Month: February 2010

3 problems I never want to see

by John Rice

There are 3 things that are never good to see when you view a house.  Since I have a drafting/building material/architectural/construction background, I tend to always be in mini-home inspection mode when I look at houses with my clients.

I absolutely hate to see cracks in the brick that have been repaired multiple times.  I don’t know if you have ever seen this, but it also can happen to a concrete block wall.  It is where somebody filled in the crack, it came back, then it was filled again……….maybe over and over again.  You can tell because often the colors of the caulk or mortar are different.  The bottom line is that the house has movement.  That isn’t going to go away and can’t really be fixed totally.  Yeah, there are expensive things that can be done, but not of them can make it all good again.

Another thing I hate to see is when the seller has gone to great lengths to direct water away from the house.  Sure I appreciate the effort, but that tells you that the house has a big annoying problem.  You know this when you see big black corrugated drain pipe running all around the house.  Maybe if the driveway is right beside the house there will be globs of caulk at the joint.  To me, that just tells me there has been water in that corner of the basement before, which always means mold if it is finished space. 

I have a house that fit this bill, but I did some permanent fixes.  I say permanent because running drain pipe all over doesn’t really change the way surface water runs to the house.  It just deals with the water running off the roof.  After trying all these cheap fixes and still getting water in the basement, I went into overdrive.  I had the basement water proofed.  That kept water out of the inside of the house, but didn’t keep the water from eroding the soil under and around my foundation.  So, I hired a dude with a Bobcat and a dumptruck to regrade the backyard so surface water ran around my house instead of through it.  I also installed the one piece gutters that don’t clog, buried the downspouts and ran them where they wouldn’t be anywhere near the house.  Since I had one corner that I couldn’t really create positive drainage, I made a valley so that water would run parallel to the house.  Now my neighbor’s basement leaks instead of mine.  I hate that for him, but the reality is that if my house had been graded properly when built, he’d have gotten a lot of it anyway. 

 You may ask why I tell people to run when this happens if I fixed it in my own home.  The reason is because I think people should feel a sense of peace while they are in their home.  I did all this, but every time it rained hard or the ground was saturated, I was a nervous wreck.  See, the sump pumps could fail or we could have that one time where all my engineering can’t handle the amount of water.  I rent this house out now, but I still worry about it.  That isn’t the homeownership experience I want for my folks!

The next thing that can tell you a lot about the history of a house, even if the seller said in the disclosure that the basement is dry, is when you go down there and they have everything up on pallets.  Or maybe the washer and dryer are sitting on bricks.  People always do that when there has been water in the basement.  See, some sellers feel like if the basement only has a little water, or it only happens every once in a while, that you won’t mind when it happens to you!

These are the 3 things that always make me give a house a thumbs down.  I’d rather see a roof past it’s expiration date, or a furnace that is an antique than any of these.  Water and soil stability issues usually end with nature winning in its battle with man.

Tricks Sellers Play

by John Rice

I was out with a client this week looking at old houses in Chevy Chase, Fairway, Lakewood, Lansdowne,basically 40502.  One house in particular stuck out to me because it was a FRAUD!!!

What do I mean by that?  Simply that the seller had done everything possible to make the house attractive……….except making it a good house.  They had all the lights on, a fire going in the fireplace, they were simmering an orange in some type of cinnamon gue on the stove.  It was decorated with small scale furniture to make the small rooms look bigger. I can over look that stuff, but what got me miffed was that the whole house was nothing more than a beautiful faux finish. 

The ceiling in the bathroom looked like tin……but it was just wall paper.  The counter top had a neat design on it…………but it was painted plywood.  The flooring in the kitchen was left over parquet flooring from an 80’s remodel, but they had painted a light green and white diamond pattern over it.  All the vanities in the bathrooms were ancient, but were painted a trendy flat black.  There was panelling in the basement and a little in the kitchen that had just been painted.

None of this would bother me in a $100,000 house………….heck, not even in a $150,000 house.   In fact, I would probably give them credit for all their effort.  But this was a $350,000 house.  I just felt like somebody was trying to fool me!

My advice for this seller is to put in some granite and do some updates that aren’t in liquid form and can’t be poured out of a can.  Make your house honestly good!  Location is only one third of the known real estate principles.  Condition and price are part of it too!

My advice for buyers is to watch out for this kind of trickery.  Until you started to look closely at what this house really was, it looked stunningly beautiful.   But, none of that comes with the house.  The decor will be gone.  The new owner will then realize that the house was really just cheap updates inspired by those HGTV shows where they make over an entire room for $1000.

But it won’t be my clients that fall for this!!

