lexington

The happiest 2 days of homeownership

by John Rice

Two of the best days of owning a house are these:

1.  The day I call you to tell you that the seller has accepted your offer.

2.  The day I call you to tell you that we just got a really good offer.

When you hire me to be your realtor, I am thinking about both days.  You may not be, and that is okay.  That is what I am here to do for you.

We are currently in a market where everything sells.  You can have two identical houses across the street from each other.  Both exactly the same.  One backs to green space.  The other backs to the loading dock of a strip mall.  Both sell fast and for the same price.  Why?  Because there are three buyers for those two properties.  It was like this too back in the early 2000s.

But what do you think will happen when the market slows down.  Maybe there is only one buyer and both of those identical houses are for sale again?

The seller backing to the green space sells their house for top dollar in record time because even in a bad market, the best houses still sell.

The seller backing to the loading dock watches the SOLD sign go up across the street.  Then they watch the new neighbors move in.  Their house is still on the market, even after reducing the price several times.  They really need to sell because one of them starts their new out of state job next month and they can’t afford two mortgages.   Then they wake up listening to an idling diesel truck at that loading dock.  They remember how lucky they felt to get their house.  How they beat out that other buyer in multiple offers by bidding as much as the green space house cost.

It is only now they realize that they made a bad decision all those years ago.  That is how real estate works.  You never know whether you made a mistake or not until you go to sell your house.

When you look at houses with me, I will always point out the negatives so you know what you are getting into.  I’ve been doing this for a long time.  I know what things buyers like and don’t like.  I don’t want anything to be a surprise to you when you go to sell your home.  What you do with that info is totally up to you, but I will always let you know because one day, you will be the seller and not the buyer.

 

Imagine if Mr. Roarke was a realtor

by John Rice

fantasy-island

A friend and I were talking this morning about what we would do with our time if we were independently wealthy.

I’m showing my Gen X roots here, but I said that Mr. Roarke from Fantasy Island had the best job ever.  My decade younger friend who is still a Gen Xer but considers himself to be a millennial had not seen the show.

I described it has this:  People come to Fantasy Island to live out one of their fantasies.  Mr.  Roarke is the gracious host who makes those dreams happen.  Sometimes those dreams can bring harm to people and he has to intervene to protect them.  He is always working even when the island guests don’t see him.  He predicts what is about to happen and always warns his guests of the outcome, so they have time to adjust their decisions.

My friend replies with “Isn’t that a lot like being a realtor?”

Hahahaha.  I guess it really is.

This has given me some ideas for my 2018 Christmas Card.

The first house you buy is the most important one ever

by John Rice

First time buyers.  I’ve been working with a few of them lately.

Most first time buyers are thinking about finding a place they like.

I like to show them that their first house is so much more than that.

Every house you are ever going to own is impacted by that first one.

It is really the most important house you are ever going to purchase.

Why?

Because eventually you will sell that first house.  How well of an investment it turned out to be will impact how much money you have to put down on your next house.  It just keeps going until you are middle aged and in your forever home.  You know, the one you sell to help fund your retirement when you downsize to a cheaper home.

My dad called this compounding.  He was mainly referring to interest when he was teaching me this stuff in middle school, but it applies to real estate too.

It really reminds me more of bowling though.  To get a strike, you don’t knock down every pin with the ball.  You just hit one of them right and the pins begin to knock down the remaining pins.

What I want in 2018

by John Rice

I am about 8 weeks away from celebrating my 13th year in real estate.

When I got into this, a lot of agents thought I was crazy and that I would never make it in this industry.  Why?  I didn’t want to do all the tasks that we were told we had to do to attract business.  I didn’t want to mail out basketball schedules, calendars, packets of seed with a card that said “Help me grow my business.”  I wanted to be out and about doing things that kept me on top of the market.  Things that would benefit my clients.  I got into real estate because I love the market and houses, not because I loved mailing people stuff.

Other agents also thought I was crazy because I wore shorts and sandals all the time.  Ok, they may have been right about that one.

I was told that if I didn’t do all those things, people wouldn’t remember me.  I said that if somebody used me as their agent and forgot about me, I didn’t deserve to be remembered.

