I just don’t buy it.
I read an article put out by the National Association of Realtors and the National Association of the Remodeling Industry. It said putting on a new roof is the biggest single item a seller can do to get the highest return. They said it increased the value of a house by 105%. Get this, remodeling or updating your kitchen only brings back about 67% in added value.
I laughed so hard I snorted a little.
About 50% of my work is with buyers. I sell a lot of houses. I have been doing for over 10 years. My experience in and around Lexington Ky is that very few buyers even notice the age or condition of the roof. The HVAC too for that matter. Most buyers care more about the appearance of the house than anything…..assuming they were okay with the location to have even considered viewing the house. Most don’t think about the roof (or windows or HVAC or water heater) until the home inspection. That is why I always try to think about these things for them. I am always telling people the age and condition of the roof and the rest of the house. In fact, I’m working with a buyer right now who fired their old realtor because they kept making offers on houses that were in terrible shape and the deals fell apart after the home inspection. The last thing I want is a client of mine to emotionally move in, tell their friends and family all about the house, and then it fall apart after the home inspection.
Several years ago I listed a house for some clients/friends have used me several times. Their house had new windows and literally a brand new roof. The house was a bit outdated. They found their dream home before doing much inside to this one. The seller knew a lot about houses and wanted to take care of those big items first. LOL, I guess I am the same way because I am sitting in my own home, that has a new water heater, sump pumps and I am about to put in new windows…..yet I have a master bathroom that dates back to when Dallas and Knots Landing were new shows.
I put their house on the market. I showed it several times. It took a while to sell because it was outdated. I would remind buyers that there was $15-20k in windows and the roof that they would not have to spend. I would tell them it is more fun to spend that much on flooring and granite than to buy another house that was updated inside but would need new windows and a roof. It finally sold, but my point is that most buyers make decisions on how updated a house LOOKS. That is just how it works. 99% of the time, I would rather have my sellers drop money on updates that can be seen verses maintenance items than cannot. Unless a roof is just ancient or really ugly, most buyers don’t care as long as it doesn’t leak.
So, I totally disagree with this report. It just isn’t happening in my area.
And ALWAYS consult with a knowledgeable real estate agent in your area before making big decisions. I spend a lot of time advising friends and clients about how to spend money on their houses. You need somebody who knows the market and even your neighborhood to help make decisions.
There are a lot of variables depending on your neighborhood and price range.
We had a hail storm several years ago in South Lexington. Almost everybody got a new roof. The norm in those neighborhoods was to have a new roof. Buyers expected a new roof. It was a negative in that situation to not have a new roof.
There are several neighborhoods that are about 15 years old right now. The norm is to have original HVAC and roof. Since buyers will be viewing houses that all have an older roof or HVAC, a seller would do better to spend money updating the interior if they are considering selling any time soon. If they plan to stay forever, it is okay to spend their money any way they want.
lexpert
Fall Market Blunder
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!
What The LEXpert has been thinking about
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.
Neighborhoods with good design
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:
- 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.
- 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.
- 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.
- 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.
- 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
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.
Your Lexington Kentucky Neighborhood Expert 