Buying Advice

Why would a Realtor go in a crawl space?

by John Rice

Why am I under a crawl space taking this picture?

Let me give you a little background of how I got here.  I just started working with a couple that will be first time home buyers.  Like many of the people who find me, they had been working with another agent that just wasn’t offering them much other than opening doors.

While they were checking out the place, I started looking around for things that could turn up on the home inspection.  I try to use my background in drafting, building materials, construction estimating and managing my own properties so my people will know if the place is a dump BEFORE writing the offer.  There is nothing worse than seeing somebody post pics on Facebook and tell their friends/family about a house they are buying and then to not buy it.  I don’t want that for any of my people, especially first time buyers.

So, one of the things I do when checking out the condition of a house is to push my foot down around the toilet.  There is a $2 thing called a wax ring that serves as a seal between the toilet and the flange in the floor.  When they deteriorate over time, you end up getting the subfloor wet every time you flush.  Replacing a section of subfloor and maybe sistering a joist to one that is rotting isn’t that big of a job, but jacking up the finished floor in the bathroom is a pain.  It is almost like a mini-remodel job.  This house had tile flooring.  When I showed the people it was soft, they could see the floor move under my foot (Okay, I’m big, but the problem was the floor, not me!)

So, to prevent my people from writing an offer and paying for an inspection before finding out how bad this was, we made another appointment to see the house wearing what my parents called “After school clothes”.  When we got to the spot under the bathroom, the picture is what we saw.  The subfloor is gone and both joists on either side of the toilet are rotting at the top.  BTW, the seller disclosed that the toilet had leaked and the floor had dried.  Sounds simple, huh?  That is why I always take anything the seller says about their house with a grain of salt.  I mean, they do want to sell it to you, right?

After this and a few other issues I discovered, my clients decided this wasn’t the house for them.  I think they may have felt bad about the time I put into it, but I really didn’t think this was the best choice for them either.  The search goes on.  (Gotta give a shout out to my client for realizing the crawl space had no vents before I did-that is awesome for a guy who has never been under a house before!!)

On the way out, we did find these two old beer cans from the days when there were pull tabs.

Why buying close to apartments is a no-no

by John Rice

Just read in the paper about a dude that was found shot to death in his apartment near Henry Clay High School.  That got me thinking about the other apartment complexes in that area.

For those that don’t know the area, it has what are now some lower end apartments  near Richmond Road and some of the most desirable homes in the most desirable zip code, 40502.

When I was a kid, the apartments near Richmond Road were okay places to live.  At that time, the now razed apartments off Lakeshore on Laketower were really nice…..although by the late 1980’s the ones called “Two Lakes” were turning into the place for well off college kids to drink beer on the floating dock.

Now, you would think the old “Location, Location, Location” mantra would apply to apartments too.  Not the case.  I’m going to use the old apartments on Laketower as an example.  Here you had two apartment complexes surrounded by super high-end houses, some of the units even backing to a lake.  What happened?  Well, the same thing that happens to just about all apartments in time.  Investors cash flow them to death, sell them for cheap to somebody who cash flows them to death, and this cycle continues until they become cheap enough for an investor to fix up or they get condemned…….or in the case of the Laketower ones, they get torn down!  Is any of this the fault of renters?  Heck no.  It is all in the hands of investors.  I never blame the tenants for this cycle.  Shoot, when my wife and I were first married we lived on Redding Road.  It was a decent, affordable place back then and now it is a dilapidated building that is for sale, probably because the landlord knows it is about to need a lot of money spent on it!

So, stuff like this is why I will always recommend my clients not buy a house that backs to apartments, or one that has car/pedestrian traffic from apartments.  Even the nicest apartment complexes will eventually become a run down eyesore.  If it can happen to a complex that is on a lake, in a great school district, and within a neighborhood full of $400,000+ houses, it can happen anywhere given enough time.

 

Why are there so many houses for sale on this street?

by John Rice

It’s a question I get asked a lot.  To a buyer, it means there must be some reason why so many people want to get out of the area.  It makes them nervous about buying.

