Protect Yourself When Buying in a Lousy Market

by John Rice

Let’s face it.  The market sucks right now.  I think I may be the only agent to come out and say this, but it is the truth.  I’m not a sugar coater.  I am a realist rather than an optimist.  I optimistically hope that values aren’t going to dip in the near future, but since most loan officers I know have been twiddling their thumbs recently, the realist in me says it is a false hope.

So, what is a buyer in and around Lexington Ky going to do?  You’ve got to make some wise choices to protect yourself from the risk.  Not every neighborhood has taken a beating.  Some are safer than others.  Real estate is all about location, price, and condition.  If you keep those 3 things in mind, you’ll be okay.

Unless you are getting a house for below market value, here are some things to keep in mind for when it comes time to resale:

1)  Don’t buy a house with a steep driveway.  Most buyers rule it out before even getting to the front door.

2)  Don’t buy a house that backs up to anything other than similar houses or better.  The people in a million dollar house don’t want to sit on their deck and see a half million dollar house.  The half million dollar folk don’t want to sit on their deck and see the $250k house.  The $250k people…..well, I’m sure you get it.

3)  Don’t buy on a busy road.

4)  If it is in a neighborhood where the target buyer is going to have kids, get the best, most well-rounded district you can.  I know of several neighborhoods in Lexington whose values were much higher when people often had to settle for their second choice in a hot market.  Now that most people can get their first choice neighborhood, those areas took a beating.

5)  Stick with things that people won’t consider random.  Like an odd-shaped lot, a weird floor plan, etc.

6)  Too new of a neighborhood.  Often, a nice area will decline once the original people start moving out.  Happens ALL the time.  Another problem with a newer area is that often, people all move out around the same time.  There is a newer neighborhood out Richmond Road where it seems like half of the houses are currently for sale.  Another issue with newer areas built during the “Anything goes” mortgage days is that many sellers paid top top dollar for all their upgrades and now owe more than they are worth.  There is a neighborhood in SW Lexington where it seems most of the houses are short sales.  That is going to bring down the value pretty fast.

I could really go on and on with this list.  But since most of it has been covered in past posts, I’ll skip it.

Basically, when you’re looking at houses, pretend you have 10 friends with you.  If 8 or more of them couldn’t find too much bad to say about the place, then you have a property that should be easy to sell and hold its value better than most.  It’s about supply and demand, so make sure you buy a house that will be in demand……I’ve only had one client who has sold their house for less than they paid for it since the market turned like potato salad that’s been left out too long. 

These are the things I do when it is my own money!

The LEXpert Tours 2 Cool, Older, Affordable Neighborhoods

by John Rice

Here is a video tour I did of Meadowthorpe and Pensacola Park.  I picked these two neighborhoods because both are cool and affordable places to live for those who like older houses!

Oh……BTW, in the video I said Leestown Elementary, and meant to say Leestown Middle.  That happens sometimes when you are trying to film yourself, talk, watch for traffic and shift gears at the same time  😉

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.

12 Phrases Folks Googled & Got to my Blog

by John Rice

One of my favorite things to do is see the phrases people google and got to my site.  Some of them help me with picking blog topics, and some of them just give me a good laugh.  I thought I might share some of them with you today:

1)  How do I know what school district I am in?  That is an easy one, go to this site: http://www.fcps.net/tools/street-directory.

2)  What is the worst time to sell in Lexington Ky?  Uhhhhhhhh, like right now dude.

3)  Is Gainesway Drive in Lexington Ky a very busy street?  Yes it is.

4)  What does C.M.A mean?  It stands for Comparative, or Comparable Market Analysis.  It is basically taking a few recent sales from your area to determine the value of your house by cutting and pasting value for ways your house is better or worse than the comparable sale houses.  You’re really just using a known value to determine a probable value.

