Which Neigborhoods Does THIS Realtor Like?

by John Rice

You know, I work with people in all price ranges from well under $100k to over $500k.  I go in a lot of houses all over town.  I’m always telling my folks where I would live in their price range.  Thought it might make a good post.  Since buyers seem to want either an older or a newer house, I’ll give my picks on both.

Under $100k for newer homes:  This one is easy…….there aren’t any!

Under $100k for older homes:  I really like the Buckhorn Road area.  There are tons of different neighborhood names along Buckhorn, but it is easier to just lump them together and call it “Buckhorn.”  Why Do I like this area?  Good schools and convenient location.  Also, most are simple homes built in the late 1970’s and 1980’s, so they are pretty easy to maintain on a budget.  Another neighborhood I am a fan of is Gardenside.  Great cape cods and ranches from the 50’s and 60’s  just south of downtown ought to put this on anybody’s short list.

$100-200k for newer homes:  I really like Chilesburg cause it is pretty close to Hamburg and it has a lot of greenspace.  Also, the middle school is right in the area.  Masterson gets a bad rap from most old-time Lexingtonians, but you really can’t beat the value since you get more house for less money.  It isn’t a convenient location for getting around Lexington, but I would still live there.

$100-200k for older homes:  Meadowthorpe has a lot of the 1940’s charm and has the elementary school within the neighborhood.  Squire Oak and Hunting Hills are probably my favorite spots if you want a medium-sized house in SE Lexington from the 1980’s.  SE Lex is pretty handy since you can get to the two main shopping/dining/entertainment areas, Hamburg and Fayette Mall, pretty easily.  These neighborhoods are right beside each other.  The school district is good, and the elementary is right there in the middle of the area. 

$200-300k for newer houses:  In the NE side of town, Andover Hills is my pick.  This is mainly a late 1990’s area.  The school district keeps this neighborhood high on the list of those wanting this part of LEX.  Chilesburg is also nice for the previously stated reasons. 

$200-300k for older houses:  Kenwick is cool since it is so close to downtown and has a lot of early 1900’s charm.  An area few even know exists is Deepwood.  It is on the north end of town.  It is a small area of houses from the 1930’s to the 1950’s.  It is surrounded by neighborhoods that aren’t as nice, but I’d still live there just for the coolness factor.  Lansdowne-Merrick, AKA Lans-Merrick is a convenient spot close to everything and is surrounded by much more expensive neighborhoods.  To me, it is a bargain and I look for this area to become more popular once we start seeing more houses that have shed their 1970’s finishes.

$300-400k for newer houses:  Stuart Hall is right next to Chilesburg, so it has all the same perks.  Prices have fallen, so it is high on my value radar.  The lots seem to be larger than I typically see for newer areas.  That area is pretty flat, so you don’t have to worry about a crazy sloped lot!

$300-400k for older houses:  I LOVE Hartland.  This area was built in the 1980’s.  Still a lot of outdated houses left, but there is no other neighborhood in town from my POV that has such a good vibe.  I think it is going to be as loved by Lexingtonians as Chevy Chase and Ashland Park.  Why?  All the mature landscaping and fantastic layout.  All the cul-de-sacs are landscaped in the center as well as the median that runs through the whole main street.  In fact, the layout of the road and lots reminds me a lot of Ashland Park.  It is just as picturesque.  ALso, you can get a decent place in  Chevy Chase and Ashland Park within this price range.

$400-500k for newer houses:  Still Meadows gets my vote for character and a good school district in NE LEX.  Beaumont is a great pick…..most desirable schools in town, convenient southside location, walking trails, etc.

$400-500k for older houses:  You can also get a great house in Andover Forest for this kind of dough.  It’s close to Hamburg and the interstate, plus it has many golf course lots.  Hartland gets even better at this price point.  Chevy Chase and Ashland Park are great.  Greenbriar is a classic 1970’s interpretation of the executive, country club neighborhood full of custom builds on large lots situated out in the country…..only now, it is just a few minutes outside of town.