LEXpert Neighborhood Tour: Brookhaven

by John Rice

Here is a tour I did for a great neighborhood called Brookhaven.  Shot it on a dreary day in February, so the area doesn’t look as good as it does when all the mature trees have their leaves and the big lots have grass that is green

!

Moving downtown trend doesn’t apply to Lexington

by John Rice

Since I get all kinds of newsletters and magazines about real estate, I’ve read a lot of predictions about buyers leaving the burbs and buying downtown.  Sorry, not in Lexington.  I guess the people that  build the condos in downtown Lex a few years ago must have been reading the same articles.  I predicted in 2006 that there wasn’t enough of a market to support all the new condos.  Back then, everybody was buying them to flip.  That wasn’t a real market.   Just goes to show that what may be happening in many other places doesn’t mean it applies here.

Why?  For starters, Lexington just isn’t big enough.  The people that are returning to downtown are in big cities and want to escape a long commute.  When you spend 3 hours a day just getting to and from work, it becomes a quality of life issue.  You can get from one end of Lex to the other in 35-40 minutes even in bad traffic.  A lot of  Lexingtonians have moved here from  rural areas in Kentucky or transferred here from a larger area.   They always tell me they are used to driving much more than we do here, so it is a non-issue to them. 

The next reason is Lexington doesn’t even have suburbs for people to leave!  We have suburban type neighborhoods, but it is all still Lexington.  The furthest developed point in Fayette County is still only 20-25 minutes from the core of downtown.   We just don’t have the sprawling suburbs that are miiiiiiles away from anything like a true city does.

The last reason is a pretty big one too.  There isn’t enough area downtown for all those people even if they did want to move there.  There just isn’t enough good existing housing downtown.  You pretty much have very small houses in areas people don’t want or very nice houses that are out of reach for the average buyer.  We do have some nice areas just outside downtown, but in reality, they were just as much a suburban type neighborhood when new  as what we have on the edge of town.  Plus, they aren’t the kind of  areas that the articles are about.  Places like Gardenside, Southland and Meadowthorpe are close to downtown and still affordable.  Spending more gets you into Ashland Park, Chevy Chase, Fairway and Kenwick.

I also don’t see the condo market getting off the ground anytime soon, even if we returned to a good economy and real estate market.  The thought is that the retiring baby boomers will want to be there and walk to everything and enjoy the low maintenance lifestyle.  My parents are boomers.  They and all their friends like the idea of it all.  Why just the idea?  Like other articles we have all read, this is the most active and affluent group of senior citizens ever?  Where do you keep your canoe, boat, bikes, motorcycles, extra cars when you have one parking space and 800 square feet?  At best, I can see really wealthy boomers having a downtown condo as a second home.

So, in a nutshell, this trend will only apply to cities with a big enough downtown and sprawling suburbs.  That just isn’t Lexington…..right now.  What do I predict?  For the short-term, more of the same.  Lexington has 3  types of buyers:  Those who want something closer in town and an older house, those who go for something further out to get a newer house with the features they want, and those that look at everything in their price range.  In the long-range, Lexington will eventually use all of its available land.  When that happens I think we’ll start to see a huge price difference between Lexington and the surrounding towns.  When the land becomes that valuable, we’ll see a lot of what are now cheap areas redeveloped.

Negotiating Repairs after an inspection

by John Rice

You know, you can find out a lot of people’s motivation if you just listen to their realtor.  Most are big talkers.  Most of them view the deal as practically done once you settle on a price.  They seem to forget that there is usually one more thing to negotiate:  The repairs after the inspection.

Here are some examples of what agents sometimes say right after a contract has been accepted: 

1)  “The sellers have a contingency contract on another house that they were about to lose.”

2)  “The buyer needed to close on a house in time for him to get his family moved down here before he started his new job .”

3)  “The seller is making 2 mortgage payments.”

4)  “The buyer’s lease is up at the end of next month.”

Now, repairs are always the trickiest part of a deal.  The seller is thinking that they have lived happily in the house for so many years and that they let it go too cheap.  The buyer is always thinking that they didn’t get the house as cheap as they wanted and they don’t want to buy the seller’s problems.  That’s just human nature.   It gets rough sometimes.  Usually there is a little compromising, meaning neither party is truly happy.

But when the agent pretty much discloses that their client can’t afford to lose your client, it makes negotiating a little easier.  I’m nice about it and all, but the reality is that the only person whose interest I need to promote is that of my client’s.  If my client gives me a list of things they want repaired, I’ve got to try to get as much of it done as possible.

So, negotiating repairs is really about knowing what is happening with the other party while keeping tight lips about what is up with your client.  It is a lot easier to draw a line in the sand if the other party doesn’t know enough about you to predict what you’ll do next.