Need help with value of Trees on land

[georgegassaway]

I'm wondering if any of you may have some knowledge, experience, or tips where to find some info on this.

The scenario: I own a small amount former farmland that my grandfather left to my mother and I, which now I own alone. We had held onto the land purely as an investment, and had not even gone down there for many years. Crossing the land is a right of way by Transco, for four large underground gas pipelines. Transco is going to be adding a 5th pipeline to the land. They will be paying a small amount for the additional right of way to add the 5th line. But also, for the work they will be doing, they will need to clear out a temporary workspace. They will be paying for the temporary use of the workspace.

But those are not the issue. The area they will be clearing out for temporary use, will require removing all trees in that space. They will be paying a fair value for the trees they have to remove. That area is overgrown with wild trees. It would be "easy" if the trees were say 5 or 6 oak trees and empty space between them. But it is not. There are not many "big" trees, but there are a LOT of small to medium trees there, sort of like a forest with trees that mostly have grown up wild the last 35-50 years.

So, I am wondering, does anyone have a ballpark idea what a "stand of trees" would be worth based on square feet or some other basis? I know, many factors involved, tree size, type, whether useful for timber or not, and so forth. But I have to figure this is not a unique scenario, that there may be some info out there to give me some practical ballpark idea.

I did indeed find out how the value of one individual tree could be determined, but the layout of the land with so many small to medium trees just does not make that practical.

Attached are a few photos showing the area of trees that will be removed, and a satellite view of the area that I've drawn up where the tress are to be cleared.

I need to determine a value to ask for those trees now, not after-the-fact. The work will not be done for a year or so, but the pipeline company wants to get everything settled with all of the landowner before they start. And I can sure use the money now rather than wait, anyway. The landowner on the other side, whom I talked to yesterday, had an "easy" way to figure out his. His land is cleared for a pasture, and will only have five individual big trees cut down.

- George Gassaway

 

[Pat_B]

George- I'm a real estate appraiser, though I'm not a tree specialist. Nonetheless I'm familiar with some generalities on this topic. Here are some generalities and I would caution you to get local advice before acting on anything.

First of all, there's a difference between land improved with trees that are intended to be harvested for landscape use and land that has additional value because it is covered with trees for amenity purposes for the benefit of the land owner. Your situation would appear to fall into the latter category.

If it was just some large mature trees on a landscaped site then you could hire an arborist appraiser who could provide a value based upon the species of the trees along with their age, circumference, etc. This is typically what happens when a condemning authority acquires a small strip of land from someone and it takes out a few trees.

Your situation is more of a 'forested site' versus an unforested site. That is, what is your site worth now that it is 'less forested'. The best data for that sort of situation is to find comparable sales from similar types of acquisitions. In effect, you would be analyzing these sales themselves to determine value rather than worrying about the value of 'individual' trees.

These comparable sales would likely come from research of similar right of way types of acquisitions. Federal and state laws will also have a big influence on how an appraisal for this purpose needs to be done. There could be additional damages, or benefits, to the land owner as a result of the acquisition and those will need to be carefully analyzed. Also, you'll likely need an attorney who specializes in this sort of work to make sure the paperwork is acurately drafted. Otherwise, your property could be tied up in the future as a result of botched documents.

 

[powderburner]

Would it work to find a tree transplanting specialist (the kind that moves BIG trees) and ask them what it will cost to replace them after the pipeline is finished?

Or, what would it cost to remove the trees intact and alive with rootballs still attached and set them aside, then come back later and replant them?

 

[Pat_B]

The methods to value real estate sometimes seem arcane but they are based upon some good principles. The 'cost' to fix a deficiency (replacing the trees) rarely equals its value. So while you could indeed get a cost estimate of replanting the trees it would not likely (unless extremely coincidental) equal the 'market value' of such a loss. With landscaping it's even more difficult when you are talking about mature trees where it would generally be unfeasible to plant lots of mature trees. The 'cost' of that would likely far exceed the diminuation in value due to not having the trees in situ.

