Low offers & a good market??

by John Rice

It’s a pretty hot market right now.  I’ve always said buyers come out sooner than sellers do….which is why I urge my sellers to put their houses on the market in February or early March.  This year, they are out sooner than normal.  That kind of happened in 2013 too, and that was an awesome year.

Main difference between Winter 2013 and Winter 2015 is that buyers are feeling a bit more confident.  Back in 2013, I’d put a listing on and it would very quickly get exceptional offers, some full asking price.  This year, I’m seeing more crazy low offers.  I’ve sold 4 houses in the past 22 days.  None of them got offers so good that the seller would just accept them.  Lots of back and forth.  They all ended up at the prices I told my sellers they would get, so the market has not gone down.  Could be all the new agents out there that don’t know what they are doing.  Could be that everybody knew prices were rebounding early in 2013 so it didn’t matter if you paid the full asking price.  Could be a little of both.

The worst one was a $40k difference between the offer and the $230k list price, which is a HUGE gap in our market.  I would have suggested we reject the offer had it not been contingent on the buyer closing on a property they had already sold.  I knew when I saw that contingency they were going to be homeless if they didn’t buy a house.

I got a low offer on a $125k list price. but we worked it out.  I had gotten a silly low offer on this house a couple of weeks ago.  As a strategy, we rejected their offer.  Rejecting an offer does one of two things:  It saves you the time and frustration of dealing with an unrealistic buyer, OR,  you turn the tables on them and put them on the defense.  Most of the time, a silly low offer ends up with the seller having little control over the negotiation process.  The buyer has seen everything else on the market and made an offer on your house.  They are telling you that they like your house the best.  If they are really going to buy something, it will be your place.  Why not use that to your benefit?

The other offer was a house that has been on the market a long time, which doesn’t happen to me often.  It had a few challenges.  One of those houses that always made a buyer’s short list, but was never at the top.  We got such a low offer that even I felt like they had slapped my face and said my mother was ugly.  The buyers felt worse.  We let them walk away.  I figured that IF those people were really going to buy a house, they would not be able to get another seller to practically give their house away.  It was best to wait.  Sometimes you have to let a buyer like that realize the market is different than they hoped it would be.  That’s why I like to part company on a happy note.  It makes it easier for them to come back later with a better offer……which happened this time.

The last deal was an offer I got while I was at the beach for a long weekend.  I told my client what the offer was.  I told him I thought he needed $1XX,XXX out of his house.  I thought the buyer was probably willing to go to $1XX,XXX.  We should counter $XXXX over what he wanted.  If they accept, great.  If they come back for more, we still that small amount of wiggle room to make the buyer feel like they won the war because they won the last battle.  20 minutes later we had a deal and I was walking out the back door towards the beach.

 

Winchester Road-Hottest Spot for New Luxury Homes

by John Rice

In the late 70’s, there was a huge demand for apartment complexes in Lexington.  At that same time, much of the land available for development was in the 40517 zip code.  That is why you see so many of them on Tates Creek Road outside Man O War and over towards Alumni Drive.

In the 80’s, interest rates went through the roof.  Our best example of what interest rates do to new construction can be found in Belleau Woods.  Every wondered why those larger houses you see from Wilson-Downing are nothing like the rest of the neighborhood?  That is because Belleau Woods was originally going to be an upscale neighborhood.  Those few houses you see from Wilson-Downing were built before the interest rates went sky high.  Once the rates rose, nobody could afford them.  Smaller homes became more popular to build.

A similar thing happen in The Home Place when the housing bubble burst.  In about 2008-2010, it was much safer to buy a smaller house, so that is what was build.  Now that the market is better, you are seeing much larger and fancier houses going up out there.

Summerfield?  That was originally going to be large luxury homes like Tuscany or West Wynd.  One of the smartest moves I’ve seen since I’ve been a realtor was turning that into medium sized upscale homes in the $250-300k range.  That was just what the market wanted.  Perfect timing.

So, here we are today.  The Dow is high, gas is cheap, jobs are being created, and Americans are no longer afraid to spend.  What is happening with new construction in Lexington?  A lot of luxury homes.  Tuscany is selling well after spending most of the past 6-8 years having been forgotten.  Jimmy Nash took a neighborhood full of large lots that nobody wanted and turned it into the hottest place to drop $750k or more on a house.

All of which brings me to where I am going with this.  The market is good, the economy is good.  The available land is out by Winchester Road.  That area is quickly becoming the high end spot to live, much like Tates Creek was in the 80’s and Harrodsburg Road was in the 90’s.

Why?  Because builders will build whatever the market demands on whatever land is available.

Chinoe Road-Most Beautiful Street in Town

by John Rice

Chinoe

Having done most of my growing up in Ashland and Frankfort, I always thought of Lexington as “The Big City.”

We would come to Lexington to visit my aunt and uncle in the 70’s.  Then in the early 80’s we would come here to see movies at the Kentucky Theatre, eat at Alfalfa’s or Max & Erma’s, shop at Dawahare’s or J&H Army Navy Store.  Lexington has just always felt like a special place to me.  I always had my eyes wide open checking out the sites, planning on where I would want to live if I ever had a chance to move here.

