Archives
June 2008
|
“Come and listen to my story ‘bout a man named Jed, poor mountaineer, barely kept his family
fed.” I can’t get the theme song from “The Beverly Hillbillies” out of my head these days. What’s
putting it there is all the hoopla and activity in Lycoming County (and Tioga, as well) over natural gas.
The gas lease folks have been diligently tracking down owners of land, trying to sign them up for
leases. There are rumors of large ‘signing bonuses’ and royalty payments in excess of 15%. It has made
our once quiet county courthouse Recorder’s Office a hotbed of activity, and there are rumors Mrs.
Annabel Miller, the Recorder of Deeds, actually had to tell some of these folks how to behave. (!) New
computer terminals were added; and the title searchers who work there all the time mutter about
books being misplaced, some say on purpose. All the gas company representatives are looking for the
same thing—parcels of land, the larger the better, which still have gas and oil rights intact. That in and
of itself is interesting—the title searches go back 150 years for this stuff, and I am told that on several
parcels, the rights have been sold or leased more than once. Whoops!
Why here in north central PA? Well, we sit on Marcellus black shale, which runs from the southern tier of New York into West Virginia. According an article online from Penn State University, the Marcellus shale could (optimistically) contain 516 trillion cubic feet of gas. The other attractive part of the Marcellus shale is that there are fractures in it. The fractures allow drillers to drill vertically, but then branch off horizontally, and this is considerably cheaper ($800,000 versus $3 million), according to PSU geoscientist Terry Engelder. The article I found you can read as well, at: http://live.psu/edu/story/28116. The big news locally, and of interest to you and me, is what it is doing to our real estate market. There are rumors on top of rumors about lease prices, sale prices, estimates of royalties, etc. I can affirm that I know of two sales that were upset at the last minute by an owner deciding maybe he didn’t want to transfer those rights. A parcel priced for $190,000 one day jumped in asking price to $5 million after an oil and gas company rep talked to the owner. So, owners are sitting tight, preferring to gamble on the future value, rather than sell today. Yet a broker friend in the Northern Tier asked my husband a good question: “Has anyone actually seen someone with a big check from a gas company yet?” I haven’t personally; yet some reliable people I know claim to have. Brokers and appraisers with a grain of sense are refraining from trying to value these rights; just last week I appraised a 40 acre farm for an estate. Thankfully, the decedent had already leased the mineral rights—but I had told the executrix going in: “I don’t value minerals, gas, oil, or timber.”
Of course, we are all optimistic. We’d love to have several Jed Clampets right here in our backyard. The Mr. Drysdales of the region would be thrilled—they already are. Local banks, local law firms, local stock brokerage companies are all busy offering seminars about gas leasing and how to handle new found wealth. The attorneys have taken a page from the REALTOR® playbook (“When the market changes, find another niche”) and some who last year were divorce or elder care or criminal experts, this year are gas lease experts. A full scale gas exploration and pumping operation could pump gas out of the ground and money into the local economy. One rumor says there are plans to build a pipeline from here to New York City, employing 30,000 people at $35 per hour and up—and once the pipeline is there, it will pump for 100 years! Who knows? I don’t pretend to be a geologist. I do know as a REALTOR® and an appraiser, that we can’t begin to estimate the effect on value of these things until the dust settles. We won’t know the value of these rights, as it affects market value, until we can observe parcels sold with and without the gas and oil rights. Another appraiser friend has done some research and tells me Pennsylvania law regarding oil and gas rights is light years behind other states; that here in PA you could actually have the gas pumped from under your land, by a well located on an adjacent parcel, and get little or no compensation. If you have a large tract, and you haven’t signed a lease, I would say: “Do your homework.” It appears that this situation is just continuing to snowball, so you probably would not lose by waiting. There are some owners who signed leases last year for under $1000 an acre who are now watching their neighbors sign leases for $2500 an acre. As in any market, timing is everything.
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
|
|
Comments (0) :: Post A Comment! :: Permanent Link :: Email This Entry
|
|
I just finished doing a day and a half of board orientation for my local association of REALTORS®, West Branch Valley. Our association is small (about 240 members) so we do this every six months. Despite our efforts to orient new members as soon as we can, there were some in the class who had been in the trenches at least a year, or even more.
New people come into our business with much hope, great expectations, and, sometimes, an unrealistic picture of what the business entails. Here in my state of Pennsylvania, if one hundred new agents are licensed on January 1, by December 31, fifty are gone. By December 31 of the following year, another twenty-five are gone—leaving us with 25% of our original group. Yet, year in and year out, hopeful new agents show up at orientation. Some of them do make it. They show up at other classes, and the smart ones figure out pretty quickly that Fundamentals and Practices gets you through the test, but learning how to list and sell real estate is something else entirely—and it calls for ongoing education, as well as a lot of on the job training. Even the ‘seasoned’ agents like me (30+ years and counting) learn something new everyday.
I asked my students this time to tell me what they had learned in orientation that they didn’t know; and what they would also like to learn. Their answers were interesting. My portion of the orientation is Code of Ethics, plus general REALTOR® information, as well as a quick review of our most popular standard forms (Agreement of Sale, Buyer Agency Agreement, etc). For the past several years, I’ve quickly gone through a slide show of pictures taken in my years as an agent and an appraiser—because the one thing I find, everywhere, all the time, is that when I ask new agents: “Has anyone ever taken you out into the field and shown you how to look at a house?” the ‘yes’ answers are 1% to 5% of the attendees. Stupefying, isn’t it? My slide show is very basic—things to look for, building materials, what an asbestos roof looks like, and wears like, compared to a composition asphalt roof. Most of the attendees said that they learned a lot about the Code, including arbitration. One person honestly said: “I didn’t know anything about Ethics before?” (Are the brokers reading this hearing that?) More important, if you are a broker, are the things we don’t cover, and they want to know. Here’s a list of the highlights:
§ Multiple offers and what you do when they come in
§ Financing (several students cited this)
§ Agency
§ Electronic advertising, including craigslist
§ Anything electronic or Internet based
§ More information on web site stats—how effective is a website, what percent of people search online
Several said they were glad I showed them realtor.org and parealtor.org, which are membership websites; one was glad I told them about District Conferences and our Triple Play Convention.
Here’s my point, and it is directed mostly to the brokers—the people that hire these fresh new agents, full of hope, desire to earn money and do well, ambition to have a better job than the last one—please—start doing your part. You see, the educators like me can’t do it all. Oh, I shamelessly promoted GRI, ABR and SRS courses at orientation—I always do because I think those designations are the most valuable to a new agent. I told them when the next CE cycle comes around to use their ‘butt time’ wisely by taking a course that will help them sell more real estate. I directed them to our District conference (this year my conference’s keynote speaker is Terry Watson, and if he can’t energize you, you’re dead!) and to the Triple Play Convention. I told them they can attend state or national REALTOR® meetings just because they are REALTORS®. But, I can’t do it all. Quit hiring these people if you don’t intend to train them. If you don’t have a mentoring program, why not? Can you really afford to lose 75% of the people you hire and train (and train seems to run the gamut in our business)? In other words—our market is tougher, and our business calls for more professionalism than ever before. If you are a broker, the buck stops with you. So please—do your job—and by the way—if you send them to an educator, we’ll do our job, too.
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
|
|
Comments (0) :: Post A Comment! :: Permanent Link :: Email This Entry
|
Page 1 of 1
|
|
RSS Blog Feed