Buying Advice

Which Neigborhoods Does THIS Realtor Like?

by John Rice

You know, I work with people in all price ranges from well under $100k to over $500k.  I go in a lot of houses all over town.  I’m always telling my folks where I would live in their price range.  Thought it might make a good post.  Since buyers seem to want either an older or a newer house, I’ll give my picks on both.

Under $100k for newer homes:  This one is easy…….there aren’t any!

Under $100k for older homes:  I really like the Buckhorn Road area.  There are tons of different neighborhood names along Buckhorn, but it is easier to just lump them together and call it “Buckhorn.”  Why Do I like this area?  Good schools and convenient location.  Also, most are simple homes built in the late 1970’s and 1980’s, so they are pretty easy to maintain on a budget.  Another neighborhood I am a fan of is Gardenside.  Great cape cods and ranches from the 50’s and 60’s  just south of downtown ought to put this on anybody’s short list.

$100-200k for newer homes:  I really like Chilesburg cause it is pretty close to Hamburg and it has a lot of greenspace.  Also, the middle school is right in the area.  Masterson gets a bad rap from most old-time Lexingtonians, but you really can’t beat the value since you get more house for less money.  It isn’t a convenient location for getting around Lexington, but I would still live there.

$100-200k for older homes:  Meadowthorpe has a lot of the 1940’s charm and has the elementary school within the neighborhood.  Squire Oak and Hunting Hills are probably my favorite spots if you want a medium-sized house in SE Lexington from the 1980’s.  SE Lex is pretty handy since you can get to the two main shopping/dining/entertainment areas, Hamburg and Fayette Mall, pretty easily.  These neighborhoods are right beside each other.  The school district is good, and the elementary is right there in the middle of the area. 

$200-300k for newer houses:  In the NE side of town, Andover Hills is my pick.  This is mainly a late 1990’s area.  The school district keeps this neighborhood high on the list of those wanting this part of LEX.  Chilesburg is also nice for the previously stated reasons. 

$200-300k for older houses:  Kenwick is cool since it is so close to downtown and has a lot of early 1900’s charm.  An area few even know exists is Deepwood.  It is on the north end of town.  It is a small area of houses from the 1930’s to the 1950’s.  It is surrounded by neighborhoods that aren’t as nice, but I’d still live there just for the coolness factor.  Lansdowne-Merrick, AKA Lans-Merrick is a convenient spot close to everything and is surrounded by much more expensive neighborhoods.  To me, it is a bargain and I look for this area to become more popular once we start seeing more houses that have shed their 1970’s finishes.

$300-400k for newer houses:  Stuart Hall is right next to Chilesburg, so it has all the same perks.  Prices have fallen, so it is high on my value radar.  The lots seem to be larger than I typically see for newer areas.  That area is pretty flat, so you don’t have to worry about a crazy sloped lot!

$300-400k for older houses:  I LOVE Hartland.  This area was built in the 1980’s.  Still a lot of outdated houses left, but there is no other neighborhood in town from my POV that has such a good vibe.  I think it is going to be as loved by Lexingtonians as Chevy Chase and Ashland Park.  Why?  All the mature landscaping and fantastic layout.  All the cul-de-sacs are landscaped in the center as well as the median that runs through the whole main street.  In fact, the layout of the road and lots reminds me a lot of Ashland Park.  It is just as picturesque.  ALso, you can get a decent place in  Chevy Chase and Ashland Park within this price range.

$400-500k for newer houses:  Still Meadows gets my vote for character and a good school district in NE LEX.  Beaumont is a great pick…..most desirable schools in town, convenient southside location, walking trails, etc.

$400-500k for older houses:  You can also get a great house in Andover Forest for this kind of dough.  It’s close to Hamburg and the interstate, plus it has many golf course lots.  Hartland gets even better at this price point.  Chevy Chase and Ashland Park are great.  Greenbriar is a classic 1970’s interpretation of the executive, country club neighborhood full of custom builds on large lots situated out in the country…..only now, it is just a few minutes outside of town.

Over $500k?  I’d be in a really nice home in Hartland, Warrenton Woods, the Lakewood area, the Estate section of Andover Hills, or find a lot and build my dream home.

