Random Real Estate Thoughts

Random thoughts from another busy week

by John Rice

FYI……This is going to be a random mix of thoughts from this week.

I closed 2 deals yesterday.  One went very smooth and the other one…..didn’t.  Crazy thing is that both of my sellers were very pleasant and really tried to make it an enjoyable experience for the buyers.  One seller discovered two cracked tiles under a piece of furniture when moving.  They were trying hard to get it fixed before the closing, but couldn’t find anybody to get out on such short notice.  At the walk-thru, the buyer realized how much effort they had put into cleaning/paint touch up/etc that they told the sellers not to worry about it.

The other deal didn’t go so great.  Wasn’t the sellers fault.  The seller agreed to do everything the buyer wanted….even replacing a few burned out light bulbs the buyer made a big deal over.   About a week before the closing, the central vac system broke.  The repairman for the only shop in town that sold that brand was out of town.  We tried to make it right for the buyer, but they started acting like we were trying to cheat them or something.  I mean, HELLO, we told them about it a week before the closing.  If we were trying to deceive them, we wouldn’t have mentioned it.  This seller also worked hard to make the house nice.  She even left a list of recommended contractors a la Angie’s List.  Well, the buyer’s agent came to the door 30 minutes early for the walk-thru and told my seller that the buyers wanted NOTHING left in the house.  The seller grabbed a ficus tree and some candles she thought the buyer might want and ripped up the list on the way out.

Guess my point is that nasty people are always gonna be nasty, even when you are trying to be nice to them.

Another random thought is about one of the few realtors I like.  This lady is in my office and primarily does short sales.  I started to help her with her buyers about a year ago.  Everytime I talk to her I think more and more highly of her.  She has a real heart for her clients.  Today, she was trying to sell me a queen sized headboard that one of her seller’s has.  Where she works short sales, almost all of her clients are having a rough time financially.  I was really touched that she would take the time to bother with trying to help her client make a couple hundred dollars.  To me, THAT is the kind of agent that you want.  I always say that anybody can be trained to do a decent job, but you can’t train somebody to care.  Agents that care about their clients always do a better job.  I wish we had more agents like this lady.

And…..my last random thought is that I am having a really good time this summer.  Its kind of nice to meet great people, help sell their house in a tough market and/or help them make wise buying decisions, then watch them move forward to their next phase of life with a smile on their face.

 

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.

 

Amazing What Furniture Can Do

by John Rice

I’ve got this client whose house I am selling.  I sold it to them when they bought it.  The house had been sitting on the market for a while when we wrote the offer.  I got them a good price on it, but I was a little nervous about selling it in a cooler market than when they bought it.  I told them before we bought it that it might be harder to sell since it had been on the market so long.  The agent that had it listed at that time did a decent job of presenting the house, so I couldn’t really blame it on her…..figured it was the casual floor plan in a neighborhood full of cookie cutter McMansions.

Well, just by word of mouth, I ended up with multiple showings before I even put it on the MLS……which was today.  It got 3 more showing today.  Granted, it ain’t sold yet, but it is in the top 3 houses for 2 different buyers.  Makes me think I have something really special here.

What gives?  How could a house sit on the market for a long time in a better market and be on the short list of two buyers now?  I think it has something to do with their furniture.  When they bought it, it was vacant.  I remember going in the house and thinking it was nice, but I had some concerns.  One of them was the “Keeping Room.”  When it was vacant, it just seemed so small.  I am usually pretty good about figuring out scale and all, but not this time.  Once the seller got furniture in the room it totally changed the vibe and actually made it seem bigger.  The house has a covered patio that is very nice, but once the sellers put out a table and flowers, it really made it seem like some place you’d like to vacation.

This past weekend, I was out with a young couple.  We went in two houses in the same neighborhood that happen to be the same floor plan.  There were some minor differences:  One had a tiled backsplash, the flooring was a different color, and the cabinets were different stains.  One had plain paint and was decorated with an older vibe……..guess I’d call it Early American Yard Sale.  One had furniture and paint that was much more hip.  Guess which one my young couple clicked with the most?  When the agent for the “Older House” called for feedback, I told her about this and suggested they make some changes since the target buyer in that price range and neighborhood is a twenty-something person (or persons!)

So, if your house is for sale or you are about to sell, think about all this.  Afterall, look at all the shows on HGTV where that lady from the Target commercial makes a few cosmetic changes and the house sells soon afterwards.  Think about your target buyer too.  I’ve noticed the twenty-something buyers like cooler colors like gray tones.  People older than that go for warm colors like beige since they remember the last time cool colors were vogue back in the 80’s.

And oh…..while I was writing this post, an offer came in on that house……a good offer.  Gotta go now!

Lexington Ky Real Estate: How $59 Bought a lot of Trust

by John Rice

Well, it finally paid off today……and in a big way!  See, I am all about keeping the trust I work so hard to establish with my clients.  I want them to know I am looking out for them, and I often look for ways to reinforce that vibe.

Let me give you a little background about this story so you’ll understand how me spending $59 to have an air conditioner looked at by my HVAC person turned out to be a fantastic decision.

I have a client who is buying a house.  We had it inspected.  The inspector said the copper had been cut out of the air conditioner lines.  The other agent had their HVAC person come out who inspected the unit.  Since I know this agent, and my client knew I knew this agent, I wanted to make sure he knew that despite my friendship with the other agent, I was totally on his side.  The last thing I need is a client to even entertain the thought that I’m not watching out for them.  That’s why I disclosed that I was friends with the other agent to begin with!  When you’re in a business where you give advice,  you must have total trust with your clients.

  Since we had opposing opinions about the lines, I sent my HVAC person out.  I told my client I had no reason to believe what the other agent said was untrue, but I wanted to prove it to him.  Now really, I expected the lines to be there and all to be well.  It was really about putting my client’s mind at ease that all was well………..

Only all wasn’t well.  Turns out the copper lines were missing, probably recycled by now and the thief that took them has already spent the money.  With no lines, the compressor was burned out.  My HVAC guy said it would be about $1500-2000 to get it working again.

I am so glad I decided to get this checked out myself.  Not that I thought there was any deception here.  This was just one of those things where the person checking it earlier didn’t investigate all that well and my agent-friend passed on the info they were told to me.  If anybody is to blame it would be the HVAC person who said it worked just fine.  (So……other agent…….I am not pointing any fingers at you if you are reading this ;-))

Can you imagine if my client had closed on the house tomorrow, turned on the air, and it not work?  Then find out he needed to spend that much money?  Not only would that have been devastating, it would have killed any credibility and trust I had built with him.  In the end, it was worth every penny of the $59 to guarantee that my client’s wallet wouldn’t be drained, his house to be  cool, and to maintain the trusting relationship we have.