“Full Service” or Just full of it?

by John Rice

I’ve always heard Realtors say they are “Full Service Agents” when they need to defend their commission.  I’ve always wondered what that really means.  Having been with a “Full Service” company in the recent past, I think it really just means they do a bunch of old school stuff that really serves no purpose other than making the seller feel good.

A prime example of that is that most of your “Full Service” agents will spend about $50 on color brochures to leave out for buyers who have probably already seen the exact same pictures on their computer.  Most buyer’s agents don’t want their clients to take one since it has the listing agent’s contact info on it……or maybe those are there to be self promoting for the listing agent?

Another example that I see is that the “Full Service” agents will hold open houses.  Now, I know sometimes a random, realtorless buyer will walk into an open house and actually buy it.  The last time I heard about that happening was about 2006.  Now I know buyers like open houses, but all the buyers I have ever encountered used them BEFORE they were really serious about pulling the trigger on a house.  So, to the agents that kick their clients out of their own house so my people can get a better idea about what they  want in a house, I say thank you.  Another angle here is that the listing agent gets to meet other people in your neighborhood.  I think that is really what it is all about these days when almost every listing has 15+ pictures online.  How can I be so sure?  I once did an open house where I met the people across the street, listed their house, held it open, met another buyer who bought another house, and I am about to be in my 5th transaction with those same buyers!  Another reason that supports my hypothesis is that EVERY real estate magazine (Both in print and online) talk about open houses as prospecting tools.    None of the articles mention that you might want to do one for, uh, your client that you are providing “Full Service” representation to.

So, what do I consider to be full service?  Some of my sellers found that out a couple weeks ago after we got the repair list from the inspection.  I was over there tightening up aerators on faucets, repairing the tub drain, fixing the toilet tank level.  I was also there to let the contractors in for some repairs that I couldn’t do.  It was like an open house for repairmen.  See, my folks were both professionals who couldn’t easily take the time from their work to be there.  

To me “Full Service” means handling the inspection for my buyer’s who live out of town.  I’ve done that a lot in the past year.  When people fly in to Lexington to buy a house over the weekend, they usually can’t get here for the inspection.   I always take my HD Flip camera to film it, but the houses I have led my buyers to lately didn’t have enough wrong with them to bother filming.

 I’m a “Full Service” agent, but I’ll never use that term since the message it conveys is about the percentage you charge rather than the service you perform.

Anybody got any ideas for a new term to describe how I roll?  (Geez, I really set myself up by asking that huh?)

LEXpert Neighborhood Video Tour: Water, Park & Golf Course…Oh My!

by John Rice

Got out in the Miata and shot a few cool areas under $200k.  Not the usual neighborhood tour…..more like a collection of a few areas in southeast Lexington.

First I went to Squire Oak/Hunting Hills.  There is a really cool park in a giant median out there.  Big trees.  A creek.  Nice. Some of the lots along Farmview back to a huge horse farm.  Houses out there run about $140,000 to $180,000.

Then I went to East Lake…..more specifically I went to a street called Cool Water and all the cul de sacs off of it.  What is cool about this area is that several of the houses back to a lake.  We just don’t have many water front houses in Lexington.  The few that there are tend to be much more expensive.  One house in particular has a panoramic view.  Houses out there go for $170,000 to maybe just over $200,000.  It has been so long since one of the fantastic lot houses has sold that there really is no data.

I then jumped across Man O War and went down Carriage Lane and Tanforan Drive.  These streets back to Tates Creek Golf Course on one side.  

I finished up at Lake Crossing, which is across the lake from East Lake.  I’ve done a full video tour of Lake Crossing, so just scroll through my blog or my YouTube channel to see it.

Well, I like these neighborhoods because they have something unique and are affordable.  When I am out with buyers, I always am looking for that “Thing” that is going to be appealing to the next buyer when it is time for my peeps to sell it.  Finishes can go out of style and get worn out.  What you really want to look for is a house with a fantastic floor plan, a great lot, or a great location.  Location is the real estate code word for an asset that is tied to the neighborhood.  Chevy Chase is always going to be a great spot to be even if all the trees die and granite becomes passe.  Beaumont will always have the best combination of public schools for the foreseeable future.  Houses that are in neighborhoods with a city park, golf course, or are on the water will always be desireable.

