Realtors

Can’t vs. Won’t

by John Rice

I’m in the middle of the worst part of all real estate deals…………Negotiating repairs after the inspection.  You see, all sellers think that they’ve lived in the house for x number of years, and the things the buyer wants fixed haven’t been a problem for them.  All buyer’s think they are inheriting the seller’s problem house.  Unless one party just totally does everything the other party wants, ain’t nobody really happy.   It is kind of the bummer part of being a realtor, since I want my peeps to be happy!

I’m in one right now where the other agent really needs to take a course on presentation and charm.  Maybe I’ll send him a link to this blog.  See, he told me, in great length, why the seller WON’T do a couple of repairs we asked for.  I don’t know about you, but when I hear WON’T, it makes me want to dig in my heals and push back. 

One of the repairs was over an issue in the backyard.  They had a major landscape company come in and do a koi pond and patio.  I think the reason for the WON’T was because they just couldn’t emotionally bring themselves to “Undo” the work they have done.  That being the case, if the other agent had just said something like “I’m really sorry, but after putting so much of themselves into creating that wonderful space, the seller’s simply CAN’T bring themselves to makes the changes your client wants.”  Isn’t that much better than hearing WON’T??  I mean, the bottom line is that they aren’t going to budge on that one, but getting it in a pill that is a little easier to swallow leaves us not wanting to push back.  

See, we aren’t done yet.  We haven’t accepted their  repairs.  We also have to get past the walk-thru.  Let me ask you this.  Don’t you think it would be easy to turn this into a battle to see who will win?  Wouldn’t you be tempted to get right up to the walk-thru, when the seller has a loaded U-Haul in the driveway, and then have an issue with how one of the repairs were done?   When one party comes across as unreasonable, it makes the other party want to be unreasonable too.  It takes a big person to not respond in that way.

In a real estate deal, both parties have a lot to walk through together.  If you’re the seller, remember that you only have one house to sell and the buyer can go out and pick any of them.  Remember that you want the buyer to find the house acceptable at the walk-thru.    Remember that the buyer has a little more control over the time/date of the closing than you do.  If you are the buyer, keep in mind that you did pick the seller’s house after seeing a bunch of other ones.  Also remember that the seller will be living in the house until you close.   See, both parties really need to keep the other one happy since each have a little control over the other. 

I tried to buy a house in Autumn Ridge a few years ago.  We really liked it.  The roof had hail damage, there was evidence of up to 6 inches of water having been in the crawlspace, and one of the furnaces wasn’t even working the day of inspection.  I put it all on the list, and didn’t really expect the seller to do much of it.  I had in mind the lowest point I would accept.  I could put in a sump pump,  the roof could go a few more years, but I really needed a working furnace.  I didn’t even ask for a brand new one, I just wanted it to work.  The seller wouldn’t do any of it, so I had to walk away.  I guess he felt like he won, but what did he gain?   He got to hang on to his vacant house that needed a new roof and furnace, and had a water problem in the crawlspace.   There was no real victory in that!

So, CAN’T is sooo much better than WON’T, even if the results are the same.  WON’T always comes across as aggressive.  CAN’T at least has a chance of getting some sympathy from the other party.  I don’t remember if it was my dad that told me about CAN’T and WON’T or if it was my old mentor Susan Webb.  Both of them are pretty fantastic, so I guess all that matters is that I learned it.

Helping out of town buyers

by John Rice

Well, I’ve got several out of town buyers busting into Lex soon.  Kinda got to thinking about how an out of town buyer is a little different that somebody that already lives in the area.

Obviously, they know nothing about Lex, traffic, schools, neighborhoods, the market.  They are kind of lost.  What they need is somebody that can be feeding them all that info before the drive or hop on a plane to look at houses.  I guess in the old days, and still today if you’ve got an old school agent, you didn’t really do anything except wash your car before they got here.  Didn’t have much choice before e-mail, satellite views, and the internet.

The beauty of all the info that is just clicks away is that a buyer can sit wherever home currently is for them and narrow down what school district they want to be in, see if the lot for a house they like is odd shaped, or backs to something undesirable, etc.  I guess I could also turn this post into why a house needs to be presented well online to even get anybody to come out in person to see it, but this is about out of town buyers………..maybe the next one.

