new listings

Older house verses newer house, which is better?

by John Rice

I often get asked by buyers if they should buy an older house or a newer house. My usual response is to say that it depends on what kind of problems they want to have. I get crazy looks when I say that, but it is just my way of telling people that all houses will have problems. Basically, it is your house verses Mother Nature and Father Time.

I have lived in both older and newer houses all my life. When I was a kid, I went from a 1910ish four square to a 3-year-old ranch. Next, my parents bought a house in Kenwick  from the 1930’s. My first house was built around 1915. My second was 1973.  Then a 10 year old home. Then 26 year old home. All of them had their own set of issues.

There seems to be this misconception that old houses were built better. True, MOST were built with more care than today’s homes are. I say most because my first house, the one built around 1915, was nowhere near as well-built as my parent’s Kenwick house from the 1930’s.

Another misconception is that people think any old house is better than any new/newer house is today. After living in a lot of old houses and showing a bunch to my clients, I can tell you that what it comes down to is maintenance. Even the best built house from yesterday will be nothing but trouble today if somebody didn’t keep it up. An older house has been in the ring with both Mother Nature and Father Time for more rounds than a newer house.

The new house misconception is that they won’t last as long as an old house. I use to think that until my parents bought a 150+ year old farm-house. Their house started out as a 2 room timber structure.  Then a porch was added on the back which was later converted to be a kitchen. Then a new porch was added to the side of the kitchen which later became the new kitchen and the old kitchen became a dining room. Then somebody added a second story over the original structure. Then came a second story over the original porch/current dining room. My attitude now is that if my parents house can defy all building codes and even gravity a little, any new house should last just as long. 

Here are some of the common older house issues: Inadequate electrical, plumbing, insulation, lack of maintenance, and poorly done improvements at the fault of previous owners.

New/Newer house issues: Rushed construction by unskilled/uncaring workers sums it all up the best. I have a friend whose house was practically rebuilt after a fire. It had no insulation on one side of the house. On a previous 10 year old house I owned, poor mortar joints on a brick window sill allowed water to run down the inside of the brick veneer and rot some of the sill plate. I only found it out when I did the demo for the new tile floor. If today’s workers would apply to their trade the same care they use to draw naked women in the potapotties, we would have the best built houses of all time!

Occasionally I do see both a really well-built newer home and a fantastic older home. I used to represent a builder who did a great job of making decisions that the buyer wouldn’t even begin to appreciate for years to come. He did a lot of little things that exceeded minimum code. I remember selling an older house that had been well maintained and had recently been overhauled by a good contractor. That combination made it a pretty unique older home and a good pick. I guess that buyer got the best of both worlds and none of the negatives.

It is rare, but this is the ideal type of sale

by John Rice

You know, we always think about the buyer for a house being somebody who wants the location, loves the house, or both, right? But there is another reason a buyer might pick your house among all the other competing listings. It is something I have only see happen 3 times in my 21 year career. It is when the buyer is a neighbor or the house is located next to a family member.

I recently sold a 7 acre parcel with a nice smaller home in Wilmore Kentucky. It got lots of showings. The location was great. The biggest issue was that it was a one bathroom house. Having sold a lot of rural property, I knew it was only a matter of time before somebody would want it. It was a lot of land for the price despite the smaller one bathroom house. We ended up getting an acceptable cash offer from somebody who owned land that adjoined this property.

I had a listing in a rural neighborhood in Madison County a couple of years ago. The place was so cool that I was thinking about buying it. It had a giant two car garage in the basement plus a HUGE detached two car garage with a loft. I was thinking of all the cars I could put in there. The buyer told us at the closing that they were moving here from out of state to be close to a relative that lived within walking distance of this house.

The last one of these I had was maybe 4-5 years ago. The market was crazy hot. This house was in a very prestigious part of Lexington on a well known road. I ended up getting several offers on it. All the offers had escalation clauses which means all the buyers agreed to pay a certain amount more than other buyers up to a fixed amount. Well, we got an offer that was $25k MORE than the highest maximum on any of those other offers. I wondered why the buyer’s realtor chose to do that. If they had used an escalation clause it could have saved the buyer some money. Turns out the buyer’s sister lived next door and that was the only reason for the move.

The wonderful thing about these types of sales are that the buyers are not looking at any other house. There is no “We will find another one if this doesn’t work out”. It is their only choice and they are not only going to pay the most, but also be the least likely to walk away after a home inspection.

