Please raise your hand if you've felt overwhelmed and discouraged while trying to find the perfect Utah ranch property for your specific needs and interests. You click on an amazing listing photo only to get hit with an obscure block of marketing copy heavy on fluff and light on facts. You know from experience, you can’t simply hit the “request more information” link as that will most likely go into the ozone. A phone call is in order which may also go unanswered. This is all daunting enough – never mind the time and effort required to actually see a property in person only to discover it has multiple deal-breakers you should’ve been made aware of up front. If you’re lucky enough to find a piece of ground you love, that's when the real work begins.
Yes, buying land in Utah is a complex process, but there's good news. Finding and buying a ranch in Utah doesn't have to be overwhelming. If you follow our advice, you can find and buy the property you’ve been dreaming about. When we're done you'll know how to:
Ready? Let's dive in.
1. Identify your goals and non-negotiable property attributes
Most of the buyers we’ve worked with over the years have spent some time in the outdoors, some are big sportsmen, others did some ranching or farming at some point in their life. Some folks haven’t had much experience at all but are determined to find a place for the family to unplug from the city life. More often than not, those who end up acquiring something have been dabbling with the idea for a long time before they get serious enough to stop dreaming and take real action. If you’re at that point, here are some critical decisions you’ll want to start thinking about before you do anything else.
First, what is your objective for the land? Is it going to be a retreat for your family to create memories without the help of iPads and smartphones? Do you want to enjoy the land during your time of ownership, and go fishing, hunting, hiking, or horseback riding? Do you need a secure, long-term investment? The good news is that the answer can be all of the above. Once you define your objective, you need to run a few reality checks.
Let’s say you want a remote family gathering place with excellent hunting. You want to build a nice place for everyone to stay when they visit and you can already picture you and your guests gathered around a blazing fire at the end of an excellent day of scouting for that big bull. One night during an insomnia-driven google search you find a promising property for sale. It’s about a 3-hour drive from your home. The property sits at 9,000 feet and is only accessible in the winter via an hour-long snowmobile ride. The pictures on the listing show some bulls that give you goosebumps. Reality check. Is your family willing to drive 3 hours to visit? Is the winter access going to be a problem? The property looks remote and there are no utilities and no water rights. How will you build a cabin or lodge without water?
We’re not trying to take the wind out of your sails. A long drive, limited winter access, and an off-grid utility scenario might make you and your family even more excited. Thinking through these questions will help you identify what we call the “non-negotiables” or the boxes a property has to check to work for you. If your spouse doesn’t want to drive more than 2 hours, don’t waste your time looking at that ranch that is 3.5 hours away. Your non-negotiables will probably evolve throughout the process but things will go much smoother if you start with some in mind.
2. Know what you can afford
In the world of residential and commercial real estate, it is customary to get pre-approved before you start the purchase process. For some reason, people looking for ranches often, start the process backward. They engage multiple brokers to show them properties all over the map without any concrete idea as to how they will pay for it if they found one they like. We have some theories as to why this phenomenon occurs but we’ll save those for another day. Here’s the takeaway: figure out what you can afford upfront. Most reputable brokers won’t work with you if you’re not pre-approved and all Sellers will require proof of your financial capacity to purchase before they will even consider an offer from you - especially if you're buying a high-value property. We’ve seen more than a few would be buyers spend months researching and touring properties only to hit a financial roadblock in the 11th hour. In some cases, the ranch they wanted was sold to another party before they could get their finances together to come back to the table.
If you require financing understand ranch and land loans are harder to qualify for than home loans. Why? Risk. Land is much harder to liquidate in the event of default. Another big challenge for lenders is determining the value of ranch and rural properties in Utah. Most experienced land appraisers will admit there are limitations to what an appraisal on a unique ranch or recreational property can tell you. Roughly 75% of the land in Utah is public so there isn’t much private land to begin with. The handful of private properties that do exist in Utah, don’t change hands very often which makes it tough to find ranch transaction comparables. Add the fact that many land and ranch sales are driven by emotional factors which are difficult to quantify and compare and you can see why lenders have a hard time knowing how much they should be willing to lend you.
So what do you do? Reach out to several lenders including your current bank that services your largest accounts. Relationships help. Don’t be discouraged if the initial prospects seem bleak. Check with lenders specializing in ranch and rural properties. Your ranch broker should be able to give you a list of people he or she has personal experience with that can get the job done. Let the loan officer know the basic elements you expect your ranch will have such as acreage, general location, improvements, proposed use etc. Remember, for any lender to be able to give you a realistic idea of what you qualify for you have to be transparent and realistic about your finances.
3. Don’t forget about seller financing
Many deals are made possible by seller financing. You’d be surprised how many deals are closed this way. Don’t hesitate to ask for seller financing even if it is not advertised. There is no industry standard for seller financing terms but here is a good summary as a starting point.
