Why I knew this house would come back on the market

I showed a house a couple of weeks ago.  It was a great house in a desirable location.  The price was sort of low for the neighborhood due to it being a bit outdated and having some expensive deferred maintenance items.

I told my people I thought it would need a new roof soon, that the disclosure said the HVAC units were original and we could clearly see the wood rotting on the windows.  I also told them that I didn’t think it was that good of a deal.  By the time you got all that addressed, you would have in it what a better one on the street was worth.  That’s just not worth it unless the property has some unique feature such as a fantastic lot or the perfect floor plan.

I gave all this feedback to the listing agent to help him out.  Within an hour or so, I saw that the house had sold.

I remember thinking to myself “I bet it will come back on the market after the home inspection.”  Sure enough, it came back on the market.

It is easy for most buyers to fall in love with a house only to be heartbroken by the end of the home inspection.   Most buyers don’t know how long a roof lasts, how long HVAC units usually last, how much windows will cost.  A lot of realtors out there don’t think about this either.

I can see the buyer for this house walking in for the home inspection, excited to again see what they were expecting to be their new home.  They have a big smile on their face.  The inspector begins reviewing the report.  The big smile is now a grin.  The inspector keeps going.  The grin turns into a blank expression.  The inspector gets to the end of the report and the buyers now have a frown.

Then the buyer has their agent write a huge repair list that the seller refuses to do.

It all ends with the buyer looking for a much better house and the seller hoping to find another buyer.

I try to prevent this outcome for my clients.  It wastes time, money and even more so, is emotionally draining for the buyer.

LEXpert Perspective: Today’s Market

It’s been an interesting spring market. I won’t get into why it has since the reason is all over the news and on all of our minds.

The market goes on though.

Both buyer and seller activity has greatly decreased. However, there are still more buyers than sellers so the supply-demand thing means any decent house that is priced in the realm of reality is going to sell very quickly. There has been some speculation that there will be more listings on later this year as sellers put their houses on the market after waiting this out. Yes, that will happen, but there will be just as many buyers out too so it won’t get any easier to get a house. Bottom line is if you are ready to sell, then do it. If you are ready to buy, get out there. Waiting is not going to change much.

One good thing I am seeing lately is more and more houses under $200k. Last year there just weren’t too many houses hitting the market under that price. I scroll through the new listings every morning. They are sorted from lowest price to highest price. Seemed like last year after the first few houses it quickly got over $200k. This year it seems I am seeing many more under that affordable threshold. I think this probably has to do with the low interest rates. A lot of those buyers with $150-200k houses are stepping up to the $250-350k range. If you’ve been reading my blog for long, you have heard me say that first time buyers are what greases the gears on the real estate market. They are usually the only people who don’t need to sell a house before buying one. There have been plenty of them out there the past couple of years, but there haven’t been enough houses for them. That is why a house that was $140k a few years back is now a $180k house. If you are going to be looking in the sub $200k range, NOW is the time to get out there. Don’t worry about the sky falling. Just do it. I’ve had several people who were always worried about buying at what is perceived as the top of the market. All of the houses they thought were too much back then are all worth much more now.

Buying in 2020? When to begin?

Right now.

I know, I know…..realtors always say it is a good time to buy, or a good time to sell, but hear me out.

There are two things I have consistently seen over my 15 year career:

  1.  All the buyers come out in mass in about March.  They fight for the best houses on the market.
  2.  When the market is good, prices always begin to creep up in the spring because that is sort of the opening season for the whole year.

If you are planning on buying under $200k this year, you will have a harder time finding a house later in the year when there will be multiple offers the first day on the market for the best ones.  You will have to do things like be flexible on when the seller moves out and possibly do the inspection type where you don’t ask for repairs, you either take it or walk away after the inspection.

Or, you could start now and avoid all of that while getting Fall 2019 prices.

Right now really is a good time to buy.

 

What’s it like being a realtor?

It is EXACTLY like you see on HGTV.

Hahahaha.  No.  Not really.

I can’t speak to what it is like for most realtors, only myself….so here goes.

What is a typical day like?

There really are no typical days for me.  Some days I have more things to do than I have time.  Other days I have little to do.  Some days I am running all over the place.  Other days I am sitting in front of a computer all day.

What is the busiest time of day?

It has always seemed like 3-5 Monday through Friday is when my phone blows up.  Clients, other realtors, appraisers, etc.  I guess people are trying to finish their to do list for the day or are just getting off work and ready to talk real estate.

What have you done today so far?

