houses for sale

How my fall is shaping up

by John Rice

I’ve been doing a lot of blogging about the market lately. Good stuff, but since I know most of you who will be reading this, I’ve been thinking I better give you all an update on what I have been doing.

I’ve been having a great time the past few weeks.

Yeah, the market is really slow. It’s there. It’s healthy. It is just slow. Few people want to buy and even fewer want to sell. That is okay for sellers and buyers. It is realtors, home inspectors and loan officers who this current gridlocked market affects the most.

I am not complaining though. I have more than enough work to stay comfortably busy.

I have several listings in the pipeline. All of them from people I know. A few buyers too.

I will be listing an amazing ranch in Versailles in a great location, with a great lot, and on a cul-de-sac. It is one of those rare houses that really has no negatives. I am looking forward to selling this for some friends who are moving out of state.

I’ve got a house around Southland that should be on the market sometime this winter or early next spring. It’s an older house with a really good floor plan and several interesting features. I have worked with the sellers several times. It might be the last one unless they were to move back to Lexington after this one sells.

I’ve got a very affordable ranch on the northend that I will be selling for a friend who has used me several times. He is an investor who is parting with several of his properties. I look forward to working with him and his family for probably most of the next year since they will sell one house at a time.

I’ve been working with a large family who has used me a couple of times before. I have really enjoyed getting to spend time with them. We found an ideal home in their existing neighborhood that will serve them well. This house has fairly new HVAC units, replacement windows and a literally brand new roof. I don’t see that Trifecta often. I should be listing their old house here in the next week or so. Their situation was very much like the “Love it or list it” show on HGTV. They loved their neighborhood but their old house wasn’t working. They were entertaining a big addition and remodeling the existing house.

I’ve been working with the mother of a woman that I went to middle school with. I have worked with her once before. Both her and her daughter are so much fun to be around. Once we find the perfect place, I will be selling her old house which is simply adorable. It is on about 3 acres in rural Franklin County. If you had told 6th grade me that I would be a realtor and showing houses to a classmate’s mother 40 years later, I would never have believed it!

Other than committing to wearing long pants every day, it’s shaping up to be an enjoyable fall for me.

Should you buy that unique home you fell in love with?

by John Rice

So, you’ve found a house you’ve fallen in love with. It’s sort of out of the mainstream. Maybe it has something strange like an elevator in the bathroom or a kitchen addition shaped like an octagonal spaceship? Whatever it is, you love it and you’re wondering if you should buy it.

The answer is yes. Yes, you should buy it. A house is an investment so you want to make a good financial decision, but it is also an investment in your happiness.

However, there are some things to realize and take into consideration before you do.

The main thing you want to avoid is overpaying for it. Most houses like I am talking about tend to have limited appeal in the broader market. It can be difficult to determine the market value since it is nothing like the comparable sales in the area that a realtor or appraiser would use. It takes a bit more of a gut feeling than hard science to figure it out.

Realize that when it comes time for you to sell it, it might take longer. You’ll be waiting for somebody just like you who cherishes all its quirks and features. The good thing about this type of house is that once you find that person, they usually don’t have a back up plan. They aren’t interested in any other house on the market.

Many years ago, I had a very unique home listed. It was an old house that had been totally renovated inside. It looked old on the outside but new on the inside. It was in town but it had 3 acres and felt like a mini-farm. The primary bedroom was “Open concept.” There was no door going to the upstairs primary bedroom. You just walked up the stairs and just like that, you were IN the bedroom once you took that last step. Also totally open was the bathroom. Like, the shower and even the toilet were just sitting there visible from the top of the staircase and from any vantage point in the bedroom. It took forever to sell. The buyers said they had been looking for a long time and fell in love with this place. They had to have it. Literally probably 100 other buyers had given it a very hard pass. That is just how it goes with unique houses.

That’s all I got. Buy it right. Go in knowing it might not be easy to sell. Enjoy your stay in the house between those two points in time.

Talk about luck

by John Rice

I don’t know about you, but I am sick and tired of the media scaring us with doom and gloom headlines about the real estate market. It’s time for some warm and fuzzy vibes to read, so here are a few of my favorite real estate stories spanning my 17 year career.