 

[powderburner]

You're probably right. Comparing transplant costs might not be directly comparable at all to land value, but I thought it might be a starting point.

I was merely trying to paraphrase that time-honored bit of advice to "put things back like you found them."

Maybe a real estate agent could give some advice?

 

[georgegassaway]

Thanks all for your info.

If there was some existing actual use for the trees, where there would be a desire or even need to have them back after the work was done, then replacement value could have come into play.

But in this case, there is no need for them to be replaced.

I may be selling the land in the near future, anyway. But I do want to get some fair value for those trees that will be lost due to the pipeline work.

- George Gassaway

 

[DAllen]

If it was just some large mature trees on a landscaped site then you could hire an arborist appraiser who could provide a value based upon the species of the trees along with their age, circumference, etc. This is typically what happens when a condemning authority acquires a small strip of land from someone and it takes out a few trees.

Frankly, I find that method speculative and arbitrary - not that it doesn't happen and I am certainly NOT criticizing Pat. Usually, when that happens the municipality in say a public works project pays a ridiculous price for junk lumber. The opposite can happen just as easily when the price is lower than market. I've personally been involved in a few of these situations and they left a bad taste in my mouth.

Economics101 says that the value of an object or service is what someone is willing to pay for it. If you want to know the REAL value call lumber company and see what they want to pay for taking it down and hauling it out. You could have the land cleared for the gas company and make a little $$$ on the side.

Hope that helps.

-Dave

 

[Pat_B]

The value of those few mature trees should be well in excess of their value as lumber. The amenity value of those trees is also taken into account, so the value of a 50-year old Oak tree should be much higher than a newly planted tree.

However, where things go wrong is that too many condemning authorities take advantage of homeowners and give them too little for their trees and those sales are then used as comparable data for future appraisals. A large scale condemnation project such as a highway widening can basically create its own market as the number of individual takings start to occur. The appraisers are basically forced to use those prior takings as data for future takings and the courts will agree. That's why its best in those sorts of situations to band together with all the affected neighbors and try to negotiate as a group at one time before anyone accepts any individual offer. Otherwise, if a few neighbors let their properties go at low prices then they've set the value for everyone else.

Now the same thing happens with the valuation of individual trees. The data that the arborist appraiser uses comes from negotiated sales between homeowners and the condemning authorities. Far too often those homeowners will settle for too little, then that becomes the data for future appraisals.

 

[blackjack2564]

For what's it's worth.

Back in the 90's I had a beautiful lot in the country on deep water in South Georgia. The land was owned by Georgia Pacific and had been tree farmed for ever. They decided to sell of the property on the rivers and marsh area as they could net much higher dollars than continued farming.

It had mostly 30 -40 year old stock and a few giant 80-90 yr old trees and looked generally like your photo's. [Why this reply]

When the neighboring lot was built on and the power lines went in, the electric company mistakenly ran the power from a pole on the front far corner of my [completely treed , undeveloped] lot. Across my lot at a diagonal to the opposite side then over to their house. Basically a diagonal across my lot, front to back, removing a swath of trees that = 1/3 acre.

After informing them of the mistake .[which was quite understandable at this time, no road, first house in etc.] The line was removed, I was given 650.00 for the trees and free hook up when the time came for me to build, but this obviously was for the damage they did. I asked for underground hook up , worth 2500.00 at the time.

Of course I wanted more, they wanted to pay less and some how the tree folks step in and set the value to which we both agreed. This would have been much less for inland land , but I got the premium for being on the water.

Any how by looking at your plot which is .27 acres and my similar situation , maybe that will at least give you something concrete to start at.

I asked a tree harvesting crew at the time what clearing was worth.. Any where from 250 -500 an acre depending on the density, age, type of trees, for pulp or timber products, non lumber. Also taking into account how large an area is timbered factors in the equip. men, fuel, and cost of hauling to a mill. This can make the difference of worth. Obviously a small tract is not even worth the time to cut. This is in the South and we're talking pine . But I bet it's similar everywhere unless we are talking high quality Oak, walnut,maple etc. And this did happen 17 years ago, so factor in inflation.

