Timber Sales - How To Sell Timber
Timber sales can be complex, but forest landowners can make the most of this unique opportunity to generate revenue and achieve ownership goals. We encourage landowners to review this material and to seek the advice of a professional forester before deciding to sell their timber.
Timber sales are often once-in-a-lifetime business transactions;
they should be accomplished through contracts and sealed bids,
with the advice and guidance of a reputable professional forester.
Learn the facts about “Selective
Cutting” and “Timber
- The seller should have a professional forester develop
a management plan and determine if it is ready to harvest.
- Generally, a private consulting forester should review
(“cruise”) the timber and handle the timber sale.
- The seller should get a written contract. Learn more about timber sale contracts.
- The landowner, timber owner and buyer all hold responsibility to ensure compliance with Virginia’s forest laws.
Methods of selling timber fall into three categories:
- Sealed Bid. The seller advertises the timber to be sold and prospective buyers compete with a sealed bid to harvest the timber.
- Fixed Price Negotiation. The seller negotiates with a buyer for a fixed price for all timber on a given acreage. This price could be a “lump-sum” value for all the timber in the sale paid prior to harvesting or a “pay-as-cut” per unit value for different timber products as they are harvested and mill receipts are tallied.
- With Lump Sum sales, all timber that meets certain standards is sold for a fixed single payment, often on a sealed bid basis.
- In unit sales, payment is based on an agreed price per unit of measure (cords, thousand board feet or tons) and is paid in installments as cutting progresses. A potential problem with unit sales is that the buyer may
cut only the best timber on the area which is the easiest to harvest. Close supervision of the harvesting operation is necessary with unit sales to ensure that unmarked trees are not cut and that trees are marketed for the highest value forest products.
- Percent Basis Negotiation. The buyer or logger negotiates to pay the landowner a percentage (or “share”) of the amount received at the mill.
Which Method is Best for You?
Regardless of the sale method, the seller should have a good estimate of the value and volume.
Sealed bids usually generate top dollar for landowners since competition creates an incentive among buyers who need the timber and know the best markets. Fixed price and percentage sales may work best when the volume or type of timber may limit the number of potential buyers or where the seller has a specialized need.
Forestry Services - Public and Private
We recommend getting professional guidance to help you get the most money from selling your timber. Retaining a consultant forester generally ensures the highest return
possible for the timber. View a list of private
The Virginia Department of Forestry offers these services:
- Forest Management Plans: Guide landowners on what to sell and when to sell to meet their goals for growing a new crop of timber after the harvest (fees may apply for some types of plans.)
- Pre-Harvest Plans: Map out where to put haul roads, skid roads and loading decks, and how to guard against erosion and stream pollution.
- Lists of Private Consulting Foresters and Timber Buyers: Assist landowners in finding forestry contractors who can prepare timber sales and harvest timber.
Private Consulting Foresters will provide:
Private consulting foresters provide valuable fee-based services for landowners, such as:
- Timber Appraisal: Provides an inventory of the species, size, quantity and quality of standing timber within the sale area. This critical information gives the landowner a basis for determining a fair market price for the timber.
- Harvest Planning: Identifies placement or locations of haul roads, log decks and stream crossings on the property. A good road system is a capital improvement with long-term benefits for management, recreation and fire control.
- Timber Sale Coordination: Provides the landowner with “peace of mind” that the harvesting operation is being overseen by a professional and conducted following all state laws and regulations. Having a consulting forester in almost every case ensures the highest return for the timber and a sale with fewer problems for the landowner.
- Financial Planning: Provides tax planning prior to a timber sale and preparation of a reforestation budget.
- Boundary Marking: Provides accurate boundary line location and marking.
Wednesday, 11-Jun-2014 12:38:38 EDT