The truth is that rarely is there some circumstance that is causing everybody to sell all at once.  The last time I saw a situation like that was when there was a shooting at an apartment complex in NE Lexington.  The next week, a whole lot of the houses on the street across from it were for sale.

Another situation where I see many people selling all at once is in neighborhoods that were built about 2004-2006.  Many homeowners bought not only before the market collapsed, but they also did the crazy loans that were available back then.  They owe more on the house than it is worth and price it based on what they need to get rather than market value.  There was one builder in town that had their own mortgage company.  I think their credit application only had one question on it:  DO YOU HAVE A PULSE?  If you did, you got a loan for any house they built.  Most of the houses in their neighborhoods have been foreclosed by now though.  In this case, it isn’t that people were wanting to leave, it was that they couldn’t afford to stay.

Most of the time, when you see a street with many houses for sale, it has more to do with how fast they are being sold than any problem with the street.   If you have a street in a neighborhood with slow sales or over-priced listings, they just don’t go away…..they just stay on the market.  Meanwhile, another neighbor puts their house on the market too….and it doesn’t sell fast.  Well, before long, you end up with every house on the street for sale.  In a neighborhood that moves faster, you still might have the same number of people moving in the same amount of time, but since their houses sell faster, you don’t see all the signs in the yard all at once.

In most of these situations, I usually advise my clients not to buy.  I always tell people that backing to apartments, multi-housing or commercial usually bites you in the rear at some point, as the people across from that apartment complex discovered.  When all the houses were getting foreclosed in the builder/mortgage company’s neighborhood, I told people that there was a good chance that investors would buy them as rentals, so let’s skip it.  I think the only real risk a buyer takes on a street with a lot of sellers is that they might have a tough time selling when it is their turn to do so.  Often, the reason for the slow sales is that it is a second or third choice neighborhood in a time when most buyers can still get into their first choice location.  If the buyer is okay with that and can get it for a price that takes that into consideration, I give it a thumb’s up.

Something you DON’T want your Realtor to say

by John Rice

“I’ve got a doctor that is relocating here and  HAS to buy a house this weekend.”

I can’t tell you how many times I’ve had another realtor, even ones I don’t know, that disclose something like this to me.  I don’t understand why they do it.  I guess they are just excited to know they are going to sell a house and have to tell anybody that will listen…..even if it is somebody they shouldn’t tell.

As a listing agent, this is what I hear when another realtor says something like that to me:  “If we make an offer on your listing, you can probably counter back for more money since my people are getting on a plane later today.”  I also hear “Don’t worry about having to do many repair items after the home inspection since it’s not like the buyers are going to be able to hop on a plane and come back to look at other houses.”

I work with a lot of out of town buyers, and I’ll tell you, I try to keep a lid on stuff like this.  It just compromises my people’s negotiating power.  I don’t even like to send the listing agent a copy of my buyer’s earnest money check because I don’t want the other agent to see an out of town address.

Sometimes my honesty makes my job harder

by John Rice

I shoot myself in the foot a lot, both feet sometimes.  It’s because I want to make sure my people know the whole story on a house.  I can’t tell you how many times I’ll be in a wonderful house with somebody and say something like……..

“You know, there is no pantry in this house, and I know you really wanted one.”

“With the garage on the back of the house, you’ll be a little limited in what you can fence in the backyard.”

“This house is vacant and looks bigger than it is.”

“No, there really isn’t enough room for an island.”

“Yeah, you can make all those changes, but you’ll not get it back when you sell since you’d be way over the top of the range for this neighborhood.”

“I don’t know if you’ll be able to really fit two cars in this garage since there is a staircase there.”

“Sure, this house looks pretty with all the fresh paint and updates, but all the windows are shot.”

It happens all the time.  A buyer walks in a house, gets all excited about what they see and forget to check on a few things.  That is why I tell my sellers we want to make their house look so good that buyers will focus on the bling and forget the obvious negatives.

I’ve had a lot of people thank me for passing on my insight.  I mainly just don’t want my people to have any surprises…..even if it means I have to keep showing them more houses until we find one that works.