John Rice

My own “First Time Buyer” experience

by John Rice

Back in the late 90s, we didn’t have zillow and few people had the internet.  Searching for a home was about driving around neighborhoods calling the number on the sign, or getting a Sunday newspaper to see which houses were open that day.

I was working with a realtor, but I found a for sale by owner and never thought to call her first.  I was in the car and called the number from my 4 pound cell phone that was 2 inches thick.  I could see the seller get up to answer his landline phone.  Next thing I knew, I had bought a house.

Like a lot of people, I never thought of all the time the realtor had spent with me.  I also never realized how the sum of all the little decisions that she had input on had lead me to THIS house.  I still feel bad about that.

However, I wish she had been involved in the sale.  This was looooong before I became The LEXpert.  I thought “How hard can this be?”  While none of real estate is what I call hard, there is a lot that experience can do to make it a smoother, better process.  I’ve loaded boxes at UPS in the middle of the night.  That was hard.

The seller and I kind of just made up a contract with the help of my mom.  I wish I still had a copy, because I doubt it covered things like if all the appliances stayed, when the seller would move out, what happens if things get sideways and the seller and I need to break up.

I did have a home inspection.  Kind of.  I was a broke twenty-something so a friend of my mom’s did it.  The roof was originally wood shakes with two layers of asphalt shingles over them.  It is a house that today, I would tell my clients to run from.  While we were there, my mom looks at the house two doors down and asks the seller “Is that the house where the shooting was last week?”  The seller told us that that guy only shoots at people he knows.  This is why I keep up with crime and tell people to look at the crime map online.

I had no idea that it was typical to negotiate with the seller to do repairs.  I just thought since I wanted the house still, I would have to deal with any issues.

The seller moving out didn’t go that smooth.  They kind of never fully moved out.  I kept calling him to come get his stuff.  He eventually brought a trailer over to clear out a shed.  As he was loading all the junk, he would occasionally ask if I wanted any of it.  He had several cast iron weights from old windows.  He said they would make great anchors for my boat.  I joyfully told him I did not have a boat, so he could keep them.  This is why I tell clients not to close until the seller is out.  Sometimes I have to be the bad guy and tell the listing agent or seller that they aren’t done moving out and no, they cannot come back later…..we close AFTER we see the place empty.  I’ve had to do that twice this summer.

While this house was a total dump, my wife and I loved it.  We brought both of our boys back from the hospital to this house.   Lots of great memories were made there.  We have since moved 3 times and life has taken me in a direction I always hoped it would.  I’ve been a realtor now for almost 12 years.  The experience of buying this house has helped ALL of my clients because it was one step towards becoming The LEXpert.

3 ways to win in multiple offers

by John Rice

Almost all my listings this year have sold in multiple offers.  That was something to brag about several years ago, but now it is pretty much the norm if the house is priced right from the beginning.

One listing had 7 offers the first day on the market.  Everybody wants the same house these days.

Since only one buyer can get the house, that means that there are others buyers who lost out.  It’s a tough time to be a buyer.

Since my work is almost always split 50-50 between sellers and buyers, want to know how to get the house you want and send all those other buyers off to fight over another one?

  1.  To begin with, go in strong.  There is a difference between overpaying for a house and offering 100% of what it is worth.  An agent should look at the comparable sales and know the value. You are going to pay top dollar for any decent property right now, so write an offer that the seller is likely to just accept.  The more time you waste on negotiating gives other buyers a chance to take the house from you.  Your battle is with the other buyers, not the sellers.  On my listing with 7 offers, we didn’t even consider any of them that had a contingency to sell or those that came in less than full price.  When you have so many good choices, a buyer can often be rejected over something minor.  When I have the buyer, I like to ask the listing agent how they want to receive the offer.  Most of us use an electronic signature program, but some agents don’t.  I mainly ask to show that I am going to be easy to work with.  Keep in mind it is like speed dating for the listing agent-they only have so much time to deal with each offer and the buyer’s agent.  I want to make it as easy as possible for them to pick my client.
  2. Don’t do anything wonky.  If the seller didn’t offer to leave their curtains, then don’t ask for them.  Don’t ask for early possession.  Don’t ask for more time than is normal for the inspections to take place.  This market is not one where you test the seller….unless you want to remain homeless.  A good, clean, simple offer is what all listing agents are wanting.
  3. Think like a seller.  Most sellers these days expect to get around full price for their houses, some even get a little more.  Believe it or not, few sellers actually care about the absolute highest offer.  Usually, the highest offers are really close, so what becomes important are the secondary terms.  The seller is concerned about your financing, so have a preapproval letter from a reputable lender.  They care about how the inspection goes, so schedule it as soon as possible.  The less time they have to worry about that, the better you look.  They care about the closing date, so be as flexible as possible.  I always ask the listing agent when the seller would like to close.  A lot of the time the seller has another closing to coordinate.

