Property Guide: How to Sell Timber

Property Guide: How to Sell Timber

The Basics of Selling Timber

Since we’ve opened up our marketplace to additional property resources, we’re starting to get a lot of questions about timber.

The most common timber questions are: 

  • Can I sell my timber? 
  • What is my timber worth? 
  • Is selling my timber bad for my property? 

In this article we are going to discuss a few of the options timber owners have, and some additional matters to consider when selling your timber.

Can I sell my timber?

If you own the surface, then in most cases, you own the timber. And if you own it, you can sell it. But many landowners have never sold timber. So, the lack of knowledge could be costly and lead to decreased profits. 

Landowners have a couple different options when it comes to selling timber. If you can harvest and process the timber yourself, you can sell the logs to the mill or a company making wood products. This method is called Log Sales. If you do not have the ability to harvest and process yourself, you could enter into a contract to sell all or a portion of the standing timber to a buyer who will harvest and haul it off. This method is called Stumpage.

Stumpage is the most common method of timber sales. With Stumpage, there are 2 ways to be paid. Either lump sum, which means the landowner is paid for all the timber to be cut. Or sale by unit, which means the buyer pays only for the timber that is cut. Whether lump sum or sale by unit, the landowner receives a portion of the negotiated price when the contract is signed, with the balance paid prior to the timber being harvested. In either case, there is no residual (royalty) payment received by the landowner after the timber is harvested.

What is my timber worth? 

The value of your timber will be based on several factors including:

  • What are the current prices being paid in your area?
  • How much timber do you have to sell? The more you have to sell, the better price you will receive.
  • What is the distance from your property to the nearest timber mill? The closer you are to the mill, the more you will be paid.
  • What is the species, size, and quality of the timber?
  • How difficult will it be to transport the harvested timber to the nearest road to load it onto transport trucks? For example, if the timber is located on a hillside, or if they have to build a temporary bridge to cross over a creek, you will be paid less.

Most landowners take the first offer because it might sound like a lot of money. But you need an expert to help you understand the real value. If half of your timber needs another year of growth to maximize the value, then only sell mature timber. But it’s good to get the guidance of an expert to help you make those decisions.

Am I damaging my property by selling the timber?

No, not necessarily. In fact, selective harvesting, or thinning, to remove the mature trees, allows the younger trees to grow better and healthier, which will increase long-term timber value. Thinning will open the property to more sunlight. This will result in more vegetation which will create a habitat for more wildlife.


If you’ve got questions on timber, reach out. We can help. Get more information by connecting with us at https://landgate.com/lease-timber or give us a call at 855-867-3876. We’re happy to help you determine the best course of action.

 

Dan_McCue

Article by LandGate VP of Land, Dan McCue

 

Follow us on social media:

Leave a Reply

Your email address will not be published. Required fields are marked *