Stick to these principles and you won’t be like the seller’s of a nice house on a busy corner in my neighborhood.  They’ve just reduced the house to an amount that will probably be the cheapest that one has sold for out here in a loooong time.   Since nobody wants to be there, all you can do is drop the price to the point that somebody feels so good about the price that they temporarily forget the big negative.  And if you disregard my advice, be sure to buy it soooo right that you can afford to be at the bottom of the comps when it is your turn to be the seller.

Lexington Ky Real Estate-LEXpert Video Tour of Andover Forest

by John Rice

I did a neighborhood tour today in Andover Forest.  It was nice.  Not too hot.  Sunny.  A day that really makes me glad I have my 1990 Miata.  I wish the neighborhood was bigger so I could have had an excuse to be out longer 🙂

Andover Forest is at the corner of Todds Road and Man O War Blvd.  Construction started in the late 80’s and ended in the mid 90’s totalling about 500 houses.  Most of the houses out there are 2500-3000 above grade square feet.  Most have basements.  There are some ranches too.

The prices seem to be mostly in the $330-$450k range.  There are a lot of them there worth over $500k, and even a few worth more than that.

The schools are Liberty Road Elementary, Edyth J Hays Middle School, and Henry Clay High School.  That is pretty well rounded, especially for any place that isn’t in South Lexington.

So, what is unique about this neighborhood?  It has half of a golf course running through it, so there are plenty of golf course lots.  Hamburg is minutes away…..easy minutes at that.  You have an interstate exit only one stop light away.  There is a cool bike path on what was an old railway, and a great city park.

Here are the names of the streets if you like to google:  Althorp Way, Andover Forest Drive, Aylesbury Circle, Bridlington Rd, Brighton Place Drive, Cheltenham Drive, Chetford Drive, Darlington Circle, Grantham Way, Haverford Way, Helmsdale Place, Kettering Court, Penbroke, Pleasant Ridge, Sheffield Place, Sherborne Place, Wakehurst Court & Weymouth Court.  My faves are Chetford, Haverford and Sheffield.

100% of Real Estate Statistics Don’t Have Anything to do with Your House

by John Rice

I met with a cool family a few weeks ago.  They were going to interview a handful of agents to see what we all had to offer.  I’m always a little freaked out at listing presentations.  See, there are agents that come with power point presentations and go over a whole bunch of junk, crunch numbers, brag about how low the average days on market is for their listings, and then blurt out something like “After looking at the statistics for this price range, you house will sell at 5:46 P.M. exactly 43 days from now.”  That impresses some people I guess.  I’m not one of those that throws out a bunch of numbers.  I kind of like to look at the house.  Assess the positives and negatives that I think buyers will see, then do a CMA to find what I think the house is worth.  I usually do all this wearing a pair of shorts, and often forget to give the people my business card.  I ordered 1000 last year and still have about 993.

Before I get into statistics for selling houses, I’m gonna expose some tactics agents use to lower their own average days on market.  I was checking out another agent’s blog the other day and she quoted the average amount of time her listings take to sell.  The number she gave was very impressive……not at all accurate, but very impressive.  See, she didn’t bother to include the listings that she had deleted, then relisted with a new MLS number.  Where did that time go?  It wasn’t in her average DOM (Days on Market-I am already tired of typing all those words!)  I am sure to her clients that time didn’t disappear.  Another thing that often gets lost in their average DOM is the fact that it only includes houses that actually sell.  If the listing expires and never sells or gets relisted with another agent, that number doesn’t count.  It would be like quoting your GPA in college but not counting the courses you failed. 

 The same thing happens with the average list to sale price.  Say a listing expired after 6 months at $200k, was relisted at $190k for another 6 months.  Expired again.  Relisted again for $180k, then got a contract for the full asking price that very day.  The agent could say that she sold that place for 100% of the asking price the first day on the market.  But we all know it was a year and a day and 90% of the original list price.

