Random Real Estate Thoughts

Winchester Road-Hottest Spot for New Luxury Homes

by John Rice

In the late 70’s, there was a huge demand for apartment complexes in Lexington.  At that same time, much of the land available for development was in the 40517 zip code.  That is why you see so many of them on Tates Creek Road outside Man O War and over towards Alumni Drive.

In the 80’s, interest rates went through the roof.  Our best example of what interest rates do to new construction can be found in Belleau Woods.  Every wondered why those larger houses you see from Wilson-Downing are nothing like the rest of the neighborhood?  That is because Belleau Woods was originally going to be an upscale neighborhood.  Those few houses you see from Wilson-Downing were built before the interest rates went sky high.  Once the rates rose, nobody could afford them.  Smaller homes became more popular to build.

A similar thing happen in The Home Place when the housing bubble burst.  In about 2008-2010, it was much safer to buy a smaller house, so that is what was build.  Now that the market is better, you are seeing much larger and fancier houses going up out there.

Summerfield?  That was originally going to be large luxury homes like Tuscany or West Wynd.  One of the smartest moves I’ve seen since I’ve been a realtor was turning that into medium sized upscale homes in the $250-300k range.  That was just what the market wanted.  Perfect timing.

So, here we are today.  The Dow is high, gas is cheap, jobs are being created, and Americans are no longer afraid to spend.  What is happening with new construction in Lexington?  A lot of luxury homes.  Tuscany is selling well after spending most of the past 6-8 years having been forgotten.  Jimmy Nash took a neighborhood full of large lots that nobody wanted and turned it into the hottest place to drop $750k or more on a house.

All of which brings me to where I am going with this.  The market is good, the economy is good.  The available land is out by Winchester Road.  That area is quickly becoming the high end spot to live, much like Tates Creek was in the 80’s and Harrodsburg Road was in the 90’s.

Why?  Because builders will build whatever the market demands on whatever land is available.

Selling in 3 easy steps (& 7 things NOT to do!)

by John Rice

A life long friend of my family asked for advice on selling her daughter’s house as quickly as easily as possible. Check out what I told her about price, condition and presentation:

“Price is the most important part of selling. Price it too high and no amount of marketing or quality pictures matter….it won’t sell. Heck, I’ve even seen poorly presented listings sell quickly because the price was accurate.

If she is going to list with a realtor, she should find one that does a lot of work in her price range. Ideally an agent that works with as many buyers as sellers. Agents that primarily list houses only see one house per client. An agent that works with a lot of buyers sees multiple houses per client. Seeing more houses (especially in the same area and/or price range) make the agent familiar with what is normal and how buyers will respond to her house.

I would price it slightly above the market value so it sticks out among the competition. The trick is to know within 1% either way what the house is worth. That is the hard part really. I don’t know what the market is like where she is. Around here, we try not to price them where there is a lot of room for negotiation. In some rural counties around us it is normal for a house to sell for way less than the asking price. Here, the average list to sale price is 96.5%. I usually get about 98% of my list prices because I can ((usually)) determine what a buyer will be willing to pay.

Next is to present it well online. She will want EXCELLENT pictures. I pay for a pro. It is well worth it. People make the decision whether to see the house or skip it based on the online presentation. It has to be done well. I try to find out what is unique about the property and write my description accordingly. People want to know what is special about a house, not that it has all the same stuff as every other house in their price range. If a house doesn’t feel special in some way, then there is no reason to come see it in person.

Then there is how the house looks when they get there. The house really has to deliver what the pictures and marketing remarks promised. There is nothing worse than a buyer who is let down once they get there.

The buyer needs to see something they like as soon as they enter the house. If the buyer likes what they see once they step in, they are more forgiving of things they see later that they do not like. If they do not like something as soon as they walk in, they are critical of everything. I see this all the time with buyers.

