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.

LEXpert’s letter to first time buyers

I’ve had a lot of first time buyer’s lately.  They are always so much fun to work with.  Most of them are coming from an apartment, so they get really excited over things like having a garage, or being able to let their dog out in a fenced backyard rather than having to take it on a walk.

I always try to tell them what we are doing before we do it, and explain things as they happen.

One of my new clients mentioned he was thinking about taking a class for first time buyers.  Then I realized I should probably do a quick explanation of the entire process up front, and then go into details as we reach each stage.

So, below is an email I sent him:

We will go out and view any houses that interest you. I’ll offer my thoughts on the good and bad points of each house. I will probably sound very critical of the houses. That is because I want you to know everything I have learned from my experience so that you will be able to make the wisest choice possible.Once you find one you like enough to make an offer on, I will see what has sold in the area and determine what the house is worth. We will want to know this so we can base an offer on the value of the house rather than the list price. The average “List to sale ratio” for this area is about 98% of the list price. If we find a really good house and it is priced right, it could very well go for the full asking price. I am hoping we will see fewer multiple offers in 2019 than we did last year.

To make an offer, you sign a contract and all the supporting documents. We can do that online using an electronic signature program all realtors use.

Often the buyer and seller counter back and forth at least one. The seller may want a little more money, or ask for a different closing date than we put on the offer. Once we all come to an agreement and everybody signs it, the offer becomes a contract.

Once we have a contract, I will get what is called earnest money, or good faith money. It will likely be $1000 but I can try for $500 if possible. This money gets deposited in my escrow account. It is your money. I am only holding it. The only way the seller can get this money is if you default on the terms of the contract. Think of it like a security deposit on an apartment. Should you not be able to get your loan, you would get this money back. I’ll go into the inspection later, but should we not be able to reach an agreement with the seller on a repair list, you would get your money back as long as we submitted the list within the allotted time frame.

You will have a specified time frame to do a home inspection. I usually write 15 days from the time of the last signature on the contract. I have a couple of good inspectors I can recommend, but you are free to use anybody. A good home inspector will probably charge $350-425. You pay them the day of the inspection. At the end of the inspection, we both meet the inspector to review their findings and so you can ask any questions.

A typical house will have 15-20 minor to medium sized issues after a home inspection. An older house will have more. The best house I have ever had inspected only had 3 problems. Keep in mind that the inspector is comparing your house to a perfect house.

From there, we write a repair list. The list is for things that were not disclosed to you. We can’t technically ask for anything cosmetic, or something that was not code when the house was built. A common example of this is GFCI outlets. Those are the ones in bathrooms and kitchens that have the test/reset button. They are usually absent in an older house because the house was built before they became required by code.

Assuming we reach an agreement, we move forward with the sale. The seller does the repairs. We have a chance at what is called a “Final Walk Thru” to see receipts and the work they did. Sometimes we can’t access where a repair was made, so having a receipt or statement is good.

At some point, the appraiser will come out to make sure the value of the house is okay. We don’t need to be there for that.

You have the option to do a termite inspection. I think it is always a good idea. Those are usually about $45. I have somebody I use, but you are free to use anybody you want. We don’t have to attend that inspection. They only take about 20 minutes. You typically pay for this at the closing. The way our contracts are written, the seller has to pay for a termite treatment if any are found. If there is any damage from termites, the seller has to pay up to 1% of the sale price automatically. If there is more damage than that, we would negotiate. If we cannot reach an agreement, either party could walk away from the sale. You would get your earnest money back. Houses often have termites. I occasionally see a little termite damage. I have never had a deal fall apart due to termite damage.

While all this is happening, your lender is asking you for all sorts of documents. Much of what they want will seem silly. I once had a lender ask about a $1000 check I received many years prior to that. It is just part of the process. Also, be sure to get them anything they need as quickly as possible because we can’t close until your loan is done.

