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Older house verses newer house, which is better?

by John Rice

I often get asked by buyers if they should buy an older house or a newer house. My usual response is to say that it depends on what kind of problems they want to have. I get crazy looks when I say that, but it is just my way of telling people that all houses will have problems. Basically, it is your house verses Mother Nature and Father Time.

I have lived in both older and newer houses all my life. When I was a kid, I went from a 1910ish four square to a 3-year-old ranch. Next, my parents bought a house in Kenwick  from the 1930’s. My first house was built around 1915. My second was 1973.  Then a 10 year old home. Then 26 year old home. All of them had their own set of issues.

There seems to be this misconception that old houses were built better. True, MOST were built with more care than today’s homes are. I say most because my first house, the one built around 1915, was nowhere near as well-built as my parent’s Kenwick house from the 1930’s.

Another misconception is that people think any old house is better than any new/newer house is today. After living in a lot of old houses and showing a bunch to my clients, I can tell you that what it comes down to is maintenance. Even the best built house from yesterday will be nothing but trouble today if somebody didn’t keep it up. An older house has been in the ring with both Mother Nature and Father Time for more rounds than a newer house.

The new house misconception is that they won’t last as long as an old house. I use to think that until my parents bought a 150+ year old farm-house. Their house started out as a 2 room timber structure.  Then a porch was added on the back which was later converted to be a kitchen. Then a new porch was added to the side of the kitchen which later became the new kitchen and the old kitchen became a dining room. Then somebody added a second story over the original structure. Then came a second story over the original porch/current dining room. My attitude now is that if my parents house can defy all building codes and even gravity a little, any new house should last just as long. 

Here are some of the common older house issues: Inadequate electrical, plumbing, insulation, lack of maintenance, and poorly done improvements at the fault of previous owners.

New/Newer house issues: Rushed construction by unskilled/uncaring workers sums it all up the best. I have a friend whose house was practically rebuilt after a fire. It had no insulation on one side of the house. On a previous 10 year old house I owned, poor mortar joints on a brick window sill allowed water to run down the inside of the brick veneer and rot some of the sill plate. I only found it out when I did the demo for the new tile floor. If today’s workers would apply to their trade the same care they use to draw naked women in the potapotties, we would have the best built houses of all time!

Occasionally I do see both a really well-built newer home and a fantastic older home. I used to represent a builder who did a great job of making decisions that the buyer wouldn’t even begin to appreciate for years to come. He did a lot of little things that exceeded minimum code. I remember selling an older house that had been well maintained and had recently been overhauled by a good contractor. That combination made it a pretty unique older home and a good pick. I guess that buyer got the best of both worlds and none of the negatives.

Best buying advice ever

by John Rice

How would you like to pay top dollar for a house nobody else wanted that sat on the market for a very long time? Not really the type of thing you want to do? Well then, let me tell you how to prevent it.

A house in a neighborhood I am very familiar with had been sitting on the market for a very long time before eventually selling. I had a house around the corner from it listed during that period, only mine sold much sooner! I ended up showing my listing to a few buyers who had called the listing agent to see that house. I would ask them how mine compared. They all told me that the other house had a funky floor plan they didn’t like. Let’s fast forward to when the buyer of that house goes to sell. Think buyers will have the same opinion?

I noticed the other day that it finally closed. I looked to see who represented the buyer. Guess who? The listing agent was also the buyer’s agent. That tells a whole lot. That lets you know that the buyer was some unrepresented sucker who was just calling listing agents to see properties. They didn’t have somebody working for them to say “WAIT! This house has a funky floor plan and you are going to have a hard time selling it down the road and sure, it seems like a good price compared to similar sized houses, but that doesn’t make it a good value nor a wise decision!!”

Now, I am for sure not making a judgement about this agent. I don’t know what all happened. All I know is that when I see a house sell that has been on the market forever, most of the time the listing agent ends up representing the buyer too. An agent has to walk a fine line when all the sudden there is a buyer for a house they thought they’d never sell…..and getting commission as both the listing agent and buyer’s agent makes it even harder. I think most of the time the agent and the seller come out better than the buyer in these situations.

Basically folks, my message is if you are buying, don’t go at it alone. Don’t trust the listing agent for advice. Don’t rely on zillow. Get yourself your very own realtor who will only represent you. One who has been in enough houses, is familiar enough with the market and can recognize the things that will bite you in the rear down the road.  The buyers of this house made a bad decision, and the sad thing is that they won’t know that until they need to move again.

Reading the tea leaves when your house isn’t selling

by John Rice

House not selling? Wondering how to interpret what is going on? Here are a few of my thoughts on some common situations. The following assumes your house is being presented well online with plenty of good pictures and marketing remarks that describe it with more than trendy generic AI generated verbiage.

