Buying Advice

How to WIN in multiple offers

by John Rice

So, you’ve found the house you’ve been searching for in this tight market and you’re about to jump into a multiple offer situation….or maybe you’ve lost a house in multiple offers?  Want to know how to get your house and leave those other buyers to fend for their second choice home?

Answer is easy.  Think like a seller.  A seller gets word that an offer is coming.  Sure, they wonder what kind of money you will offer, but they also wonder things like “Are they gonna kill me on the home inspection?”  “What if I can’t be moved out in time?”  “What if their financing falls apart?”  Well, it is a good thing that most of the contract covers such things!!

Sounds good, huh?  And all this time you have been thinking like a buyer and that it is like an auction where price is the only factor.

There are many elements to working a deal.

Most sellers don’t do more than $1000 worth of repairs and most buyers walk away if the place needs a whole lot of work.  Try offering to have the house inspected, but you won’t be asking the seller to do any repairs.  You will take it or leave it.  They love that because they don’t have to worry about accepting your price and then wondering how much of it they will have to give back in repairs.  And think about it, if you really love the house, would $1000 worth of repairs make YOU walk away?  If not, then this plan will work for you!

Possession is also a biggie.  When every other buyer is going to go a little over the asking price, how about offering the seller a few days after the closing to vacate?  Or let them pick the closing date if you can.  Again, this makes it easy for them to say yes to you.  Often, convenience trumps  a little extra cash.  Somebody both buying and selling might love to have a few days to move out or coordinate their two closing dates.  If it works for you, offer it!

Sellers worry about missing buyers while you do your loan.  In the old days, savvy agents would get a pre-approval letter for exactly the contract amount.  Back then, it worked to keep the seller from thinking you could pay more……but everybody today knows that trick.  Now, with lending being so tight, I like to show that a buyer can purchase MORE house than they are buying.  Somebody who is preapproved for $300k and is buying a $250k house is somebody you don’t have to worry about getting to the closing table.  It will be an easy loan and will ease the sellers mind.

The key is to find out what is important to the seller and make it easy for them if you can be flexible on such things.  I bought my current house in multiple offers.  I knew that I would be competing with some cash buyers.  I bought my house “As-Is” and let the sellers pick the closing date.  I beat out a full price cash offer plus 2 other offers by making it easy for the seller to say yes to me.

Just think outside the box and do what needs to be done.

Hope this helps somebody……off to show 3 houses across town now 🙂

Best Performing LEXington Schools & Their Neighborhoods: Rosa Parks Elementary

by John Rice

Rosa Parks.  The #2 top performing elementary according to Fayette County Public schools website.  Right behind Veteran’s Park Elementary in test scores.  Wonder why Rosa Parks is considered the MOST desirable elementary school then?  It’s because you get that rare combination of getting ALL good performing schools in this part of town…..which is southwest Lexington.

Here are the neighborhoods that have Rosa Parks Elementary as their district:

