Random Real Estate Thoughts

Home inspection memories

by John Rice

Ahhhhhhh the home inspection.  Probably everybody’s least favorite part of buying/selling a house.  After 11 years, below is my favorite home inspection story.  It happened when I was a new agent.  I think the listing agent thought she could push me around since I was a newbie.

My clients and I  got past the offer and had the house inspected.  Seems the upstairs furnace didn’t work.  It made a squeaky noise and started smoking when the inspector looked at it.  I wrote the repair list and sent it to the agent.

She called me about an hour later and said that I really couldn’t ask for the furnace to be repaired since she put on the listing detail that it had baseboard heat upstairs.  I fired up the computer.  Sure enough, for heat source it said “Heat pump, baseboard (upstairs)”  I told her at best, that was a little ambiguous since it could also be interpreted that there are 2 heat sources upstairs.  She started to argue with me, then I said let’s look at the seller’s disclosure (which, btw, is incorporated into the contract.)  The seller’s disclosure just listed the age of the upstairs heat pump, making no mention of it not working-the seller is to answer yes or no if there has ever been a problem with the HVAC……not working IS a problem.  Knowing she wasn’t going to scare me into doing what she wanted, she then started to argue that the inspector we used has always had HVAC issues on all of her listings.  I told her I don’t know why she is now claiming that this is somehow the inspector’s fault since everybody agrees that the furnace doesn’t work!!

We finally got past that.  We had a lot of repairs on this house.  I suggested we bring back the inspector to make sure they were all done correctly.  As you already know, most weren’t done right.  The agents then tried to tell me that I was outside of  the 10 days I had to do inspections and couldn’t bring back the inspector.  Again, I whip out the contract and quote them the part about us being able to check on the repairs we asked the seller to do.  Finally, all but one item was correct.  My buyer was so tired of dealing with it all that he just accepted the house without that one repair done.

Here are some funny memories of dealing with inspections/repairs:

1)  The seller’s agent told me that the dishwasher was installed and the painting was done (part of the contract).  I go to the house and the paint is about half done and the dishwasher is sitting in the middle of the kitchen floor.

2) My buyer and I show up for the walk-thru and the basement is flooded…………..and it was my listing!!

3)  A house I almost bought had 2 little rooms with window air conditioners in the attic.  The kiddie pools full of dirt only added to the mystery.

4)  A football stuffed in some ductwork in one of my listings.

5)  The inspector turned on the water for a foreclosed house and I got a shower.  Water started coming out of the ceiling and spewing from the drain on the hot water heater.  Got that cleaned up and found water all over the kitchen floor too.

Do you need a realtor to sell in a hot market?

by John Rice

A seller-client of mine posted on Facebook that she was about to list her house.  We had two showings before it officially hit the market and sold it.

If you think all a realtor does is find a buyer, then I would be considered totally useless in this deal.  Getting paid for nothing.  Unfortunately, the public seems to think that the realtor’s work is done once we get to this point……heck, some realtors think their work is done at this point too!

All that was left to do on this deal is negotiate the offer, then negotiate the inspection repair list.  Coordinate the closing and be done with it.

But it didn’t go that smooth.  The appraisal came in very low.  In fact, it came in LESS than my people paid for it almost 3 years ago.

The deal was about to fall apart.

I tried to get the appraiser to up his value since one of the comparable sales he used was 11 months old and there was a non-listed sale that was only two weeks old.  He refused to budge or consider using the newer sale.

The buyer’s agent and I discussed alternatives.  I knew getting a new appraisal with the buyer’s same lender would not work.  Assuming the new appraisal would have come in higher, the underwriter for the loan would be forced to pick between a lower and higher appraisal.  Underwriting is all about minimizing risk and covering your own rear end.

The buyer had a big down payment.  I thought maybe she would be willing to pay the difference in cash.  Nope.

So, here I am in a hot market with a lousy appraisal.  I don’t want to lose this buyer, but the only chance we had of getting a higher appraised value would be to have a new lender.  Any other option was too risky.

I sent the release to void the contract.  The buyer decided to change lenders.  Bingo!  That was what we needed because the underwriter for the new loan would never know about the low appraisal.  (And I was sort of hoping sending the release might make the buyer realize that she was about to lose the house she wanted.  The release shows the other party that you have really done all you can do.)

My client was concerned about the appraisal.  She wondered if we should lower the price to make it more likely to appraise.  I said no, that I would rather have the appraiser shoot for the contract price.  If he could justify that value, then all would be well.  If it came in lower than the contract amount, we could renegotiate with the buyer at that time.

There was another listing up the street that was 100 square feet bigger.  I called that listing agent to see how it was going.  She told me that her seller had turned down two offers close to the list price (which was similar to my listing) because the seller wanted to move out after the end of the school year.

Armed with that information, I told the new appraiser about the other listing getting offers well above the first appraisal we had.  I told him that the market value of the neighborhood has outpaced the recent sales.  Keep in mind, that market value is right NOW.  Recent sales just tell you what the market was doing in the recent past.  That helped him out, and also told him nicely that I wasn’t going to be easy to deal with if the value came in light.

The value came in just fine.  Crisis diverted.

Not every deal has a big problem like this to navigate.   This deal would have fallen apart if it wasn’t for the right combination of experience, wisdom and luck.

So yeah, even in a hot market, it is good to have a realtor.

