lexington ky real estate

Fall Market Blunder

by John Rice

It’s that time of year again.  The time when sellers make their biggest mistake.

Many people think fall and winter are bad times to sell.  Truth is there is never a bad time to sell.  If you have a good house that is priced right, it is ALWAYS a good market for you.  Sell it whenever you want.  You might even get more in the fall/winter.  There are two sides to the supply and demand equation.  Yeah, there are more buyers out in the spring and summer, but there are also fewer good listings in the fall and winter.

Let’s say you have a house that hasn’t sold this past summer.  Your instinct is to take it off the market.  But guess what?  If nobody knows your house is for sale, then there is a 0% chance of selling. Then let’s say you wait until spring to put it back on the market.  Well, you are setting yourself up for failure all over again because you will have to compete with better listings.

Without a doubt, fall/winter is the BEST time to sell a house that did not sell earlier in the year.  I preach this to sellers all the time……few ever believe me.  Whenever I have a listing that is hard to sell for whatever reason (steep driveway, bad lot, poor condition, awkward floor plan, etc) it always sells in the fall/winter.  It is because there are so fewer choices for buyers that your listing looks better.  It’s like that last piece of pizza.  The one that only had one pepperoni on it and didn’t have much cheese.  Once all the better pieces have been taken, you eat that one because you don’t have another choice.

I’ve had two listings that were hard to sell this year.  One was an amazing house whose only flaw was a sloping lot.  The other was a great house too.  On a golf course with a view of a pond.  The problem there was that the HOA dues were nearly $1500 a year.  If you didn’t plan on golfing, there were similar houses for similar prices in similar neighborhoods that didn’t have those HOA dues.

The high HOA seller took their house off the market and wants to try again next spring.

The amazing house with the sloping lot just sold.  While it was an amazing house, it was always the bridesmaid and never the bride as long as there were other amazing houses with flat lots.  Once the market exhausted it’s supply of amazing houses with flat lots, this one rose to the top.

So, if you are thinking of selling, or you have been trying to sell, now really is a good time!

Kitchens/baths and how NOT to over-improve

by John Rice

Kitchens and master baths.  There is a lot of confusion about them.  Watch HGTV and you’d think that is all home buyers care about.  Since I don’t want you taking your advice from people who don’t sell houses, here are some things I tell people:

  1. While kitchens and master baths ARE very important, the whole house must be attractive.  All too often I see sellers who blew the budget on a kitchen renovation and left the hall baths and other rooms the same.  That is polarizing.  Plus, the new stuff just makes the old stuff look worse.  If you have $50k to drop on your house, spread the love all over the house.
  2. Watch out for over-improving.  It is soooo easy to get carried away.  You’re like “Everybody has granite.  I want marble.  Well the Carrera Marble is just a little more and I love the veining.”  You only have to be a little better than all the other houses in your price range.  If you’ve got a $150k house, no $150k buyer is expecting higher end updates.
  3. Some things just don’t give you a good return on your investment.  A massive deck that cost $10k to build might only get you an extra $3k compared to other houses with normal sized decks.  A $7k roof really isn’t worth any more than a roof that is less than 10 years old and doesn’t leak.  A new water heater has no value over an existing one unless the existing one is just super old.  Buyers don’t like to reimburse sellers for maintenance.  If it isn’t exciting, then it has no value.  It is easier to sell a house with bad windows and granite counter tops than it is to sell a house with argon filled, Low-E triple pane windows and a green laminate counter top.
  4. THE cheapest thing you can do to help your house sell is fresh paint and carpet/flooring.  Think about it, flooring and paint is all you see in most rooms.  Even an ugly kitchen or master bath can get a nice facelift with just new flooring and paint.

All this reminds me of several houses I have been in over the years.  The best (or worst) one was a house behind where I use to live.  A realtor was flipping it.  This is in a 1970s neighborhood where most houses still had everything original.  He came in and did an amazing kitchen and master bath.  He also left the paneling in the downstairs family room.  It was a polarizing house.  You loved some of it and hated some of it.  It didn’t sell.

My wife and I looked at a house in our current neighborhood.  It had an amazing deck and high end kitchen cabinets….the kind you see in a magazine.  We tried to like it, but the 99 cent laminate floors in the kitchen and the paneling downstairs turned us away.  Those sellers must have run out of money when renovating the kitchen.  I’ve never seen such cheap. rental grade laminate floors with such nice cabinets.

So when you are thinking about resale, look around and see what is the norm in your neighborhood and price range.  Definitely don’t cheap out, but also don’t go overboard.

Neighborhoods with good design

by John Rice

Some people just want a house.  Some people want a house and a neighborhood.  I don’t mean location when I say neighborhood.  That has more to do with proximity to features.  Neighborhood is a vibe thing.  A feeling.  Has to do with trees, the layout of the streets, etc.  Think curvy streets and roads with landscaped medians.  Some good examples are Hartland Parkway in Hartland, or Slashes in Ashland Park.

It is no surprise that neighborhoods with a good vibe are more desirable than neighborhoods that don’t.  That is one reason the exact same house is worth more in a neighborhood like Chilesburg than it is in Willow Bend or Masterson.