  • Beaumont-There are lots of suffixes for the whole Beaumont area…..Beaumont Reserve, Beaumont Enclave, Beaumont Crossing, etc.  The whole Beaumont area is generally a mix of large homes from brand new up to about 15 years old.  Most have basements and most are in the $400-600k range.  Some are well over that, with the new UK football coach dropping $1.45 million for his new digs in the Reserve section.  The cheapest you can get into this area is to either rent an apartment at Beaumont Farms or a little section called Beaumont Enclave.  Expect to pay in the low $200’s for an 1800-2500 square foot house in this part of the neighborhood.  Beaumont is loved for its convenient location, extensive walking trail, and having things like restaurants, banks, offices and the YMCA inside it’s parameters.
  • Palomar-One of my favorite neighborhoods in LEXington.  The houses are between about 15-25 years old.  Values range from the low $200’s up to $500k.   There are 3 streets with sub $200k houses on Valencia, Maura and Glade.  Palomar has a really nice clubhouse with a park and pool.  Lots of mature trees give it that classic vibe.  It is right across Man O War from many useful business at Palomar Centre.  A gym, Panera Bread, Malone’s, Orange Leaf, other restaurants, banks, a gas station mean you seldom have to go far for anything.
  • Harrod Hills-The first neighborhood out Harrodsburg Road.  It was the Beaumont/Palomar of the 70’s and early 80’s.  Nice houses on big lots.  A few houses of interesting design.  Not too many are that updated, but that has not slowed the sales or effected the values.  The location is great since it is between Palomar and Beaumont, so it offers the same conveniences.  Values are all over the place depending on condition/updating.  Wide range of sizes too.  I usually see $175k as being the looooooower end and close to $400k at the top.  There really is no other neighborhood like it in SW LEXington.  Maybe it is just me, but it still feels a little bit like the neighborhood out in the country that it was until the late 1980’s.
  • Harrods View-Think Palomar era houses, but on a narrow strip of land between Harrod Hills and Palomar Centre.  There are only a handful of streets that make this neighborhood.  One way in and one way out make it one of the best kept secrets in town.  It kind of has a feel that is a mix of Harrod Hills and Palomar.  I have been in many in this neighborhood.  Like most 15-20 year old areas, not many are really updated, but that has not reduced demand.  Many have basements.  On the low end, expect to pay $275k.  About $350k is the most I have seen any sell for recently.
  • Wellesley Heights-Right off of Versailles Road.  One of those neighborhoods that was developed to be in the country with all acre plus lots.  Most are 30-40 years old now.  These were true executive homes when new. I have only been in a few out here since there aren’t many and they don’t come on the market often.  Just looking back at sales over the years, $300-400k seems to be a good number to give you.  There have only been like 2 sales in the past year or so!  If you want an older, large house on a HUGE lot with a horse farmish feel, look no further.
  • Cave Hill-This is the cheapest way to get into this expensive part of town and school district.  You’ve got all the same location features that Palomar and Harrods View have since it is kind of between both those neighborhoods.  These are mostly 10-15 year old smaller homes that run between $145k and $170k usually.  These are the same houses that sell for $130-150k in inferior locations, so the calling card here is location, location, location.
  • Pine Needles-I am mainly including this just so nobody can say I missed one.  Pine Needles is an upscale neighborhood of clustered/attached homes with first floor master bedrooms, so I don’t think having an awesome school district is that big of a bonus to Pine Needles.
  • The Rural SW part of Fayette County-all the property out in the country go to Rosa Parks.  No real neighborhoods out that way, but wanted to cover the whole district.

That wraps up Rosa Parks district.  We’ll hit Picadome next time since it is the 3rd highest ranking elementary school.  There are a ton of neighborhoods for that district!!

Best performing LEXington schools & their Neighborhoods Part 1: Veteran’s Park Elementary

by John Rice

One of the things I get asked the most when working with a client is “What school district is that in?”  Thought it was about time to list the highest performing schools and talk a bit about the neighborhoods that feed into them.   I got my list of top schools straight from Fayette County Public Schools (FCPS) themself…..here is the link http://www.fcps.net/scores.

THE top performing elementary school for 2011-2012, which is the most current test scores out there since the 2012-2013 school year isn’t over, is Veteran’s Park Elementary.

The neighborhoods that feed into Veteran’s Park Elementary are:  Fairhaven, Cumberland Hills, Woodfield, Ashmoor, and PARTS of Pinnacle and PARTS of Waterford.  I always caution people to go to the site  I’ll post in a sentence or two to confirm the school district for any street in LEXington.  Realtors have been known to intentionally/unintentionally put the wrong school on the MLS.  I have seen where agents have listed Maxwell Elementary as the school for their listing.  BTW, Maxwell is a Spanish Immersion School that you can only get into by lottery-it HAS no school district.  http://webapps.fcps.net/framedapps/streetdirectory/2.4/

All the neighborhoods in this area are close to Veteran’s Park (Yeah, the park and the school share a name.)  The park has 235 acres and is really cool.  You should check it out.  One thing most of my clients like about this area is that you aren’t too far away from anything.  Hamburg, Fayette Mall and UK are fairly close, even though there may be a lot of traffic.

So, here are the neighborhoods:

1.  Fairhaven-This is about as cheap as you can get into this school district.  Most of these houses were build in the mid to late 1980’s.  They tend to be moderate in size, like 1200-2000 sq feet and run from $125-175k.  You can walk to the school from this neighborhood.  The streets between Saron and the park are the best in my opinion just since it is nice to be closer to a park than it is to hearing Tates Creek Road.