She will need to get the house ready. I haven’t seen the house so I have no idea what it specifically needs, but a deep cleaning, fresh paint, decluttering and fixing visibly broken things really helps to catch a buyer. If she can’t deal with many issues, work on the 2-3 biggest ones. You would think buyers would balance the good and bad, but they don’t. If there are a few major negatives no amount of positives will make them pull the trigger and buy it. I tell sellers there are two ways to do this unless it is just an awesome Seller’s Market. You either put the effort in up front and can usually sell quickly, or you leave your house on short notice for multiple showings, get negative feedback and no offers, then end up doing everything you should have done in the first place.

Turn on every light in the house and open every blind unless it shows an ugly view. Take out the garbage. Keep the yard looking good. New mulch is like paint for your yard….it really gives it a fresh look. Make the front door area look good since that is what the buyers will be seeing while the agent is trying to open the lockbox.

Some things NOT to do:

1. Don’t run the dishwasher or have laundry going during a showing.

2. Don’t cook stinky food before a showing.

3. Don’t play music. Often people with fancy audio equipment want to show it off. It is distracting to have music playing in every room.

4. Don’t put out potpourri or those nasty Glade plug in air fresheners. People with asthma will leave ASAP and everybody will wonder what odor you are trying to cover.

5. Don’t stay at home for the showings. LEAVE. Buyers always feel like they are crashing into your life if you are there and they will want to leave in a hurry. It is hard for a buyer to decide if they want the house when they feel like an intruder.

6. In case she will have the house vacant while on the market, don’t do something like keep the thermostat too high or too low. People that are too hot or too cold don’t stick around much either. And don’t turn off the water. Somebody will use the restroom and won’t be able to flush.

7. If she comes home and a buyer is still there, don’t run them off. It typically means they were running late or they are past their appointment time because they love your house and don’t want to leave. Drive around until they leave or park way down the road. Just don’t make them leave……it would be like a movie scene where two people about to kiss get interrupted.

That is about it. I needed to blog today so I may just cut and past this!!”

How adding a 2nd bath ruined a house

by John Rice

I went out with a client to look at houses yesterday. This will be the 3rd time this lady has used me. She is super cool and always likes interesting houses. After totally renovating an old house on top of a hill deep in Jessamine County, this time she wants to be in town. So we are looking at older houses around the University of Kentucky.

We saw several houses yesterday, but today’s blog post is about one in particular. This house was “Renovated” after being bought for just over half of today’s list price. The materials used were fantastic. The house was in in good shape. It was all going swell until we got to the 2nd bathroom. You walked out of the dining room into this space that had a bathroom sink. Beyond the sink room was a pantry and another room that housed the rest of the bathroom. Not the end of the world if that was all….but also off the sink room was the kitchen. So, to get to the dining room you had to walk through the sink room, which felt like that awkward area of some hotel rooms that have the sink outside of the bathroom. It pretty much killed any hope of this being “THE” house for my client.

When I go into an old house that has been remodeled, I like to try to deduce what the original floor plan was like. I usually look at door trim and baseboards. If something doesn’t match, odds are that indicates a change.

Knowing a house from the 1920’s would have had a dining room, one bathroom and probably a small kitchen, I deduced that the room that was NOW the kitchen was the original 3rd bedroom. The space that was the sink room/toilet and tub room/pantry was probably the original kitchen. It was off the dining room and had one tall window in the pantry which made me think it was tall because there was originally a kitchen counter under it.

So, I go home and look up the previous listing from the last time it sold. Sure enough, it was a one bathroom house and I can see the window in tub/toilet room and the tall window with the counter top under it. I LOVE it when I am right 😉

The seller really ruined this house in my opinion. They probably did it because they heard it is easier to sell a 2 bathroom house than a 1 bathroom house. True in general, but…..If this house was a newer house, it would be harder to sell. If this house was a larger house, it would have been harder to sell. If this house was not in a cool older area with an awesome location, it would have been harder to sell. But it was none of those. It was a modest sized, older house in an area where a lot of houses still have one bathroom. You’ve really got to know your market when making these decisions. So, they would have been better to have kept it as a 3 bedroom/1 bathroom house than screw up a perfectly good floor plan by adding a 2nd bathroom. They probably would have sold their house yesterday if they had left it alone.

