location

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.

 

Which offer to pick when you have more than one?

by John Rice

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This is a house I put on the market late Friday evening.  I own it with a friend.  It is fixed up pretty nice, which is why we had over 25 showings scheduled.  We got 7 offers on it.  We had two more interested buyers, but when I told their agents we had multiple offers, they didn’t want to join the bidding war.

You’d think it would be an easy thing….picking which one to accept.  There is so much more to an offer than just the one with the highest sale price.

The lowest offer was way under the asking price and the buyer wanted us to pay $4200 of their closing costs.  When 4 of the 7 offers came in over the list price, that one was rejected with a good laugh.  I am glad I got it because I used it to force the next buyer into bringing their highest and best offer.

I had priced the house competitively. I knew that there was not much on the market.  I knew we had done a really good job making the house appealing.  What I didn’t know was how many buyers there would be.  You don’t know that until you list it and watch it unfold in real time.

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Most sellers would be thrilled to have offers over the list price.  While I was excited, I was also thinking about the appraisal.  Anybody doing any type of loan will need to do an appraisal.  And I wanted an offer that would result in a CLOSING!  All of the loan types the buyers were doing made me nervous about the appraisal.  Plus, most of them wanted us to pay their closing costs too.

 

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So, I really wanted a conventional loan buyer.  Since we were over the list price already, I wanted somebody who did not need us to pay any of their closing costs.  The closing cost issue was a really big deal.  Why?  because if the house only appraises for the original list price of $138,750 and the buyer needed $3000 in closing costs paid by us, we would only net $135,750.  If we have to reduce the sale price to match the appraised value, I don’t want to also deduct the buyer’s closing costs from that value too.

Fortunately the house was so nice that I knew all I had to do was wait until the right offer came in.  Once it did, we accepted it.

This is one of many things I take into consideration for my clients.  It was fun to do it for myself this time!

 

Neighborhood Review: Creekside at Andover

by John Rice

When I was a teenager, I use to love to drive my 1978 Chevy LUV truck out Todds Road.  This is when nothing was on Todds Road except farms.  It was black with white wagon wheels and the trendy bright stripes that were so popular in the 70s.  My Dad bought it new.  I thought it was the coolest thing in the world when he got it.  I still liked it when I got it in the mid 80s, even though rust was quickly claiming the black paint.  The bright stripes had faded too.  The red looked orange.  The orange looked yellow.  The yellow looked like a rotting lemon.

This isn’t my exact truck, but it is the closest thing I could find online.

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I use to drive out to a road I think was called Athens-Chilesburg.  It ran between Todds Road and Winchester Road.  It doesn’t really matter now because that road is currently two dead end roads.  On the Winchester Road side it is called Walnut Grove.  It is Deer Haven on the Todds Road side….although the Todds Road expansion has just ripped up where it connects to Todds Road.

 

Here is an old map I have.  Notice that Man O War ends at Todds Road.  Liberty and Todds do not connect.  There is no Hamburg.

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All of this gets me to the real topic of this post.  A neighborhood called Creekside at Andover that one day replaced a field and a barn I use to drive past.  I’ve got a couple of friends who live there.  Here are my thoughts on it.

Use to be this neighborhood was very popular because it was the most affordable way to get the highly desirable combination of Athens-Chilesburg Elementary, Hayes Middle and Henry Clay.  For the Hamburg area, this was THE trifecta of schools.  Just like everything, time marches on.  Today, the district is Garret Morgan Elementary, Hayes Middle and the new high school being built on Winchester Road.  I think time will prove that this new district is just as desirable.

A client who I have become friends with lives in Creekside at Andover.  Yes, she did buy out here so her son could go to Henry Clay, but she has found other things she really loves about her neighborhood.

Since it is right off of Deer Haven, she can walk down that old country Road that I use to drive on when it was Athens-Chilesburg.  You immediately feel like you are in the country….especially if you look east since that is the edge of the urban service area.  It is a short walk to that broken line in the above picture.  That old train track is a tree lined walking trail now.  It goes from Walnut Grove, cuts across Polo Club, passes by the city park on Pleasant Ridge and ends up over in Hamburg.  Being able to experience the bluegrass is one of the best things about life in Lexington, and you’ve got a remnant of it here.

Having lived in both Greenbrier and Andover Hills, one of my favorite things about this neighborhood is how easy it is to not only get to Hamburg, but how easy it is to also AVOID Hamburg.  If you want to go to the new side of Hamburg by Costco, exit your neighborhood towards Polo Club and a few stops signs and one light later, you are there.  If you want to get to the main side of Hamburg, exit your neighborhood on Todds Road and you are there quickly.  Want to go somewhere else in Lexington?  Go out Todds Road and cut through Chilesburg and Stuart Hall on Hayes Blvd to get to Richmond Road…..totally bypassing Hamburg.  Since I like driving in the country, another perk for me is that you are on the edge of town.  Turn east on Todds Road and you are instantly in the county.  This would be great for people who enjoy bicycling too.

