how to pick a realtor

Do you really need a Buyer’s Agent?

by John Rice

YES!! YES!! YES!!

I’m seeing a lot in the news that the future of real estate might do without the role of a Buyer’s Agent.

That sort of scares me. Not because half of my work is with buyers. It scares me because buyers need an agent, almost more than sellers need a listing agent.

Having cut my teeth in the worst market in all of real estate history, I can tell you first hand that a buyer doesn’t know if they have made a mistake in picking a house, or overpaid, until they sell their home. It has been a good market for so long that I think most people think all there is to buying a house is picking the one they like…….as if it is as simple as choosing which product to buy on Amazon. One day, every buyer will become a seller. Your home may be a noose around your neck and you don’t even know it yet.

This was a common scenario for me when I was called to list a house between 2008 and 2011:

Seller calls me to list. They say they paid full price in multiple offers to get their house in 2003-2005. They assumed it would always be that way when they needed to sell. Then I have to tell them their house is worth less than they paid and they really should have called me before they bought the place. I could have saved them not only money, but a lot of time, frustration and headache.

I frequently saw where a spouse was transferred here. Their home back wherever they were from was on the market. The spouse was living in a studio apartment here until their house back home sold. The family was separated. Nobody was happy. Trust me, you don’t want to be this buyer.

This is how a Seller’s Market works: EVERYTHING sells for top dollar and fast since there aren’t many options. This is how a Buyer’s Market works: ONLY the choice, Grade A homes in Grade A neighborhoods sell fast and for top dollar. Everything else goes for less. Have a house in a less desirable school district? Have a house with an awkward floor plan? Have a house with a terrible lot (Think steep driveway, no privacy, backing to a busy road, etc)? Good luck selling in a Buyer’s Market because every buyer can get that Grade A house. You need to have a big price difference between those Grade A homes and your home to entice a buyer.

Aaaaaaaand you need a Buyer’s Agent who can tell you these things BEFORE you buy a house.

When is the best time to sell your house?

by John Rice

I’m seeing a lot of buzz lately saying right around now is the best time of year to sell your house. Many realtors post these articles. I can’t blame them. We are always saying “Now” is a good time to do anything, lol.

I am in now way doubting the statistics. Numbers don’t like. The problem though is knowing what they mean.

Fact: There are more buyers out in the market in the spring. It’s always been this way so I don’t see the newsworthiness of it.

Fact: The likelihood of your house selling for top dollar is less dependent on when you list than it is on the condition of your house and how it fits in the market…..meaning, how do buyers rank your house compared to what is currently available to them in terms of condition, price, floor plan, lot and location.

I have sold plenty of houses in multiple offers the very first day on the market back in 2008-2010. That was when it was an extreme Buyer’s Market.

It is a simple formula really.

You do some prep work. Fix anything that is going to keep a buyer from saying yes to your house. You want them to leave their showing with a positive emotional response. If there is work to be done on your house, they leave with a logical response. They are thinking about what they need to do to your house and how much it is going to cost. If they even make an offer, it will be less since they are deducting the cost of those repairs. So, leave them with nothing to do but fall in love.

Price it right. I don’t mean use what zillow, a recent appraisal or an AVM says the house is worth. Do some real research. See what has recently sold in your neighborhood. See what is pending in your neighborhood. Pending sales, while you don’t know the actually sale price until it closes, can tell you what buyers are doing in real time.

The last step is the most important one. You see what other choices a buyer has maybe 15% below and 15% higher than the value of your house. Then you price your house so it is clearly one of their top choices. Why? Because after 19 years in this business, the one biggest thing I have learned is that every buyer wants the best house they can get for their budget. As long as you have one of those houses, it will sell quickly for top dollar in any market and in any time of the year.

Are Investors ruining the market?

by John Rice

Are real estate investors who buy single family homes ruining the market for other buyers and driving up rent?

Unpopular opinion, but I say no.

Sure, many of these investors might make terrible landlords. None of us like the robocalls we get asking to sell our houses to them…..but they are not ruining the market and driving up rent. I am by no means defending them or their actions. I am just saying that they are not the root of the problem.

I spent a couple weeks in Florida recently where I read an article saying how large scale investors were ruining the market. They were outbidding other buyers. They were reducing the number of homes available for owner-occupant buyers. They were raising the rent and making housing unaffordable.

This type of logic drives me crazy. Let me pick apart a few things here:

For every house for sale, that means there is both a Buyer and a Seller. If one Buyer is outbidding another, that means there are not enough houses for sale. This is a Supply and Demand issue. Also, the never mentioned seller who is about to become a buyer is happy with the terms they got.

Are they reducing the number of homes for sale? Yes, but isn’t the same true for anybody who buys an available home? Again, the issue is the imbalance between Supply and Demand.

Are they raising rent and making housing unaffordable? This one always amazes me. We have all just survived a crazy period of inflation where the cost of everything went up. Somehow most people single out housing, as if that shouldn’t have also been affected by inflation. Like we are shocked and appalled that housing costs, whether renting or buying, went crazy at the same time when everything else did too?

