But it appraised for….

I sold a house a few days ago.  The listing agent told me that it appraised for $25k more than the list price.

Which begs the question:  Why didn’t it sell for that?

Because there is a big difference between market value and appraised value.

Market value is what the house is worth to a buyer.  Appraised value is a way to spend $375 and still not really know the market value.  The main purpose of an appraisal is to justify the purchase price to a lender.

Lots of things affect market value, such as floor plan, decor, features, view, lot size, odors, etc.

An appraiser doesn’t care about any of that.  I mean, they aren’t buying the place so it is all about comparing data to them.  Square footage, condition and what has sold in the area recently are what drives appraised value.  Appraised value is often more about the area the house is in than it is about the subject house.  I’ll also mention that in an appreciating market, appraisals are often incorrect because the data they use is recent history.  In other words, the current appraised value is based on the past.  Market value is always in real time.

Which leads me to this house that I sold.

The area around the house has homes that are 20 years old to brand new.  Values are all over the place.  The brand new houses that are the same size as the one I sold go for $50-75k more than what my client paid.  The same size house in the nicest section of the area is a lot more too.  By comparing my client’s new house to the more expensive and brand new houses, I can see how the appraisal was more than $25k higher than the actual sale price.

How did I help my client determine what the house was worth?  I excluded the more expensive houses up the road.  I excluded the brand new homes since that is a unique sale-they are only new once.  I looked at similar sized houses. I looked at the finishes of each house.  Did they have hardwood?  What were the appliances like?  What was the backyard like?  I looked at all the pictures of every comparable recent sale.  Then I thought about it.  I made adjustments for size and condition just like an appraiser, but I also thought about it through the eyes of a buyer.  I then told her what I thought the house was worth and she made an offer.

 

THE most perfect deal ever

Sometimes things just work out perfectly.

I had a client/friend send me a family that ended up buying a new house that was not finished yet.  They had a house to sell in Cumberland Hills.  The new house was at the foundation stage when they bought it and we had nooooo idea when it would be ready.

I had another client/friend send me their sister and brother in law.  They wanted to be close to their family in Cumberland Hills.  The only obstacle they had was that they were locked into a lease for several months.

Back when I was a kid, there was a commercial for Reese Cups where somebody was aimlessly walking down the street eating a chocolate bar.  Around the corner, another person was walking down the street eating peanut butter.  They run into each other at the corner.  One says “Hey, you got your chocolate in my peanut butter!”  The other says “Hey, you got your peanut butter in my chocolate!”  They each take a bite and realize what a wonderful thing just happened.

The buyers and I looked at a few houses.  The houses were nice, but nothing great.  The market in this price range moves so fast that some sold before they could decide if they wanted to make an offer or not.

I arranged a time for the buyers to see the sellers house.  They liked it.  We negotiated the terms.  Sold.

My seller probably sold it for a little less than they could have, but they had a buyer who was in a position to wait until their new house was complete before closing.  That kept my seller from having to potentially move twice and gave them the peace of mind that their old house was sold.  The buyer was using a lender I know, so that made it feel even more secure.

My buyers got the house for a little less than it’s full market potential and did not have to compete with other buyers, which is a real luxury in this market.  They also were able, of course, to buy a house on the same street as some family members.

It was very satisfying to be a part of making this work so well for both of my clients.  Everybody got what they needed out of the deal.

I think I’ll go eat a Reese Cup now.

It was fun to be me this week

I kind of like the crazy days.

It’s been a busy week for me.  I’ve sold 3 houses, have 9 pending sales, and have been out with several new buyers.

This time of year always reminds me of that scene in Bambi where all the animals come out on the first day of spring.  I’m meeting new people and seeing old friends.  The days are getting longer and I am close to being back in shorts.

 

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Many of my past clients are calling to say they are thinking of moving.  Several of my past clients and friends have referred their friends or family to me.

I had one especially busy day this week.

I had to show a new construction home to a friend who has used me 3 times so far.  There was not a lockbox on the model home, so I had to find another model home with the same key, then return that key after the showing.

Then I had to rush to Winchester to see a house a friend and past client may sell.  It was out in the country in a beautiful setting.  I took my little M Roadster.  Back roads from Masterson Station to deep in Clark Co.  Lots of fun.

The whole time I was at that house, my phone was going crazy with texts and calls.  One was an agent telling me she was sending an offer on a listing of mine.  I already had an offer so I had to tell the other agent we were getting a new offer.

I check my email before pulling out of their driveway.  17 emails.  One was a new client who was referred to me from her daughter, who has used me a couple of times.  They were ready to make an offer on a house I had shown them in Clark Co the day before.

It was already well past dinner time and I had to get some work done, so I did the only thing that made sense.  I got a pizza and ate it in my car while I returned calls, texts, and emails.

 

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I’ve never eaten pizza in the dark, nor in such a small car.  All I can say is that I am glad the interior is black and I was wearing a red shirt.

I got home, wrote the offer for the Clark Co property, worked on the offers for my new listing, and finally got done about 10:PM.

This weekend looks pretty calm since I crammed about 3 days worth of work into that one day.  Saturday is Cars and Coffee, then Sunday I am going for a long drive in the country with some other car enthusiast friends.

The busy days make the not so busy days even better.

Glad it is almost spring!

Old house/New house & my latest car

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Cars and houses.

Those are my two things.  I can’t talk about too much else.  I don’t keep up with politics, pop culture or sports.  Get me on either of these two items though, and I am hard to shut up.

I recently added another car to my collection…..if you want to call a bunch of cars that aren’t old enough to be classics a collection.  Junk yard or used car lot is probably a more accurate term.

Sure, I’ve got a new car I use for work.  It looks good.  Is fast.  Gets lots of compliments.  But to me, it is sterile and generic.  It isn’t anything special because you can go to the dealership and buy one just like it.  I don’t feel anything but comfortable when driving it.

What gets my blood circulating is older BMWs.  I love the way they handle.  I love the way they look.  To me, the 90s-early 2000 BMWs were the high point for the brand.  An era I want to celebrate.

They don’t build them like they use to.

That is a phrase you often hear about older houses too.  Just like some people are into older cars verses new ones, some people also prefer an older house to a new one.  Old house people think all new houses are build poorly and lack any character.  The people who like new houses don’t want old house problems or floor plans that don’t work as well for today’s lifestyle.

Whether it is cars or houses, it is cool to like whatever you want.

As a realtor, the task at hand is getting in the mindset of your client and figuring out which they want.  When I buy a car, it is about what I want.  When I am trying to make a real estate love connection for a client, it is all about what they want.  Sometimes they don’t know yet and you need to help them figure it out.

After 12 years of doing this, I can pretty much tell if a client is really wanting to build a brand new house.  If you show them perfectly good move in ready houses and they don’t like any of them, they probably want to build even if they don’t realize it yet.   Another obvious sign is if their previous houses were brand new.  You would be amazed at how many people build a brand new house with each move.

The old house people will sometimes look at new houses, but they don’t like that the trees are small, or comment about the lack of character or perceived quality.  They walk in a perfectly good new house and don’t have any reaction at all.  It is just a structure with 4 walls to them.  Take them in an older house and they light up.

What do I like?  Both really.  In my dream world, I have an old house in a cool part of Lexington.  In that same dream world I have a super modern beach house.  The kind that is mostly glass.  In the garages of each place, I have a couple of older BMWs and also a new car because sometimes it is really nice to hop in a new car with really good air conditioning, comfortable seats and an awesome stereo with bluetooth.

 

How I grew up to become The LEXpert

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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.

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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.