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!

Zillow=TMI

by John Rice

Okay.  I woke up in the middle of the night like a good 40 year old.  I couldn’t get back to sleep because I was thinking about an out of town client who relied on Zillow more than he did me.  It kind of became a real problem for me.

And here is why.  When you check out Zillow and you know nothing about the local market or neighborhoods, you can draw wrong conclusions.  On Zillow.com, there is a tab  that shows you recent sales.  They must mainly sort those by zip code, not the neighborhood.  Often, you see sales from a different neighborhood that can make you think you are about to pay waaaay too much or you are getting a bargain.  If you enter a cheaper listing that is by a nice area, you can think the cost per square foot is a bargain in comparison to those recent sales……….and the other way around.  Apples to apples and oranges to oranges.

Another thing that I had to explain was how the assessed value (Tax Bill) worked.  See, the house he was wanting to buy had been owned by the seller for several years.  It showed a taxable value that was much lower than it’s fair market value.  What’s up with that?  Well, the PVA often only reassess the taxable value when the house is sold.  The new assessed value will be the sale price.  If the house hasn’t sold in several years, usually the taxable value will be lower.

Every so often, the PVA will send out its people in their little white Toyota Pruises to snap a picture of your house and then come back to the office to compare it to recent sales.  They don’t actually go inside the houses.  It is kind of hard to get a feel for value from only the outside of the house.  Plus, they know that tax payers don’t want to over pay, so they are pretty conservative.  That may change in today’s world of budget shortfalls.

I own a house that I know I can sell for about $160,000.  I have been paying taxes on only $135,000.  The house next door sold for that much about 4 years ago and they guessed mine would be the same.  I’m not going to call to tell them that my house is under assessed!

All this leads me right into the next issue.  They have an ariel map of the neighborhood with all the assessed values.  Based on what I just told you above, you are right to assume that most of the dollar figures that appear to be painted on the roof tops of the houses are much lower than what most of them are probably worth. 

You should have seen me trying to explain all this to my untrusting client.  I am sure he must have thought I was making all this up as I was telling it.  What I had to do was pull recent sales from within the neighborhood.  I was able to show him 2 other houses that were the exact same model as the one he wanted and had sold within the past 6 months.  We did a few adjustments for thing like one had a fenced yard and newer appliances, and came up with what the real market value was.   It was much higher than what the seller had been paying taxes on for all those years.

So, feel free to use Zillow.  It is a useful tool.  But realize that you need to know how to interpret the info that they give you.  You always want to compare a house you want to make an offer on to similar ones within the same neighborhood that have sold within the past 6 months.

What’s to love about Masterson Station?

by John Rice

Okay……If you are one of those people that frowns on cookie cutter houses and the lack of character, go a head and hit the back button.  If you like newer suburban areas………well, read on.

Here is what I like about Masterson Station:  It is a big neighborhood, so that helps with stability.  I always see people out walking their dogs, pushing baby strollers, kids on bikes, etc.  It seems like a friendly place to live……..And they have a brand new elementary school on one of the main drags through the neighborhood.

What some folks think is a drawback is that it is kind of away from everything.  There isn’t a whole lot of shopping around that part of town.   Also, there is a minimum security prison across the street from the west end of the neighborhood.  Now this is such a minimum security place that when prisoners do escape, they usually just walk off!  It really wouldn’t worry me unless I was one of the first houses across the street.  I must add that there have been no major problems.  I think the worst thing that happened was a car was taken once.

Probably the draw for most buyers is that you can get a lot more house for the money in Masterson Station.  A house I sold a few months ago would have been an extra $20,000 if it were on the more popular south end of town.  Plus the lots are sometimes bigger too!   There is a lot to be said for getting more for less. 

The prices run from $125,000 to close to $300,000.  The bulk of the area is in the $125,000 to $180,000 range.   Like any neighborhood, I wouldn’t go over the typical value range.

If you want to know what I think Masterson Station will look like in 25 years, take a look at the whole Buckhorn/Squires/Alumni area in Lex.  There are dozens of different names for all the development phases out there, like Century Hills,  Hunting Hills, East Lake, etc.  The whole area pretty much just blends together now.  You have some tiny starter homes and some nice move up homes.  They all seem to happily co-exist.

So, there you have it.  Overall, I give it a thumb’s up for giving you more for less in a friendly environment that will probably age well.

My Top 10 Fave Things about life in 40509

by John Rice

40509.  I use to drive the country roads that are now lined with neighborhoods when I was a teenager.  I always like the feel of this part of town.  A lot has changed since then…….Oh, this isn’t about nostalgia, it is a Top 10 list, so here I go:

#10  You can live out here with just about any budget.  There are townhouses/condos in decent neighborhoods from the $90’s all the way up to McMansions.  Most of the area seems to be $180k to $250k.  There are lots of great neighborhoods like Autumn Ridge, Andover Hills, Chilesburg, Stuart Hall, Brighton East, West Wynd, and Eastwood Club.

#9  The schools are getting better all the time.  There is a lot of excitement and expectation about the new Liberty Road Elementary.  Some of 40509 goes to Athens-Chileburg ElementarySchool (ACE).  It is a good school.  We also have a newer middle school, Edyth J. Hayes.

#8  We are close to the interstate.

#7

Why did I switch to Re/Max??

by John Rice

Well……I finally did it.  I had been thinking about moving to Re/Max for about a year now.  A couple of weeks ago I finally made the move.

I am sure  there really is no perceivable difference between my last place and Re/Max to most people.  Both are well respected places.  If I wasn’t a Realtor, it wouldn’t make much difference to me as long as I still got to use the agent that I liked.

I only wanted to make a change if it was going to be better for not only me, but also for my clients.  I really want to take my business to the next level.  I love what I do and want to do it more and keep getting better at it.  Re/Max is the place to be for all of that.

Re/Max is really set up to be about the agents as opposed to the company.  I pay a set fee for the year rather than a non-stop 80%-20% split based on a full 6%  commission like at the old place.  This gives me the freedom to negotiate my fees.  Real Estate these days takes place on the computer.  You’re really paying me for what I know more than for my time.  In the old days, it took a lot of time to list and sell a house.  The effort and time involved has decreased, but the cost hasn’t.  I’m happy to give people a break!  Oh yeah, plus all the calls from the yard sign go straight to me rather than some agent sitting by the phone who has never been in my client’s house.  Wouldn’t you want somebody telling a perspective buyer about your house to be me??

The training is fantastic!  They have all kinds of videos, webinars, and stuff that is only a few clicks away at all times.  The website is the best.  They even have this thing where if somebody calls me, I can push various websites (school district, crime map, etc) to their screen from my phone!  Is that cool or what??

I really love the cutting edge tech aspect of Re/Max.  A lot of people think I am really in to tech stuff, but to me it is all about the most efficient way of getting something done.

I could go on and on, but I am already up to 377 words.  The bottom line is that as much I liked my old place, I wanted to go somewhere that would make me a better Realtor and help my clients in their needs.