cash buyer

It’s all about trust & credibility

by John Rice

Well, it finally paid off today. In a big way too!

I am all about keeping the trust I work so hard to establish with my clients. I want them to know I am looking out for them. I often look for ways to reinforce that vibe.

Let me give you a little background about this story so you’ll understand how me spending the money for a service call to have an air conditioner looked at turned out to be a fantastic decision.

I have a client who is buying a house. We had it inspected. The inspector said the copper had been cut out of the air conditioner lines. After informing the seller’s realtor about it, they had their HVAC person come out to inspected the unit. Their HVAC person said the lines were there and all was well. 

 Since we had opposing opinions about the lines, I decided to send my HVAC person out. I told my client I had no reason to believe what the seller’s realtor said was untrue, but I wanted to prove it to them. I was really expecting the lines to be there and all to be well. It was really about putting my client’s mind at ease that all was well………..

Only all wasn’t well. Turns out the copper lines were missing. Probably recycled by now and the thief that took them has already spent the money. My HVAC guy said it would be a few thousand dollars to get it working again.

I am so glad I decided to get this checked out myself. Not that I thought there was any deception here. This was just one of those things where the person checking it earlier didn’t investigate all that well and my realtor-friend passed along the info they were told. If anybody is to blame it would be the HVAC person who said it worked just fine. (So, realtor-friend, I am not pointing any fingers at you if you are reading this.)

Can you imagine if my client had closed on the house tomorrow, turned on the air, and it not work? Then find out they needed to spend that much money? Not only would that have been devastating, it would have killed any credibility and trust I had built with them. In the end, it was worth every penny of the service call to guarantee that my client’s wallet wouldn’t be drained, their house to be cool, and to maintain the trusting relationship we have.

What is the 2025 Spring Market Like?

by John Rice

I have no idea what the rest of the year is going to be like in real estate, but the spring 2025 market is super hot in and around Lexington Ky.

I have sold 12 houses in the past 9 weeks. I think that might be a record for me. Five have been cash purchases. Five have been in multiple offers. Two went $60,000 or more over the list price.

If you see a new listing that looks amazing, be prepared to be in multiple offers and view the list price as the starting point for any offer.

Don’t want to get in a bidding war? Well, don’t look at houses that are newly listed. Stick with the inventory of homes that have been on the market for at least a week.

I am going to take a nap now.

    Things you hear when I am your realtor

    by John Rice

    1)  “Don’t buy a 2 bedroom house.” They are harder to sell when most every buyer and their realtor enters “3” for the minimum bedroom count on searches. A two bedroom listings is like playing Marco Polo alone. You’re shouting Marco, but there is nobody listening to reply with Polo.

    2)  “If you buy a house that had been on the market for a long time and was realistically priced, you will have the same thing happen to you when you go to sell.” I find usually that means there is something odd about the house that most buyers don’t want, or else it would have sold sooner.

    3)  “It is good to be in multiple offers when in a slow to balanced market.”  My experience tells me that when this happens in a slow to balanced market, you either have a fantastic house or one that is priced below market. When you go to sell you will either have a house that everybody wants or are buying it right, or maybe both!

    4)  “If you have to use the word ‘Except’ when you describe your purchase, it was a bad one.”  “Except” means there is some major negative that will bite you on the bum if you need to sell in a slow market. “We got a great house…..EXCEPT for the tiny yard…..EXCEPT for backing to the loading docks of a grocery store…..EXCEPT for being on a busy road.”

    5)  “Avoid a bad school district.” There are exceptions here, such as a condo complex that appeals mainly to empty nesters. However, if you have a house where the target buyer will likely have kids, it will be important to them even if it wasn’t to you. And notice what I did not say. I did not say to buy only in the best district. Why? Because most buyers with kids are okay with an average or better performing school, they just don’t want a poorly performing one.

    6)  “A fixer upper isn’t always a bargain.”  I learned this one the hard way long before I got into real estate. If you buy a house for 80% of the potential market value, but must spend the 20% savings to make it just as good as any other house on the street, all you have gained is experience that will help you if you ever decide to become a realtor.

    7)  “Buying the least house in the best neighborhood doesn’t always make sense.” This one runs contrary to what most people think. The reality is that the typical buyer for the nicer neighborhood is going to find your house plain or too small. I see it all the time where people will pick the better house in a lesser neighborhood over the lesser house in the better neighborhood for the same price.

    So, follow these rules and you should be on a good start to not losing your shirt when you need to sell!

