27 things The LEXpert thinks 1st Times Buyers need to know

by John Rice

I don’t really have 27 of them.  That is just the day of the month.  I do have several things that all first time buyers should consider though.

Here is how most first time buyer’s seem to go about looking for a house: They get on Zillow or Trulia and find houses they like.  Most of their criteria is based on looks.  That is why it can be pretty easy to sell an inexpensive house in a terrible location as long as it looks pretty.

So, this is what The LEXpert tells first timers to think about:

1)  I know this is a bummer, but you probably won’t spend the rest of your life in whatever house you pick.  I had big plans for my first house.  I was going to remodel it and add on to it…..then one day, my dad said “You’ll be out of here in a few years.”  Well, I ended up being able to afford better, so I did move a few years later.

2)  Since this house is really a stepping stone to the next house, buy something that will be easy to sell later.  One day, you will find your perfect move up house and don’t want to miss it because you picked a house that will be hard to sell.  That means a decent location, floor plan and anything else I have blogged about when picking a house/neighborhood.  Your first buying experience is much more simple because you don’t have to sell a house in order to buy another.

3)  Since it is unlikely you will be in your first place for a long time, go for either a newer house or one that has a newerish roof and HVAC.  Why?  Let’s say you end up wanting to move in 5 years.  If the house you bought has a 10 year old HVAC system or a 15 year old roof, odds are you will have to replace it before you sell or potential buyers will be turned off by the ages of those expensive items.

4)  Buy as big of a place as you can.  Odds are interest rates will be higher years from now when it is time to move up.  You want a house big enough to grow into if you can’t afford a bigger place later.  Right now, 1300 square feet looks big compared to your apartment, but it will be easy to outgrow……geez, I know this seems doom and gloom, but you’ve got to be wise because, trust me, the house you buy will impact many areas of your life and financial future…..and relationships too.

5)  Think ahead.  Maybe what you think you’ll encounter 5-10 years down the road.  Sure, you have one 2 year old child now.  Think you will have more?  Buy with that in mind.  Maybe you don’t have kids now and buying a beautiful house on a busy road doesn’t bother you.  It will every time your kid runs out to the car.

 

I totally enjoy working with first time buyers.  They require a bit more attention than somebody who has bought and sold before, but I like knowing I helped them with something they will enjoy now and that will be a good investment for later.  I am a little more….experienced (OLDER) than most first timers so I’ve been though the stages of life that are ahead of them.

Okay, that is only 5 things.  I have several others I could add, but at 592 words so far, you might get bored reading them 😉

How to pick a neighborhood

by John Rice

A friend of my dad’s has a beach front house he paid something like $100k for back in the 1980’s and it was brand new.  Even after the bubble burst, it was still worth about $750k.  Could have saved maybe $20k when new and got one across the street, but those are now worth maybe $450k.   I don’t know about you, but I spent most of my younger years hearing real estate stories like this just hoping I could end up in the same spot some day.

I also use to work for little old ladies who had lived in their houses for a long time.  They were sitting on a gold mine since their once-on-the-edge-of-town location turned into a hot spot.

Guess today’s post is really about location and time.

Once I got into real estate, I realized that those two things are what makes all the difference when investing in real estate….and even if all you think you are doing is finding a home to live in, you are investing in real estate.

I kind of think regardless of how long you plan to be in a house, you need to think about its future value.  I see a lot of people, especially first time buyers, who just find something pretty and buy it.  I usually get these people as sellers when they are needing to unload a house they bought when the market was hot.

So, how does the LEXpert go about picking a property for either his clients or his family?  Easy, I look backwards and forwards in time:

1)  Has there been a shift in how many houses in a neighborhood are rentals in the past few years?

2)  Was this neighborhood just as desirable before and after the market sunk?

3)  How has it rebounded compared to other similar priced neighborhoods?

4)  How close are the nearest apartments and/or retail area?  Are those stable or declining?

5)  Are there any changes that could affect value?  School district change?  Zoning change?  I look at vacant land around the neighborhood and think what the worst thing that could happen with that property could be?

6)  What will make the houses in this neighborhood obsolete in the future?  For example, only having one bathroom, not having a garage.  (Think split foyers here too since nobody is ever excited or intentionally looking for one of those.  Lexington buyers only accept those if the lot is really good or it is in a great school district.)

7)  Since ALL neighborhoods go through cycles of decline, where is this neighborhood right now?  Usually after about 15 years, you start seeing houses needing a new roof, updates, etc.  The quicker all the owners do all that, the quicker the neighborhood moves on to the next cycle, which is improvement.   The longer the owners collectively drag this out, the further in decline the neighborhood goes.

