Buying Advice

Older house verses newer house, which is better?

by John Rice

I often get asked by buyers if they should buy an older house or a newer house. My usual response is to say that it depends on what kind of problems they want to have. I get crazy looks when I say that, but it is just my way of telling people that all houses will have problems. Basically, it is your house verses Mother Nature and Father Time.

I have lived in both older and newer houses all my life. When I was a kid, I went from a 1910ish four square to a 3-year-old ranch. Next, my parents bought a house in Kenwick  from the 1930’s. My first house was built around 1915. My second was 1973.  Then a 10 year old home. Then 26 year old home. All of them had their own set of issues.

There seems to be this misconception that old houses were built better. True, MOST were built with more care than today’s homes are. I say most because my first house, the one built around 1915, was nowhere near as well-built as my parent’s Kenwick house from the 1930’s.

Another misconception is that people think any old house is better than any new/newer house is today. After living in a lot of old houses and showing a bunch to my clients, I can tell you that what it comes down to is maintenance. Even the best built house from yesterday will be nothing but trouble today if somebody didn’t keep it up. An older house has been in the ring with both Mother Nature and Father Time for more rounds than a newer house.

The new house misconception is that they won’t last as long as an old house. I use to think that until my parents bought a 150+ year old farm-house. Their house started out as a 2 room timber structure.  Then a porch was added on the back which was later converted to be a kitchen. Then a new porch was added to the side of the kitchen which later became the new kitchen and the old kitchen became a dining room. Then somebody added a second story over the original structure. Then came a second story over the original porch/current dining room. My attitude now is that if my parents house can defy all building codes and even gravity a little, any new house should last just as long. 

Here are some of the common older house issues: Inadequate electrical, plumbing, insulation, lack of maintenance, and poorly done improvements at the fault of previous owners.

New/Newer house issues: Rushed construction by unskilled/uncaring workers sums it all up the best. I have a friend whose house was practically rebuilt after a fire. It had no insulation on one side of the house. On a previous 10 year old house I owned, poor mortar joints on a brick window sill allowed water to run down the inside of the brick veneer and rot some of the sill plate. I only found it out when I did the demo for the new tile floor. If today’s workers would apply to their trade the same care they use to draw naked women in the potapotties, we would have the best built houses of all time!

Occasionally I do see both a really well-built newer home and a fantastic older home. I used to represent a builder who did a great job of making decisions that the buyer wouldn’t even begin to appreciate for years to come. He did a lot of little things that exceeded minimum code. I remember selling an older house that had been well maintained and had recently been overhauled by a good contractor. That combination made it a pretty unique older home and a good pick. I guess that buyer got the best of both worlds and none of the negatives.

Best buying advice ever

by John Rice

How would you like to pay top dollar for a house nobody else wanted that sat on the market for a very long time? Not really the type of thing you want to do? Well then, let me tell you how to prevent it.

A house in a neighborhood I am very familiar with had been sitting on the market for a very long time before eventually selling. I had a house around the corner from it listed during that period, only mine sold much sooner! I ended up showing my listing to a few buyers who had called the listing agent to see that house. I would ask them how mine compared. They all told me that the other house had a funky floor plan they didn’t like. Let’s fast forward to when the buyer of that house goes to sell. Think buyers will have the same opinion?

I noticed the other day that it finally closed. I looked to see who represented the buyer. Guess who? The listing agent was also the buyer’s agent. That tells a whole lot. That lets you know that the buyer was some unrepresented sucker who was just calling listing agents to see properties. They didn’t have somebody working for them to say “WAIT! This house has a funky floor plan and you are going to have a hard time selling it down the road and sure, it seems like a good price compared to similar sized houses, but that doesn’t make it a good value nor a wise decision!!”

Now, I am for sure not making a judgement about this agent. I don’t know what all happened. All I know is that when I see a house sell that has been on the market forever, most of the time the listing agent ends up representing the buyer too. An agent has to walk a fine line when all the sudden there is a buyer for a house they thought they’d never sell…..and getting commission as both the listing agent and buyer’s agent makes it even harder. I think most of the time the agent and the seller come out better than the buyer in these situations.