You know, I’ve been doing this for 11 years.  It is still awkward for me to write this advice.  It wasn’t too many years ago I was telling sellers how to attract buyers in a tough buyer’s market.  I was telling buyers how to bring a seller to their knees and beg you to buy their house for probably less than they paid for it.  Times change though, and this is where we are now.  And this is what you’ve got to do to get a house today.

 

Looking at the big picture

by John Rice

Just for fun, I thought I would go through my old blog drafts that I never published for some reason.  I found this one below.  I got a good laugh out of this because I never bought an SUV and I wrote it so long ago that my kids both have their own cars now…..and my dad is retired!

It still makes a good point that is true today:  You’ve got to look at the whole picture when buying a house and any house, unless brand new, will need some of your hard earned money spent on it.

“So, I am thinking about getting a bigger vehicle, maybe an SUV to haul kids to school.  Not too excited about it, so I have a lot of reservations, and find myself trying to make comparisons based more on my perceptions rather than reality.  Then it dawns on me that I am going through the exact same thing that home buyers deal with after they get a home inspection.

See, I am sitting around thinking things like how the tires on my current car have only about 25,000 miles on them, that my brakes are pretty new, and that I just did a major service.  I feel like I am throwing that money away if I were to trade.  Then I realize that I am only looking at half of the whole picture.  If I buy an SUV that still has plenty of life left on the tires and brakes, then I am coming out the same.  Also, since the ones I am looking at all seem to have just over 30,000 miles, they would have just had a major service too.

I think that most buyers deal with something like this after they get their home inspection done.  They start adding the costs of all the problems.  That is natural.  They also usually start to compare the house to other ones they have looked at.  So, at this point I like to try to get them to look at the whole picture like I am trying to do with my car situation.  Lets say House A needs $2000 worth of work on stuff like the roof or plumbing.  House B needs none of those things fixed, so House B must be the better one to go with, right?  Well, House B needs fresh paint, and it will also cost $2000.   When I put it this way, I am sure you see that $2000 is still $2000 no matter how you spend it. (Now I know I have over simplified here, and that most buyers have a chance to ask the seller to make repairs, but this was just the easiest way to make a point.)

My dad is the master of looking at the whole picture.  Seems like most of his friends and family always come to him seeking advice.  The funny thing is that I don’t think he ever really gives advice.  He seems to lead you to the obvious conclusion by asking a series of questions.  He’s like the compassion of Mother Teresa and the wisdom of Yoda wrapped up in a motorcycling, pet loving lawyer.

So, by looking at the whole picture about my car situation, I can now go forward to the next step, which is to decide if it is really something I want to do.  When you get to this point of the home buying process, keep in mind that just about any house is going to need money spent on it somewhere, then decide what you can live with and what you can’t.

What makes a good location?

by John Rice

This week, I’ve been listening to several different buyers tell me what part of town they want to be in.  It has had me thinking about the whole “Location Location Location” thing.  I think most of the time, we as people like to reduce things down to a yes/no, for/against, good/bad scenario……Like this is a good location and this is a bad one.  I just don’t think it is that simple and here is why.

Just this week I’ve had two people tell me they really want to be in a location that many people avoid.  This is a high density area, so the buyers are looking for townhouses and condos.  See, the people that think this is an area to be avoided don’t want to be in that kind of density and are single family home types.  Both buyers mentioned that they had lived in that area before and liked how easy it was to get any where in town and that they enjoyed the 30+ acre park in the middle of the area.  When my wife and I were newlyweds, we lived in this area too…..we thought the same thing back then.

I guess my point in all this is that what makes a good location is really a subjective thing that varies greatly.  Age, income, property type, etc, all greatly have an impact on what makes a location appealing.  There is one common thing that all people tell me they want in a location:  Proximity to work, businesses they shop at, restaurants they eat at, and things like parks/sports/ or places they frequently go.  People with kids like to be in a good performing school district too.

Lexington is big enough to support all these different opinions about what makes a location good.  It is all in the eye of the buyer, and if enough of them think it is a good location, then it must be.

When do you know you’ve found the right house?

by John Rice

“We pretty much know as soon as we walk in.”

I was covering for an agent that was on vacation this week.  This is what one of her buyers said to me when I commented that they didn’t spend much time in the first house I showed them.  I often hear this from my own buyers.

You know what this means?

A lot of people base their decision on how they feel.

I’ve always said you could find a house with all of the items on a buyer’s must have list, but they still might not buy it.

This is why that first impression when a buyer walks through the door is so important.  If your house isn’t perfect, you are better to have the the rooms a buyer sees in the first few minutes looking better than the last few rooms they see. If a buyer likes what they see at the beginning, they are more forgiving of little things they don’t like later.  It doesn’t work in reverse.

I recently sold a house in one of my favorite neighborhoods.  It sold for about $3-4k more than it should have.  Sure, the market is hot, and we did get multiple offers…..but I think we got TOP TOP dollar for it because the seller’s decor was so attractive.   They had the right colors, the right furniture and everything else just right.  The house felt good.

And I bet the two buyers who made offers the first day on the market both  knew they wanted it as soon as they walked in.