Over $500k?  I’d be in a really nice home in Hartland, Warrenton Woods, the Lakewood area, the Estate section of Andover Hills, or find a lot and build my dream home.

What are your favorite neighborhoods?  Leave me a comment 🙂

Sure, a tomato is a fruit, buuuuuuut……..

by John Rice

“Knowledge is knowing a tomato is a fruit.  Wisdom is not putting it in Fruit Salad.”

A friend of mine posted that this morning on Facebook.  I got a kick out of it.  It also reminded me of a trend with many of today’s buyers.

Now, I am not trying to defend my industry or bash these buyers, but more and more I am seeing buyers who don’t want a realtor and who don’t know how to use all the info they find online when it comes to real estate.  They go on sites like Zillow, Trulia, the PVA and get the same info that only realtors use to have access too.  I don’t have any issues with that at all, unlike many of the old school agents out there who long for the by-gone days when we controlled that stuff.  My issue is that most people end up making bad decisions with good info and don’t even know it.  (Putting the tomato in the fruit salad.)

Examples?

A buyer told me he saw the zestimate value for a house on Zillow and thought it would be a good one to flip since it was priced so much lower than the rest of the neighborhood.  I looked at the place.  It was on the most miserable, busy corner of the whole neighborhood and was out of character with the rest of the neighborhood.  It SHOULD be priced a whole lot lower than the neighborhood to even make it a fair price.  It was not a bargain.

Another buyer told me he didn’t see the need for having his own Buyer’s Agent.  He was going to rely on these sites and the PVA.  I told him that was fine and well for figuring out averages like price per square foot, but that isn’t going to help him know what the house he buys is really worth.  How so?  How will he know whether a house he knows sold so many months ago for so much money had a new roof? An old furnace?  How the inside compared?  What value the market bears for a covered patio verses an uncovered deck?  What is considered typical for the neighborhood?  If the house has some fatal flaw that will turn off most buyers when he goes to sell?  If the seller paid any of the buyer’s closing costs?  Those things aren’t on those sites.  And while I am here, many sellers pay part of the buyer’s closing costs these days.  Let’s say the PVA or zillow say a house just sold for $155k and this buyer is using THAT number to base an offer on.  If the seller paid $5k of the buyers closing costs, then the house really sold for $150k…..OUCH!  He just over-paid by $5k and won’t even know it……until it is his turn to sell the house!

I’ve got a little different business model.  I don’t mind buyers that like to also do their own research.  Many of my buyers actually know much more info than many of the realtors here in town.  I don’t mind letting them do that if they wish and then helping them put the pieces together.  I find that it actually helps build trust because they can verify everything you say.  Tell them the truth and work for their benefit and they love it.  So, whether a buyer wants to help out or let me do all the work, I am cool with it, and we’ll find a good use for that tomato.

Test for radon when the levels will be the highest….if you’re the buyer

by John Rice

I woke up this morning thinking about radon.  Now, isn’t that sad?  Why not something like remembering a beach vacation, or thinking about one of my favorite cars?  Makes no sense, but that is how it went down.

Since most real estate deals only give 7-10 days for all the inspections to happen, the 48 hour radon test has become the norm.  Really, a longer term test is better since radon levels in a home can vary widely.  The way it works is there is a device that reads the radon level every hour and the numbers are averaged.  Anything at 4 pCi/L (picocuries per liter) or higher needs mitigation.  That’s the number most realtors are familiar with, however, the EPA says that you should consider mitigation of any level between 2 and 4 picothinggies per liter.  So, you shouldn’t feel like you have no right to ask for radon mitigation if your test averages, say, 3.9 pCi/L.

