Corder's Corner

How to properly value your assets

Mornings are brisk as our warm exhalations hang heavily in the frosty air. The days blur together as my body struggles to differentiate between day and night. Checking cows is done with anticipation of being ready at a moment’s notice, because as any rancher knows, whatever can go wrong, will. It is the peak season for a rancher, the same as harvest would be for a farmer. Because we also farm, I have a solid understanding of each industry. Now, owning a company in the real estate world, it is even more evident of how significant it is to have a sound background in these trades. I speak the language of clients seeking to purchase or sell farms or ranches. Beyond selling and purchasing, our company formulates Competitive Market Analysis or CMA’s for clients and lending institutions alike. This evaluation helps determine value which is important information to someone looking to buy or sell. Why is it important to have a qualified broker to perform such analysis? Such information determines fair and true market value.

Just like calving season is much more complex than watching a mama cow give birth to a calf, determining value for an agricultural property is just as in depth. For example, what if you are curious to know how much your commercial feedlot is worth? A commercial feed yard would be considered a special purpose property, because it is fairly limited to one use. The valuation is similar to other properties that require segregation of the components of business value, going-concern value, real estate assets, furniture, and fixtures. In addition, most feed yards are constantly improving or undergoing expansion that result in complexities when determining depreciation estimates. To reiterate, knowing every angle is imperative. Your ranch isn’t only worth the property it sits on. A complete analysis also accounts for a combination of assets including rolling stock, feed inventory, management-in-place, an established clientele, an on-going business operation, real property fixed assets, and personal property including machinery and equipment and perhaps an animal herd. Further, the value of the feed yard is related to its market share and on the basis of dollars per head of capacity.

As a licensed real estate brokerage in Montana and Wyoming, we often formulate Comparative Market Analysis for financing, sales listing, investment analysis, property insurance, and for potential buyers. When formulating these reports, our brokerage seeks out past sales that are comparable to the property with similar factors in common such as date of sale, property size, land use, soil type, irrigation equipment, and outlying buildings. As is evident, a brokerage that is accustomed to analyzing value data and creating a fair and true analysis is paramount. Don’t settle for mediocre. Call Corder and Associates for assistance in finding value for your property or one you are considering purchasing. We do not just buy and sell real estate; we have lived the life that we intend to sell!

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