Dividing your legacy ranch: Getting the right valuation

Getting a divorce is difficult in its own right, but one of the major problems people have in Montana is seeking a proper valuation of their ranches. Ranches are unique, so no simple guidelines can determine what each one is worth. Values depend on what the ranch does, how big it is, its popularity and other factors.

The reality is that valuing a ranch is not easy, and valuing one-of-a-kind ranches is tricky. Legacy ranches are all different, and emotion can play a role in how much someone wants the property to be valued for. In addition, ranches rarely bring in a heavy cash flow in comparison to the value of the ranch overall.

Why is it so hard to value a legacy ranch?

One issue is that there are so few ranches that go on the market. Without similar transactions, it’s hard to know what to price a ranch for and how much it could sell for. In a situation where a divorcing couple needs a proper valuation of the property, this makes it hard to agree on what the property could, or will, sell for.

How do you value a legacy ranch?

One of the main ways is by working with appraisers, bankers, landowners and county offices. Why do you need so many people? It comes down to not having any central database of similar transactions. Instead of being able to look at comparable ranches sold, you need to get the ranch valued from the ground up.

For instance, the county might suggest the value of the land. The bankers might say how much they’d be willing to provide in a loan based on the property, not including farm animals or other factors. Once you collect information about the value of different parts of the property, an appraiser and your attorney can work with you to decide what you think is a fair value overall.

The important thing to realize about your ranch is that there is no guarantee that the value you come up with is going to translate to that value in a sale. Ranches are unique, and purchases, as well as sales, often come from an emotional place. With unique landscapes and the potential for a genuine Western homestead, ranches can sell for much more than their initial valuations if the right buyer comes into the picture.

For your divorce, coming up with a valuation may not be easy, but by working with the above professionals, it’s possible to get a good idea about the value of your ranch on paper.