LEXpert’s top picks for around $250k

by John Rice

Okay.  You want a 4 bedroom house in Lexington.  Nothing too old.  Maybe you have kids.  Maybe you don’t.  Either way you realize a house in this price range and size should be in a good performing school district to keep the resale potential up.

Here are a few neighborhoods I always suggest and why:

Andover Hills-I know, I know.  I am always talking about Andover Hills.  I lived there for several years and it has been my absolute favorite place I’ve ever lived.  You are close to Hamburg, but since you are on the southeast side of it, you do not have to pass through Hamburg EVERY time you go any place else in town.  Since I now live on the northeast side of Hamburg and must get past Hamburg to get anywhere, I am always aware of this.  Andover Hills has a nice vibe.  Upscale without being pretentious.  $250k is the low end for this neighborhood.  An added plus is having Andover Golf and Country Club so close for golfing and the pool if you wanted to join.  There are a lot of businesses that you use regularly that are very close too.

Chilesburg-This neighborhood would not have been on my list many years ago.  It has always been nice, but the school district change finally put all of Chilesburg in the elementary school that sits in the middle of it.  It is just a few minutes past Andover Hills, so it shares many of the same perks.  One cool thing Chilesburg has is a bunch of walking trails through the neighborhood.

Willow Oak-This is one neighborhood few people know exists.  It is tucked away behind Millpond Shopping Center on Boston Road.  If you’ve been out there and seen a park with a pool and a big pond, that belongs to this neighborhood.  There is only one way in and out, and it is across a picturesque bridge.  Anything you want in South Lexington is close, and you could walk to Starbucks.  The streets are lined with huge pin oaks.  This neighborhood has one of my highest “Good vibes per dollar” ratings ever.  You could spend twice as much elsewhere and not get as much neighborhood character.

Copperfield-This is one of the most desirable neighborhoods in this price range.  It is upscale in a classic sense like Andover Hills and has all the character that you find in Willow Oak.  It is also on the edge of the Dunbar High School district, which is one reason it is so popular.  The neighborhood has it’s own pool and clubhouse too.

 

 

 

LEXpert’s top picks for around $150k

by John Rice

Let’s say you are a first time buyer, retiring, downsizing, or maybe you just don’t need a big house.  Your budget is around $150k.  You don’t want to compromise location.  You don’t want a characterless neighborhood.  What to do?  Where to look?

Here are my top 5 picks for neighborhoods to consider.  All are from the 80s and 90s and all are in southwest Lexington:

  1.  On the low end of the budget, you should consider Overview Drive in Hidden Springs.  One side of this street backs to a creek, so you have a little breathing room since the houses on the other side of the creek are a little further away.  Not that you will, but you could walk to the Boston Road Kroger, or Starbucks, or all the stores on either side of Boston Road.  You’ve got a gas station and pharmacy too.
  2. If you like being in an affluent part of town at a bargain price, look into either Ashbrooke or Harrods Point.  Both are right on the Fayette-Jessamine County line out Harrodsburg Road.  Both are nice, quiet and convenient locations.  You have Bellerive Shopping Center sooo close.  Just down Harrodsburg Road is Palomar Shopping Center, the library and the YMCA.
  3. Copper Trace is in the middle of it all.  It is on the outside corner of Man O War and Clays Mill Road. Anything you want to do in south Lexington is a very short drive.  Unless you are on Spring Run Road, there is only one way in and out of either side of this neighborhood.  The huge pin oak trees that line the streets give it that established vibe everybody likes (except in the fall when the leaves drop!)
  4. While all of Clemens Heights is a nice neighborhood, one street in particular is amazing.  If you know the area, you know I am talking about Steamboat Road.  Almost the whole street backs to either greenspace or the city owned Waverly Park.  I’ve been in many houses on either side.  The wooded greenspace is a great view.  Waverly is a real gem of a park.  Just the right size and all the features you’d want.
  5. The fifth one was Harrods Point, but I combined it in #2 with Ashbrooke since they are so close.

Worried about resale value?

by John Rice
I sold a house to a very cool family I have been working with for a while.  We’ve looked at a lot of houses and I have become pretty close to them.  We always have a great time looking at houses and talking about our favorite Lexington restaurants.
But this post isn’t really about all that.  I just wanted to give you the background.
This family has owned several houses before.  This is the first one using me as their realtor.  The last two they ended up selling for less than they paid for them.  Granted, that happened to a lot of people between about 2007 and 2012.  They are understandably nervous about it happening again.
While I don’t have a crystal ball to predict what will happen in the future, I told them I thought they would be in good shape with this house.  Why?  Because the value of their new house is right smack in the middle of the range for the neighborhood.  That is always a safe place to be.
This house is in Hartland.  The range in Hartland is between the low $200s all the way up to over a million.  Most fall in the low $300s to mid $400s.  When you think of Hartland, it is the houses in this range that pop in your head more so than the ones under $300k or over $500k.  Which houses in this (or any other neighborhood) do you think would be the hardest to sell?  It is the cheapest and most expensive ones.  See, somebody looking at the low $200k house might be thinking that they could go to a slightly less fancy neighborhood and get a better house for the same money.  The buyer in the high range for the neighborhood is thinking they might want to be in a neighborhood with more houses in their price range.

Any neighborhood has a range of values.  Most don’t have as wide of a range as ones like Hartland, Chevy Chase, Ashland Park, Greenbrier, etc.  Even if you are shopping in a neighborhood with a narrower range of values, you are usually best to stay away from both the lowest and highest price houses.

So I think my special family is going be just fine with the house they have picked!