Posts with tag 'Chicago, IL'

There's a particular kind of regret that shows up about four months after closing on a piece of ground, and it has nothing to do with the land itself. It's the regret of realizing you structured the loan wrong, or missed a program that would've saved you two points of interest, or learned the hard way that "pre-qualified" and "pre-approved" aren't the same thing. I've watched friends make this mistake. I've almost made it myself. So when TrophyCast sat down with Daniel Steininger from Bank of Springfield to talk through the actual mechanics of financing recreational and farm ground, I paid closer attention than I expected to.

Steininger is a Mizzou grad who's spent his entire career at the bank, spending his days underwriting the exact loans that put people onto the land they've dreamed about since sitting in a tree stand their uncle built. He's not a hype guy. He's the guy who tells you what the numbers actually are, which turns out to be far more useful than almost anything else in this business.

Here's the first thing, and it's the piece that will save you the most grief: talk to a banker before signing a contract, not after. I know—the agent has things moving, deadlines are looming, and someone else might swoop in. But knowing your true numbers before becoming emotionally attached to a property is the difference between negotiating from strength and negotiating from desperation. Also, brace yourself, because recreational ground isn't financed like a home. You're looking at 20 to 25 percent down, not the 5 or 10 percent first-time buyers expect from residential deals. Raw land doesn't carry the same collateral cushion a house does—a bank won't lend 95 cents on the dollar for a piece of dirt with no structure, and honestly, they shouldn't. That's just reality.

Once you're actually securing the loan, there are basically two avenues. Bank of Springfield keeps plenty of recreational paper in-house—think a five-year balloon sitting on a 20-year amortization schedule. That works great if you're not chasing a set fixed rate for three decades. But if you want long-haul certainty, you're looking at Farmer Mac, which is essentially the ag-and-rec-land counterpart to Fannie Mae and Freddie Mac. At the time of recording, a 30-year fixed through Farmer Mac was running around 7 percent with 40 percent equity or better, while a 5-year fixed-variable option sat closer to 6.25. The bank doesn't hold that paper long-term—they service it, meaning you still call the same contact for the life of the loan even though the capital originated elsewhere. That detail matters more than it sounds, because the alternative is getting passed around between strangers every time your loan changes hands.

If you're on a tight timeline, keep in mind that Farmer Mac closings typically require about 40 days, primarily due to the appraisal. You're looking at an 80-to-100-page formal report rather than the brief five or six pages from an in-house appraisal. On top of that, boundary surveys in many rural counties are currently backed up five to six weeks. Put those together, and a 30-day close—the kind sellers love—gets tight quickly. Not impossible, just tight.

If you're new to the game, there's a program worth knowing about that a surprising number of eligible buyers miss entirely: the FSA's Beginning Farmer loan. Don't let the name fool you—"beginning" doesn't mean you're 23 years old in your first pair of Carhartts. It applies to anyone in their first ten years of filing a Schedule F, meaning you could be 61 and just getting into farming after retiring from another career entirely. The program allows entry with as little as 5 percent down, with the FSA financing roughly $500,000 to $600,000 directly and a local bank covering the rest behind them. If you qualify and nobody mentioned it, that's real money left on the table.

There's also a smart workaround for a situation many recreational buyers face without realizing it: handling a property with an existing house. Farmer Mac now allows a dwelling valued up to roughly $750,000 without disqualifying the deal, provided the land itself retains most of the collateral value. Say you're eyeing 100 acres with a nice farmhouse—often the best play is splitting the house off onto a smaller parcel (up to 20 acres, depending on county rural classifications) and financing it separately through conventional residential options like Fannie Mae, while the remaining acreage rides a long-term fixed land loan. It costs an extra survey, but it can save significant money over the life of the note.

As for the current market state—which I trust more than general market chatter since it comes straight from an underwriter calculating what buyers can actually afford—things around St. Charles County and surrounding areas remain steady. Strong, even. Loan volume has pulled back from the 2020-2021 peak, but that's not a red flag; it's simply the market taking a breather after being, as Steininger put it, "stupid" for a while. Buyers are thinking carefully before committing, which is the healthy response as conditions normalize. Ground an hour or two outside the metro remains the sweet spot—far enough to truly escape, close enough to be back at your desk Monday morning.

Don't count on those 3 percent 30-year rates returning. That ship has sailed and won't be circling back anytime soon. Short-term movements are unpredictable—dependent on the Fed and employment reports—but long-term, plan around current market rates rather than what a neighbor locked in four years ago.

The toughest part of the conversation, and one more landowners need to hear, touched on farm bankruptcies—which are climbing, particularly in Illinois. Steininger made clear that bankruptcy rarely stems from a single bad year. It's a series of difficult years piling up, compounded by relentless input costs and debt structures that get rolled forward instead of addressed. The classic trap occurs when an operating note isn't fully paid down and grows year after year; as rates rise, a note that began at 3 percent can wind up refinanced at 8.5—on land that previously carried much lower overhead. It's a hard conversation for a banker to have with a client of twenty years, but avoiding it only makes the eventual outcome worse.