I guess what I have learned to do is to work even harder BEFORE they get here.  Moving is stressful, but can you imagine coming to a town you know nothing about?  Lay in bed at night and wonder if you can really find a house you like in the short period of time you’ll be there?  Worry that you’ll make a bad decision just because you are pressed for time?  Run out of time because you’ve wasted so much of it looking at houses that won’t work for you?  All that really sucks.

So, what I try to do is narrow down the search to certain parts of town.  Usually a job or a school are the biggest things buyers need to work around.  From there, of course comes price range, old or new house, amenities they want, and the million other things they have in mind.  I usually spend a lot of time e-mailing answers to questions, telling them about neighborhoods, sending links for more info.  One thing that has really been sweet is that I bought a HD camcorder.  It is so cool to answer their questions with video.  They say a picture is worth a thousand words, and most realtors including me can probably go past that, so I guess it is also a real time saver too.

I’ve got some cool peeps coming to town this week.  I am excited to meet them in person.  I got a Facebook friend request, so this is actually going to be the first time I’ll know what an out of town client looks like when I arrive to pick them up.  I usually wonder around a motel lobby, make eye contact with anybody around until one of them smiles at me, then I say “Are you______?” 

I’m hoping after all the e-mails, all the previewing houses with the camcorder, all the info I have given them, that they will come to town and kind of feel like they already know enough to make a good decision.  That when they do see the houses, they feel like they kinda have already been there.  To me, that is really what it is all about:  Making it easy for them to make this huge decision…………and have fun when they get here!

4 things you need your Realtor to do

by John Rice

I am stuck in my dining room today while the flooring guys put down hardwood in the next room.  What a good time to blog about some of the things that have been on my mind.

I recently met a couple who paid way too too much for their house back in 2007.  They want to sell it now, but they are going to take a big hit.  I know you are thinking that stuff like that is happening all over these days, but there is more to this story that just a slow market.

This couple used a well-known agent in town.  They moved from a much more expensive part of the country.  To them, ALL the houses looked like a bargain.  They told me they didn’t want to use her again since she didn’t tell them that they were buying the most expensive house on the street.  She also didn’t do a Comparable Market Analysis (CMA).

I thought, well maybe there were multiple offers.  Sometimes if a person finds the right house and there are other buyers in the picture, you got to move fast…………Nope.  Not a multiple offer situation.

Well, being a little OCD, I thought that I would do a CMA based on the date they bought it.  It is easy to do.  I just plug in the date of the sale and look back 6 months to see what else had sold that would have been comps for the house.  It was as if it was early 2007.  The exact same info available to the other agent.  The only surprise was that they only over paid by $7-10,000, rather than the $10-15,000 I had suspected.

So, I have 4 things your realtor should do for you.  There are countless others, but these 4 will eliminate a lot of potential bad surprises for you.

1)  You guessed it.  Your realtor should do a CMA.  Sometimes my clients will ask me how much they should offer based on the asking price.  I usually tell them that we first need to find out what the house is worth.  If it is over priced by 10% and you offer 95% of the list price, you have just over paid.  You HAVE to know what the house is worth independent of the asking price.

2)  You need to know who owns the houses around you.  A quick check of the PVA website will let you know if  there are a lot of rental houses around you.  Nothing scares buyers more than buying in a high rental area.  See, the PVA site will tell you where the tax bill is sent.  If it is sent somewhere other than the house in question, odds are the occupant is not the owner.  I once had a client who fell in love with a house and was ready to buy it.  A PVA search revealed that about 40% of the neighborhood was rental.  One of the big builders in town owned about 20%.  I could have sold them that house and saved all the time we spent looking at about 20+ houses after that, but that is not my business model. 

3)  Your realtor should check the crime map before making an offer.  That will tell you what kind of neighbors you’ll have and/or what kind of people are coming into your neighborhood.  Bear in mind that a neighborhood under construction will have a lot of theft from people taking tools, material, copper from vacant houses, etc.

4)  Your realtor should verify the schools for the house.  I see a lot of wrong info on the MLS, especially for schools.  Sometimes agents get lazy and do things like assume that the closest school is the one.  My kids are in a magnet school that you can only get into by lottery.  I was amused to see that one realtor had put the school as the disctricted elementary school.  Can you imagine buying that house and thinking your kid was going there?

There are lots of other things a realtor should do, but to protect yourself, make sure they at least do these 4!

