When you look at real estate you usually have residential, commercial and then farm and ranch. When you are looking at Montana home and ranch realty the house is always in play. Clients that are selling or buying a Montana farm or ranch have to consider the residence. We find, in a lot of cases, the home is given very little consideration by a buyer but means a great deal emotionally and financially to a seller. So here are some considerations to consider from both sides.
From a seller standpoint is the home located where it can be deeded out of the rest of the property. This gives you the possibility and leverage that you could sell the house to someone else besides the farm or ranch purchaser. Is it located on an outer boundary of the property? Is there a road that if it is sold separately doesn’t put a big hole in the property? If this is the case, the seller has the potential option of selling the home separately but it will need to be separated legally from the rest of the farm or ranch. This definitely holds water if the farm or ranch is being sold for agricultural purposes only.
If it is being sold as a recreational or trophy property the buyer might have a significant issue with carving it out of the Montana farm or ranch. Then it is just thrown into the negotiation and it can go either way. If, however, the home is in the interior of the property it is a good possibility that the house will not get full value. One man’s mansion is another man’s teardown. The seller can try and keep the house out of the transaction but it is likely that will greatly affect the offer a buyer is willing to make.
This is why we recommend to clients to go slow and not build a large owner home or lodge until they know this is going to be in the family for a while. The other thing we tell clients is that if they build a home, especially in the interior of the property, that they might not see any appreciation and they could be heavily discounting the house when selling the property. This isn’t always true if the buyer has the exact same tastes but there is always major negotiation. This is why we recommend building the home on a boundary on a public road that doesn’t hurt the aesthetics of the property. Then separate legally the land and the house from the farm or ranch so that there are options to sell the house separately.
This can also sometimes help you on mineral surface agreements where oil & gas firms aren’t able to drill within so many feet of a house and most reputable oil companies don’t want to risk litigation on impeding on someone’s home and aesthetics. It is not a solid legal defense but it can potentially help.
Montana home and ranch realty is trickier than most know and knowing how to protect yourself whether a buyer or seller of Montana home and ranch realty is something that should be considered and legal representation is recommended. It can be a tax or value issue when you sell and thought going into the transaction can save you significant dollars.
We all want the home in the perfect spot with the perfect view that all can enjoy but it can lead to not recouping what you spent if you decide to part with the ranch down the road.
We hope you enjoyed this article on Montana home and ranch realty. If you sign up we will send you updates on properties and notification of new articles. You might also try Montana Hunting Land for Sale and Buying Montana Ranch-13 Things to Ponder if are looking at purchasing a Montana Farm or Ranch.
If you are starting the journey, contact Buzz and let him help you find the property that is right for you and your family to start creating memories! If you are looking at listing a Montana farm or ranch let us take a look at the property and help you get a fair price for your property.
Buzz Tatom is a Partner at Venture West Ranches. He moved to Montana 5 years ago and still owns the 5T ranch in Texas. He has a BBA from Texas Tech and an MBA from SMU. He built his Printing/Marketing firm 10 fold over 24 years before selling in 2011 and is involved in a number of business ventures. He enjoys teaching part time at MSU in business and mentoring students.