buyer’s agent

A pleasant surprise this morning

by John Rice

Like always, I woke up, made a cup of coffee and checked out the new listings. I saw what prices got reduced, then viewed the pending and sold listings. Pretty routine. Lately it takes about 30 seconds to go through the 15-25 new listings every morning.

Today I woke up to more new listings than I have seen in a while. Many of them were under $200k!

I am really hoping this is the beginning of a new trend. There has been speculation that a lot of sellers were holding off on listing there homes until COVID got under control and they felt okay about letting people in their homes. Today might have been the first day of that.

I am starting to hear from a lot of sellers that it might be a good time to sell their homes. Of course, it has been for a long time. However, when many sellers feel like prices have gotten crazy and decide to cash out, it could mean a shift in the market a little. While I think it will remain a Seller’s Market for quite a long time, I totally welcome a more balanced market. It is good for everybody.

Or it could just be that it is the first big spring day when all the sellers begin to put their homes on the market. Sellers usually need the first couple of warm weekends to spruce up their yards before listing.

We’ll see how the next few weeks pan out. All I know is that it got me excited to think about so many new listings hitting the market!!

2 wrong ways and 1 right way to win in multiple offers

by John Rice

I recently got to experience a part of real estate that I don’t do often. I got to be a seller. In all of my life, I have only been a seller 4 times. I sold the first house we owned a long time ago. I sold two rentals in the past several years. And just this week I sold another rental property.

The first sale of this house fell apart and it came back on the market. Two of the offers I got were from people who had seen it when it was first on the market.

Wrong way #1

I got an offer from somebody who had lost in multiple offers the first time it was on the market. It was the exact same offer with just the dates changed. The buyer’s realtor seemed a little upset that I didn’t take it the first time and was a little snarky in letting me know that I should have accepted it then. Here is the thing. If I didn’t pick your offer the first time when I had other offers, why would I pick it again when I also had other offers. They should have changed some terms to make it more attractive to me. I even told the buyer’s realtor what I didn’t like about the offer.

Wrong way #2

I got a phone call from a realtor who had a couple of questions about it. This realtor asked if I did “Escalation clauses.” I wasn’t totally sure what he meant but I did tell him one of the offers I had in hand did have an escalation clause, so I guess I do them. He then told me how they were not fair to buyers and that he wouldn’t show my house to his buyer. Since I had two other offers in hand, I really didn’t care. He called me later that night and said his buyer wanted to offer $150k for the house that they hadn’t even seen yet. The list price was $130k. Both my offers were $130k and $130,500. If he had submitted an offer earlier, and done the escalation clause he was opposed to, his buyer might have gotten my house for something like $131,500 instead of $150k. He dropped the ball. Instead of riding his high horse about a perceived injustice in the market, he should have shown her my house and written an offer. But no, he lost his client the house and was willing to let her overpay for it.

Right way #1

I get a phone call from a very wise agent. She tells me how her people saw the house the first time it was on the market. They currently live on that side of town and want to stay. That tells me these buyers really want the area. She tells me that they are preapproved with a local lender. Always the best choice. I asked her who she usually recommends for a home inspector. One of the inspectors she mentions is one I personally use when I buy houses. I tell her that and the next thing I know, they have scheduled an inspection with the inspector. So, I am a seller and a realtor. What am I looking for when examining offers? The best terms I can get from a buyer that I feel will mostly likely get the deal done. This agent recognized my concerns and adjusted. In the end, her ability to think about what she could do to get the house for her buyer is what got it.

This is what you need a realtor for. Today’s market is like a traffic jam. You can have a realtor who sits there not moving and complains, a realtor who just stays stuck in the same lane, or one who figures out how to get around obstacles. I feel sorry for the buyers represented by the first two agents.

When it seems like it was meant to be

by John Rice

I sold a house this week that I wanted to tell you about.

The buyer is a first time buyer who was sent to me from two separate past clients. She works with a client who has become a friend of mine…..Thanks David! Her mother works with another friend who has used me before too……Thanks Doug! I don’t have this happen often when somebody is asking for realtor references and I get mentioned twice. It always makes me feel twice as good that somebody would take their time to connect two people they care about. Close to 100% of my work is getting referred to new people or people coming back to use me again. That is why I don’t ask for reviews and don’t advertise. I just don’t need to do either to attract new work!

The buyer was going to be in the super tight $150ish market. There is almost nothing ever for sale and when something hits the market, you are competing with cash buying investors who sometimes don’t even look at the house before making an offer. This was going to be a tough one.

Right after I started working with this buyer, I get a text from another client who was wanting to sell their house.

The sellers are past clients who I have thoroughly enjoyed working with several times. They bought a house to rent many years ago and it was time to part with it. The sellers did a lot of work to it themselves and it looked really good. The price point was going to be around $150k, which is very hard to find in the current market.

I just knew this was the house for my buyer. I mean, I had recommended it to the sellers when they bought it so I could certainly recommend it again to my buyer!