What this article seems to forget is the tenants. Where would they be if all the sudden there were no properties to rent? It isn’t like investors are buying these houses and keeping them empty. There is just as much demand for single family rental homes as there are for people wanting to buy them and live in them. If rent exceeds market demand, houses will sit vacant and investors will have to lower the rent to get a tenant. Again, Supply and Demand.

Are you seeing a theme here? Supply and Demand. There is a short supply of houses for sale for investors and owner-occupants. There is a short supply of houses for rent for those who cannot afford to buy or choose not to. Having more demand than supply is the problem here.

Some say that the issue is sellers just aren’t selling these days. Okay, true. But let’s think this through. We have far more people wanting to buy AND to rent houses. If all the sudden everybody decided to move, we would still have more people than houses because everybody living in their current house would also need another house. What’s that? Supply and Demand.

Building more homes is the only real solution to this. It is what the writers of the article I read should be encouraging if they honestly feel like everyone should be able to afford to buy or rent a home. The demand is there. The supply is the issue. Until there is a better balance, prices for buyers and tenants will not change.

What’s 2024 Going to be Like?

by John Rice

I do these type of posts every year. Not to brag, but I am usually spot on. Why is that? I think it is because I don’t concern myself with short term knee jerk reactions to market fluxuation like the media does. I don’t view “Demand” like most people. I think there is always demand because everybody loves real estate and everybody ultimately wants to own their home. How many people are out there buying at this exact moment can vary, but there is always demand.

I think 2024 will be a better year for buyers and a still great year for sellers. We have all been on a roller coaster the past few years:

2020-We thought we were all going to catch COVID and die, or didn’t think it existed at all. We were too busy fighting over everything early on to bother with buying or selling houses….until later in the year when rates got so low.

2021-We partied like it was 1999. We chatted daily about how much our crypto went up. We got a better house, an airbnb or refinanced what we already had like crazy.

2022-We continued to party like it was 1999 but we knew the ball was about to drop. Just like inflation was eroding our purchasing power, we could no longer afford the cost to maintain our enthusiasm.

2023-Was like “Will there be a recession?”, “Are we IN a recession?” and “These rates are crazy high right now!” It felt like when somebody thinks they saw a shark and everybody jumps out of the water. Was there a shark? Who knows, but nobody wants to be the first one to get back in the water.

2024 is looking like the economy has stabilized, rates are going to drop to a level that is historically average, and all those people who are on the fence will come out….just like the opening scene of Bambi. Affordability will remain an issue. Prices will at least stay stable. We will read later in the year that rent prices are dropping but that data is skewed. All the new giant apartment complexes will be competing for the same tenants. Prices for apartments will go down for sure. The single family rental market will remain strong since there are not enough single family houses for anybody in any market.

Ultimately, I think this will be the most normal market we have seen since Covid.

And I welcome it. Bring on 2024!

Time for the Santa Suit, Shorts & Sandals

by John Rice

I forget how many years it’s been since I accidentally started this tradition.

I had been doing Christmas cards for a few years. I really enjoyed them. I remember going to stores and trying to find funny ones.

Being known as the realtor that wore shorts and sandals year round had sort of become my trademark. I thought it would be fun to dress up as Santa since I was a pretty round shaped guy back then. Of course I had to have the shorts and sandals.

That first year it was just a picture of me dressed as such with a studio background. Everybody LOVED it.

I remember renting the costume from a place off of Southland Drive. When I picked it up, the store was very messy inside and smelled like a cat box. I was so happy to get out of there. My friend Shaun took the picture at his studio. I did not expect the costume to also smell like a cat box. Once we took the picture and I returned the costume, I rushed home to take a shower. I also smelled like a cat box.

Since the first year was such a success, I thought we would expand the concept a little. My friend Shaun and I went out in the country looking for just the right spot. The concept was me as Santa again, but this time I would be sitting on the back of the blue Mazda Miata I had back then. It had antlers and a nose on it just like Rudolph the Red Nosed Reindeer.

While we had the car parked and Shaun was getting his gear ready, an older man in a truck stopped to ask if we needed help. He though the car was broken down. He seems totally unfazed that I was wearing a Santa Suit, shorts and sandals and that my car looked like a reindeer. We said we were fine, thanked him, and he drove off.

After that one, my son Stuart started taking the pictures. Most were car themed after everybody loved the Miata one. Once we ran out of cool cars in the garage, we did one with my Dad’s motorcycle sidecar. My other son and dog were elves in that one.

My son Stuart was majoring in Digital Media at the time. He was really becoming a great photographer and learning a lot of skills in school. He had the idea to photoshop me into backgrounds. That’s the way we have done it ever since. Probably his most famous card was one where I was trapped in a snow globe. Ever since then, I have just told him to do whatever he wanted.

We always say we are going to start working on these sooner so we don’t have the pressure to get them done in time to hit the mailboxes. However we always wait until around the beginning of December. I usually put on the outfit, pose how he tells me to pose, then wait for the finished product.

Each year, we find it is getting harder and harder to come up with something better than the previous year. I think the one this year with the picture of Big Blue in downtown Lexington may be the peak. All I know is that I’ve only got 11 months to come up with something at least equally as good…….wait a minute, I mean my son only has 11 months to do that.

I hope everybody enjoys their Holiday!