When I was a little kid, my dad had this old set of poker chips.  There were red, white and blue ones built into a little round thing with a handle on top.  I remember playing poker as a pre-teen with my friends.  I also remember winning a lot.  I didn’t do it by bluffing or anything that actually had anything to do with the game itself.  What I got good at was studying my friends.  It’s pretty darn easy to win when you can tell if your pals have a good hand or not.

My dad always told me I was pretty good at reading people and seeing their motives.  That is one of my favorite things in real estate.  See, when I get an offer on a listing, I like to sit back for a minute and just take in all that I know before responding.  It is even easier if the buyer’s agent has loose lips.  Sometimes google and Facebook help you out too. 

I recently was in a deal with a great realtor.  He did everything he should have done.  My clues here were the closing date.  It was the Friday before school started back after Christmas break.  Sure, most real estate deals close on a Friday, but what made this one stand out to me was how soon it was.  Not the usual 30-45 days out, this one was just about 2.5 weeks out.  So, I hit Facebook, and sure enough there was a person with the same name with school aged kids who lived in the same surrounding town that was on the check for the earnest money.  I also knew that most seller’s wouldn’t want to be out of their house the week between Christmas and New Year’s Day.  We stood firm and got a good price.

I just had another deal like that.  My listing is in the only neighborhood in its price range to have the good school district that it does.  We got a really low offer.  So low we didn’t even counter it.  Since the buyer thought this house was in poor condition, I figured they must really want to be in this school district.  I mean, there are tons of new/newer houses within walking distance of this one, but they are in a different school district.  I don’t know why somebody would pick a house they didn’t like that much when they can get a better house for the same money.  Had to be school district.  So, I hit the MLS to see what all choices this buyer had in that school district.  The only other house was one with a crazy steep driveway…….so I knew we could hold tight on our price.  We did and got it, despite the other realtor’s great effort to get it for less.

So, like Kenny Rogers said, “You gotta know when to hold ’em.  Know when to fold ’em.  Know when to walk away.  Know when to run.”

Well…..It finally happened to me.  Finally encountered a house so bad that I had to tell my client to walk away from it.  My client has used me a couple of times now.  He likes to find a good deal, live there for a little bit, and then cash out.  That model has us looking at some houses that most other buyers won’t consider, so we tend to see bigger problems than usual.  We knew this one had some window issues and a lot of cosmetic stuff when we wrote the offer.  After getting it inspected, turns out the furnaces and air conditioner units were also shot as well as the roof.  These are things I can normally check before we get to this point by looking at the seller’s disclosure, but where this was a bank owned property, we were really shooting in the dark.  Sometimes I can search the history of the house on the MLS and get this info from when it had been listed before……This one had no history!  No electricity was on until the inspection and the roof had been covered with snow too.

Since this just didn’t fit my buyer’s model of getting a bargain and doing some sweat equity work, I told him to walk away.  I think I floored the home inspector, who told me he had never seen a realtor do that before.  He said most of the time realtors  always try to sugar coat things to keep the deal glued together.   To me, you have to put the results of a home inspection in perspective with your clients goals.  If this house could have been bought enough below the potential market value and my folks were totally in love with this place, my advice might have been different.  I might have gotten quotes on the work it needed and then negotiated with the seller.  In this case, it just simply didn’t fit with my client’s investor mindset.

I really think the toughest part of being a realtor is keeping up with the market.  No, I don’t really mean knowing all the statistics, average days on market, etc………Those things are about the recent past.  What I mean is what is happening right now and what am I going to do in response.

 Here are a few observations of mine since the tax credits expired:

1)  Everybody wants to buy a house for LESS than what the recent sold comps show the value of a house to be.  Even as recently as 6 months ago, buyers were satisfied to pay anywhere in the range of value that the comps supported.  Now, they want it under the lowest number in that range.  I recently had an offer where the buyer’s agent and I both agreed that the house was worth $125-130k.  The buyer wouldn’t come up past $123k.  I mean, here she has her own realtor telling her the house is worth at least $125k??? (Of course, if they start getting these prices, it will be the new market value.)

