houses for sale

I wish my dog was an appraiser

by John Rice

This time of year is always tough for comps…..which is the term we use for recent comparable sales used to determine the value of a house.  Realtors use comps to determine a list price.  Appraisers use them to justify a contract price.  The thought is that the recent past will tell you what the market is doing now, but it really doesn’t work that way in a really good or really bad market when prices are either going up or down.

This reminds me of my old dog Julie.  She was a beagle.  She loved to go out in the yard and sniff around for critters.  I remember one time she was on the trail of a rabbit.  She had her nose to the ground and was on the trail of where that rabbit had been.  What she didn’t know was that the rabbit was right behind her.  That is how appraisals work.  They always know where the market used to be and never where it currently is.

Part of what makes this time of year tough is that the market for the new year is kicking off and we are looking back at late fall and all of the winter to determine value.  Sales are usually down in the winter and most of what sells are the leftovers from last summer.

So, we are looking at the worst times to sell to determine a value during the best time of the market.

I personally have a house that I sold for $200k.  It only appraised for $185k.  The best comps for my house were from 6-12 months ago.  So we have a big gap between what a real buyer with money will pay for a specific house and what an appraiser, whose job is to determine market value, says it is worth.

My current dog Sherpa is a dachshund-Jack Russell mix.  She has no problem keeping up with critters in the backyard.

I wish we had a system of determining value more like Sherpa than Julie.

Real estate match-making

by John Rice

Sometimes things just work out perfectly.

A friend of mine referred me to one of his friends.  This seller needed to sell his house quickly without having to do a lot of prep work.

I’ve always got a long list of people who are looking for something specific.  I’ve got a guy wanting a ranch on a golf course.  I’ve got investors looking for various houses to fix up or rent.  I’ve got people looking for their ideal move up house.  I’ve got people looking for rural properties in very specific spots.  None of these buyers are actively looking.  They are just waiting for me to call them up and say “I’ve found it!”  I’ve also got plenty of sellers in my pipeline who may sell sooner than later if the right situation arises.

I also have a buyer who has been looking for a similar house in the exact neighborhood as the one that this new seller has.

So, I arranged a viewing.

Then a deal was made.

The seller got the fast sale they wanted without all the prep work before listing.

The buyer got the property they have been waiting to buy, including the huge dining room she wanted.

I get the satisfaction that I brought two people together whose needs were met perfectly by what the other party had to offer.

How will I know?

by John Rice

Sorry if I have that Whitney Huston song going through your head now.

Buying a house is stressful.  You don’t want to lose a house and at the same time, you don’t want to make the wrong decision.

Back before the market got so hot, I would tell people they know they have found the right house if they wake up the next morning afraid it is no longer available.

I haven’t said that in a very long time because usually, a good house is sold long before you ever get in bed to sleep on it.

While I can’t really give that advice any more, the principle is the same.  If you like the house enough that you don’t want to lose it, that is probably a good sign that it is the right one.

 

Some questions I occasionally like to ask when a buyer is unsure:

Can you see yourself waking up here every morning?

Can you see yourself tucking your kid in bed here?

Is there anything that is such a big turnoff to you that it would make you miserable living here?

Think about what your daily routine would look like in this house?

 

For most people, buying a house is an emotional decision.  Sure, there are basic parameters of size, location, etc.  Among all the houses that meet that general criteria, buyers pick the one that makes them feel the best.

Real Estate Proverbs

by John Rice

You know, I’ve been doing this for a long time.  You start to see patterns after a while.  I guess that is called wisdom?

Here are some things I have learned that are typically true in real estate:

  1.  If somebody says they are going to make an offer, every hour afterwards that you don’t have it in hand reduces your chances of getting it at all.
  2. If you are a seller and decline a showing, few buyers ever reschedule a time.  They say they will come see it later, but never do.
  3. Usually the best offer you are going to get is the first offer.  The times it isn’t the best offer, it will be the worst.
  4. If you get 10 offers on your house, 8 will be practically the same, one will be crazy low, and one will be the best.
  5. If 20 buyers have seen your house and given the same feedback about the condition and list price, odds are the next 20 buyers will say the same thing.
  6. If you get a full price offer the first day, that means you priced it just right.  Don’t wonder if you should have asked more.  When a house is priced too low, almost always does it get more than one offer and both will usually be above the list price.
  7. If you feel like you got a good deal on a house, most likely it is because it was a house nobody else wanted.  You will have to give a good deal when it is your time to sell.
  8. Crazy realtors have the craziest clients.  You can often tell a lot about a buyer by who their realtor is.
  9. The more complicated the deal is, the more likely it is to fall apart.
  10. The longer the time between contract acceptance and the closing date, the more likely it is to fall apart and not close at all.

What’s the market like right now?

by John Rice

I had an appointment to show a house this evening after my client got off work.

The listing hit the market at 7:38 this morning.  By the time the buyer and I worked out a time, the house already had multiple offers on it.  By 1:PM, the house sold.

I’ve got an out of town client who has been driving down from Ohio whenever a really good house comes on the market.  We had an appointment to see a house the first day on the market.  When my people had just crossed the state line into Kentucky, I got word that there were multiple offers and the listing agent wanted to present all the offers at the exact same time as my appointment to show it.  My people turned around and went home.

I had another client make a contingency offer on a house they loved.  The seller accepted it with a 48 hour kickout clause.  A couple days later, the house had a non-contingent offer.  Fortunately my people were in a spot to remove their contingency and purchase the house without first having to sell their old one.  This house is in a small rural community, not exactly where you expect houses to sell fast.

Meanwhile, every night before I go to bed, I catch up on news from an app on my phone.  Many articles say the market is slowing down.  They usually quote some statistic about the declining number of sales.  The reason there is a declining number of sales is because it is so hard for a buyer to actually get a house these days.  Last week I blogged about a house that had 14 offers.  Only one person will get the house.  That means there are 13 buyers out there waiting on a house.  Does that sound like a slowing market?

Unless sellers get in the game this spring, we are shaping up for another crazy year.  When 14 people want a house and every house goes in multiple offers, we will see prices go up.