance and he signed, and now everything is speeding towards a closing and is, so far, going smoothly. And I can sleep at night once again.