I'm gonna guess you'ld be lucky to get 1000.00 plus for those trees because they are on the right of way with no such thing as a "good view" , but only their intrinsic value, what ever that turns out to be.........unless there is some special circumstance. Please let us know how you do.

 

[georgegassaway]

Jim, that is exactly what I was hoping for by asking here. That someone might have had (or know of) a very similar situation, and some ballpark dollar amount for a given area that I could extrapolate from (given the area vs. inflation, vs. noise level of not being exactly the same thing).

Thanks very much!

- George Gassaway

 

[Pat_B]

I can't emphasize enough that valuing individual, or a swath of trees, on a replacement basis is NOT the proper way to value something like this. What everyone is talking about here is what is known as the cost approach in appraisal terminology. The market value (aka 'sales approach') is what is used in takings such as this. Not only is it incorrect, but it almost always results in the land owner getting way too little money. And, all of this is based upon local land values in your area which are likely to be different from other areas.

I've worked on assignments where the taking of a small corner of property rendered the site useless because the total area of the site was now below the minimum required by the municipality to build a house. That taking on a per square foot basis was extremely valuable. In actuality the homeowner received over $50K for a 40 square foot corner. On the other hand, a corner taken away from crop land might only affect the farmer's yield by 1% and be valued accordingly. I had another situation where the site sat on a corner between two counties. The taking rendered the original driveway unusable, so the driveway had to be switched to the other side of the site which changed his address to the other county! Suddenly, the homeowner had to contend with all sorts of different buidling code requirements whenever he made any changes to his house. We're talking about how it affects the utility of the land-- we're not talking about valuing the trees or dirt as personal property.

In takings such as this the land should be valued on a 'before taken' (forested) and 'after taken' (partially forested) basis. Comparable properties will be researched and chosen from BOTH categories. The value of your land 'before the taking' and 'after the taking' will be subtracted from each other, and the difference will be the value of the taking itself.

There are MANY other compensable factors that can come into play that could warrant additional payments to the land owner. For example, the accessability of your site needs to be considered. If their easement makes your site unbuildable then the value of that easement could equal as much as the entire site. Or, if your site after the taking is still buildable but limited to a smaller house then the site could also be less valuable. There are sometimes issues of ingress and egress. You'll want to make sure that the taking doesn't affect how you can access your site to get to any potential future house. Please note that all of this still applies even if you personally never have any interest in building a house on your site. Doesn't matter- the highest and best use of your site will be determined and all of this revolves around what the HBU of your site should be, and the damages payable to you are based upon that. You'll also want to make sure you get compensated for your legal fees.

We're talking about real property here-- not personal property which is what everyone is talking about when valuing the trees by themselves. The trees by themselves would only be valued when a small scale taking is involved like in someone's front yard. In a situation like that, the legal and appraisal fees would likely be too much for anyone to want to pay, so the parties usually stipulate to more of a simple formula for valuing the taking on a 'per tree' basis, and that's when an arborist gets involved.

Most of this is covered on a statuatory basis based upon state and federal laws. What is, and what is not compensable is very important. I guarantee you that the utility company will want to oversimplify this and pay you a token fee for their taking. You might find out years later that your site is unbuildable as a result of their taking. Or, perhaps their taking ocurred in the best portion of your site, leaving you with a flood plain portion. All of this needs to be researched to really know how much compensation you are owed.

In our area, under ground gas pipelines have a significant negative affect on market value. There are signage requirements that require the utility company to post very noticeable signs every so-many feet above ground. These signs are quite unsightly and visible to any potential purchaser. Furthermore, the information on the signs themselves can be quite frightening to any potential purchaser as they warn about the possibility of gas leaking or an explosion if you dig in that area. Anyone owning this type of land is really at a disadvantage as compared to the non-encumered land. Again, the effect on value of these unsightly signs is usually a compensable claim.