    Who will buy your house when you are done with it?

    by John Rice

    You know, I think too often realtors and the public operate out of “one size fits all” generalities. Case in point is resale value. If asked which is better, a house with a first floor primary bedroom or one with all the bedrooms upstairs, most people and realtors would agree that the one with the first floor primary has broader appeal, and broader appeal is what resale value is all about. True…..but what if both houses are in a neighborhood that many people pick because of a good elementary school? That means that the target buyer has young kids. Very few parents I have shown houses to with young ones feel okay about sleeping on a different level from them. So, I think in this case, the one with all the bedrooms upstairs is a safer bet.

    I used to live near a house that has 4 bedrooms and is about 2500 square feet. Being in a good school district, who do you think will be attracted to that house? Right, a family with kids. But, this place has zero back yard. The deck is about a foot from the property line. So now this poor house will always need to  find a family that doesn’t care about the yard or a couple/single person who wants a big house. A smaller house would have been better suited to that lot, and would probably have taken up less space too.

    Many years ago I listed a 3rd floor condo in a complex that was mainly retirees. Did I mention there was no elevator? That was a hard sale. The typical resident didn’t want all the steps and it wasn’t the type of place to be on the radar of most people who weren’t retired.

    I had a townhouse listed a long time ago whose target buyer would be a person downsizing.  The place sat right between a pharmacy and an elementary school on the same road. Which one did I emphasize in the marketing remarks? That it was close to a pharmacy.

    So, when you’re buying a place, always think about the whole picture. Will the floor plan work for the most likely buyer? Is the yard too big or too small for the most likely buyer? Is that buyer going to even care about the school district? I always find when you start asking yourself a bunch of questions, you can always make a better decision.

    What’s an old house worth?

    by John Rice

    I had to run the comparable sales data for a house in the area between Chevy Chase and UK. My buyer wanted to know what I thought a house I showed him was worth. Usually comps aren’t too hard. In a newer neighborhood, they can be really easy since sometimes you can even find three of the exact same floor plans to use.

    Older houses are a little harder to comp. For example, the 3 best ones I had to pick from today were all in the same area, but were very different. A lot of realtors would have just divided the sale price by the square footage, maybe added/subtracted for differences such as the number of bathrooms or a garage. (Or even worse, just gone with what Zillow says is the value.) It is all a very logical process of averaging data to come up with an opinion of value. The only problem is that it doesn’t always work.

    Back to my story….

    The cheapest one was on the edge of the neighborhood near where the commercial section ends on South Ashland. That corner of the neighborhood has a very different vibe than the one I saw with my buyer.  The next one was right around the corner from the house I showed. You’d think that would have been a good one. But, it was much bigger, had been converted to student housing a long time ago, had a surplus of bedrooms, and was handicap accessible. That isn’t going to attract anybody from the same buyer pool as the one we saw. Sorry if this is starting to sound like the real estate version of “Goldilocks”, but the last one was just right.

    The last place was similar in square footage, was more updated, had newer systems and would attract buyers from a much broader pool. It sold for less than the asking price of the one we saw.  I had to tell him that I thought the one we saw was over priced.

    I also had to tell him that with old houses, you just never know. Somebody could see that place and totally fall in love with it, with the end result being they paid more than any other buyer would.

    All this reminds me of 2 houses I had listed on Wabash a long time ago. Both of them were totally and tastefully updated. The first one I listed was everything anybody could want in an old house, with the exception of very rough and very steep steps that went to the converted attic space. It was really nice up there, but getting there was posing a problem. Time after time (not trying to sound like Cyndi Lauper here) the feedback would be that the house was very nice but those stairs were a deal breaker. We did sell it however.  I should add that we actually sold it for much higher than the neighbors and a realtor who lived a few blocks away ever though was possible. The comps didn’t really support the asking price. We kind of pushed the envelope and it worked. The buyer was transferring from California, had a tight time line and everything in Lexington looked like a bargain!

    The next house I listed on that road was equally nice. They had remodeled the upstairs, bumped out the roofline of the back and added a killer master bathroom and a walk-in closet. Those are 2 things you don’t see often in an older house, especially for the price range we were in. That house posed a different problem for me. See, the downstairs rooms were sooooo small. If you just looked at the comps, you’d have thought the house was worth about $20,000 more than it was. We had to sell it a little under the comps to make up for the small rooms because this time, there was no California transferee to be found.

    So, you really have to have a feel for how buyers will perceive the house as a whole to know where to add or subtract value. That is the art part of the deal. Even to the most unemotional buyer, they still have to like the house to buy it. On the comp sheets that all the realtors use, it has the scientific stuff  like values for square footage differences, bathroom count, a finished basement verses unfinished basement, the number of garage spaces, etc. The problem is that if we don’t throw a little art into the comps we’ll just get them wrong…………unless the house is one of those where 3 identical houses have recently sold!