This is usually a slower time of year for me.  I tend to do most of work in waves.  This is the between waves time.  I just closed the most work I have ever done in the past 8 months and am waiting for the next wave to come.  I used to get nervous during these times, thinking it would never come back, but it always does.  I am trying to enjoy it.  I guess I still haven’t answered the question?  Today I slept in a bit, drank some coffee, sat with my dog while scrolling through Facebook.  Then I ran some comps for an upcoming listing, cranked out a few emails, and started this blog.  Unless something changes, my plans for the rest of the day are to wash cars.  However, what often happens with any slow day is that you wake up with little to do and suddenly you have a lot to do.   It can change in a heart beat depending on if you have a problem with a transaction of if a cool houses hits the market and you have to show it to a client.

What is the best part of being a realtor?

Helping people and being trusted.  Most of my work anymore is from people who have used me several times.  They know I am giving them the best advice possible to serve their interests.  The second best thing is getting to drive around in cars I love.

What is the worst part?

Not having much free time.  I have taken one full day off in the past 15 years.  Sometimes I have very little to do, but there is always something that needs done, plus you never know when the right house is going to hit the market and you need to get one of your clients in to see it.  It is sort of like being on call 24/7.

How has it changed in the past 15 years?

When I got into this, realtors dressed up a lot and hung around the office.  I didn’t see the point of either.  Now it is much more casual and realtors work from home more often.  We used to present offers to sellers or fax the offer to the listing agent’s office.  Then we quit presenting offers (THANKFULLY!) and used PDFs.  Today we use electronic signatures and the actual document doesn’t even physically exist unless somebody prints it.  I used to spend hours a day talking on the phone.  Now everybody texts.

What will the next 15 years be like for you?

I hope pretty much the same.  I enjoy working.  I hope my streak of working with people who have used me in the past and people that were referred to me continues.  I never had to advertise or do any marketing to attract work and I sure hope I never have to do that…..mostly because I am no good at it.

Mistakes first time buyers make

Being a first time buyer is tough.  I mean, you go into it with no experience and have to make one of the biggest decisions you’ve ever made!

When my wife and I were ready to buy our first house, we were clueless.  We had a tight budget like most first time buyers.  We would look at terrible houses.  One backed to a train track.  One was in a high crime area.  We finally found one in Winchester.  We had not thought about what happens once we find one we want.  We had no idea what to do with making an offer, the inspection process, or anything else.

We ended up with a pretty worn out house that the seller had only completed 80% of any renovations he had done.  The house did not have central air conditioning, the heat was a fireplace and a giant floor furnace in the dining room.  Usually those giant floor furnaces are in a central location so the heat can move around the house.  Our’s was in the far front corner.  It would get about 110 degrees in that room.  The next room was 90.  The next room was a very nice 70.  By the time you  got to the opposite rear room, it was 50 degrees unless you started a fire in that room.  Also, two of the floor joists were cut when this furnace was added to the house.  It was a really old house and probably didn’t have heat when it was built in about 1915.

We picked sort of a terrible location.  Turns out there was a shooting two doors down right after we signed a contract.  The seller assured me that the shooter only shoots at people he knows.  For some reason, that made me feel better and I made a mental note to never introduce myself to him to avoid being on the list of somebody he might shoot.

We moved in and we were happy living in our craptastic first home.

The house seemed huge at first.  Then we had two boys.  We began thinking about things like school districts and the boys playing outside alone.

We moved.

So, here are some common things that first time home buyers don’t think about……including one first time buyer who would become “THE LEXpert.”

  • Size-Most first timers are coming out of an apartment.  All houses seem big.  I see a lot of people buy a house barely bigger than their apartment.  It becomes too small once a kid comes along.  Try to buy something you can grow into a bit.
  • Location-Most first timers have to choose between a prettier house in a worse location and an ugly house in a better location.  They usually choose the prettier one.  Location never goes out of style, but trust me, one day we will be sick of having everything white and of shiplap.  When that day comes, you’ve got an outdated house in a bad location.
  • Condition-Most first times don’t know how long a furnace lasts, so when they hear that one is 27 years old, they don’t care.  They also don’t know the cost to replace one.  Same for roofs, windows, etc.  I usually tell all buyers that there are 3 biggies in a house, which are the roof, hvac units and windows.  I don’t usually see all 3 that have recently been replaced, but shooting for 2 of the 3 is good.  You don’t want a house that will have a $5000 expense coming up soon.
  • Price-First timers seem to fall into two categories:  The ones willing to pay the full asking price and the ones who will want to make an 80% of the list price offer.  I always tell all my buyers that the first thing we need to do is figure out what the house is worth.    Then we base an offer on the value of the house and not the asking price.
  • Maintenance-Houses are money pits.  Mother Nature is pretty much trying to ruin your house.  She will win the war, but you can win each battle.  You’ll have repairs for appliances, the furnace/air conditioner, your roof may spring a leak, the water heater may go out.  I’ve got a bunch of rental properties.  I usually spend an average of $2k a year for repairs and maintenance.

My goal with all my buyers, especially first timers, is to find a house in a safe location, that won’t need a ton of repairs in the near future, and that will be easy to sell when they want to move up.