lexington

What working with buyers is like now

by John Rice

Working with buyers these days feels like this guy:

You beat the same bushes everyday in search of something for your people.  It is even harder if somebody needs a certain neighborhood or school district.  It is the toughest market I have ever seen for buyers.  It is harder right now to be a buyer than it was to be a seller after the market crashed.  Most houses get multiple offers.  The deciding factor often comes down to something minor like which buyer has a better closing date, or which buyer has stronger financing.  That is about all you have left to differentiate one buyer from another when all the offers are full price.  I recently got 7 offers on a listing.  The top 4 of those offers were the exact same price.  We went with the one that had a local lender I knew.  That was what got that buyer a signed contract.

 

And when you do finally have a house to show your people, this is what it feels like:

When a house that meets your buyer’s criteria hits the market, you get them in it ASAP.  If they like the house enough to make an offer, you rush to make sure you’ve got a current preapproval letter, you find out when the sellers would prefer to close, what their occupancy needs are….anything the sellers want that might help your buyers look more appealing since you know the best offers are going to be similar in price.

Being a buyer’s agent these days is equal parts boredom and excitement…..but it is all very rewarding when you do get your people a home they love.

How I grew up to become The LEXpert

by John Rice

lincoln-logs-vintage-1977-playskool-scout-set-856-original-75-pieces-free-ship-c0df4cdf82a4cd27de941b006d55a2cd

 

A little tubular box just like this one is what got me into real estate.  I remember all the times I sat in my grandparent’s family room and the thrill of pulling that plastic top off the cardboard container.  My grandfather would be sitting in his green plaid Lazy-Boy recliner watching golf or some sport on the 19 inch TV with a rabbit ear antenna.  The room was paneled.  Had a giant brick fireplace that took up most of the wall.  I would sit and built houses with these 50-60 pieces.  I played with these so much that the cardboard tube was badly frayed where the lid goes from taking it off and putting it on so many time.

 

Then I stepped up to this:

105 pieces of pure real estate pleasure.  It totally amazes me now to think how far Legos have come.  Most today are about building something and following a plan.  Back then, it was about being creative and making something that only existed in your mind.

I mainly did modern, flat roof houses because with only 105 pieces, you didn’t want to use half of them to make a sloped roof.

IMG_2960

Then I started to draw floor plans.  It was the 80s.  The dawn of the open floor plan for the masses.  There was still enough 70s left over that things like Conversation Pits, like I have in this house, were as cool as firepits and reclaimed wood are today.  My grandfather got me the drafting kit for something like my 10th or 11th birthday.  I still have the note inside that he wrote me.  I wish it had a date on it, but neither of us realized I might need it nearly 40 years later for something called a blog.

Then I got into neighborhoods.  Thinking about how one street compared to another and such.  Asking myself which house was better, which lot was better, what I liked or disliked about each.  We lived in Frankfort at the time.  I remember thinking our cul de sac was one of the better ones in the neighborhood, but I didn’t like that it sat at the bottom of the hill, and that the house behind us sat slightly higher than ours……but it was still far better than the houses closer to the East-West Connector Road with all the traffic noise.

I’d go to Florida in the summers to see my grandparents.  My entertainment was having them drive me around cool neighborhoods and going to model homes to see new houses.

People often ask me how long I have been in real estate.  I tell them I’ve had my license since 2005, but I’ve been in real estate all my life.

 

Driving this car makes me a better listing agent

by John Rice

Here is my latest ride.  It might look familiar to you because I’m standing beside a similar car in the picture on my blog, but they only look alike.  This one has a different engine, transmission and suspension.

My youngest son found it.  It was going to be a project both my boys could work on and then they sell for a little profit.  That plan changed when I drove this broken down 17-year-old car home from western Tennessee last fall.  I knew I wanted to keep it and I knew that I wanted to rescue it from becoming a parts car.  So I bought it from my boys.

I really liked the lighter blue one I use to have, but I LOVE this one.

Why?

M Roadster

Because the way it feels while driving it.

When people ask me why I like it so much, I don’t quote the weight of the car, I say it is very agile.  I don’t mention the steering ratio, I say the steering feels lightening quick.  I don’t tell people about the high flow throttle body and cold air intake, I say the engine sound is intoxicating.

I try to do the same thing when I list a house.