I told the sellers what I thought it was worth. I told them that I had somebody that was interested in it. I also told them that they could put the house on the market and possibly get a little more than the price range I thought it would sell within since you never know what a desperate buyer will do in this market. They liked the idea of me managing the entire transaction and keeping it simple, so I showed it to my buyer. Of course she wanted it. It was a gorgeous home in one of the most desirable neighborhoods in her price range.

The buyer is happy she didn’t have to frantically make an immediate decision and that she got a great house. The sellers are happy because they know I am managing the whole transaction and made it so easy for them. A win for everybody.

I seem to be having this happen several times a year now. A seller will tell me they are wanting to sell soon and then shortly afterwards I have a buyer tell me what they want and they describe exactly the house my seller has. Happens the other way too. I will have a buyer tell me what they want and then I will have somebody tell me they are ready to sell the exact house the buyer described. It’s sort of cool when this happens. It makes me feel like I am a small part of a bigger story.

Want to know where the market is, TODAY?

by John Rice

I like to do these market updates every once in a while. When I do, I do them in real time. What do I mean by that? I meant that the info is right now. Most of the time when you are hearing about the real estate market, it is from sources that are a month or more behind, or it is from a national source that is giving you a dated snapshot of the market for the entire country. My data is taken from the MLS in the past 20 minutes and is specifically for the Bluegrass area.

I won’t geek out and break down all this data into price range, which town, or property type, but there were 24 existing home sales that went pending in the past 24 hours. Do you want to guess how many of them sold within 2 days of being listed? You would think it would be all of them based on what your realtor friends post online, or what you read in the news. But, of those 24 houses, only 4 of them sold in less than 2 days. There were 8 that sold between 2 and 10 days. 4 sold between 11 and 30 days. 4 sold between 31 and 60 days. And 4 sold between 61 and 90 days on the market.

Let’s look at the houses that closed in the past 24 hours. While pending sales give us a snapshot of what the market is doing right now, freshly closed sales give us a snapshot of where the market was a month ago since it usually takes 30 days or so to close.

How many of the closed sales do you think got full price, or over full price offers when these sales went pending last month? Again, you would assume all of them, right? Of the 23 closed sales posted today, only 8 of them sold for the full list price. 5 sold for over the asking price. One sold for $10k over the list price in a neighborhood where I have seen this happen frequently. That means 10 of the closed sales went for LESS than the full asking price.

I could go a lot of ways with this blog post, but I think I will take this chance to say that you really need an agent that knows when you need to offer the full price, when you need to go over the list price, and when you can make an offer for less than the list price. The market is so fast right now that I think a lot of buyer’s realtors are not looking at comparable sales in the neighborhood. They are just so focused on getting an offer in fast that they don’t really take the time to figure out what the house is really worth. To me, that is the most important bit of info we have to offer a client. I have had many listings in the past year where I had a ton of showings and didn’t get an offer on the first day on the market. Then the next day a realtor is frantically trying to reach me saying they are about to send a full price offer and are so glad the house is still available. Well, if I had 12 buyers look at the listing and didn’t get an offer, truth be told the house probably wasn’t worth the list price……but I am not going to tell the buyer’s realtor that, I just tell them where to send the offer.

That’s the data. I am by no means saying the market is slowing down. It is after all the middle of winter which is usually the slowest time of the year. I do think the market will stay strong for quite some time. I just wanted you all to know that not every house sells the first day on the market for full price or more. I want to help separate the perception of what the market is like compared to the reality.

The one thing this agent did that got his buyer my listing

by John Rice

He called me.

That’s all it took.

I put a listing on the market yesterday that I knew would get a ton of showings. It was priced at $155k and there just isn’t much for sale in that price range.

The agent called me before his showing and asked what type of terms my seller was looking to have. He also told me that his buyer had tried unsuccessfully two times to buy a house in this particular neighborhood. He has friends/family in the neighborhood and really wants to be there. I really wanted to hear that because I knew that his buyer would not walk away after a home inspection since he not only needs a house in a tight market but really wants to be in that neighborhood. His only option would be to wait for the next house to come up in that neighborhood. This buyer was committed. I asked who the buyer was using for his mortgage. It was a local company that is well respected. Icing on the cake to me.

Some of you might wonder why an agent would tell me this? Isn’t it compromising his buyer’s position? In today’s market, everybody assumes they will have to pay full price. Everybody is electing to do the inspection type where you will have an inspection but not ask for any repairs. Since everybody is doing pretty much the same thing, the decision on who gets the house often comes down to minor things such as what type of financing the buyer is doing, if they are using a local lender who can be trusted to get the loan to a closing…..and even to little things like letting the listing agent know the buyer really wants to be in the neighborhood.

Being a buyer’s agent today is not about negotiating since buyer’s have no power right now. It is about advocating for your clients. It is about finding out what is appealing to a seller and what will make them pick your client. That is exactly what this agent did. In an era where you get a random text from an agent that they are sending you an offer, making a quick phone call can really make a buyer stand out. The actions of this agent is what got his client the house.