lexington ky

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.

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.

 

Good deals in a seller’s market? (Depends on the seller)

by John Rice

The market isn’t hot enough for buyers to accept two things:

  1.  A nasty house.
  2. An over ambitious asking price.

If your house is nasty, no buyer is going to be able to imagine themselves in it.  I’m talking if it is dirty, messy, desperately needs paint or stinks.   Trust me, buyers just want to exit a house like this.  Even if you slashed the price in half, I bet most of the buyers would still say no.

I recently sold a nasty house.  It had been on the market for quite some time.  It was in a desirable neighborhood and actually priced right.  It has more updates than most in this nice neighborhood.  Problem?  It smells like dogs and has one of the nastiest bathrooms I have ever seen in a house for sale.  It was hard to get excited about the expensive tile in the remodeled bathroom when there was urine and hair all over the toilet.  Sorry to be so graphic…..I have a picture but decided not to include it, so I am holding back a little for those with weak stomachs.

My buyer is one of the rare people who can see past that and is getting a super nice house for a really fair price.  Added bonus:  It was one of the few times recently that I haven’t been in multiple offers with a buyer.  The house was so nasty that my client called me after the home inspection asking if I thought the seller was going to clean it when they moved out.  He just met with a home inspector and heard everything wrong with the house and the thing that was on his mind the most was how dirty it was.

Moving on, the next item is the overly ambitious list price.  A client bought a house for $400k that had been listed originally at $445k.  Nice house, just not a $445k house.  Maybe $410-415k based on the comps.  LOL, the way the market is going, it might be worth that now!  Anyway, it was reduced, reduced and reduced again.  By the time 170+ days had passed, it wasn’t on anybody’s radar.  Nobody cared?  Buyers today are focused on new listings.  If a house doesn’t catch their attention on Day 1, few will go back and reconsider a house.  They’d rather wait for tomorrow’s new listings.

My client actually passed on this house two times, then came back to it.  They were worried because it had not sold.  In today’s market, 6 months is an eternity of buyer’s saying “No” to a house.  Ironically, a house two doors down just sold for $405k the first day on the market.  It was 1200 square feet smaller and had a marginally more updated master bathroom.

While it is one of the hottest seller’s market ever, not all houses are selling immediately in multiple offers.  I always encourage buyers to seek out these good houses that are being held back by the sellers.  You can avoid multiple offers and get a good deal, even in a seller’s market.  My buyer with the nasty house might pay $400 to have it professionally cleaned but saved much more than that.  My buyer who made a reasonable offer on an overpriced listing didn’t have to immediately make a decision to buy it since there were no other buyer’s around.  It felt like a buyer’s market to them.

Will a Selling Bonus help sell your house faster?

by John Rice

I recently had a somebody ask me if I thought it would help their house sell faster if they offered a “Selling Bonus” to the buyer’s agent.

My answer was no.

Selling bonuses use to help back in the days when realtors were the only ones who knew what houses were for sale.  The thought was that you could entice a greedy agent to show and sell your listing because they would make more money.  Today, it is usually the buyer who tells their agent what houses they want to see since they have access to all listings (and thanks to some sites that are not up to date, they also have access to houses that WERE for sale and are no longer available….but that is another blog post.)

Know what I told this person?  To reduce their price.  If they were willing to pay more commission to an agent, why not lower the price by the same amount and offer it to the buyer?

Offering a selling bonus does one thing today:  Since the buyers have access to all listings and pick what they want to see, a seller is really just giving extra money to the agent of the buyer who would have bought the house anyway.

When I show a house that has a selling bonus, I always make a point of telling my buyer before we see it.  Should they end up buying the house, the last thing I want is for them to think it influenced my advice to them.

What The LEXpert has been thinking about

by John Rice

Here are some things that have been on The LEXpert’s mind lately:

 

  •  I am seeing more and more interest in the houses around Liberty Road and Henry Clay Blvd.  About 25 years ago I saw that once Kenwick got expensive, interest would move to the Courtney/Clayton area.  And once those prices shot up, it would keep going further down Henry Clay Blvd.  What I didn’t see back then was that Delaware would become a hip spot for businesses and restaurants.  Back then, we all thought it would remain the scuzzy industrial area it had always been.  You watch, once the National Avenue area gets filled and rents go up, you’ll see more businesses you want to frequent along Delaware and Winchester Road.   The great thing about the Henry Clay/Liberty Road area is that you are minutes to downtown, minutes to NoLi, and minutes to Hamburg.  It really is an ideal location.

 

  • Greenbrier is seeing a lot of sales.  I have seen several that sold by word of mouth lately.  A couple others sold extremely fast.  I think it mostly has to do with the new school districts.  It is no longer a nice neighborhood on the wrong part of town thanks to Hamburg.  It is also no longer a nice neighborhood with a poor performing school district.  It will attract people who want to have their kids in public school now.   That makes for a broader market.  That means more buyers for fewer houses.  That means prices go up.

 

  • The $350-500k market is strong in Lexington still, even as we get late in the year.   Sales seem to come in waves.  There might be a few slow weeks for certain parts of town and then, all the sudden, that area will have lots of sales in one week.

 

  • Century Hills is blowing my mind.  I have seen several 3 bedroom/1 bath houses without a garage sell for over $100k, some close to $110k.  It wasn’t too long ago that the nicest ones out there were $95k!  Percentage wise, that is a huge increase.  Looks like we are back to the days where under $100k doesn’t get much.

 

  • I think that the new Citation Blvd is going to be a big gain for the west side of town.  That road really ties together all the neighborhoods between Georgetown and Leestown Road so well.  It is easier to get in and out of that area too.  It nolonger feels like a bunch of random neighborhoods scattered across the west side of town.  Businesses are what the area needs.  I think values will really go up if the residents of those neighborhoods do not have to go to Hamburg or south Lexington for shopping/dinning/entertainment.  A nice big road like this might attract them.

 

This is an exciting time to be in real estate.  Things are changing so fast.  Prices are increasing in some areas, stable in others.  Tastes are shifting too.  It is a lot to keep up with…….every new business, every new road that opens changes how people feel about a location.