How To Sell Timber

Introduction

• 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. (Sample contracts: Northeast Forests, LLC., Cornell, Nebraska)
• Provide for compliance with Virginia's Forestry Laws.

Learn the facts about "Selective Cutting" and "Timber Theft"

Selling Methods

Methods of selling timber generally fall in one of three categories:

1. Negotiation with a buyer for a fixed price for all the timber on a given acreage;
2. Acceptance of a logger's offer to cut timber "on shares" per unit of volume cut. The logger pays the landowner a portion of the value received for logs delivered to a sawmill or pulpwood yard, frequently in a range of 40-60%;
3. Holding a sealed bid sale utilizing the competitive bidding process after advertising the timber to be sold and showing it to prospective bidders.

Methods 1 and 2 often work well for landowners familiar with timber markets and marketing and who have a general idea of the quality of timber they wish to sell. Method 3 normally generates top dollar for landowners due to competition among buyers who have the greatest need for the timber and the best markets.

Forestry Services - Public and Private

Selling timber can be a complicated process, and most landowners sell timber only once or twice in a lifetime. Before deciding to sell, contacting a professional forester is a good idea, particularly for landowners who are unfamiliar with the process.

The Virginia Department of Forestry provides:

• A Forest Stewardship Management Plan, for advice on what to sell and when to sell, and to reflect landowner's goals for growing a new crop of timber after the harvest. The Department can provide a "Stand Plan" for management of just one unit on your property.

Private Consulting Foresters will provide:

• Pre-harvest plans to determine where to put haul roads, log loading decks, and how to handle water to protect against erosion and stream pollution.
• Valuable fee-based services for landowners including planning and conducting timber sales and monitoring the subsequent logging operation.

Consultant foresters may be retained to provide the following services:

• Boundary line location and boundary marking.
• Timber appraisal to provide an inventory of the species, size, quantity and quality of standing timber within the sale area. This is very important information. Without it the landowner has no basis for determining a fair price for the timber.
• Implement the logging plan in terms of haul road and log deck construction and stream crossings. A good road system is a capital improvement with long term benefits for management, recreation and fire control.
• Prepare the timber sale contract and act as the landowner's agent in conducting the sale and overseeing the harvesting operation.

Retaining a consultant forester generally ensures the highest return possible for the timber.

View a list private consulting foresters.

Timber Sale Contract Provisions

Timber should be sold only under a written contract to protect the rights and obligations of both the seller and the buyer. Written contracts generally reduce the potential for misunderstandings and disagreements. The contract should state exactly what the seller and buyer have agreed to concerning the sale. The following list of items should be included in a contract:

• Date of the agreement.
• Names and addresses of the seller and the buyer.
• Seller's declaration of ownership and guarantee of the title to the timber and to defend all claims against the timber.
• Seller's guarantee to the buyer of the right to ingress and egress with entrance and exit routes physically described as needed.
• Description of the tract including exact location, acreage, and map of the timber area to be sold.
• Statement of the type and amount of timber to be harvested.

  Indicate the type of harvest to be carried out such as clear-cut, diameter limit or thinning. If natural regeneration is desired after clearcutting, a statement requiring the cutting of all stems down to 2 inches in diameter should be included. Indicate volume of sale by species, unit of measure and log rule used as appropriate.

  Indicate the minimum top diameter down to which utilization is required; especially important if the seller is paid by the volume cut.

  Establish ownership of the tree top residues; normally in a clear-cut sale the buyer is entitled to all residues.

• State the purchase price and method and terms of payment.
  • Indicate whether purchase price is a lump sum or on a value per unit harvested basis.
  • Timing of payment must be clearly stated.
• State the starting and ending dates for the contract during which period the timber must be cut and removed.
• Indicate restrictions or conditions regarding equipment operation.
  • Designated areas for log skidding and loading activities may be included.
  • Requirement of buyer to notify seller prior to moving equipment onto the tract.
• Conditions regarding protection of the property may include:
  • Payment for trees cut or damaged that are not included in the sale.
  • Maintenance and restoration of existing roads.
  • Repairing damage to specified fences, bridges, culverts and/or buildings which may occur from logging activity.
  • Removal of logging debris from fields, roads, ditches, streams, rights of way and across property lines.
  • Postponement of logging when wet weather would result in serious soil rutting through continued equipment operation.
  • Removal of trash upon completion of operations.
• Statement of conditions for or against subletting of the contract.
• Compliance with Virginia's Forest Laws.
  • If the timber to be cut is subject to the Seed Tree Law, statement of method to achieve compliance is needed. (Article 9, Section 10.1-1162-1169 of the Virginia Code).
  • Requirement of buyer to comply with all fire laws and to immediately suppress at his expense any fire originating from accident or negligence of the buyer or his agent (Article 6, Section 10.1-1139-1145 of the Virginia Code).
  • Requirement of logging activities to avoid causing water quality problems or potential for water quality problems in compliance with the Silvicultural Water Quality Act (Article 12, Section 10.1-1181.1-1181.6 of the Virginia Code).
  • Forestry Laws page | Virginia Seed Tree Law | Water Quality Law
• Requirement for performance bond and financial responsibility of the buyer.
  • To ensure performance, the buyer may be required to put a cash bond in escrow.
  • The buyer should be compelled to carry the following for the period of the contract:
    • personal liability insurance.
    • property damage insurance.
    • Workmen's Compensation Insurance.
• A statement directing arbitration may be included in case of disagreement (e.g. each party names one person and these two agree on a third to form a board for settlement of disputes).
• Notarized signatures of all parties on the contract.

Last modified: Monday, 19-Oct-2009 15:42:43 EDT