The typical time period from contract acceptance to closing is 30-45 days. We will write a target closing date on the offer. Most of the time you do end up closing on that exact date. I’ll probably make it a Friday so that way you will have the weekend to move in.

Most of the time you get to move into the house right after the closing. We call that “Possession with deed.” Sometimes a seller will ask if they can stay in the house for a few days after the closing. I never like that, but sometimes if there are multiple offers, it is done to prevent you from losing the house.

I hope this helps. I love working with first time buyers. I’m here for you, so don’t hesitate to call/text/email with anything you need.

 

How a hot market really sucks

As I was driving home today after a closing, I got to thinking about how the market is always  changing.

When I got into this, it was much like today.  Buyers felt lucky just to get a house and sellers were drunk with power.

Then there was the looming threat of a nationwide crisis.  We were convinced it wouldn’t  make it to Kentucky.  We all said things like “We didn’t see the crazy appreciation like California, Arizona or Florida did, so we won’t see any changes.”  Only we said that with the same fear in our voices as the kids from that Stephen King movie when they talked about Pennywise the clown.

Then “IT” happened. (See what I did there?)

It slowly went from being a seller’s market to a buyer’s market.

Nobody was happy.

Seller’s were bringing cash to the closing to payoff their houses.  Buyers were afraid their new house would continue to depreciate.  Buyers were hitting sellers up with big repair lists.  They felt the seller should just appreciate that they picked their house among the other 50 houses in the neighborhood for sale.

Then in late 2012/early 2013 we had this euphoric time.  Sellers were happy because their houses were selling in less than 6 to 12 months.  Buyers were happy because prices had stabilized.  Sellers were okay to do whatever repairs were requested since they were happy to have sold their house.  Buyers weren’t asking for as many repairs since they were happy too.  They knew the house wouldn’t be worth less by the time of the closing.  It was great!

Only it didn’t last.

Prices started going up.  Fewer houses were on the market.

Prices kept going up.  Even fewer houses were on the market.

Prices went up even more.  And even fewer houses were on the market.

And now we are back to where we were when I started, only a little worse.  Prices are sky high.  Buyers resent it but know they have to pay the price.  So, they are hitting up the sellers with big repair lists.  Sellers feel like they are doing a favor to the buyer just by accepting their offer.  They don’t want to do repairs.

Basically, nobody is happy right now.

The happiest 2 days of homeownership

Two of the best days of owning a house are these:

1.  The day I call you to tell you that the seller has accepted your offer.

2.  The day I call you to tell you that we just got a really good offer.

When you hire me to be your realtor, I am thinking about both days.  You may not be, and that is okay.  That is what I am here to do for you.

We are currently in a market where everything sells.  You can have two identical houses across the street from each other.  Both exactly the same.  One backs to green space.  The other backs to the loading dock of a strip mall.  Both sell fast and for the same price.  Why?  Because there are three buyers for those two properties.  It was like this too back in the early 2000s.

But what do you think will happen when the market slows down.  Maybe there is only one buyer and both of those identical houses are for sale again?

The seller backing to the green space sells their house for top dollar in record time because even in a bad market, the best houses still sell.

The seller backing to the loading dock watches the SOLD sign go up across the street.  Then they watch the new neighbors move in.  Their house is still on the market, even after reducing the price several times.  They really need to sell because one of them starts their new out of state job next month and they can’t afford two mortgages.   Then they wake up listening to an idling diesel truck at that loading dock.  They remember how lucky they felt to get their house.  How they beat out that other buyer in multiple offers by bidding as much as the green space house cost.

It is only now they realize that they made a bad decision all those years ago.  That is how real estate works.  You never know whether you made a mistake or not until you go to sell your house.

When you look at houses with me, I will always point out the negatives so you know what you are getting into.  I’ve been doing this for a long time.  I know what things buyers like and don’t like.  I don’t want anything to be a surprise to you when you go to sell your home.  What you do with that info is totally up to you, but I will always let you know because one day, you will be the seller and not the buyer.