68/ MARCH/APRIL 2013 THE RIDER “Specific Use Properties” By Teri Davidson.


Selling farms is a spe- cialized market and each year I say to myself I should stop being involved in the marketing of farms and deal strictly with rural residential, income produc- ing and city homes. Most


29TH MINIATURE HORSE SALE


May 25th, 2012 & October 19th, 2013 10:30 am at


GRAY’S AUCTION CENTRE INC. 5737 Hwy 23, 1 Mile West of HARRISTON, ON at the Corner of Hwy’s 87 & 23


SALE CONSISTS OF: AMHA & AMHR “A” & “B” Registered Horses. Easy Entry Carts; single and team harness, there will be carts, wagons, and working carts. For more information contact GRAY’S AUCTION SERVICE INC. @ (519) 338-3722.


TERMS: Cash, Cheque, Visa or Mastercard with proper I.D. Own- ers or Auctioneers not responsible for accidents day of sale. Any announcements given verbally day of sale take precedence over written ads.


Please watch our website for summer dates!


www.graysauction.ca To Consign Horses Call:


GRAY’S AUCTION SERVICE INC. (519) 338-3722 AUCTIONEER: GRAY’S AUCTION SERVICE INC. - Harriston - Licensed & Bonded


real estate salespeople do not want to spend the long days and months it takes to sell a farm. The reason so much time is involved to sell one of these properties


because these properties are “use specific.” This means the use they are being put to is something only a few buyers want and can afford.


is


we think will remain high again next year and maybe for many years to come, has really affected the bottom line of the horse industry.


For example an equine facility is very much “use specific.” The barns have either been built or renovated to suit the containment of hors- es, wash stalls, viewing rooms, bathrooms all of which are not needed by a buyer who is not involved in the horse business and has no need for those improvements and who therefore does not think he or she should pay for them. An indoor arena which is a very expensive improve- ment and is coveted by horse riders is again very “use specific.”


Real estate values are determined like all commodities pricing by the simple rule of supply and demand. The less demand , the less value, especially if there is a high supply. High demand for a product with little supply pushes the price up.


The second issue is affordability. Older buy- ers are not usually look- ing for the work involved in running an equine boarding and training property and would be looking at hir- ing outside help. This is a cost they have to factor into the amount of money they want to pay for the property. The cost of hay this year, which


Financing these large acreage horse prop- erties is always difficult. The older buyers will have much stronger down payments, more strength for borrowing because their jobs are more well established and more finese with their lending institutions way of thinking to order to accomplish the mort- gage. But very few of them are interested in pursuing a use specific property which requires them to work long hours , usually for low pay back financially.


It is usually younger couples who come or families with the parents keeping their current jobs and having a daughter or son running the farm as his or her job. The young couples have great difficulty in arranging financing because of low funds, no


previous credit or simi- lar job history and trying to mortgage larger acreages which banks are not interested in funding. The family situation is usually the best buyer for a property like this but again those buyers are few and far between. I wish the buyer who is living in a home in the city now , has a good job and has a horse or two whom they are boarding would think seriously about these equine properties. They , for some reason, don’t seem to appreciate the idea of buying a rural property that already has a barn, perhaps even an indoor arena, and land to ride on. They could sell their existing home, move their small number of horses to their own property and enjoy living in the country with their horses on their own property. The land sur- rounding these properties is easily rented. The cost of hay if they share- cropped would be far less, taxes are less on the agricultural property and they wouldn’t have to pay the high boarding fees. They could hire a horse person to clean the stalls used by their small group of horse which would be a very reason- able amount .


I do have buyers like this come to look at


the equine facilities I have listed but they feel , even on the smaller rural properties that the asking prices are too high. They base this feeling on their city home value. In other words if the farm they are looking at , like one I currently have listed, is priced at $600,000 , offers a lovely older home which has been remodelled, a barn in excellent condition struc- turally, an indoor arena and several fenced pas- tures, along with some acreage , the buyer seems to look only at the house to house compari- son. They are selling a city home for the same $600,000. and it features a family room, fire- places, upgraded kitchen, ensuite and attached dou- ble garage. They seem to think the $600,000. farm should have all the same features in the house ad will say to me , “ This isn’t a $600,000. house!” I can’t understand why they don’t appreciate the asking price on the farm includes the barns, the arena, the fencing and the acreage. Seriously the farm is offering so much more for the same money but they can’t see that.


Land is something we can’t reproduce and farm values have gone up not down over the years. The problem


seems to be when you make them ‘use specific” like an equine farm, cat- tle farm, turkey business or greenhouse set up. The best way to market these types of properties is to down play the use and promote the country lifestyle, the lower taxes, the feel of being on a property with wide open spaces and freedom to live a simpler lifestyle.


There will still be a small amount of buyers looking for the use the farm has been put too and that is wonderful but we have to open our minds and use creativity to help buyers visualize a different use and why this property is some- thing they should consid- er purchasing.


And the sellers have to be patient....


Teri Davidson has been a licensed Real Estate Bro- ker for 36 years. She is the Broker/Owner of Associate Realty, Brant- ford’s largest indepen- dent real estate company. Teri , along with her family also own and operate “Whitehouse Farms” where they raise AKC Registered King Sized German Shepherds and enjoy their own quarter horses and paints. Contact Teri at teri- davidson@rogers.com


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Erin, Caledon & Surrounding Areas


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