 

[shrox]

Trees play a vital role in the environment, they shield the earth from falling rockets and kites.

 

[bobkrech]

George

A co-worker inherited 38 acres of woods in the middle of Massachusetts on the top of a ridge on a nice lake. It was the family farm 2 generations ago, and the land he grew up on. The last farming occurred 70 years ago so the tress are between 70 and 100 years old. He is also a master wood worker and plans to build a retirement home on the top of the ridge overlooking the lake and a woodworking shop on the bottom near the road, and havest enough trees every to supply his wood working needs.

Last winter he hired a Forrester who perform an extremely detailed tree survey of the property and made an estimate of the usability of each tree, and their yield. This winter he is planning to remove a stand of 70-100 year old mature white pines that will begin to die off over the next decade which cover an acre, thin out the defective hardwoods so that the remaining hardwoods grow straight. He is also going to clear ~1+ acres near the top for his house and a 40 foot wide winding path for the 1000' driveway from the street to the house location, however most of the land will remain forested.

Wood is basically divided into 2 main categories: hardwood and soft wood. There are at least 2 dozen species of hardwoods in various sizes from 6" to a few 20"-24" trees on the property what will be removed. The larger, straight trees will be milled for timber and board, the defective trees down to around 8" diameter will be turned into pallet wood, and the smaller trees chopped into firewood. Hardwoods have significantly more value than soft wood, but the prices are pretty low. Standing trees for timber and boards is worth about $150 per MBF or 15 cents per board foot. Standing firewood is worth $10 a cord, and the chipped hardwoods are used to make pellets for stoves.

The softwoods, principally pines, hemlocks and cedars have little value. The larger one, probably in the 8" and above range have some value for timber if they are straight, and cedar for garden chips but they frequently are used for paper pulp. The chips have some limited for industrial kilns, flake board, other composites and paper.

The cost of sawyer cutting the wood is approximately equivalent to the the standing price or ~$150 per 1 MBF, the transportation cost is dependent on the price of fuel, but is probably running at $250-$300 per MBF. Storage at the lumber yard and kiln drying and the interest to dry the wood for a year or two is around $300 per MBF. The brings the cost of the wood before milling to ~$900 per MBF. After milling there is typically a 25% loss, so the mill price is somewhere around $1100-$1150 per MBF of medium quality lumber. After the markup by the retailer, it going to cost between $1700 to $2000 per MBF for medium quality lumber. Better quality hardwood and small quantities are higher. On average the ratio of retail price to standing price runs between 7 to 8 and as high as 10 depending on supply and demand and the price of fuel.

Cord wood has even a higher multiplier. In New England is 24. Standing price is $10 a cord, then it is trucked to the processor where it is aged, cut ands split. Then it is broken into smaller lots and delivered to the retailer or end user. Again, if firewood is plentiful because of high winds and storm, the standing price plunges. When the price of fuel increase so does the retail price.

Right now demand is low and there is plenty of wood in the supply chain so the standing price is actually lower than it was 20 years ago. The fuel prices are relative high so the prices are relatively high because wood is perceived to be a good, cost effective, alternative fuel. In reality it is only if you have a good supply of it and cut and split it yourself.

I believe the forestry plan for my coworkers property involves about 2600 trees IIRC with a 60/40 hardwood to softwood split. After all is said and done, he figures he'll net a few thousand from it. The sawyers get paid by selling the wood to the mills, but he has to pay the Forrester who actually did an incredibly detailed yield evaluation of every single tree that will be cut down and he supervises the cutting to minimize collateral damage and is worth every penny he gest paid! My friend will spend all the proceedes and probably a bit more to grade and gravel the driveway.