What are your favorite neighborhoods?  Leave me a comment 🙂

Sure, a tomato is a fruit, buuuuuuut……..

by John Rice

“Knowledge is knowing a tomato is a fruit.  Wisdom is not putting it in Fruit Salad.”

A friend of mine posted that this morning on Facebook.  I got a kick out of it.  It also reminded me of a trend with many of today’s buyers.

Now, I am not trying to defend my industry or bash these buyers, but more and more I am seeing buyers who don’t want a realtor and who don’t know how to use all the info they find online when it comes to real estate.  They go on sites like Zillow, Trulia, the PVA and get the same info that only realtors use to have access too.  I don’t have any issues with that at all, unlike many of the old school agents out there who long for the by-gone days when we controlled that stuff.  My issue is that most people end up making bad decisions with good info and don’t even know it.  (Putting the tomato in the fruit salad.)

Examples?

A buyer told me he saw the zestimate value for a house on Zillow and thought it would be a good one to flip since it was priced so much lower than the rest of the neighborhood.  I looked at the place.  It was on the most miserable, busy corner of the whole neighborhood and was out of character with the rest of the neighborhood.  It SHOULD be priced a whole lot lower than the neighborhood to even make it a fair price.  It was not a bargain.

Another buyer told me he didn’t see the need for having his own Buyer’s Agent.  He was going to rely on these sites and the PVA.  I told him that was fine and well for figuring out averages like price per square foot, but that isn’t going to help him know what the house he buys is really worth.  How so?  How will he know whether a house he knows sold so many months ago for so much money had a new roof? An old furnace?  How the inside compared?  What value the market bears for a covered patio verses an uncovered deck?  What is considered typical for the neighborhood?  If the house has some fatal flaw that will turn off most buyers when he goes to sell?  If the seller paid any of the buyer’s closing costs?  Those things aren’t on those sites.  And while I am here, many sellers pay part of the buyer’s closing costs these days.  Let’s say the PVA or zillow say a house just sold for $155k and this buyer is using THAT number to base an offer on.  If the seller paid $5k of the buyers closing costs, then the house really sold for $150k…..OUCH!  He just over-paid by $5k and won’t even know it……until it is his turn to sell the house!

I’ve got a little different business model.  I don’t mind buyers that like to also do their own research.  Many of my buyers actually know much more info than many of the realtors here in town.  I don’t mind letting them do that if they wish and then helping them put the pieces together.  I find that it actually helps build trust because they can verify everything you say.  Tell them the truth and work for their benefit and they love it.  So, whether a buyer wants to help out or let me do all the work, I am cool with it, and we’ll find a good use for that tomato.

Test for radon when the levels will be the highest….if you’re the buyer

by John Rice

I woke up this morning thinking about radon.  Now, isn’t that sad?  Why not something like remembering a beach vacation, or thinking about one of my favorite cars?  Makes no sense, but that is how it went down.

Since most real estate deals only give 7-10 days for all the inspections to happen, the 48 hour radon test has become the norm.  Really, a longer term test is better since radon levels in a home can vary widely.  The way it works is there is a device that reads the radon level every hour and the numbers are averaged.  Anything at 4 pCi/L (picocuries per liter) or higher needs mitigation.  That’s the number most realtors are familiar with, however, the EPA says that you should consider mitigation of any level between 2 and 4 picothinggies per liter.  So, you shouldn’t feel like you have no right to ask for radon mitigation if your test averages, say, 3.9 pCi/L.

Since real estate deals necessitate a short term test that don’t really give you a year round average, wouldn’t it be nice to find a way to get the highest reading possible so you can hit the seller up for installing a mitigation system?  Since I’ve been doing this, I have noticed that the level of those hourly readings always seem to jump when there is snow on the ground, heavy rain, or the ground is frozen.  I once had a test done before and after the system was installed and the “After” test was actually higher since the ground was frozen!

So, if you are buying a house and having a radon test done, pick a day with the greatest change of rain, snow, or a frozen ground.  I am sure the radon mitigation companies know that too since I have had a few that conveniently forgot to pick up the test equipment until after it quit raining…..guess everybody but the seller wants a higher reading.