I was excited to view every house I could because the more houses I was in, the better I knew the market and neighborhoods.

As the market went sour, I gained momentum.  The agents who use to laugh at me began asking me what I was doing to get so much work.

It grew and grew until it peaked in 2014.  I was in the top 1.5% of all the agents in my area.  2015, 2016 and 2017 were all good years.  I did less work, but I enjoyed it much more and  had more time to focus on each client.

I’ve pretty much achieved all the goals I made 13 years ago.  It’s been a wild and fun ride.  Sort of like surfing and riding a bucking bronco at the same time.  What a rush.

So what do I want out of 2018?  I mean me personally…..sure my goal has always been to be the best realtor I can for my clients and always will be.  The fact that almost all my work is repeat clients and referrals from past clients shows that is happening.  But what do I want to say to myself on January 1st in 2019?

I want to look back and say “Man, that was fun.”

That is it.  No setting goals for how many houses I want to sell.  No setting goals for how much money I want to make.  No comparing myself to other agents.  I’m past all that.  I just want to be the best version of me I can so I can be the best realtor I can be…..and I want to enjoy every single day.

 

Reading the real estate market in real time

by John Rice

One day this summer, I looked out across my backyard.  I do that every day.  All the time.  I love my backyard.

This time I noticed one of the pine trees in the corner had a bunch of brown needles on it.

I immediately reached out to my buddy Phil who knows just about everything there is to know about every plant there is.

He told me that usually once you see the needles turn brown, the tree is already dead.

I knew he knew what he was talking about, but just to be sure, I waited to cut it down until every needle had turned brown, fallen to the ground, and the branches snapped as crisply as the first Saltine cracker in the box.

That experience reminds me of the real estate market.  You never know exactly where the market is at the moment.  You just see the signs after the change occurred.

I got into real estate during the spring of 2005.  My first listing was in May.  I was so excited.  Houses had been selling for top dollar immediately.  I wanted to be a part of that.  The house took several months to sell.  I remember thinking, even as a newbie, that the house was priced right, had a good location, and statistically should have sold already.

Nobody knew it at that time, but the market was slowing down and was about to become the worst market in recent history.

After weathering that storm, I got to witness another change.  Early in 2013.  It felt like that first decent day in spring.  The one where you notice the sun stays up a little longer, you didn’t feel as cold as the day before.  Like that scene in Bambie where all the animals come out for the first time.

I was working with a really cool buyer named John.  He traded cars as often as I do.  He wanted the south end of town in an affordable price range.  We made a few offers on houses and lost them.  The offers we made were spot on within the recent comparable sales.  After the 3rd time, I told him that I felt like the market was improving, so all the sale prices for the recent comparable sales were going to be lower than what the value would be now.  We would have to made an adjustment.  Sure enough, as the ones we had made offers on closed, the prices were about 2% higher than the comps I had been using.  Meanwhile,  we had a backup offer on a foreclosure that he ended up getting.  He put very little money in that house and less than 6 months later we sold it for $41k more than he had paid for it.  By the time he sold it, everybody knew the market had changed.  The market had changed so much that even after the house sold, people were walking up and looking in the windows while he was home.  I told him to pull my for sale sign out of the yard and keep it in the garage until we closed.

So, where are we right now?  After such a hot hot hot market earlier this year, the market is really slow.  I don’t think it is in trouble or anything.  I just suspect that everybody who was going to buy this year did so in the first 10 months.  It has been a frustrating year for buyers.  I think a lot of them have given up on buying this year and are waiting until spring.  Sellers aren’t too happy right now either.  They have watched all their neighbors get multiple offers the first day on the market, but now they aren’t seeing the same thing happen with their house.

So, right now is a great time to get out and buy a house if you can find one you like.  We still don’t have a lot of choices, but you’re going to have more of a chance to negotiate and probably be the only offer the seller has on the table.  Historically, buyers come out of hibernation late spring and sellers start putting their houses on the market about a month later.  So you’ve only got about 8 weeks to enjoy this slow period.

The more of these changes I live through, the easier it becomes to notice them more quickly.

And now the same holds true for the trees in my backyard.