The oldest story happened back when the market wasn’t so good. I had a young couple who had used me to buy their first house in Masterson Station. Well, it was time to move up. They found an incredible house in Copperfield that had been on the market for a while. It was a relo sale, which is when the seller has been transferred and a relocation company is involved. When the house doesn’t sell by a certain time, the relocation company buys the house and they become the seller. We wrote an offer contingent on selling their old house. It was accepted. We then sell their old house. Everything is good. Until it isn’t.

The sale of their old house fell apart…..while they were on a cruise. Yep, I had to call and interrupt their vacation to tell them that not only are they not selling their old house, they are also going to now lose their new house. It was one of the toughest calls I’ve had to make.

They came home. We put their house back on the market. We sell it again after a little while. Guess what? The Copperfield house is still on the market. Only now the relocation company has lowered the price AND replaced some of the carpet. In the end, they got their house for less money than they were paying the first time and got some new carpet too.

Years later, after moving out of state and returning, this same couple told me what they wanted in their next home. They are really good at remodeling so a fixer upper would be a plus if one was available. They had narrowed it down to two neighborhoods. The husband told me he wanted a spot to park a camper or boat. About that same time, a seller in one of those two neighborhoods randomly called me to list their house. The seller was the original owner. The house was in good shape other than some deferred maintenance but was a bit dated. As I saw the house for the first time, I remember thinking it would be a good fit to my buyers. I KNEW it was their home when I saw the extra concrete going from the driveway to the backyard where the seller told me he used to park his camper!

A couple years after this, another client sent her brother to me to talk about buying a first home for he and his wife. As he was describing what they wanted in a house, I told him that I was about to list one just down the street from his sister and brother in law as soon as the seller’s new house was done. Sure enough, they bought it and started their family there. A couple of years later, they asked me to work with them to find an entry level investment property. I had a friend who had been talking about selling a townhouse I had sold him a few years earlier and sure enough, he was willing to part with it.

Some time later, another seller was referred to me by some clients and friends. I met with her at the house she had lived in most of her life since it was built by her parents. While I was waiting on this seller to do a few things to get the house ready, another client took me out for coffee and told me he was looking for a house. His big requirement was enough space to do his woodworking. I told him about the house I was getting ready to list since it had a huge detached garage that, if I remember right, already had enough electrical service for his heavy duty equipment. He bought it.

I used to think these people and many others I have worked with were just incredibly lucky to have exactly what they wanted drop in their laps. Now I realize I am the lucky one for getting to be the hands that drop it in their laps.

Now, isn’t this better than reading about higher interest rates? Don’t worry. They will come down. The real estate market will soldier on. How do I know? Because it always has and that is because everybody has a dream about what they want in their next house, just like these friends and clients of mine.

Why Zillow is selling homes for less than they paid

by John Rice

This may not be news to you, but Zillow got into the business of flipping homes in several larger metro areas. They recently stopped buying houses and are selling many of their homes for less than they paid for them.

If you read headlines or even worse, get on YouTube, you could conclude that the market is about to crash and Zillow knows it.

I don’t think that is why they are selling their homes for less than they paid for most of them.

I think they overpaid for them in the first place.

Zillow’s paper thin profit margins on these flipped homes was based on their data. I have always said you can’t argue with data. Data is always correct all the time. The conclusions drawn from data is not always correct though.

Their data told them what a house should be worth and they paid that for it. While I don’t know exactly what data they use, I imagine it is very similar to the data an appraiser would use such as general condition, square footage, features, etc. Once you have all that, you look at what houses have sold within a radius or within the same neighborhood, make adjustments for hard data differences and then whatever number is at the end of the equation is their Zestimate of value.

What Artificial Intelligence and computer algorithms cannot tell you though is what a buyer will like or dislike about a house. It cannot tell you that buyers tend to not like a backyard that slopes uphill. That they usually don’t like a steep driveway. That there are two Ball Home floor plans all over the Bluegrass that are same size and one of them always sells for more money. That there can be a huge value difference between two identical floor plans within the same neighborhood just due to where it is within the neighborhood. All of these things are subjective.

Zillow has been telling the public that they don’t need a Realtor any more. All you need is them. Sounds to me like Zillow could have used the local expertise that only an experienced realtor can provide.

Why I knew this house would come back on the market

by John Rice

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.