Okay, now I’m going to tell why I don’t worry too much about DOM and list to sale price.  It is because I am only dealing with one house.  Yep.  That’s right.  The only number I care about is the one that will have to do with my listing.  The list to sale price isn’t much help either since that number will be brought down by the over-priced listings that sold for market value.  Also, like most averages, the low and the  high numbers have too much control over the whole.  Plus, there may be a darn good reason why one of the houses you’re using took twice as long to sell as the others in your test pool.  Then you have to look at the history to see if any of the listing agents for the other houses pulled the old delete/relist game to give a false DOM.

The bottom line is that you really never know when the buyer who is going to bite at your house will arrive.   All you can do is price it realistically, make it look great, and present it well online.  When I get a seller that will do all that, their house usually sells in less time that the average DOM.  My average DOM is lower than typical, and I don’t even bother to tell people my number.   I’ve sold several houses in less than 10 DOM and had a 3rd floor walk-up condo in an area that tends to attract retirees take just over a year.  I worked just as hard on all of them. 

So, back to the listing appointment.  I’m on the tour of the house and the husband asked me the average DOM question, and I told him that I didn’t even look at that because I don’t care how long it took other houses to sell, I only care about how long it is going to take his house to sell.  As soon as I said that, I knew I either had this listing or I had just totally blown it.

I think the statistics agent uses them to impress you at first, then uses them to justify why your house hasn’t sold.  C’mon, when you’re asking your agent why your house hasn’t sold yet, are you looking for advice on what to do next or wanting to hear about numbers?

Fortunately this cool couple saw my point and went with me.

Lexington Ky Real Estate: Want fries with your offer?

by John Rice

Okay.  I admit it.  I was watching a real estate show on TLC yesterday.  You’d think when I get a free Saturday, I’d do something that has nothing to do with real estate, but no.

What got me miffed was watching this buyer’s agent do like all of them do on those shows.  The agent is getting ready to write an offer and asks the buyer what they want to offer.  I call that order taking!  May as well ask if they want to super size their offer or if they need fries with that?  I just want to scream at them “Hey, why don’t you tell them what YOU think the house is really worth?”  You’d be pretty miffed if you went to the doctor and he asked you what you thought you should do about your own medical problem, right? 

You’ve just got to know what the house is worth.  Using a terrible agent can cause a lot of problems, but they usually all get worked out by the closing.   If you overpay for a house, that is the one mistake your agent can make that will survive the closing and haunt you later.

How do you know what a house is worth?  Order an appraisal?  Yeah, you could, but the only difference between what we call a Comparative Market Analysis (CMA) and an appraisal is a few hundred dollars and an appraiser’s license.  The steps and values should be the same. 

I always do a CMA before I let somebody make an offer.  I WANT to tell them what I think the house is worth.  After that, I’ll suggest some strategy, then they can tell me what they want to do.  You can’t assume that the asking price indicates the real value of a house.  I’ve had some folks buy a house for much less than the asking price because it was over inflated, and I’ve had people make near full price offers because it was priced on the low-end of the comps.  Neither paid too much.   Maybe this is why I have never had a house NOT appraise.  When the market slowed and lending got really tight, I was always hearing bad stories about houses that didn’t appraise.  Personally, I would be embarrassed if I had done a CMA and then not had the house appraise for one of my buyers.

Something else that bothered me about that show yesterday was that the buyer had flown in from out of town to buy a house.  The one he picked needed $70,000 worth of structural and plumbing repairs.   The buyer wasted his time and money on a trip that produced N-O-T-H-I-N-G!!  I’m not asking any Realtor to be a home inspector, but gez louise, know enough about houses to be able to prevent your clients spending their time and money, not to mention emotional investment, in a house that isn’t going to work.  When people start to get serious about a house, take a look at the roof, the electrical panel, the foundation, check the seller’s disclosure to see the age of the furnace and air conditioner.

Maybe I should have just watched Hannah Montana yesterday instead.