The sales prospectus is a letter with supporting materials that describes the timber and sale conditions in detail. This is your means of advertising the timber sale and attracting interested buyers. The more complete the prospectus, the better your chances of attracting serious bidders. Each sale prospectus is different, depending on the sale type, size, and information included. Main elements should include:
- Identification of Seller/Seller's Agent
- List your full legal name, business/home address, and telephone numbers. Include your forester's contact information if a forester is representing your interests.
- Location and Size of Sale Area
- Include the complete legal description and acreage of the sale area. If the sale area is in separate tracts, provide information on each one. Include a description of the sale boundaries and how they are marked. Also, set a time and place for prospective buyers to tour the sale area, if desired.
- Sale Information
- Indicate what sale and payment methods you plan to use. Describe how the final sales price be determined: negotiation, sealed bid or auction. How do you desire to receive payment, by lump sum or periodic settlements? Describe how the trees to be cut are designated - by marking, diameter, or species within the sale boundary. List whether the volume information was from a sample timber cruise or a 100-percent tree count and by whom it was conducted.
If you have already completed a harvest plan, most of the information needed to create a sales prospectus should already be available.
Volume Information
Volume data comes from the timber cruise or tree tally. The information should include total volume and average volume per acre, grouped by species and product class. If there are separate sale areas, give this information for each tract, as well as a total sale summary. Mention the log rule used for volume estimation and minimum top diameters for pulpwood and saw timber.
Duration of the Sale Agreement
Designate the time a buyer has to harvest the timber by setting a beginning and ending date. In determining the time allowed, consider tract size, volume, and ground conditions.
Harvesting Restrictions/Conditions
Provide all requirements expected from the logging operation. Restrictions can include road maintenance, size and type of harvesting equipment, supervision requirements, and penalty provisions. This information should also be in the timber sale contract, but the prospective buyers should be aware of these prior to bidding.
Bid Review
For sealed bids, set the date, time, and place where the bids will be opened. Invite buyers to attend the opening and specify how you will notify them if their bids are successful. Allow 4 to 6 weeks between advertisement and the bid opening. This allows adequate time for the buyers to evaluate the sale area and draw up their bids. Explain your conditions for an acceptable bid. This information includes bid format, how to address the bid, and terms for a bid-performance bond, if required. Specify requirements for receiving the bids, either mailed or hand-delivered. State that you retain the right to refuse any or all bids. Also specify a time limit for seller and buyer to agree to a sale contract and sale closing.
Provisions for Payment
Outline the payment method in this section. Specify your preference, such as personal or certified cashier's check, and time of payment. You may want one lump sum at sale closing, or perhaps installment payments. Remember to consider your income tax situation before deciding on how you want to be paid.
Supporting Attachments to Bid Invitation
Include two maps of the sale area in your sale prospectus. The first should be of the sale area itself and the surrounding tracts. It should show property boundaries, sale boundaries, access roads, streams, and other physical land features. Also, a description of the sale boundaries should be included. The second map should show the location of the sale area in relation to surrounding towns and highways.
The summary tables from the timber cruise should include the number of trees by diameter class, species, and product class.
A sample timber sales contract can be included so the buyer can examine it and identify any problem areas.
A sample bid form will make it easier for the buyer to submit his bid. This also makes it easier for you to compare bids.