Down payment. The purpose of the down payment is to put enough money in the Seller’s pocket to make the risk of lending worthwhile. Remember, upon closing, sellers will probably have to pay 7-10% in closing fees. They may also have existing debts on the ranch that need to be paid. Do they have family members or partners expecting a portion of the sales proceeds? You’re down payment needs to be large enough to leave them with a good chunk of money after all their obligations are met. If you have to skimp on the amount down, expect to compensate for it with a higher interest rate.
Most sellers expect to get a higher interest rate than those offered by the lenders with whom you’ve already presumably met. Payments are typically amortized over 30 years with a balloon payment due sometime within the first 10 years. Learn as much as you can about the Seller’s situation and needs when considering your proposal. Don’t be afraid to get creative. We also recommend using an escrow service to facilitate the collection and disbursement of payments like the Escrow Specialists.
4. Research properties the smart way
The next step is to search the internet for ranch brokerages that specialize in the types of properties you’re interested in. Make a file or spreadsheet to keep track of the properties that catch your eye. It can be helpful to organize properties by type, price, and location. Bookmark the sites and or brokerages that have listings you like. Pay special attention to those with the most informative websites and detailed information. A good broker will include acreage allocations, crop yields, water rights, carrying capacity etc. in the marketing material. If this information is not included, you can and should find out these details before making a drive to visit.
Unfortunately, there are a number of brokers who aren’t great at getting back to potential buyers. If you have trouble getting a response from the listing agent on a particular property you can always ask other brokers with similar listings. Most ranch brokers are very familiar with other broker’s listings. Phone calls work better than emails. If you do email, avoid ambiguous requests such as “send more info.” Specific questions are easier to answer and indicate you are serious.
The listing broker isn’t the only place you can get information. Talking to locals in the areas your interested can be very productive. You can also check with the Utah DWR Biologist in the region for unbiased information on wildlife and hunting. Keep in mind a lot of the information you’ll get is subjective. For example, you might visit the local fly shop to find out about the river on a ranch you’re thinking about buying. Fishing guides and fly shop owners may not want the public to know how good a fishery is—or how bad. Some rivers that have a bad reputation may be improving due to work by the DWR, Trout Unlimited, or other conservation groups. Some of the best fly fishing rivers in Utah aren’t mentioned on the weekly fly fishing reports. If you mention certain rivers out loud in a fly shop you’ll elicit death stares from the staff. If you get the death stare you’re probably onto a trophy stream that those in the know would like to keep secret. Be wary of the amateur expert. Throughout your research process be sure to mix everything you’re told with a grain of salt and ½ cup common sense. This advice also applies to hunting, trucks, towns, shotguns—you get it.
There is certainly a limit to what you can learn online but it’s a great way to start clarifying what you want. Run the listings you like through a reality check and see if they pass your non-negotiables sniff test.
5. Select a Utah ranch broker
By now you have a clear vision of what you’ll do with the land and a list of non-negotiable search criteria to work from. It’s time to find a land broker. Purchasing land in Utah is much more complicated than buying a house. Use a land broker to purchase land. Even if you’re only buying 5 acres there are lots of moving parts and guidance from someone with land and ranch transaction experience is invaluable.
When selecting a broker, choose someone who understands Utah land and ranches as well as he or she understands real estate. Every real estate agent can write up a purchase contract and schedule showings but do they know the difference between water rights and good fly fishing water? Do they understand what makes a quality stand of timber and the areas where elk genetics produce trophy bulls? Do they know what needs to be researched during due diligence? Can they recognize red flags? Do they have experience solving the problems that will come up during the land purchase process? Are they experienced with seller-financing? Are they familiar with costs for fencing, wells, or roads and do they have a network of trustworthy contractors to share with you? It’s tough to find someone to fence your remote ranch on Yelp!
The best brokers usually work for the best brokerages. This is when you want to refer back to your notes to see which brokerages had the most professional websites and detailed marketing. A good broker will look at things through your eyes and only get excited about property that fits your objectives. Are they pointing out the good, the bad and the ugly, or just the good? Every ranch is imperfect. Some drawbacks you can live with, some you can’t. You have to be flexible and realistic but stick with a broker who won’t hesitate to point out the negative aspects and help you understand the potential impact they may have on you down the road. Whoever you choose, be loyal. If you work with several brokers you won’t be a priority to any of them.
6. Get your boots dirty
Once you’ve identified a few good prospects use your broker to help you vet each one. Remember the reality check and gather as much information as you can before you schedule any tours. Most ranches won’t fit all your criteria. Don’t worry. You’re objectives, and non-negotiables are probably going to change once you get boots on the ground anyway. You will accomplish more in one day of looking at ranches with a good broker than you can in months combing through websites. If you’re traveling a significant distance to see a property, have your broker arrange to tour comparable properties in the area- even if they don’t particularly pique your interest. We even arrange to show our buyers properties that have sold or are no longer available because it gives them something to compare to and better familiarizes them with the market.