Most of the houses in Creekside at Andover fall between about 1300 and 2300 square feet.  Seems to me that most are around 1800-2000 square feet from what I see come on the market.  They were build in the mid 2000s. There are some townhouses in the neighborhood too.  Prices on the townhouses have been around $140k recently.  That is a good entry point for first time buyers.  The other houses are all between $170k and $200k.  There are a few basement lots, mostly the ones near the top of Deer Haven and Wargrave Walk.  Those are around $225k.

Here is a very typical home in Creekside at Andover.  This model is very popular because you get a great big vaulted great room and a HUGE bedroom or bonus space over the garage.  I have seen it be one giant room as well as divided into two rooms.

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Well, that is it for today.  I guess in another 25 years I will blog about driving my gas powered, non-autonomous Audi through this neighborhood and remembering when all the trees were small and how it was on the edge of town back then.  I may even keep a map from today so I can show what it was like.

 

Best way to negotiate

by John Rice

Most people think negotiating is making the other party do what you want.   That works when one party has the power to force the other into submission.  Like if you’re an 18 wheeler trying to make a slow car get out of your way.  If you’re the President and can threaten nuclear war.  Fist fights.

Not in real estate.  That behavior typically is counter productive because the other party can usually find somebody nicer to work with and still come out better.

It is a seller’s market now.  Sellers have the upper hand since there are fewer houses for sale.  But they still can’t make a buyer do more than the buyer is willing to do.

Negotiating is getting the other party to do the most they are willing to do for you.  You get them there by thinking of which terms are the most important to them.  In a sale, you have price, inspection repairs, what stays with the house, closing date and possession date.  You also have to know which terms you have some wiggle room on.

Sometimes the timeline is more important than a little more money.  When I bought my current house, there were several other offers.  To compete, I asked the listing agent what plans the seller had made for moving.  They had not found a new house yet.  Since I was keeping my old house as a rental, I did not care when they moved out.  They had lived in the house for 20 years and taken good care of it, so I was not worried about them trashing the place.  I wrote the offer with us closing in 30 days and agreed to let the sellers rent back from me until they found a new house.  They stayed for 3 weeks after the closing.  Now, I know not many people can be THAT flexible, but it is a prime example of giving the other party something really appealing that was really of no value to me.  Conversely, I’ve had clients who needed to be in or out of a house on a short timeline.   I’ve even had clients who had a new fridge and let the seller take the one in the house for agreeing to a better price.

I sold a house last night and it is a prime example of good negotiating.  The buyer had a price in mind.  My seller had a price in mind.  It wasn’t the same price unfortunately.  We were $1000 apart.  This was a cash sale.  The house was sitting vacant.  The buyer offered to close sooner than originally stated and agreed to not ask for any repairs unless there was something majorly wrong with the place.

To my seller, this meant less interest to pay for a house to sit vacant.  Less to spend to insure and heat the place in the dead of winter.  No concern for having to do repairs.  All in all, it probably added up to $1000 in saving for him.

So, the buyer got his price and the seller effectively got his price too.  All because the buyer gave the seller something that was not important to him, but was of value to the seller.

This is how it should be done.

 

If I could have any house, this is it

by John Rice

I was out with a new client last week.  She told me that she had asked her husband which house he would pick if he could have any house in Lexington.  Eventually that house came on the market and they bought it.

It got me thinking about what house I would pick if I could have any house in town.

Here it is:

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As many of you know, I moved to Lexington in 1985, the same year I got my driver’s license.  It was a magical time of combining my love of driving and my love of houses.

I’ll never forget when I first saw this house.  I had never seen such a place except for on TV shows.  I remember thinking it was a very interesting piece of architecture.  At first, I really couldn’t tell if it was a house or an elementary school since a lot of modern/contemporary homes can look a little institutional.

There was no Google Earth back then.  No Bird’s Eye view unless you were in fact a bird.  The view from the street was all I had.  And I loved it.

I wondered what it would be like living there.  I was picturing all the goofy pastel furniture and art that were so popular in the mid 80s.  I pictured myself waking up in the house, putting on a mint green T-shirt with a light gray sports coat and white pants, then getting in my Ferrari and having an exciting day……because this was the type of house you’d see on Miami Vice.

 

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But, eventually reality sat in and I was a chubby teenager driving a green 1976 Chevy Chevette parked out front of this house.  To keep from getting the police called on me, I moved on.

The house last sold a few years ago for $2,500,000.  Still a bit out of my price range.

Here is the bird’s eye view I would have loved to have seen back then:

 

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See that house behind it?  I showed it a couple of months ago.  While I was in the backyard, I did walk over and touch the brick wall of the pool house.  That is the closest I have ever been to this house.

If you could live in any house, which one would you pick?