Finally, an issue that comes up whenever auctions are mentioned to first-time buyers: the buyer's premium. People hear the term and assume they're taking on an extra burden compared to traditional sales with seller-paid commissions. They aren't. The math works out the same in the end—whatever final contract figure you reach gets financed, premium included. The real advantage of the buyer's premium is transparency: the number you watch rise on the screen during the auction is the exact amount that goes to the seller. No mental math needed when the gavel drops.

None of this is overly complicated once it's explained clearly. It's simply the kind of insight usually gained the hard way—after the fact, over a drink, wishing you'd known earlier. Might as well learn it now instead

TrophyCast Is Back — Here's What's Really Happening in the Land Market

TrophyCast just came back from a long break, and it's back with more voices at the table. Mike Meagher, Jason Wallingford, and Jake Brown sat down to catch up on everything that's changed in Midwest real estate over the last few years. No script, no fluff — just three guys who work in this market every day talking through what they're actually seeing.

Residential: It Depends Where You're Standing

Ask three agents how the housing market's doing and you might get three different answers, and that's basically what happened here. The read: there's no clean trend line up or down right now. It's sporadic, and it comes down to location and price point.

Entry-level and move-up housing under $500,000 in tight submarkets — St. Louis County, St. Charles County, Warren and Lincoln Counties — is still moving fast, with multiple showings and multiple offers when good inventory hits. The $500,000–$1 million range has been slower. But interestingly, the $1.5 million-plus segment picked up steam early this year, with listings that sat untouched all of last year finally going under contract in the first quarter.

The bigger shift is buyer behavior. Contingencies are back. Inspections are killing more deals than they used to. Buyers aren't panic-buying the way they were a few years ago — they're pickier, and they expect a house to actually be move-in ready.

One point worth remembering if you're pricing a listing: overshooting the number doesn't just cost you time, it can cost you the whole sale. List too high, and by the time you reduce, buyers assume something's wrong with the house. The list price is a marketing price — not a wish.

A New Development Worth Knowing About

Callaway Lake Estates, a development offering 5 acre lots just outside Defiance/New Melle with lake access to a 170-acre private lake, came up as one to watch. It's the kind of property that feels remote — wooded, quiet, private marina, boat slips — but sits about 25–30 minutes from Chesterfield Valley. Waterfront and water-view lots have been moving, though plenty of buildable acreage remains.

The bigger question hanging over that whole corridor: data centers. Several are planned west of the metro, and nobody's fully sure yet what that means for property values or quality of life nearby. The honest answer from the team: reserve judgment until the first one actually goes in and everyone can see the real impact instead of guessing at it.

Farmland: Quality Still Wins, and the Auction Process Proves It

On the tillable side, Class A farmland is still bringing serious money. A recent auction in Clark County, Missouri, saw a highly productive tillable tract sell for $15,251 an acre after two neighbors got into a bidding war — a number that never would have shown up on a traditional listing at $15,000 flat.

Lower-quality ground with waterways, draws, and mixed cover is a different story. It's pulling back in price, mostly because it satisfies neither the farmer looking for tillable acres nor the hunter looking for prime habitat.

Pasture ground with tight fences and reliable water is holding strong too, driven by cattle prices that are about as high as anyone's seen. And buyer interest isn't just local anymore — more people are pulling money out of the stock market and parking it in income-producing land, treating it as the more consistent, tangible alternative to a market that everyone quietly suspects can't keep climbing forever. For what it's worth, the numbers back that instinct: farmland and the S&P 500 have delivered comparable long-term average returns, but land does it with a lot less volatility — and you can hunt it.

Auction vs. Listing: The Honest Version

Not every property fits an auction — especially when a seller's locked into one number. The properties that struggle at auction are usually the ones where the seller has already decided what it's worth, regardless of what the market says. The fix is setting realistic expectations up front, so that any surprise is a good one.

Here's the part sellers don't always think about: a strong offer with a fast, clean, cash close in 30 days is often worth more than chasing a slightly higher number through months of showings, negotiations, and contingencies. There's value in money, value in time, and value in convenience — and a lot of sellers underweight the second two.

The team was also candid about listings that go the traditional route and stall — start high, sit for months, then get chased down in price until it lands near where the auction reserve probably should've been in the first place. The difference: an auction compresses that whole process into a 30–45 day window and forces real competition, instead of letting the market slowly figure out the right number on its own.

What's Coming Up

TrophyCast is aiming to release new episodes every other week, with guests on estate planning, tax strategy, land management, and wildlife biology on deck. There's also a stack of live auctions running right now across Franklin, Ralls, Cedar, Howard, and Miller Counties, along with the quarterly Bundle Event — a flat $895 option built for smaller properties that don't need the full auction treatment.

Bottom line from this episode: the market hasn't fully picked a direction yet. It's not booming, it's not crashing — it's figuring itself out. But quality ground, priced honestly and marketed the right way, is still finding buyers fast.

Ep. 001: We're Back!