7. Make the most of each property tour
We often get calls from people who are visiting Utah for their holiday ski trip or summer vacation and want to make a quick last-minute stop while they are here in town to see a property they found online. We know it seems appealing to kill two birds with one stone, but these kinds of tours are generally unproductive. You need to be able to focus and soak in each property your considering. This is different than doing a quick walkthrough of a commercial office space or an open house for a home. Most properties, including small tracts, cannot be appreciated without a thorough tour which can take anywhere from a couple of hours to a couple of days. When we list a property, we often spend significant amounts of time on it before we start developing the marketing because our first impressions tend to change drastically as we get more familiar with the land. When we show our listings we arrange to have ATVs, snowcats, or even a helicopter ready to ensure buyers are able to experience the property fully. Make sure you have the appropriate time, transportation, and even the right shoes and clothing for each tour. You won't regret it.
8. Make an offer and get it accepted
Eventually, you’ll find a place that feels like the one. You may get a feeling while you're touring. It just hits you in a way where you know you right then and there, you have to have it. Maybe one property keeps coming back to your mind weeks or months later. The one you can’t stop thinking about might even be one that didn’t check all those non-negotiable boxes we keep talking about. Remember, there is no such thing as a perfect ranch. You can spend a lifetime looking at ranches if you don’t understand this point up front. We have a long list of clients that have called us about different ranches for years but they haven’t even come close to purchasing one. There’s a good chance they never will. Life rewards action. Do your homework, make informed decisions and pull the trigger.
Once you’re ready to offer, be prepared for what’s ahead and expect things to take longer than you think they will. In our business, it is standard to give a seller at least three days to respond to an offer, but it’s not uncommon to give the Seller a week. There are often family discussions that need to happen, an attorney may need to review the document, and a decision to accept or counter needs to be made. This is an emotional process for the sellers. Memories are scattered throughout the pastures, river bottoms, and valleys, not to mention blood, sweat, and tears. Recognizing this will go a long way. Showing respect for the people who have dedicated their lives, often for multiple generations, to the land is important. Many Sellers care more about who is buying their ranch than how much they’re willing to pay for it.
We recommend you leave your clever negotiation tactics and your ego out of the process. Make a sincere effort to learn as much as you can about the seller’s situation and objectives. This helps your broker tailor an offer to meet both the seller’s needs and yours. Be prepared to verify your financial capacity to purchase and submit proof of such with your offer. Earnest money on high dollar deals is commonly around 3% of the offered amount and closer to 1% on smaller deals. Don’t skimp on earnest money. This is your chance to show the seller you are serious. Your broker will guide you so you get it back if you back out of the deal later.
9. Conduct your due diligence
The due diligence period is typically 30 to 60 days, with 45 being an average. This is your opportunity to research what you have agreed to purchase. If everything checks out, the deal moves ahead. If you find something that can’t be resolved you can cancel and get your earnest money back.
The first step in the process is reviewing the title report. Don’t be surprised if issues surface here. The chain of title on a 100-year-old ranch can be full of discoveries. We have represented clients on land that did not have insurable access and never has. This is an extreme example but the point is, there is almost always something to clean up on the title report.
Another critical part of due diligence is checking the water rights. Make sure all water rights advertised exist and are recorded in the Sellers name with the state. You can do this by visiting the Utah Division of Water Rights website. Are the rights approved for the use and allocations advertised? For example, if they irrigate 40 acres do they have water rights allocated for irrigation and are they irrigating in the approved location? In some areas of Utah like the Uintah Basin, a mineral search and remoteness test may be warranted, depending on the likelihood of the presence of extractable minerals like oil.
This is not a comprehensive list of due diligence items but these are some areas to look for issues. Don’t be discouraged. A good ranch broker has the experience to identify and resolve problems and a team to help you cover all your bases. Most complications can be dealt with, but it will take some understanding and cooperation between the parties to see it through. If you have the right expectations going in, things will go much smoother.
10. Close with no regrets
Congratulations! You’re moments away from making what may be a life-long dream come true. The hardest part is over but you still want to stay sharp during the closing process. Use your broker to carefully review all closing documents before you show up for closing. If you’re buying a high-value ranch we recommend using an experienced transaction attorney as well. You have the right to inspect the property again prior to closing to ensure everything is in the same state it was when you executed your purchase contract. Make sure all water rights, right of ways, mineral rights etc. are specifically conveyed on your deed (this is where an attorney is handy). Lean on the experts but do your best to understand what your signing and don’t be afraid to ask questions.
Deciding to purchase a ranch in Utah is the start of a great adventure. You will experience some beautiful country along the way and hopefully meet some great people. If you follow the advice we’ve shared, you’ll increase your odds of making an excellent financial investment in something that may even become a gathering place where memories will be made for generations to come.
If you have any questions along the way, don’t hesitate to reach out to us. We are passionate about what we do and enjoy being part of this exciting process with our clients. Have fun and good luck!