Will there be Realtors 50 years from now?

by John Rice

I always hate it when I get asked a BIG question like that, and I just did it to myself!  The short answer is yes there will be Realtors in 50 years, but there will be changes.

Before I get too far into this, let me tell anybody younger than I am how real estate use to work:  The agents were the only ones who had access to what was on the market, what a place was worth, what the comps were, what the PVA records were.  You know, the dark age before the computer put ALL this and more at our fingertips.

Flash forward to today:  I think a lot of agents are scared to death that consumers have the same info they do.  I think a lot of agents wonder if they really are needed.  People sell by owner all the time.  Buyer’s often have more information that the agent does.  To be polite, it really FREAKS out agents!!  I have to laugh when I hear agents talk about the future of real estate.  It reminds me of a scene from Gone With the Wind.  The one where all the southern landowners are sitting in a mansion getting all excited thinking they are gonna kick some Yankee butt because nobody is gonna make them give up their “Lifestyle”.  That’s the way most Realtors are today.  They want to hold on to the past so they can justify getting paid to do what the public perceives as easy.  The MLS is the only real foothold we have left.  You have to list with an agent to get on the MLS (Multiple List Service).

Let’s face it, real estate transactions are not rocket science and Realtors are not scientists.  Most of them only know how to fill in the blanks on the contract, having never really read the document.  These are the ones you see advertising that they can help you find your dream home.  This is especially funny to me when they say that online.  I am thinking, as you are, that anybody who sees that ad online can probably find their own dream home.  Finding a house you like is really easy.

All right, I know this was going to be about the future of Realtors, so I better get there before you hit the back button.  Real Estate has always been about information and it aways will be.  That won’t change.   So many fields are really about information.  I take my kid to the doctor, who asks a bunch of questions, then INFORMS me what the problem is and how to fix it.  If it does not require surgery, the doctor hasn’t had to really DO anything except draw on his experience and training.

I see a future where what we do is to act more as a consultant.  When I take my kid to the doctor I have all the information about his symptoms that I will ever need.  What I don’t know is how to interpret that information into anything that can help him.  So, I go to the doctor.  (Wouldn’t it sound silly if the doctor offered to help you find the symptoms?  That’s what agents that have nothing to offer do.)

We, as agents, need to quit thinking about just the “NOW” of real estate.  It is really easy to find the present value of a house in Lexington.  You find 3 close comps of a similar size, type, quality that are in the neighborhood, then you cut and paste the pros and cons of all in comparison to the subject house.  The end result is the approximate value of the subject house. When a buyer of mine picks a house, I also try to look 5 and 10 years down the road.  I ask myself what external forces are present that will cause the area to improve or decline?  Is the neighborhood large enough to not loose its identity to an adjoining neighborhood?  Does the neighborhood has well defined perimeters?  Good or bad traffic patterns?  How will market fluctuations effect this property?  Does the house fit in with others well (I mean size, building material and all, not socially.)  Why do we need to do all this?  Because there was a time when Split-Level houses were popular.  There was a time when people thought they were going to get 6% appreciation EVERY year.  There was a time when a pool was viewed as a positive.  Heck, there was even a time in my old neighborhood when having Tates Creek Elementary/Middle/High Schools so close drew buyers!

Agents will also need to know more about the legal aspect of real estate transactions.  Most of the nightmares people have when buying or selling a house can be prevented by wording it in the contract.  Most agents write the contract as if there will not be a problem.  There probably won’t be, but if there is, you want to cover your you know what in the contract.  My attitude is that even if you are 100% right, it still sucks to have to go to mediation.  I frequently hear where, say, a seller removed the refrigerator.  The buyer’s agent just wrote “All Appliance come with house”  or “As listed on the MLS”  in the offer.  If the buyer’s agent had written each appliance in the offer, the seller wouldn’t have a leg to stand on.   One thing I do is to never take an amount for earnest money that exceeds the limits of small claims court.  Our contracts have a mediation clause, but better to be on the safe side if mediation goes nowhere fast!

So, yes there will be Realtors in 50 years.  Yes we will need to “See” the future a little more.  Yes we will be needed to help people make wise decisions.  Yes we will need to protect them legally.  I just hope other agents will do these things rather than just offer to help you find your dream home.  The sooner the better!