Hiring a timber consultant

When selling your woodlot, who should you enlist for help with all the choices you'll need to make? August 12, 2001

My grandmother has decided to have a portion of her timber cut. She has consulted with a timber consultant about finding a reputable logger and overseeing the operation. He wants 10% off the top before taxes for his services. Seems to me he might be trying to rip her off. I think she could take sealed bids on the job herself and save a lot of money. Does anyone have advice?

Forum Responses
Some of the big paper mills (Mead, International Paper, etc.) have foresters that will work for free as long as that mill has first refusal on the wood. You might check that out.

I have seen some real ugly logging jobs done that were overseen by the "10% consultants".

Check with your county forester. He or she will come out and mark the trees (this is normally done for free). Next, hire a logger to cut and haul the trees to a landing, where they will cut them into the best logs from the tree. From there, contact mills and have them come bid on them at the landing. This will return you the most money.

I recently did this with some of my woods. The highest bid was $27,000 and lowest $12,000. Whatever you do, get lots of bids.

Here's what a consultant should do for you. He should mark the timber to be sold, solicit bids, and oversee the operations so it meets specs. His marking should be done to better the stand. The consultant will be working for you. He is a hired gun. However, get more than one consultant to give you a proposal. Then, hire the one that you feel is the best for your situation. If you don't like the commission, try working on a $/Mbf basis or by the hour.

If you are going to get the state to mark your timber, there is a long waiting list. Some states don't allow their foresters to mark timber.

If you think you can handle a sale on your own, have a consultant mark your wood and give an inventory and appraisal. Then all you have to do is the legwork. Contacts, inspections, showing the timber, advertising, taking bids.

By all means, get referrals from whoever is doing any work. Check them out! Very important.

You might want to check market conditions in your area, as well. Markets may have gotten a little soft, and now would not be the best time to sell.

A good consultant should be able to get your grandmother over 10% more, vs. a dishonest consultant. Get everything in writing.

In California you need a licensed forester to put together a plan, but I don't think they have to oversee it. Typically about $5k, I think.

Does your grandmother know she may not have to pay taxes on all the timber she sells? For instance, if she purchased the land and timber in 1960, she only has to pay taxes on the amount of growth on those cut and sold trees since 1960. If the land in 1960 had, say 16 tons/ac in pines, and she cut 35 tons/ac, she only pays taxes on 35-16=19 tons of timber/ac. Not 35 tons/ac. Now, if your grandmother has owned the timber since day one of the trees, there is no gain.

I am a state forester and we do recommend forestry consultants very highly.

There are several factors to consider. First of all, location. Different areas of the country have different regulations. You may need a forester working on your behalf to navigate this maze.

Next, procurement foresters make a living buying timber. They do it on a daily basis. If you are unfamiliar with this process, you should seek help. Properly written contracts are critical to the success of the sale, both from the buyer's and seller's perspective.

Finally, be sure of the tax implications. Establish the basis if it has not been done. A knowledgeable timber tax attorney or CPA may be your best friend in this deal and save you thousands of dollars in taxes. I made my living for a number of years buying timber. I now work for a consulting firm.

Just keep in mind that the highest price for your timber is not always the best deal. The individuals working on your property should be the best available. Check references. There is considerable difference between one logger and the next. Only deal with the best.

From contributor J:
If it's a nice hardwood stand, I wouldn't trust too many foresters or loggers. Foresters will tell you it's worth 50,000 when it's worth 10,000. Loggers will tell you it's worth 10,000 when it's worth 50,000. Henchman and dreamers abound. You can't tell what it's worth till it's on the ground, skidded, bucked, scaled and graded. You will get ripped off for the veneer, which can represent 10% of the volume or more, but 60% of the total gross income.

Contracts rarely mean anything, because they are usually arbitrary to the buyer and most will run you and your wood lot ragged.

Here's what I would do: Tell a professional forester that you want a "light commercial cut" of 2-5 financially mature trees/acre that may make the veneer grade. Then get a good "independent" contract logger to cut the marked trees only, without damaging the residual stand. Then get a buyer/buyers from a veneer mill to look at the logs once the trees are down and out. Don't get a middleman buyer--you will be taken. Sell the sawlogs to a sawmill that will treat you right. Private wood lot owners rarely get a fair shake, trust me.
You could pay your forester and logger based on the gross percentage.