2. Cumberland-This was one of the prime spots to be in during the late 1980’s.  A good mix of traditional and a few wild contemporaries on large lots give this neighborhood a peaceful, relaxed vibe.  Cumberland has it’s own pool and clubhouse.  It also has it’s own entrance to Veteran’s Park (The Park-not school) at the end of Rockbridge.  Some old school LEXingtonians still refer to that section as Ribbon Park.  It is one of my favorite parks in town!  Houses are mostly 2000-2500 sq ft.  Some have basements.  Prices are in the $200’s.  I occasionally see a rough one sell for less, and the best ones may be something like $275k.

3.  Ashmoor-I call this neighborhood Cumberland Lite.  It has much of the same charm and character, but the houses are and lots are smaller.  Plenty of ranches too.  Most of the streets are lined with huge pin oaks.  Sizes are mainly 1400-2000 and prices are usually in the $150-200k range.

4.  Woodfield-Early 1990’s to 2000’s homes.  Kind of like Cumberland, but with a bit more flair and modern features like vaulted ceilings and open floor plans.  Most houses are in that same 2000-2500 sq ft range and I have only seen one house go for over $300k out there.

5.  Pinacle-this neighborhood is mostly a mid to late 1990’s area.  It kind of filled in the space between Cumberland, Waterford and Southpoint if you look on a map.  Lots of rolling hills out here.  You can get some big lots in this neighborhood, but like Waterford, odds are you won’t get a flat one.  Houses are 2200-2500 sq ft.  Many have basements.  Prices are mostly in the $220-320k range.  You get a big updated house with a finished basement for the higher end of the range.  Has it’s own pool too and easy access to a mini-Hamburg like shopping area called Brannon Crossing.

6.  Waterford-poor Waterford.  The past several years have been cruel to you 😦  First, half of you gets redistricted out of Veteran’s Park, then the housing crisis….and all at a time when most of your houses were hitting that first cycle of decline.  If I were to give an award for taking it on the chin and perseverance, you would get it.  Wow….that was weird, I’ve never spoken directly to a neighborhood before, but that gives you the background.  Waterford is a very nice area.  It has a nice pool and clubhouse.  It has matured well since the early 1990’s when it was a wooded area on the edge of town.  The pair of ponds at the entrance are a good spot to feed the ducks.  Many lots are big, but can be hilly.  Most of the houses are 2200-2500 sq ft.  Many have basements, which can add to those numbers.  Prices are in the lower $200’s up to about $300k.  I think Waterford is going to be a future classic, so I look for values to increase….especially the houses on the streets that go to Veteran’s Park Elementary!

 

CHECK BACK SOON BECAUSE WE STILL HAVE TO LOOK AT THE NEIGHBORHOODS FOR THE REST OF THE TOP PERFORMING ELEMENTARY SCHOOLS…….WHICH ARE ROSA PARKS, PICADOME, GLENDOVER, CASSIDY, ASHLAND AND A.C.E. (aka-Athens-Chilesburg Elementary.)

27 things The LEXpert thinks 1st Times Buyers need to know

by John Rice

I don’t really have 27 of them.  That is just the day of the month.  I do have several things that all first time buyers should consider though.

Here is how most first time buyer’s seem to go about looking for a house: They get on Zillow or Trulia and find houses they like.  Most of their criteria is based on looks.  That is why it can be pretty easy to sell an inexpensive house in a terrible location as long as it looks pretty.

So, this is what The LEXpert tells first timers to think about:

1)  I know this is a bummer, but you probably won’t spend the rest of your life in whatever house you pick.  I had big plans for my first house.  I was going to remodel it and add on to it…..then one day, my dad said “You’ll be out of here in a few years.”  Well, I ended up being able to afford better, so I did move a few years later.

2)  Since this house is really a stepping stone to the next house, buy something that will be easy to sell later.  One day, you will find your perfect move up house and don’t want to miss it because you picked a house that will be hard to sell.  That means a decent location, floor plan and anything else I have blogged about when picking a house/neighborhood.  Your first buying experience is much more simple because you don’t have to sell a house in order to buy another.

3)  Since it is unlikely you will be in your first place for a long time, go for either a newer house or one that has a newerish roof and HVAC.  Why?  Let’s say you end up wanting to move in 5 years.  If the house you bought has a 10 year old HVAC system or a 15 year old roof, odds are you will have to replace it before you sell or potential buyers will be turned off by the ages of those expensive items.

