ALC Application - Transaction Narrative Guide
Transaction Narratives are utilized by the ALC Designation Committee in order to understand the transaction and the role of the candidate.
Narratives should:
· Include:
o Candidate’s role
o Buyer/Seller’s objectives
o Transaction activities, challenges, solutions, and outcomes
o ALC skills and tools applied to complete transaction
· Be no less than 300 words.
· Be written in a professional voice.
· Have correct grammar and spelling.
Below are examples of great narratives from previous applications.
Further tips are highlighted in red.
Transaction Narrative Example #1
The following narrative fulfills all of the above points and incorporates how the LANDU courses would have been helpful had the candidate taken the courses prior to the transaction.
This transaction was one of my first large-scale sales. It was challenging at times but ultimately prepared me for sales down the road and led to what has become my most beneficial professional relationship.
My role was that of the buyer’s agent, and I have ended up helping this party purchase three class A farms and currently have another pending. The seller had listed this farm with another REALTOR® in our firm who has since left the industry. The seller had owned this parcel for a short time purchasing it when river bottom land was selling at a discount. His goal was to reap the benefits and use the proceeds for a 1031 like-kind exchange. The buyer’s goal was to enter into a new venture with a parcel large enough to make the commute economically and logically feasible.
The initial connection with the buyer was made through advertising in a farmer publication. After some initial data gathering, buyer interest “gained steam” and negotiations got underway. The immediate challenge came from the seller. He had the reputation of being a very tough negotiator. He had always had a way of piling on additional requests that would muddy the waters. When a deal appeared imminent, he would request a closing extension or suggest a complex closing date trigger clause in case he found a 1031 opportunity.
Another issue involved a natural gas pipeline that had just gone through the property. The farm was in the middle of a multi-year damages payout plan through the Express Pipeline Company. This added additional dollars and payments to an already complex situation.
Transaction Narrative Example #2
The below narrative is an effective example of how challenges were overcome, lessons were learned, and knowledge was used from the LANDU Education Program.
This transaction was unique in several ways. I secured this listing as an auction working for the seller as a seller’s agent. The seller’s objective was to make a large profit on this farm. His family purchased this farm in 2007 before land prices sky rocketed. The current market place gave the seller an opportunity to “cash in”. The seller was also moving his/her family across the United States which was a motivating factor.
My actions as the land professional took all aspects into consideration. An auction greatly intensifies the need for concise and efficient marketing plan. The marketing was to stay within a $5,000 budget. Flyers, posters, newspaper ads, and site specific signage were included in this budget figure. Securing a strategic and feasible auction site was also a priority. We, the firm, refrain from onsite auctions because too much is at stake to rely on “Mother Nature”.
Another challenge was the location of the farm. It was a little further south than the area to which we usually marketed. Our network was not as deep, and so more investigative work and networking needed to be done. Finding addresses and establishing meaningful contacts was time consuming. We also took on the challenge of separating this tract into two separate parcels. We did this because our fear was that such a large piece of land would limit the numbers of bidders. Not many parties have the economic means to purchase 270 +/- at a strong price. Organizing and obtaining the survey in a timely fashion added to the responsibilities I had to oversee. In the end, the same party purchased both tracts, but we opened up options which brought interest and potential new clients.
The outcome was that tracts one and two sold for a very strong price. Tract three did not meet the bidder’s reserve price.
This was a huge learning experience for me. I realized that doing business in an unfamiliar geographic area is challenging and takes time and a more strategic approach. We, as a firm, also learned how to better handle situations where one tract does not quite live up to expectations.
Transaction Example #3
This narrative includes all of the requested points and presents the transaction in a well-written and well-organized narrative format. Many transactions have stories behind them adding to the learning experience.
Going with Your Gut – Marketing unique real estate has a way of allowing land professionals to cross paths with interesting people creating business opportunities. Although I ended up representing the buyers for this transaction, I originally met them while representing a seller on another listing.
A lady, Jane, called me stating she, her mom, and sister would like to view a specific property I had listed in Iowa. She mentioned how she and her husband were originally from Iowa, and they wanted to move back to Iowa from Ohio.
I arranged the showing and met Jane and her family at the property for a tour. Jane’s husband was unable to join us for the showing. When I asked Jane a few personal questions about her husband, she did not offer much information. When I asked her what her husband did for a living, she replied, “not much anymore.” Since I did not receive clear answers about who they were and what they did, I started to think that I had done a poor job of qualifying them as legitimate buyers for the property. However, I had a gut feeling from our initial conversations that she and her husband could afford a place such as the one I was showing her. I had learned from previous experience, especially when selling $1M+ real estate to unrepresented buyers, qualifying them from the beginning is an absolute must, but can be much harder to do than qualifying buyers on properties of lesser value.
After viewing the property, Jane informed me that she did not believe the house was large enough to accommodate her husband and three young children. She told me that she would be interested in other properties in Iowa with 80+ acres including some sort of outbuilding and a home of no less than 5,000+ finished square feet—a criterion that does not often come up in our state. After doing some searching, I was able to locate a property for sale that seemed perfect for Jane and her family.
Note: All of the contract negotiations took place while I was at 2011 LANDU Education Week in Chicago.