If you do it this way, you will still have a valuable forest that can be cut again in 10 years and make twice the money. This isn't cut and dried by any means, so learn what you can before you get $ signs in your eyes, or before your wood lot is pounded into oblivion.

From contributor E:
Most people will only have one timber harvest in their lifetime, and if it is a bad experience, you end up sounding like the contributor J.

I have been in the wood business well over 20 years. I have seen the bad, but the bad is the exception. For every shyster there are 100 hardworking loggers, foresters and mill hands that are honest individuals that care about their customers and industry.

Educate yourself, talk to references and hire a professional that cares about our industry and its sustainability.

From contributor J:
With all due respect, if you are saying that a wood lot can only be cut once in a lifetime, you must fall into the 1% you referred to, so I would be running for cover if you showed up in my wood lot. How can you say getting one cut in a lifetime is sustainable forestry?

From contributor E:
Just how fast do your trees grow? I did not say they will get one timber cut. I said most people would experience only one timber harvest.

Do not attempt to do this without help unless you are qualified by previous experience or training. If you do attempt to manage this without experience, you will be disappointed with the amount of financial returns and the condition of the woods when you are done. In short, whoever logs this will take advantage of your lack of knowledge and experience. This is not meant to disparage loggers, as most are very hard working and honest, but they will always try to make the most return by the fastest, easiest way possible and that may not be what you want.

The most important thing to do is to carefully interview independent, fully qualified foresters, check with their previous clients, and then select the one you feel best about working with. Explain your objectives as to the future of the woods.

When folks look at a clear cut and say it is bad and that the landowner is not abiding by sustainable forestry practices, they are not considering variables in harvesting decisions.

How a wood lot looks during "sustainable forestry" practice depends on the size of the wood lot, the species of the trees, the soundness of the trees, the products the trees are being grown for, etc. Managing 1000 acres produces a different look than managing 10.

A simple example may be SYP in the Southeast. Trees are planted or naturally seeded on prepared ground, perhaps thinned in 3 years and seed trees removed. The trees may be thinned again in several years for pulpwood, thinned again later for chip and saw, thinned again later yet for saw timber and finally clear cut for poles and veneer. Then replanted for another cycle. Trees appearing in the middle of this cycle are canopied over and won't grow, so it looks like the land is just being used up.

It isn't and that is why the person managing the property needs to have a forestry education, regardless of where he gets it. It's also why the person criticizing the farming techniques should understand forestry and the goal of the owner.

Is a clear cut a rape or did the forest reach its merchantable maturity? Is the property being managed for fiber or looks? In a nutshell, hire a good consultant, create a management plan and follow the recommendations.

From contributor J:
Sorry if I misconstrued what you were saying. I guess the reason why private landowners see only one cut in their lives is because the average ownership of private property is only 7 years.

Forestry is a very simple yet diverse concept that in my mind is a three way co-operation between forester, logger and landowner.

As we know, forests are generally very resilient in most climates, except for semi-arid regions. The Scandinavian countries saw huge clear cuts when it was first settled, but is now intensively managed sterile forests. North Americans have largely learned from these countries most of their Silvacultural practices of today. There are many valid reasons to cut that tree, but there are just as many equally valid reasons to leave it standing. So in view of that, there must be an enforced compromise to get the most quality roundwood out of our forests in the shortest period of time, while considering wildlife, recreation and water quality without damaging the residual stand. It just comes down to a hands-on ethic by those who really care in the first place, as opposed to the "cut and run" ethic that largely still prevails.

The comments below were added after this Forum discussion was archived as a Knowledge Base article (add your comment).

Comment from contributor S:
Do not put down all timber consultants. That would be like saying one bad apple spoils the whole barrel. I am a timberbroker, I have done this for over 17 years and I do not believe in ripping off the land owner. I work for the land owners not the buyers. Buyers will try to get your trees as cheap as they can and if the land owner does not know the real value of their standing timber, yes they will get ripped off by the timber buyer.