I afraid that you'll probably get only a few hundred dollars for the wood based on your description of the property since most of the trees are small (trees below 8" aren't worth much), and you have only a few large hardwoods. Since the amount of land to be cleared is small you could get a diameter tape and measure each tree. There are generic formulas for trunk diameter vs MFB yield for each species. You could get the data in less than a day, and sort it in a spread sheet to determine the MBF yield and the yield of timber and lumber, cord wood, pulpwood and chips, but in all probability your free time is worth more than the extra humdred you might be able to negotiate based on a detailed survey.

Bob

 

[Pat_B]

Bob- that's simply not how it is done in a taking. I would agree that the timber value is probably next to useless. That doesn't make the taking useless. It is figured in a much different way (explained above.)

 

[bobkrech]

Pat

I would agree with you that in a taking, with a good lawyer, a person can do very well, however there already appears to be a preexisting right-of-way on the property as evidenced by the 4 existing pipelines. If the new pipeline does not go outside the preexisting easement, the terms of preexisting easement would apply and it should be recorded at the local registry of deeds.

If the trees are outside the existing easement, then I would agree that one could clearly ask for more that the price of the wood. The present owner is required to allow access to the existing easement however if the easement is accessible without cutting trees, the land owner is under no obligation to agree to permit the tree cutting. Unfortuneately for the landowners, many power companies prefer to ask forgiveness rather than permission. Another friend has acreage in Maine on a rural road with a powerline, and the have permission by law to trim trees that can intefere with their lines. We he went up after the trimmed, he was appauled that they clear cut 30' into his property so they wouldn't have to come back for many years and there wasn't much he could do about it.

George asked for the price of the wood and my description is correct. If he wants more than that the he'll probably need a lawyer how he has to pay. This isn't an urban area so the land isn't worth what it would be worth in an urban area. A buildable 1/4 acre lot in the metro Boston area is worth up to $400K in the "better" communities, probably only a few thousand in a rural farm community.

Bob

 

[georgegassaway]

Thanks again for the info on this.

Due to the situation, the only thing "extra" I can get out of this is the value of the trees (not replacement value), and also due to the situation it is not something practical to involve a lawyer with. The way the land is grown up, it was not very practical to attempt to go into that area and try to measure and count tree by tree.

I got the info I was looking for, which was to have some really rough ballpark idea of what might be practical for me to get for the trees that will be removed. Blackjack's message of Oct 10th was the closest thing to this.

I have put in an "estimated value" as the pipeline company requested. I'll find out at some point, maybe the next few weeks, if they'll go with that or pay something less than that.

I know the way things go with "thread drift", and that you guys might want to discuss this further regarding principles, legalities, and so forth, in general. But I do want to make clear that as of this point I've gotten the info that I need for this particular situation (especially since I've already submitted the estimated value).

- George Gassaway

 

[Pat_B]

George- do you have any sort of agreement under the previous easement that allows them to expand it according to agreed upon terms?

Here's a good link to your state law regarding the condemnation procedure. https://records.mobile-county.net/judicial/Condemnation.aspx

It's very similar to laws in many other states. The before and after taking values are compared, and the difference is the value of the taking itself. Please note no procedure for the valuing of personal property (timber). It's just not done that way in compliance with the law unless we're talking about commercial crop land. Even then, there will still be two appraisals of the before and after taking that take into account the decreased yield of the timber operation as a result of the taking.

The advantage to this method is that one of the appraisals will give you the market value of your property before the taking so that you are getting a 'free' appraisal of your land for what it's worth today. In a large scale condemnation the condemning party will already have completed those appraisals. Be sure to get a copy of those-- typically, the condemning party would present you with those appraisals simultaneously with their offer.

It shouldn't cost you anything to get a copy of those appraisals.

 

[Len B]

Hi George,

My wife works for the Canadian Department of Justice. She is involved with native land claims. Often, trees are an issue to be considered for a particular piece of land. They enlist the services of tree appraisers. They really are out there. In your case, this may be overkill and also may cut into the value you get for the trees. I just wanted to point out that they exist and may be found in your area.

Good luck with your situation.

Len Bryan
CAR L3 TRA L2