A home is much more than some cold list of features.

When I describe a house, I want to convey the vibe of the place.  I want people to get a feeling about what the house is like as they read my description and see my pictures.

How do I know buyers think like I do about my car?  Because I have never heard anybody describe a house they love by quoting the square footage, bathroom count or other features.  They always tell me how all those things make them feel.

Oh, and like a lot of real estate pictures, my car looks better online that it does in person.

Real estate lessons from a bird?

by John Rice

Something happened in my yard yesterday that made me think about how important location is and why buyers need somebody with experience to guide them.

A robin built a nest in one of my bushes.  I have like 50 bushes in my backyard.  This poor robin picked the one right by my backdoor.  And she built it about 2 feet off the ground.

I am sure she thought it would be great to be over there by the dryer vent on these cool spring mornings.

She worked hard building a really nice nest.  It was a great place, she thought, to lay her 3 eggs.

If this robin had asked me, I would have told her I have a dog.  I also would have told her about the neighbor’s cat named Stewart that walks down the fence several times a day.  Stewart is the reason my wife can no longer feed the birds.  Our feeder area became an all you can eat buffet for that stupid cat.

Had she asked, I would have suggested one of the taller bushes at the back of my yard, on the far side of where Stewart cuts between my house and my neighbor’s house to get home.

But there are no realtors for bird houses.

You probably see where this is going.  My dog knocked the nest out of the bush and the eggs fell to the ground.  I can’t really blame my dog for being a dog, but we were looking forward to watching this robin’s journey to motherhood.

When you are buying a house, there is a lot of stuff to process.  It is easy to focus on what you like and assume you are seeing the whole picture.  Even more so when you have to make a quick decision in a fast moving market.  I always try to make sure my clients know everything I know about a location or house.

Some things I’ve told clients:

“I know you like that this house is right across the street from the school.  Between 2:05 and 2:50, there will be 500 moms parked in idling SUVs and minvans in front of this house.  Will that bother you?”

“I know you don’t mind that this house is on a busy road.  I know you’ll have 3 teenage drivers in the next few years.  I wanted to make sure you realized that they won’t be able to park on this street and this driveway is only one car wide.”

“I know this is a great house and any house will sell fast in this market.  I think that only having two bedrooms upstairs and the rest in the basement will make this house harder to sell in a soft market.”

I couldn’t do anything to help this robin, but I can help you pick the right place to live.

 

What amount should you put on the preapproval letter?

by John Rice

I was cutting edge back in the day.  I remember telling buyers and their loan officers why I wanted the preapproval letter to be made out for just the offer amount.  The logic back then was that it comes across better to appear like you “Can’t” go any higher than what you offered verses “Won’t” go any higher.  In fact, you can probably scroll through my blog posts from 7-8 years ago and read more about it.

Times change.

Now everybody does that.  When everybody does it, there is no point in continuing.  The strategy is lost.  Cliche.  Passe.

I don’t do it any more.

Now I spend my time telling buyers and their loan officers why I want the preapproval letter to be made out for the MOST the buyer could purchase.

Today’s market is not only hot, it is fast moving.  You often get one shot to make an offer.  You want to be as attractive to the seller as possible since they likely have multiple offers….and all the offers are good, so the winning offer often comes down to some secondary thing like possession date, waiving inspections or, wait for it, your financing.

All decent realtors know that your preapproval amount is based on your debt to income ratio.  You make an offer of $200k and produce a preapproval letter for $200k, the listing agent either knows you’re bluffing OR $200k is going to use all your debt to income ratio and the loan has more risk of not making it through underwriting.  You produce a preapproval letter that says $275k on that same $200k offer, and suddenly that listing agent knows that you aren’t eating up all your debt to income ratio.

Also, there isn’t any time these days to make an offer with a matching preapproval letter amount, then go back to your loan officer to revise the letter when the offer gets countered for more money.  You’ll lose the house while waiting to get a piece of paper that says you can go a little higher than your first offer was.

A couple of people have wondered if letting the seller know how much you have been approved for somehow means you’ll pay more since they know you could do more.  Well, I’ve been on both sides of that since I do list as many houses as I sell to buyers.  I have never had a seller think that.  And even if they did, you don’t have to pay more than you want……meanwhile it could be the thing that gets you the house in this time of so few houses on the market.