Since real estate deals necessitate a short term test that don’t really give you a year round average, wouldn’t it be nice to find a way to get the highest reading possible so you can hit the seller up for installing a mitigation system?  Since I’ve been doing this, I have noticed that the level of those hourly readings always seem to jump when there is snow on the ground, heavy rain, or the ground is frozen.  I once had a test done before and after the system was installed and the “After” test was actually higher since the ground was frozen!

So, if you are buying a house and having a radon test done, pick a day with the greatest change of rain, snow, or a frozen ground.  I am sure the radon mitigation companies know that too since I have had a few that conveniently forgot to pick up the test equipment until after it quit raining…..guess everybody but the seller wants a higher reading.

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.

 

So, A Buyer, A Realtor, & An Appraiser Walk into a House…….

by John Rice

I just got off the phone with a seller who was wanting me to list their house.  The seller’s house has been on the market for 6 months with another agent.  I looked at the comps and had to tell this seller that the house was never going to sell anywhere near it’s current asking price and even if it did, would never appraise for an amount a buyer getting a mortgage would need it to.   The seller decided they might pursue refinancing rather than sell.  When I got off the phone, I was pretty mad.  Not at the seller, but at the current listing agent.  See, had that agent explained how real estate works, this seller would not have wasted the past 6 months thinking the house might sell.  I don’t know why realtors won’t explain how it all works to people.  I guess they are afraid that if the typical buyer or seller understands our business, then they won’t need us.  I find the opposite to be true. 

So, here are some things that people need to know, especially sellers since they seem to have it the hardest these days:

1)  Today’s buyers are more savvy than ever.  They know if a house is overpriced as if it were a sixth sense.  They are going to look at every house in their price range and pick the best one.  (In fact, most buyers out there have a keener sense of the market than a lot of realtors!)

2)  Let’s say you do find a buyer who is willing to pay too much.  I’ve only seen it happen a few times, but here is a series of events that all must happen in order for you to sell for over market value to a buyer getting a loan these days:  A stupid buyer must end up with an equally stupid or lazy realtor and they get a mortgage from somebody with an appraiser who will “Make the numbers work.”    I can count on one hand how many times I have seen that since the market slowed and we now have all these new laws that try to minimize this type of activity.  (In other words, don’t count on it happening for you!)

3)  Which brings us back to how things roll these days.  Once a buyer and seller agree on price, any buyer getting a mortgage is going to need an appraisal for at least the contract amount.  An appraiser is going to pick the 3 best comparable houses that have sold within the neighborhood in the past 6 months.  In a pinch, they’ll go back a year and/or about a mile from the house.  If the house doesn’t appraise for the contract amount or more, the buyer has the option of basing their loan on the appraised amount and paying cash for the difference.  That happened some in a better market, but few, if any, buyers are willing to do that today.

4)  Realtors guesstimate value by doing what we call a CMA or Comparable Market Analysis.  It is similar to an appraisal….I actually think it is more realistic since we are trying to determine an actual sale price.  An appraisal is mainly to justify a sales price.  We pick 3 or more houses that have sold in the same neighborhood too.  We then cut and paste dollars for differences between the subject house and the recent sold listings.  This is where things like square footage, finishes, condition, etc come into play.  Generally, the less you have to cut and paste the better.  It pays to pick the most similar comps.  Why do we do this?  Basically it is a prediction based on recent buyer behavior.  We are saying “Hmmmmm, if a buyer recently paid this much for a house that was so many square feet bigger than my listing, then my listing should be worth so many dollars less……But my listing has a fenced yard and that one didn’t, so I need to add a few bucks for that.”  I keep the appraisals of recent deals I’ve been in and will use the same values that appraisers use when I do a CMA or have somebody about to write an offer.  That is one reason I have NEVER had a house not appraise for enough.

So, a seller really needs to price their house close enough to the market value in order to attract a buyer, and will also need to convince an appraiser that the contract price is okay.  Keep those two things in mind and if you have a realtor that hasn’t or won’t explain that to you……fire ’em!!