8)  How big is the neighborhood?  A larger neighborhood is more likely to impact the surrounding smaller neighborhoods.  A smaller neighborhood is more likely to be impacted by a larger one.

There are many more questions I ask myself, but the bottom line is that you can never go wrong picking a location that will stand the test of time.

Here are some examples from when I have been the buyer:

1)  Did not buy a house in a neighborhood in 40509 that was across from a vacant field.  Checked the zoning, didn’t like it, and now it is going to be a giant apartment complex and several houses by this one are now for sale.

2) DID buy a house in an established neighborhood with lots of growth and new schools in the pipeline……and under market value.

3)  DID buy a house in the only neighborhood in its price range with the best elementary school in the area.

4)  Did NOT buy a house we loved with a golf cart path beside it for that reason alone.

5)  Did NOT buy a great house with a pool that backed to greenspace because I felt the area was too new and I just didn’t see anything about the area that will stand the test of time once all the pretty finishes go out of style.  Plus, it was a small pocket of very nice houses surrounded by houses costing half as much ((BIG RED FLAG)).

 

Hope this helps you 🙂

How to get buyers to want to see your house Pt 2: Marketing Remarks

by John Rice

Do I need to tell you this is a blog about Lexington real estate, or that the topic today is marketing remarks?  Heck no!  You probably googled words or phrases that got you here or saw it in the title……Then WHY do realtors always tell you the info you already know?  What a waste of time.  I mean, if you entered you wanted a 4 bedroom home with 2 or more baths, why do they say in the marketing remarks stuff like “This great 4 bedroom home with 2 baths is a must see.”

If you aren’t interested in history, skip down a few paragraphs.

See, back a long time ago, there were no pictures to market a house.  Go even further and there was no MLS.  All an agent had was open houses, networking, and a sheet of paper in a tube out in the yard.  Back in the day, words were all you had.

Then realtors had books with one picture of every house for sale.  Those were more targeted for agents than consumers so it had marketing remarks like “Great 3/2 split plan.  Curtains do not convey.  Appliances not warranted. ”  It was all about getting info to the agent that he/she would need to know to answer the buyers questions.

Then the agent got the same info on a computer disc.  Then the age of the internet came and changed the game, but most agents still kept some of the old methods.

Okay, history lesson is done.  Back to today.  We now know that EVERYbody, even agents, use the internet to search for houses.  We know that ALL search engines let you pick bedroom count, price, bathroom count, and some even let you refine the search more.  Soooooo, there is no need to repeat the same info the searcher just typed in within the marketing remarks.  All that info is also usually up at the top of the listing in a little summary of the main details.

What should the marketing remarks be used for then?  To catch (and keep) a buyer’s attention.   Searchers get bored easy since there are typically dozens of listings to look though that match their criteria.  You’ve got to tell them what is unique about the house.  If all you tell them is the same stuff that is in every other listing, then your house just blends in, rather than standing out.

Sure, I do mention anything new, or features that I know buyers like, but I try to say things that you can’t tell from the pictures…..like if a house is on a quiet street, has a lot of natural light, which side of the house the sun sets on if it makes for a shady patio, if there is anything close that can be walked to, or if the driveway is flat (great in the winter and for a basketball goal in the summer.)

Bottom line is that the pictures do most of the work, and the marketing remarks are for info that can’t be seen and to describe what is unique, not common, about a house……and  if you made it to this point, I must be pretty good at keeping the public’s attention 😉

How to get buyers to want to see your house: Pictures (Part 1)

by John Rice

Pictures.  Some say they are worth a thousand words.  In real estate, they can be worth thousands of dollars.  They make the difference between getting showings from a few buyers who see your house online and getting showings from EVERY buyer.

See, few of today’s buyers will give your house the benefit of the doubt when they see it online.  I’ve had people not want to see a house because there were not enough pictures online-not enough info to decide if it was worth seeing or not.  I’ve also had people not want to see a house at all based on bad pictures.  The house might have been okay, but bad photography killed any chance of a showing.  My favorite example of this is a client who debated for over a week if she wanted to go see a certain house in a neighborhood she liked……which was a 15 minute drive from where she lived.  That seller lost a showing from somebody who wouldn’t make a 30 minute round trip to see if this house could have been “The” one…..that’s just how buyer’s are these days!