The house that gets lots of showings but no offers

Assuming that you don’t have some negative that wasn’t obvious like backing to a highway, apartments, or having an Eiffel Tower looking electrical thing in your yard, this situation simply means that the house doesn’t live up to what buyers expected. The good news with this one is that buyers think the price for what they thought the house would be is okay or else they wouldn’t come at all. The solution here is to either lower the price or improve the house so that it meets the expectations buyers have. Whichever is easiest.

I once had a condo that got tons of showings. I kept encouraging the seller to paint. Once we did, it sold. I recently had another listing that was getting tons of showings. It was a nice place, but just felt like a 15 year old house that needed a fresh vibe. The seller did some painting and replaced the flooring in all the bathrooms. As soon as it was done, it sold. Both of these places looked great online, and just needed to match what buyers thought they were getting. Both were improved for far less than the price reduction we would have needed, so both sellers actually came out better by going that route.

The house that gets no showings

This one is easy, but hard for sellers to accept. The price is too high. If a house is presented well on the MLS, and still nobody comes to see it, all you can do is lower the price. Real estate is all about price, location, and condition. You can’t change the location, but the other two you have some control over.

Also something to think about is this: If you have a $400k house and you’re asking $475k for it, buyers are comparing it to other houses that are really worth the asking price. The buyers who are going to spend what your house is really worth aren’t even going to see it since the list price is over their budget.

The house that gets the same bad feedback over and over

This is the least fun thing that can happen to a seller. I mean, they get kicked out of their house for showing after showing with no offers AND get to hear what people hate about their house.

Several years ago I had this really cool older house that had been mostly remodeled. It had the smallest living room I have ever seen……must have been the smallest anybody had ever seen since that is all I kept hearing after the showings. I’d ask for feedback and the buyer’s realtor would go on and on about how beautiful the place was, how unexpected it was to have walk-in closets in such an old house….then they would say their client wasn’t going to buy it since the living room was so small.

We tried putting in smaller scale furniture, but that didn’t help. After that, all we could do was drop the price. A price reduction opens the house up to a larger pool of buyers as well as enticing them to overlook a shortcoming if they are getting a better deal. We got that one sold too.

If you have a situation that doesn’t fit into these scenarios, give me a shout and I’ll let you know what to do.

A bridge not to burn

by John Rice

We are back in a market where buyers want to test sellers and see how far they will bend.

Used to be that the average List-to-Sale percentage was about 97%. That means that the house sold for 97% of the list price. As the market got hot right before COVID, it inched up. During and immediately after COVID, houses were selling for no less than full price, many going for 10% or more over the list price.

Those days are gone. I occasionally see a house that will go for slightly over the list price. That is only for super amazing houses that got multiple offers immediately. Short of that happening, full price is about the best a seller can expect and not a whole lot sell for that.

I have had many sellers this year get super discouraged when we finally got an offer. Most will tell me they don’t even want to reply to it. I tell them that it doesn’t matter what the initial offer is. What matters is how high the buyer will go. Most of the time the buyer will end up paying an amount that the seller is satisfied with.

If a buyer offers 92% of the list price, odds are they will go to 96%.

If a buyer asks for $5k in repairs after a home inspection, odds are they will settle for $2500.

It is crazy how predictable this is. So much so that when I get an offer or a repair list, I am usually correct on where it will end.

So, if you are a seller, be prepared for this. Don’t be offended. Don’t reject the offer or burn the bridge. Keep playing the game until it is over. Odds are you will be glad you did.

Harsh reality of renting instead of buying

by John Rice

Sometimes when I tell first time buyers that they should buy a home as soon as they have a down payment and know they won’t be moving for several years, I wonder if they think I am just trying to get a sale.

Here is a harsh reality. Even if you are renting, you are paying somebody else’s mortgage.

In 2013, I bought a house to rent out. My mortgage was $543 a month including taxes and insurance. I rented it for $1100, which was a fair price at that time. Last year, I raised the rent to $1450. That is still under market value. When I raise rent, I try to keep it at about 85-90% of full market value since I am benefiting from the continued relationship. It is a win-win for everybody.

When I bought this place, I think I made the first 5-6 payments while I was renovating it. Do you know who has made the payments for the past 12 years? The same tenant. If that tenant could have bought the house in 2013, their mortgage would have been a little higher since I had to have a larger downpayment and I paid cash to do some work to the house. Their mortgage would have been more than mine, but still a little cheaper than the rent. Do you know what their monthly expense would have been today had they bought the house back then? THE SAME AMOUNT ALL THIS TIME. Ok, technically their taxes and insurance would have gone up a little, but what they pay for interest and principal would have been the same all this time. My point is that had they basically had a down payment and decent credit, they could have bought the house, had a fairly stable payment, been building equity for themselves instead of me, and would have the house more than half paid off by now.

This is why I encourage first time buyers to buy as soon as they can. I know it is tough right now with higher rates, prices, tariffs, inflation, etc. It is not impossible though regardless of how discouraging it may be. I think anybody is better off in the long term buying most any house they can afford verses renting.