That happened in 1985.  My dad was out of law school and got a job here.  We ended up in Kenwick LONG before Kenwick was a cool place to be.  I was a sophomore at Henry Clay.  I only had one friend here, a kid named Daniel whose parents were friends with my parents.  I was 15.  Too young to drive but eager to explore Lexington.  I decided to ride my bike over to Daniel’s apartment on Lakeshore Drive.  We rode all over the Ashland Park and Chevy Chase area.

I remember being totally in awe of how pretty Chinoe Road was.  I don’t think I had ever been on it before.  It was a warm and sunny September day.  Late afternoon.  It didn’t feel hot since we were under the  cover of all the big trees.

To this day, nearly 30 years later, I still think that first section of Chinoe Road between Richmond Road and Fontaine is one of the prettiest streets in all of Lexington.   All of the houses look as good as the one in the picture above.  If I were a artist, I would paint a picture of that street with all the big beautiful houses, big trees and lush landscaping…..but as I discovered in a water coloring class I had my senior year, I am not.

Sometimes, if I am not too busy trying to get where I am going, I’ll drive down that road and I feel like I am 15 years old again and seeing it for the very first time.

Winchester Ky-One of my favorite little towns

by John Rice

Before 1995, Winchester was just the town east of Lexington where my favorite soft drink was made; Ale-8.  That was the year my parents moved to rural Clark County.  Then my wife and I moved to downtown Winchester in 1998 and stayed until 2002.

When my kids were babies, I would end up driving all over the far side of Winchester while they were asleep.  Muddy Creek, Logan Lick, Old Ruckerville, Pilot View. Those were my favorite roads.  If you’re ever on Logan Lick, look for an old car from the 50’s stuck between two trees at the bottom of a hill.  I’d love to know the story on that eventful day if anybody knows!

While I was out there, all I had to do was look at the land and the houses.  I had no idea back then that it would someday come in handy when I was a Realtor.

Seems like I am doing more and more in Clark County – Winchester Ky.  A lot of it is rural too.  I like working there.  The people are nice and there are a lot of pretty neighborhoods and rural areas.  I may end up back there one day.  I’ve moved twice since coming back to Lexington.  Each time has me closer and closer to Winchester.  I’m practically on the edge of Lexington right now, so one more move should have me somewhere between the two towns.

My favorite funny memory of living in Winchester was when I decided to test how nice the people were.  I had noticed that everybody there assumes it is your turn at a 4 way stop, which was not the case in Lexington.  One day I decided to see how long somebody would wait at a 4 way stop for me to go.  I’m across the intersection from this guy.  He waves for me to go.  I do nothing.  He waits.  He waves again, signaling it is my turn to go.  This time I wave back at him to go.  Then he waves at me to go.  I wait.  He doesn’t go.  He waves at me to go.  I wave back.  He does nothing.  I get bored with all of this any finally just go!

Same house, nearly 10 years later

by John Rice

It’s the spring of 2005.  I just got my license.  I was a newbie.  All I had was a desire to be the best realtor I could be.

Now it’s wintertime in 2015.  Nearly ten years later.  I’ve sold 266 houses.  Started in the pre-bust market.  Grew my business through the declining market.  Been in the top 5% of all agents for production since 2009.  Made it to the top 1.5% for 2014.

Want to know what both of these years have in common?  620 Hidden Point Drive.

This house was the 2nd listing of my career.  The sellers called me about a month ago saying it was time to sell.  I had not had any contact with them since we closed on 12/28/2005…..which happens to have been my 14th wedding anniversary.  They had forgot my last name, but they did not forget me.  They actually had to work a little to find me.  I am glad they did.

Here is my 2005 description:

“More than meets the eye! This convientently located home has 3 bedrooms, 2 full baths, plenty of room for your stuff in all the storage areas. Outside you have a storage shed & 7’behind the garage door, inside there is a second level, go up a hidden stairwell (in a closet) to discover this bonus space. It’s heated & cooled & does have windows. Use it for storage or make it a cozy get away.  Enjoy the shady, fenced backyard from the covered patio. See this unique home today!”

 

Here is 2015:

“If you’ve been saying you don’t want a cookie cutter house, then you’ve got to see this one. Big rooms. Open concept. Three season room on the back. Fenced yard. Want your mind blown? Look for the hidden ladder to check out the loft. You’ve got a ton of storage and a bonus space unlike ANYTHING you have ever seen. This house brings to mind 3 things: IKEA in the sense of efficient use of space. A Swiss Army Knife in the sense of versatility. The T.A.R.D.I.S because it seems bigger on the inside than the outside (That’s Doctor Who’s time traveling ship that is bigger on the inside than it is on the outside……google it.)”

LOL, it sure was fun to compare my old work to my new work on the same house.  It brings back a lot of memories of the past decade.  I haven’t eaten a hot meal nor had a day off since then, but I wouldn’t trade it for anything!