5)  Lexington Ky find sex:  I imagine THIS person didn’t hang around my site for very long, and I also imagine we might find him on another useful site, which is the Ky Sex Offender Registry…..Since I have a link on my blog, that is how this person probably found my site!

6)  Will house prices in Lexington Ky go up?  I think it is going to take inflation to make the prices go up in the near future, sorry.  Not only do we have supply and demand working against us, there has also been a mental shift in how people perceive their home.  It seems most people no longer view it primarily as an investment or an ATM machine, but as a place to live and build some equity along the way.

7)  My Lexington Ky realtor sucks, what should I do?  This one is easy…….call me!

8)  Previous sale prices in Beaumont Enclave:  Do what I do when I need that kind of info, hit the PVA site and scroll through previous sales at   http://fayettepva.com/Search/Disclaimer2.aspx?FromUrl=../Search/GenericSearch.aspx?mode=address.

9)  Is the Hamburg area a safe place to live?  I think so, but go to the crime map to see for yourself at http://crimewatch.lfucg.com/.

10)  Lexington Ky Realtor Rice “God Loves You John”:  Thanks whoever you are, I already know that, but I do appreciate being reminded 🙂

11)  What to leave in the house after the sale:  Well, you leave anything that was written on the contract.  In our area we usually write down everything the buyer wants that is attached to the house but could easily be unscrewed or removed.  Usually these items are things like ceiling fans, window blinds/treatments, garage door openers and remotes, range, dishwasher, sometimes the fridge, sometimes shelving.  The more you write down and the less you assume, the better it is at the end.  Nobody likes drama.

12)  Lexington Ky single ladies over 60:  I know I am the LEXpert, but this one has me stumped.  I’ll ask my mom where her single friends hang out.

So, these are some of the better ones.  If you have a LEXington question, feel free to give me a shout, but let’s keep it about real estate please 😉

How to Handle a Low Offer When All You Want to Say is “REALLY??”

by John Rice

I’m siting on my couch last night, watching Monk and trying to relax.  See, my phone chirps, buzzes and rings from the time I wake up until about 9-9:30 at night.  That last couple hours of my day is my chill time.  So, when I got a call at 10:30 from another Realtor, I was a little surprised.

Turns out this agent had an offer she wanted to send me and needed my fax number.  It was right on the email I had sent her earlier, but nobody ever seems to think to look at that I guess.  She then called me just after midnight…..I was in bed.

I was pretty excited to get an offer for a house that hadn’t been on the market but about 2 weeks, especially since she was up so late working on it.  My excitement turned to shock when I got the offer.  It was for nearly $40k less than the asking price…….and this isn’t a $600k listing, so it was really low.  I mean LOOOOOOOOOOOOOOW!

As an agent, when this happens you really want to scream at the other agent and ask them why they are wasting everybody’s time, especially their own, with  a buyer who thinks there is a chance he can buy a move-in ready house for less than foreclosure money, but, you bite your tongue, put on the biggest fake smile you can muster, and thank them.

A lot of people are writing low offers these days, but it seems like about 1 in 20 are in what I call the “Crazy Loooooow” category.  What do you do with one like that?  You treat it just like you would any offer you need to counter.  The sellers instinct is to flat out reject the offer, but you never know  if the buyer is just testing the waters or they are crazy.  I tell people let’s give them a little bit of our time to see if they are realistic or not.  Sometimes they work out and sometimes they don’t.  I sold a listing last week where the buyer started out loow, but not loooooooow.  We got that one worked out with within a few counter-offers.

Now, about this offer strategy.  It is really counter productive for the buyer.  I’ve blogged about that before, but the bottom line is that the seller is always expecting the buyer to come back, and back, and back.  That means the seller never really shows the buyer their bottom dollar since they always want a little reserve budgeted into their counter-offer.

I should know later today if this buyer is legit or if he is a dreamer.  It is like musical chairs:  I don’t know if we’ll be out or if we will win, but you have to keep moving until the music stops.