Basically folks, my message is if you are buying, don’t go at it alone. Don’t trust the listing agent for advice. Don’t rely on zillow. Get yourself your very own realtor who will only represent you. One who has been in enough houses, is familiar enough with the market and can recognize the things that will bite you in the rear down the road.  The buyers of this house made a bad decision, and the sad thing is that they won’t know that until they need to move again.

Does spending more get you more?

by John Rice

I’ve always been into two things: Houses and cars.

There are a lot of luxury cars out there that are really just blinged out versions of cheaper cars. Cadillac Escalade? At its core, it is a Chevy Pickup truck…….sorry if you have one and I have insulted you. Lexus TX? It is a better looking Toyota Highlander. Nothing wrong with these companies doing this. It is an economy of scale to be able to sell essentially the same thing to buyers in different socioeconomic classes. They add a few features and make it look better for a lot more money, but all the important stuff is shared with their cheaper platform mates.

Now that you’ve got the concept of today’s blog post, let’s see how it relates to houses.

I showed a house to a client today. It was in a very Toyota Highlander neighborhood. It was close to 3500 square feet with a basement. Great location. Great school district.

I told my client I thought this $484k house was a great value. Why? Because if you spend $100k more, you wouldn’t really get a bigger or better house, you might just get brick on all four sides and be in a more Lexus TX neighborhood.

Sometimes spending more doesn’t really get you much more.

Harsh reality of renting instead of buying

by John Rice

Sometimes when I tell first time buyers that they should buy a home as soon as they have a down payment and know they won’t be moving for several years, I wonder if they think I am just trying to get a sale.

Here is a harsh reality. Even if you are renting, you are paying somebody else’s mortgage.

In 2013, I bought a house to rent out. My mortgage was $543 a month including taxes and insurance. I rented it for $1100, which was a fair price at that time. Last year, I raised the rent to $1450. That is still under market value. When I raise rent, I try to keep it at about 85-90% of full market value since I am benefiting from the continued relationship. It is a win-win for everybody.

When I bought this place, I think I made the first 5-6 payments while I was renovating it. Do you know who has made the payments for the past 12 years? The same tenant. If that tenant could have bought the house in 2013, their mortgage would have been a little higher since I had to have a larger downpayment and I paid cash to do some work to the house. Their mortgage would have been more than mine, but still a little cheaper than the rent. Do you know what their monthly expense would have been today had they bought the house back then? THE SAME AMOUNT ALL THIS TIME. Ok, technically their taxes and insurance would have gone up a little, but what they pay for interest and principal would have been the same all this time. My point is that had they basically had a down payment and decent credit, they could have bought the house, had a fairly stable payment, been building equity for themselves instead of me, and would have the house more than half paid off by now.

This is why I encourage first time buyers to buy as soon as they can. I know it is tough right now with higher rates, prices, tariffs, inflation, etc. It is not impossible though regardless of how discouraging it may be. I think anybody is better off in the long term buying most any house they can afford verses renting.

Can’t afford Lansdowne? Pick these neighborhoods

by John Rice

Love the Tates Creek area, and I mean the part with the 40502 zip code? Want a house built in the middle of the last century? Lansdowne is likely your dream spot to be. And for good reason. Those giant lots and large homes have been fantastic since Day 1.

But if you’re looking at financing most of the $600k to million dollar plus purchase price and your budget says “No Bueno”, What do you do? Stay where you are and be unhappy?

No, you look in Lans-Merik since it is right across Tates Creek Road from Lansdowne. Here you will get almost as large of a lot and the houses are mostly from the 1970s but it has a similar vibe. Think of it as “Lansdowne Lite”. You will end up spending between $450k to maybe just over $700k for the best ones that back to the park.

$450k too much? While it is technically not in the 40502 zip code, Gainesway is literally just across New Circle Road from Lans-Merik. Here you will get a 1960s home on a larger lot in the $300-450k range.