home-buying

The repair list shouldn’t be like playing Marco Polo

by John Rice

Most people think all a realtor does is open doors, fill in the blanks on the paperwork and cash checks. Sad thing is that there are a lot of realtors who think this too.

Not me.

The ultimate goal is the get the best terms for my clients and make the process as smooth and drama-free as possible.

I recently had a situation where my drama radar was going off so I made some moves to prevent it.

I got a repair list on one of my listings. The issue was the wording on the repair request for an air conditioner. The other realtor stated what the inspector found and pretty much just said fix it. The inspector stated that the air conditioner was only producing a temperature difference of 9 degrees. Now, I knew what the intent of the buyer’s request was. They wanted a normal working air conditioner. But at what point would they find a repair acceptable? If my buyer fixed it and it was only 10 degrees, would that be okay? Who knows? I never liked playing Marco Polo when I was a kid. I don’t like finding Waldo. I also don’t like the “I see something you don’t see and the color of it is” game. I am definitely not going to play those games with a repair list.

My Dad is retired now from being an attorney, but he is still a brilliant man. Back in 2005 when I was writing my first ever repair list, I consulted him on the wording. I think I did what most realtors do, which is to state the problem and just say fix it. He told me two things which I have never forgotten and try to share as often as I can with other realtors so our industry improves:

  1. Write a repair to be done to achieve a goal rather than for a task to be performed. Why? You can sometimes do a task which doesn’t achieve the goal. When that happens, you have no recourse because you asked for a task to be performed and it was done as you requested.
  2. Write EVERYTHING so clearly that a third party could read the contract, addenda or repair list and know exactly who was to do what and what the agreed upon outcome should be. That third party could be a judge or mediator.

So, when I read this one repair item, I knew there was no specific outcome requested. There was no verbiage saying that “If the seller does this with the air conditioner, the buyer will accept it.” The effort to get this right at this point may have saved some last minute drama right before the closing. When my seller has packed up and moved out, and the buyer has packed up and made moving plans is NOT the time to discover that we had a difference of opinion on what was expected.

Ultimately we agreed upon wording that said the air conditioner had to cool within industry standards, which is a minimum temperature difference of 15 degrees.

Decor can make or break the sale of your house

by John Rice

This past weekend, I was out with a young couple. We went in two houses in the same neighborhood that happen to be the exact same floor plan. There were some minor differences. One had a tiled backsplash, trendy furniture and finishes.  The other was very plain and was decorated with an older vibe……..guess I’d call it Early American Yard Sale. Guess which one my young couple liked with the most? When the agent for the “Older House” asked for feedback, I told her about this and suggested the seller make some changes. The most likely buyers in this price range and neighborhood are first time Gen Z buyers.

So, if you are selling, think about your buyer and make any needed changes that will make your house more appealing to them. First time buyers are mostly buying houses from Millennials, Millennials are buying houses from Gen X and Boomers. It is important to make your house appealing to each group as they move up the property ladder.

Can’t afford Lansdowne? Pick these neighborhoods

by John Rice

Love the Tates Creek area, and I mean the part with the 40502 zip code? Want a house built in the middle of the last century? Lansdowne is likely your dream spot to be. And for good reason. Those giant lots and large homes have been fantastic since Day 1.

But if you’re looking at financing most of the $600k to million dollar plus purchase price and your budget says “No Bueno”, What do you do? Stay where you are and be unhappy?

No, you look in Lans-Merik since it is right across Tates Creek Road from Lansdowne. Here you will get almost as large of a lot and the houses are mostly from the 1970s but it has a similar vibe. Think of it as “Lansdowne Lite”. You will end up spending between $450k to maybe just over $700k for the best ones that back to the park.

$450k too much? While it is technically not in the 40502 zip code, Gainesway is literally just across New Circle Road from Lans-Merik. Here you will get a 1960s home on a larger lot in the $300-450k range.

Is it turning to a Buyer’s Market?

by John Rice

Short answer: It depends on the house.

Long answer: I read an article this morning asking this same question. It had all the usual data in any article related to the nationwide real estate market. Average days on market, Average sale price compared to previous years, the number of listings compared to previous years……blah blah blah.

None of that really matters. Why? Because no two houses and no two markets are the same. There is no average house. Average means a composite of all data. It does not look at each house individually. Do you know who does look at each house individually? Buyers do.

A buyer looks at every house within their budget and decides which one they want to buy. Let’s say they look at 10 houses. They are only buying one so they pick the best one. Do you know what else happens? Usually every buyer in that same price range also picks the same best one. That means we have multiple buyers competing for the best houses on the market. Meanwhile, the rest of the houses sit there and dilute all those averages so the media can make illogical conclusions to share with the world.

I have been a realtor for 20 years. It was a Seller’s Market when I started. Then a Buyer’s Market. Then an EXTREME Buyer’s Market. Then a stable market. Then it slowly built into the strongest Seller’s Market ever. Now, more than ever, we sort of have two markets. If you want the best house in the best neighborhood, you better be prepared to go over the list price and be flexible on anything important to the seller. If you are not picky, make a low offer on one of those houses that nobody else has wanted. After 20 years of this, I can tell you that when you go to sell whatever house you decide to buy, picking the best one will always have been the wisest decision. The best houses will always be worth the most, be the easiest to sell, and will have the broadest appeal.

What I like about a contingency contract

by John Rice

Well, I don’t really like them, but there is a good side to this type of contract if you are the seller.  Guess what it is? The buyer will typically pay you more with a contingency to sell their house first than they would without it.

I see it all the time. A buyer with a house to sell gets really nervous about not knowing where they will be living once they sell their old home. Now, unless the buyer already has a contract on the house they are selling, I always counter back with a kickout clause.  That basically means that IF the seller would like to sell the house to another buyer who does not have a contingency, they give the contingency buyer a certain amount of time to remove the contingency or back out of the deal. 

Another thing I like is that IF the contingency buyer can and does remove their contingency,  you have a back up buyer. Sometimes it helps when negotiating repairs if the buyer knows there is somebody else wanting the house if the deal falls apart!

I don’t really care for this kind of contract though when I am working with a buyer…..for all the same reasons. When I have a buyer who wants to write a contingency offer, I usually try to get them to just wait until we sell their house first. Here is why I don’t think they are a good idea for the buyer who can’t possibly remove the contingency if needed: Any decent realtor is going to counter back with a kickout clause. That means that if another buyer comes along they will lose the house. If no such buyer comes along, that means that the house would still be there when the buyer’s old house eventually sells, and they could probably strike a better deal at that point.