4)  Buy as big of a place as you can.  Odds are interest rates will be higher years from now when it is time to move up.  You want a house big enough to grow into if you can’t afford a bigger place later.  Right now, 1300 square feet looks big compared to your apartment, but it will be easy to outgrow……geez, I know this seems doom and gloom, but you’ve got to be wise because, trust me, the house you buy will impact many areas of your life and financial future…..and relationships too.

5)  Think ahead.  Maybe what you think you’ll encounter 5-10 years down the road.  Sure, you have one 2 year old child now.  Think you will have more?  Buy with that in mind.  Maybe you don’t have kids now and buying a beautiful house on a busy road doesn’t bother you.  It will every time your kid runs out to the car.

 

I totally enjoy working with first time buyers.  They require a bit more attention than somebody who has bought and sold before, but I like knowing I helped them with something they will enjoy now and that will be a good investment for later.  I am a little more….experienced (OLDER) than most first timers so I’ve been though the stages of life that are ahead of them.

Okay, that is only 5 things.  I have several others I could add, but at 592 words so far, you might get bored reading them 😉

How to pick a neighborhood

by John Rice

A friend of my dad’s has a beach front house he paid something like $100k for back in the 1980’s and it was brand new.  Even after the bubble burst, it was still worth about $750k.  Could have saved maybe $20k when new and got one across the street, but those are now worth maybe $450k.   I don’t know about you, but I spent most of my younger years hearing real estate stories like this just hoping I could end up in the same spot some day.

I also use to work for little old ladies who had lived in their houses for a long time.  They were sitting on a gold mine since their once-on-the-edge-of-town location turned into a hot spot.

Guess today’s post is really about location and time.

Once I got into real estate, I realized that those two things are what makes all the difference when investing in real estate….and even if all you think you are doing is finding a home to live in, you are investing in real estate.

I kind of think regardless of how long you plan to be in a house, you need to think about its future value.  I see a lot of people, especially first time buyers, who just find something pretty and buy it.  I usually get these people as sellers when they are needing to unload a house they bought when the market was hot.

So, how does the LEXpert go about picking a property for either his clients or his family?  Easy, I look backwards and forwards in time:

1)  Has there been a shift in how many houses in a neighborhood are rentals in the past few years?

2)  Was this neighborhood just as desirable before and after the market sunk?

3)  How has it rebounded compared to other similar priced neighborhoods?

4)  How close are the nearest apartments and/or retail area?  Are those stable or declining?

5)  Are there any changes that could affect value?  School district change?  Zoning change?  I look at vacant land around the neighborhood and think what the worst thing that could happen with that property could be?

6)  What will make the houses in this neighborhood obsolete in the future?  For example, only having one bathroom, not having a garage.  (Think split foyers here too since nobody is ever excited or intentionally looking for one of those.  Lexington buyers only accept those if the lot is really good or it is in a great school district.)

7)  Since ALL neighborhoods go through cycles of decline, where is this neighborhood right now?  Usually after about 15 years, you start seeing houses needing a new roof, updates, etc.  The quicker all the owners do all that, the quicker the neighborhood moves on to the next cycle, which is improvement.   The longer the owners collectively drag this out, the further in decline the neighborhood goes.

8)  How big is the neighborhood?  A larger neighborhood is more likely to impact the surrounding smaller neighborhoods.  A smaller neighborhood is more likely to be impacted by a larger one.

There are many more questions I ask myself, but the bottom line is that you can never go wrong picking a location that will stand the test of time.

Here are some examples from when I have been the buyer:

1)  Did not buy a house in a neighborhood in 40509 that was across from a vacant field.  Checked the zoning, didn’t like it, and now it is going to be a giant apartment complex and several houses by this one are now for sale.

2) DID buy a house in an established neighborhood with lots of growth and new schools in the pipeline……and under market value.

3)  DID buy a house in the only neighborhood in its price range with the best elementary school in the area.

4)  Did NOT buy a house we loved with a golf cart path beside it for that reason alone.

5)  Did NOT buy a great house with a pool that backed to greenspace because I felt the area was too new and I just didn’t see anything about the area that will stand the test of time once all the pretty finishes go out of style.  Plus, it was a small pocket of very nice houses surrounded by houses costing half as much ((BIG RED FLAG)).

 

Hope this helps you 🙂