So what is a seller to do?  What I do has been pretty successful for me so far.  I use a professional photographer.  Everytime I meet her at a new listing, she alwaaaaaaaays like to pick on me for micromanaging her.  I am amazed she still answers the phone for me.  Before we meet, I try to think about how I want the house presented online.  I always like to show as much open space as possible.  A wide angle lense helps with that.  I often see pictures online where it take 2-3 shots to get what one shot with a wide angle lense can accomplish.  If there are any interesting details in the house, I have her get a close up shot.  Tiled backsplash?  Fancy faucet?  Exotic hardwood?  All get their own picture in addition to any taken of the room they are in.

The order of the pictures is important too.  Today’s buyers get bored easy.  If they see two or three pictures they don’t like, it is over.  They hit the back button and move on to the next house in their search results.  Gone.  Your house is forgotten.  I like to make a cup of coffee and look slowly through the pictures several times to get a feel for the best way to organize and present them.  I usually make the lead picture whichever one really popped to me.  That is the one picture you see that forces a buyer to decide if they want to quit strolling through listings and see the detail of your house.  If the house stays on the market long enough, I mix the order up so it doesn’t look stale to buyer’s agents who may have seen the listing when it was new on the market.  I then order the pictures from most interesting to least.  Secondary bedrooms are usually at the end of the order.  Sometimes if the house has a killer backyard, I may make that the 2nd picture before going to the inside ones just to keep the buyers interested.  People are into kitchens and baths, so I try to get those in pretty early.  Since a wide angle camera was used, the buyers can often figure out the layout of the house.  I’ll add commentary to each picture to help them out….something like “See that door on the left?  That is the HUUUGE pantry that you’ll see next!”

I’m not afraid to delete a picture.  Not all pictures are the most flattering.   That is why I have my photographer take pictures from every angle of the rooms.  If one doesn’t look as good as the other, it is trashed.  If one shot makes the room look too narrow or too small…trash.  I do all that because I don’t want to let any buyer have a reason not to come see your house.

Here is something else to remember.  The goal of the pictures and any marketing ISN’T to sell the house.  The goal is just to get buyers to come see it in person.  There is no need for 80 pictures of a 2000 square foot house or to describe every detail of every element of the house.   Just as too little info can turn people off from seeing the house, too much info can give people more things to possibly not like.

 

I’LL TALK ABOUT THE MARKETING REMARKS NEXT IN THIS SERIES 🙂

 

3 buyers. $250k. Different Houses. Why?

by John Rice

Three buyers.  All spending $250k.  One buys a 1300 square foot house close to downtown in an up and coming area that is a little shady in spots.  Another buys a much bigger, plainer house further out.   The last one gets nice finishes, but is in an area that is seldom anybody’s first choice.   All of them feel like they got the best house for the same money.  None of them would have even looked at each other’s houses.

What gives?

Something that always amazes me, even after 8 years of being a Realtor, is all the different reasons people make the choices they do.  What one person considers a fantastic location, another thinks is a terrible location.  What one person thinks is appealing, another doesn’t.

Whether you are the buyer’s agent or the listing agent, I think there are things to be learned here…..let’s take a look at the 3 buyers I have mentioned.

The one that buys the 1300 square foot house close to town in a sketchy area cares about location and emotion.  They want to be close in, but also needed to fall in love with it since they were shopping for a feeling too. A good location to them is defined by proximity to downtown rather than the usual mix of good schools and a safe neighborhood.   When they go to sell, they need an agent that realizes this and will effectively market it to a similar buyer pool.  What needs to happen here is to describe the location and the feeling you get while in this neighborhood and inside the house.  The people attracted to this house aren’t going to care if a bedroom is on the small side as long as it looks and feels right.

The buyer who went further out  to get a bigger house is much more practical in their search.  They either wanted or needed  the space.  When that house sells, the location isn’t going to be as important as the raw facts about the house……and the emotional response to the house is not relevant at all.  When this one goes on the market,  a spread sheet of all the practical features will attract the next buyer.

The one that bought in an area that is second tier to get a pimped out house is also an emotional buyer.  They were most concerned about how the house feels inside and were willing to sacrifice location to get it.  This buyer type usually goes for new construction to get all the current trends in finishes or a freshly flipped house.   Assuming the finishes are still in style when this person sells the house, the listing agent needs to focus on bang for the buck.

Now, not every person or house fits perfectly in these 3 scenarios.  But the thing to keep in mind is that there is always a mix of the practical, emotional, and a broad definition of what makes a location appealing.  Each buyer is different and each house is different.  I typically see agents market all their listings the same way, which may work in some situations, but not others.  When you are listing a house, you really have to get a feel for not only the house and neighborhood, but also how to make the listing pop with the target buyer’s personality.  Same thing but in reverse when working with buyers….you really have to put your head in their world and think like them in order to show them the houses and neighborhoods that they will like.