That is just my 2 cents, but if you want 2 more, here you go: After looking at the floor plan, I think I personally would have kept the kitchen where it is. The wall between it and the dining room could have been removed allowing a more open feel as well as a place for bar stools. It would have been cheaper too since all the plumbing was already there. I would have left the 3rd bedroom (where the new kitchen is now) alone. If you absolutely needed a 2nd bathroom, it would have made more sense to have converted one of the bedrooms into a private master bath and walk-in closet. You would have had a private master bathroom that way rather than having the new bathroom on the other side of the house between the kitchen and dining room.

Sometimes being a tough negotiater gets you……nothing at all!

by John Rice

We made an offer. A really good offer. Even accommodated the sellers desire to close in 8 weeks instead of the typical 30 days.

The offer was countered. We countered. They counted. We moved on. They came back and said they would accept our last offer just the way it was. Know what happened next? My people were not as interested.

Sellers never realize that when a buyer feels like the deal isn’t going to happen, they go on Zillow or the MLS and start finding another house. That is exactly what my people did. We are now looking at other houses in Lexington and may come back to the original house if we don’t find anything better.

Kind of backfired on the seller, huh? They thought they had us right where they wanted us to be, and are now chasing us…..hoping we come back to them. I guess now they know that even in a much better market, they don’t have the only nice house for sale.

This situation is why I tell MY sellers not be so difficult and drag out the negotiations. Once you get the terms that will work for you, just say yes!! The last thing we want a buyer to do is see if there are any new listings or other houses they may like. Once that happens, the buyer has mentally moved on. It is very hard to get them back.

So, as we go look at more houses tonight, a seller is sitting at home wondering if we will revisit the exact same offer that he had in his hand just a few days ago. The ink would have been dry on the contract if he had just accepted it. Now he has nothing.

One of a kind properties

by John Rice

It is always fun to work on the sale of a unique property. Most real estate advice is about playing it safe….you know, beige walls, nothing too bold, or “Too” anything really. Just middle of the road. Safe is predictable and predictable has a broad audience. Conventional wisdom is that broader appeal is better.

So what about a house that is unlike any other? One that somebody has given it’s own bold personality?

They can take a while to sell. I have had several unique listings in the past year. I’ve had a tiny lake house, an old farm house on 5 acres and an old house in downtown Wilmore. All of them were incredible to see. All the sellers had a knack for design and detail and those houses are totally amazing. What tends to happen with these listings is that they get shown left and right, but you end up waiting for just the right buyer to pull the trigger. My parents have somewhat of a unique place. They are often worried about selling it. I tell them what I tell all sellers with one of a kind houses: You will have to wait for the right buyer. The good news is that “Right” buyer will not be deciding between your house and another. They will only want your house.

Marketing a unique property is all about showing off it’s personality. I recently had this at the beginning of the marketing remarks on a listing: “Old. New. Modern. Distressed. Pinterest. IKEA. Style. Functional. Character. Unique. Amazing. These are all words to describe what the seller’s affectionately call their Frankenhouse.”

And what about the buyers? I have had several buyers who have bought unique places. These buyers are not looking for a house that checks everything off their list. It is not a practical decision to them. I rarely get much criteria to go by other than a price range and bedroom count. It is about how the property makes them feel more than anything. They tend to not care as much about the traditional factors such as school district, neighborhood, etc. It is all about their connection to the house. These buyers are a small part of the whole market. That is why I really want to get the best deal I can for them. I also want to make sure they know that it might take longer to dispose of when it is their turn to be the seller. There is nothing wrong with buying such a unique place, I just like all my clients to know the good and bad of everything so they know what to expect.