It’s over……We’ve hit the bottom

by John Rice

I think it has finally happened.  We’ve hit bottom.  All the top analysts have been predicting it for quite some time.  I remember in 2006, they said we would see a recovery in 2008….then 2009….then 2010.  I don’t know what criteria they use for making their predictions, but here is what I base mine on, well, at least for Lexington:

  • Remember the glory days of real estate when everybody was wanting to flip houses?  Heck, several of my friends who know nothing about real estate were wanting to do it back then.  It was just on everybody’s mind.  Rapid appreciation was the motivation.  I am sure they are glad they didn’t!  Well, now everybody is talking about wanting to buy real estate as rental property.  It is on everybody’s mind, and low prices are the motivation. Just as the average Joe or Jane wanting to flip houses was an indication of the frenzied peak, I think the same people wanting to buy now shows we have hit the bottom. 
  • Buyer’s these days still want a bargain, but there isn’t the fear of buying like there was even last year at this time.  I think part of this is the change in attitude about real estate.  Nobody is viewing it as a quick money-making investment anymore.  People seem to view their home as just their home and a way to build equity by paying down principle over time. 
  • The market doesn’t have anything artificially stimulating it.  The tax credits are over.  We all know now what the market is like without any lipstick or botox.
  • I’ve seen a couple of houses sell for waaaaaaay more than they were worth.  I just had a deal where another buyer paid my client $5000 to walk-away from their contract…..on top of that, the buyer’s back up contact was for just over $20k MORE than my buyer was paying!

Despite all this, I don’t think we’ll start seeing appreciation or a return to a high volume of sales.  I think we’ll stay near the bottom for a while.  I’ll even go as far as saying that some newer neighborhoods may see a little more depreciation as the dust settles.   In the past, appreciation across the board made up for things like aging systems and the normal cycles of decline that a neighborhood goes through.  A flat market means that a seller isn’t going to be able to put 5-6 years of wear and tear on a house and get exactly what he paid for it.  I think it is more like mileage on a car-the less usable life you pass on to the next guy the lower the value.

It’s over, but you still need to make wise decisions!

 

Say yes to the…..HOUSE?

by John Rice

Okay.  I hate to admit it, but I do…..sometimes….watch “Say Yes to the Dress” with my wife.  Not that I am into wedding dresses or anything.  To me, I enjoy seeing the process a bride goes through when picking the dress.

Seems to me, most of them go in with a specific vision of what they want, but they end up with something totally different.  It is often the same way with shopping for a house. 

Often, people come to me, or any realtor I assume, with a list of what they want in a house.  Usually people give a bedroom/bathroom count, part of town, square footage range and their budget.  I then take them out and look at houses that match that criteria.  While I am there, I try to pick up on the non-verbal cues about what they like and don’t like.  What rooms they spend the most time in.  Even which rooms they go to first.  When a buyer goes straight through the house and into the backyard, that means I better make the backyard they want a high priority.  All this is one reason I never lead people around and “Show” them the house.  I shouldn’t set the pace nor the order.  There is just too much I can learn about them by letting them set the pace on those things, especially the first few times we go out to see houses.

Just like on the show, you can tell by facial expressions if the house is a hit or miss.  Sometimes people do say things that they don’t even notice they have said.  If a buyer makes a comment that it was dark in the house, and all the lights were on, I know I need to be on the lookout for fewer trees around windows or more/bigger windows….or suggest cutting down some of the trees if everything else is good about the house.

Picking a house is so much more than just a logical choice.  Even the most unemotional person still wants to like their home, which is a feeling.   Often, a buyer will not be interested in a house that is perfect on paper, because it lacks the vibe they want.  Just like with the dresses.  You never hear a bride who has found THE dress say the dress is beautiful, they always say THEY feel beautiful in the dress.  It is a vibe thing.

Unfortunately, the vibe factor isn’t something that you can search for on the internet when looking at house.  A lot of the time, it is a process.  Often a buyer doesn’t know the vibe they are looking for.  You really just have to go out and look, and eventually the vibe starts to get more defined. I have had a lot of buyers apologize to me for taking so long, or  for the time we spent while they discovered the vibe they really want.  I always tell them not to worry about that since I know this is a process that we have to go through in order to get to the right house.