I am more of vibe person.  I really like neighborhoods that have some pretty features to see as you walk or drive through them.  An element of design.  So, here are a few that I can think of off the top of my head and why I like them:

  1.  Hartland is probably the best thought out neighborhood in Lexington since Chevy Chase and Ashland Park.  It has a landscaped median running through the whole neighborhood.  All of the cul-de-sacs have landscaped islands in the middle.
  2. Chilesburg-Since it has so many creeks running into the reservoirs in Jacobson Park, the developer didn’t have much of a choice but to work around them.  There are several ponds in the neighborhood, a walking trail with plank farm fencing around it, and some wooded greenspace areas such as the best one on Willman Way.
  3. Greenbrier-There is just something about seeing so much green as you drive through it.  Then you pass the clubhouse and see the golf course.
  4. The Woods-I really like the elevation changes and meandering road that runs through the whole neighborhood.  It is now old enough to have some amazing trees.  You feel like you have left the heart of the city and are in a secret, private place.  Lakewood is a lot like that too because Lakewood use to be on the edge of town.
  5. Chevy Chase and Ashland Park-no explanation needed.

Those are my favorites.  I don’t think we will see anything like these neighborhoods in Lexington again.  There just isn’t the space left.  Other than a few areas in town, we are down to infill projects.  Those often don’t have the space to do much more than clear the land and lay out the neighborhood in a way that maximizes the number of lots.

How to WIN in multiple offers

by John Rice

Had a client who wanted to see a house this weekend.  Called the listing agent.  The place already had 3 offers on it.  That is happening more and more these days.  So much so that I thought this might be a good time to talk about how to WIN in multiple offers.

Most people think in terms of outbidding somebody.  Sure, more money is always nice, but when there are two offers that are very close in the offer amount, I normally see a seller look to secondary things.  If Buyer A and Buyer B are $1000 apart, most sellers start asking things like:

  • “How solid is their financing?”
  • “When do they want to close?”
  • “How much of a down payment do they have?”

The seller then picks whichever buyer seems most likely to get this deal to the closing table.

What are some things you can do to make your offer more appealing in this situation?

  • Inspect the house, but let the sellers know you will not be asking for any repairs.  ALL sellers hate doing repairs.  They are too busy packing to deal with it.  Most of the time, a seller just does $500-1000 worth of repairs anyway, and they usually don’t care much about how well the job was done.  It is just something they want to cross off their to-do list.  Just do those yourself and brag to your friends how you beat the other buyers and got the house.  IF the house is a hot mess, you walk away from the deal after the inspection just like you would have done anyway.
  • Find out when the sellers ideal closing date would be.  If possible, give them the time that is best for them.   Sellers are under their own stress from moving and packing.  Making it easier on them makes you more attractive to them.
  • Let’s face it.  If you are in multiple offers and really want the house, you are already going to your max offer…may as well add some personal stuff in a letter to let the seller know how much you like the house.  Sellers usually love their house and want to see it go to somebody that they think will love it too.  In multiple offers, you have no room for negotiation so I see nothing wrong with showing your cards as long as it benefits you.
  • And some stuff that seems obvious:  Don’t ask for personal items like the seller’s grill or patio furniture.  Don’t ask for things that were not listed as coming with the house.  Don’t try to pressure them to respond quickly because in multiple offers, it is their world and you are just living in it.

This is soooooo different than it was several years ago when I was blogging about how to squeeze the desperate seller out of every last penny.  Times do change.  Sometimes you are the bug and sometimes you are the windshield.  That’s why it is always important to buy a house that will be desirable in both a good and bad market.

Time is the enemy of Location

by John Rice

Location sure is a funny thing.

I showed a property in Gardenside this week.  It was on the street behind the shopping center on Alexandria Drive.  I was thinking, that when the house was new, it was probably a great bonus to be so close to one of the premier shopping centers in Lexington.  That was in the 50’s and 60’s.  Now, being so close to that shopping center is more of a negative than a positive.  It use to have businesses like Dawahare’s Department Store and Lexitalia Restaurant.  Now it has a strip club.

My family moved to Kenwick in the mid 80s.  There was a super neat house on North Hanover that we loved.  We didn’t buy it because it was just a few houses down from all the scuzzy commercial sites on National Avenue……which is now a trendy spot with cool restaurants and businesses.

Part of the whole “Location Location Location” mantra is what desirable commercial areas are close.  Schools are another big one too, but that is another post.  Can you imagine what would happen to Townley Park if that shopping center in the middle of it was half vacant, and the rest were the same businesses you see in every failing shopping center?  Nobody would want to live there.  On the flip side, look at the NoLi District on the north end of downtown.  Al’s Bar gets discovered by hipsters, then we get a lot of other cool businesses like North Lime Coffee & Donut and suddenly what use to be a scary part of town is now desirable.  I just sold a house on Rand Avenue.  Just a few years ago NOBDODY wanted to live on Rand Avenue.

It is kind of sad to see some locations lose their luster, but seeing other parts of town be transformed makes up for it.

Location is never static.  Time usually makes it better or worse.