Best buying advice ever

by John Rice

How would you like to pay top dollar for a house nobody else wanted that sat on the market for a very long time? Not really the type of thing you want to do? Well then, let me tell you how to prevent it.

A house in a neighborhood I am very familiar with had been sitting on the market for a very long time before eventually selling. I had a house around the corner from it listed during that period, only mine sold much sooner! I ended up showing my listing to a few buyers who had called the listing agent to see that house. I would ask them how mine compared. They all told me that the other house had a funky floor plan they didn’t like. Let’s fast forward to when the buyer of that house goes to sell. Think buyers will have the same opinion?

I noticed the other day that it finally closed. I looked to see who represented the buyer. Guess who? The listing agent was also the buyer’s agent. That tells a whole lot. That lets you know that the buyer was some unrepresented sucker who was just calling listing agents to see properties. They didn’t have somebody working for them to say “WAIT! This house has a funky floor plan and you are going to have a hard time selling it down the road and sure, it seems like a good price compared to similar sized houses, but that doesn’t make it a good value nor a wise decision!!”

Now, I am for sure not making a judgement about this agent. I don’t know what all happened. All I know is that when I see a house sell that has been on the market forever, most of the time the listing agent ends up representing the buyer too. An agent has to walk a fine line when all the sudden there is a buyer for a house they thought they’d never sell…..and getting commission as both the listing agent and buyer’s agent makes it even harder. I think most of the time the agent and the seller come out better than the buyer in these situations.

Basically folks, my message is if you are buying, don’t go at it alone. Don’t trust the listing agent for advice. Don’t rely on zillow. Get yourself your very own realtor who will only represent you. One who has been in enough houses, is familiar enough with the market and can recognize the things that will bite you in the rear down the road.  The buyers of this house made a bad decision, and the sad thing is that they won’t know that until they need to move again.

What will 2026 be like?

by John Rice

I think it will be like 2008. Don’t panic though. Next year shouldn’t be like the 2009 market.

In 2008, we were starting to feel the market slow down. It peaked in 2005 just as it did a couple years ago. We were all in denial back then, hoping what we were seeing in California and Arizona would not come here. It did, but not as severe. The Lexington/Bluegrass market has always been pretty stable and resiliant.

So, by 2008 we were seeing a lot of price reductions. A lot of rising inventory. Only the best houses were selling fast. A seller had to do some prep work to make their house stand out. Many sellers were in denial because they had bought in a frenzy. They were shocked not to have a line of buyers wanting their house the first day on the market. Being a realtor began to be a real job that required skills where you really need to know the market, know how to negotiate, and know how to present a house so it stands out among all the competing listings.

I would normally use this paragraph to contrast 2008 to the current market. Since it is identical, just go back up there and substitute 2026 where I wrote 2008.

Don’t worry though. There are no signs of a coming crash. This slow down is driven by lack of demand due to affordability. Back then, the market crashed due to bad mortgages causing forclosures.

I think the rest of this year will see little appreciation, frustrated sellers, cautious buyers and a lot of realtors getting out of the business.

A bridge not to burn

by John Rice

We are back in a market where buyers want to test sellers and see how far they will bend.

Used to be that the average List-to-Sale percentage was about 97%. That means that the house sold for 97% of the list price. As the market got hot right before COVID, it inched up. During and immediately after COVID, houses were selling for no less than full price, many going for 10% or more over the list price.

Those days are gone. I occasionally see a house that will go for slightly over the list price. That is only for super amazing houses that got multiple offers immediately. Short of that happening, full price is about the best a seller can expect and not a whole lot sell for that.

I have had many sellers this year get super discouraged when we finally got an offer. Most will tell me they don’t even want to reply to it. I tell them that it doesn’t matter what the initial offer is. What matters is how high the buyer will go. Most of the time the buyer will end up paying an amount that the seller is satisfied with.

If a buyer offers 92% of the list price, odds are they will go to 96%.

If a buyer asks for $5k in repairs after a home inspection, odds are they will settle for $2500.

It is crazy how predictable this is. So much so that when I get an offer or a repair list, I am usually correct on where it will end.

So, if you are a seller, be prepared for this. Don’t be offended. Don’t reject the offer or burn the bridge. Keep playing the game until it is over. Odds are you will be glad you did.