2)  Buyers are the pickiest they have ever been.  I don’t mean this in a bad way…..just stating a fact.  With all the staging that has taken place over the past few years, buyers have gotten use to seeing some eye candy when they come to see a house.  They don’t want to do anything either.  Has to  be move-in ready or else they start subtracting dollars off the asking price.  I think some of that is just that buyer’s want to preserve any cash they have these days, so they no longer seem willing to do things like finish a basement, remodel anything, or replace flooring.

3)  The low ball offer is the new norm.  Even if a buyer is planning on paying a fair price, they all want to feel the seller out for his lowest number.  I tell sellers just to expect it these days and try to dance with the buyer until the music stops…..sometimes they will come up to a fair price.

What is a seller to do about all this?  Well, as always, I am encouraging my sellers to price their house right, but also to make any improvements needed to get somebody to fall in love with their house.  Sure, I’ve always been big on getting the house ready to sell….making minor tweaks to make it show better.  But now, I am encouraging my folks to paint, replace any worn flooring, update anything that needs updating, etc.  Why go through all that?  Because……….if you can get a buyer to have an emotional reaction to your house, they lose some power in the deal.  If you can make your house the best one in its price range/neighborhood, I mean make it where they hear angels singing when they open the door, they really want your house.  At that point they quit thinking logically and start making decisions with their feelings……and THAT is THE best way to overcome the 3 items above that you just read.

As I was doing a search for houses within a certain elementary school district the other day, I thought for fun I would see how many listings had a certain magnet school as the districted elementary school.  For those of you that don’t know, the school I am talking about is one that you can only get into by lottery.  So, in other words, there should be NO houses in all of Fayette County that claim to be in this school’s district.

The sad news is that there are 5 listings that claim to be in a school district that does not exist.  I see stuff like this all the time.  From wrong neighborhood names to wrong school distircts….everyday.  My personal favorite data entry mistake was a townhouse in Andover Hills which had a lot that was 6500 ACRES!!  Yep, that agent checked acre rather than square feet as he/she input the info into the MLS.    Another listing had the lot size as being smaller than the first floor of the house.  Then there are the intentionally deceptive ones.  You’ll see this sometimes if a house is close to a more desirable neighborhood.  I once saw a house in Mount Vernon labeled as being in Chevy Chase.  Another one that was in Southpoint was listed as being in Waterford.

I get a good laugh out of some things like that, but the school district thing really bothers me.  See, somebody may still come look at the 6500 acre townhouse and buy it.  It would be obvious that it didn’t really have almost 3 times the amount of land that was last added to the urban service area.  The house with the lot smaller than the square footage of the first floor should also be easy to clear up.  But a school district?  That is something that you can’t tell from looking at the house.

Being a realtor, I know that my clients look to me to give them an answer.  They assume I know what I am talking about.  That is one reason I usually tell them I am not 100% sure about something unless I am 100% sure…….then I go find out for sure.  Not all agents do that.  I can easily see a buyer, especially from out-of-town, ask their agent about the school district, then the agent look at the inaccurate info that the listing agent provided.  School district plays a big role in a lot of people’s real estate decisions.

On the flip side of this is the seller, who may be in a really desirable elementary school district but nobody will ever know it.  That seller may end up sitting on their house longer and possibly selling for less that the full potential due to a simple mistake.

So my message to both buyers and sellers is to verify all the info.  Sellers, make sure the square footage, lot size and school district are correct.  Also see if your house says whether it has a garage or not.  There is a box to check yes or no when an agent does the input.  The default is no.  If an agent misses this, then to anybody who enters having a garage in their search criteria won’t find your house.  To buyers, check all that stuff too.  If you are concerned about square footage, have your agent measure it for you before you make an offer.  To check the school district for any street in Fayette County, go here:  http://www.fcps.net/tools/street-directory.

And oh, I asked about removing this school from the list of schools in Fayette County.  I thought not having it as an option for agents to choose from might just be in the public’s best interest.  I was given a really logical reason for why we have to continue with something that doesn’t make any sense.

Caveat emptor…….cause nobody is really policing all the info that agents put online.