June 29, 2016
The number 1 question I am asked during the timber purchasing process is this; how do I know I am getting treated fairly? The answer is, in most cases, you have to trust me, my references, and my companies experience in the business. Sometimes that is all people need to hear, but other times they need more.
I am writing this article today to give a brief “what to know” list of items/processes you need to be aware of when you sell your timber.
First, if you want to sell your timber it is very easy to get the ball rolling. All you need to do is contact a timber company (like myself) and tell them you are interested in selling your timber. Usually the process goes as follows. The timber buyer will look at your property, assess the timber stand condition and value, then come back to you with multiple options on how to cut the timber on your property. If you agree on a harvest type and price then the timber company will prepare a deed, and you can close the deal. This is where it gets fun. So to help out I will give you a break down of simple to understand harvest types, payment options, and deed points.
-Clear Cut: Just how it sounds. This means cutting all timber usually for the purpose of replanting in pine.
-Improvement Thinning: This can mean any thing from a row thinning on a plantation to a selective pine log cut on a mature native stand. Basically an improvement thinning is just what it sounds like, thin the timber to improve the stand.
I could go all day on all the different types of thinnings, but I won’t in this post (maybe a later post).
After they present you with options, you have to make a decision on what you want to do. I can’t tell you what to do because each situation is different, but you have to make sure that what you are doing is what you need at that certain time. This is where a skilled forester can really help (like myself).
Now I will breakdown HOW YOU GET PAID. There are generally two ways to get paid.
- A lump sum up front cash payment
- By the ton
Both ways has its advantages and disadvantages.
If you are clear cutting your timber I highly reccomend a lump sum deal. This will guarantee that your timber will be harvested within the contract date, and you receive all of your money up front; ridding you of the hassle of counting tons. If you want to do a clear cut by the ton, you can; however, timber companies prefer the clear cuts to be lump sum (and you get more $ this way). My only word of caution when doing a per ton deal on a clear cut is to watch for the “over seller”. EX: I offer you $50,000 lump sum for your timber, then another timber buyer says, “we can get you $70,000 if we cut it by the ton”. DO NOT FALL FOR THIS TRICK! If they won’t write you a $70,000 check right then and there then don’t believe them.
If you are doing an improvement thinning on your property the best way is to contract the timber by the ton. This insures you get paid for each ton, not a penny more or less.
But one might ask, “how do I know I am not getting screwed?”. That is a good question. It is very important to state in the contract the specific product prices, specs for each product, when you get paid, and how they are keeping track of the timber being hauled.
Here at VanDusen Timber we use an “accountability tag” system. This pairs each load delivered to the mill with an accountability tag #. They write the tag # on the load sheet and staple the tag to the ticket. This allows the landowner to double check that each load that goes out they are getting paid for.
Now one might ask, “how do I know they aren’t skipping loads on the load sheet?”. There is also a simple fix for this. Game Cameras. Use the same camera you use for deer hunting or security on your property, and count the loads. If the game camera and the load sheet do not match then you know something is crooked.
Now lets assume you have agreed on a harvest type and payment options now it is time for the timber deed. Timber deeds are fairly simple, there is a buyer, seller, consideration (payment), legal description of land/description of timber being harvested, length of contract, and then stipulations of the contract. That last part is where you as the land owner need to look for a few key items. Here are a list of items that you need to have in the deed holding the buyer accountable (there are other items that hold you accountable but all companies are different):
- Buyer agrees to repair any damages
- Buyer will not leave litter
- Buyer will follow Best Management Practices
- Buyer will notify Seller prior to commencement of logging
- Buyer will provide proof of Insurance
- Explanation of “Accountability System” if it Per Ton
This is not a comprehensive list, nor is it in the “legal terms”, but if one of these items is not included in the deed I would ask for it to be added.
This is not the end all be all when selling your timber, but I hope that this can help you along the way. Of course if you ever do sell your timber we are always here to help at VanDusen Timber.