older homes

Does spending more get you more?

by John Rice

I’ve always been into two things: Houses and cars.

There are a lot of luxury cars out there that are really just blinged out versions of cheaper cars. Cadillac Escalade? At its core, it is a Chevy Pickup truck…….sorry if you have one and I have insulted you. Lexus TX? It is a better looking Toyota Highlander. Nothing wrong with these companies doing this. It is an economy of scale to be able to sell essentially the same thing to buyers in different socioeconomic classes. They add a few features and make it look better for a lot more money, but all the important stuff is shared with their cheaper platform mates.

Now that you’ve got the concept of today’s blog post, let’s see how it relates to houses.

I showed a house to a client today. It was in a very Toyota Highlander neighborhood. It was close to 3500 square feet with a basement. Great location. Great school district.

I told my client I thought this $484k house was a great value. Why? Because if you spend $100k more, you wouldn’t really get a bigger or better house, you might just get brick on all four sides and be in a more Lexus TX neighborhood.

Sometimes spending more doesn’t really get you much more.

What I like about a contingency contract

by John Rice

Well, I don’t really like them, but there is a good side to this type of contract if you are the seller.  Guess what it is? The buyer will typically pay you more with a contingency to sell their house first than they would without it.

I see it all the time. A buyer with a house to sell gets really nervous about not knowing where they will be living once they sell their old home. Now, unless the buyer already has a contract on the house they are selling, I always counter back with a kickout clause.  That basically means that IF the seller would like to sell the house to another buyer who does not have a contingency, they give the contingency buyer a certain amount of time to remove the contingency or back out of the deal. 

Another thing I like is that IF the contingency buyer can and does remove their contingency,  you have a back up buyer. Sometimes it helps when negotiating repairs if the buyer knows there is somebody else wanting the house if the deal falls apart!

I don’t really care for this kind of contract though when I am working with a buyer…..for all the same reasons. When I have a buyer who wants to write a contingency offer, I usually try to get them to just wait until we sell their house first. Here is why I don’t think they are a good idea for the buyer who can’t possibly remove the contingency if needed: Any decent realtor is going to counter back with a kickout clause. That means that if another buyer comes along they will lose the house. If no such buyer comes along, that means that the house would still be there when the buyer’s old house eventually sells, and they could probably strike a better deal at that point.

Who is the most important person in your renovation?

by John Rice

It’s not your contractor. It’s not your designer.

It’s your realtor.

Why?

Because one day you’re gonna want to sell your home. You will want all that time and money you spent on the renovation to have added value. Having a great designer and using the best contractors are wonderful things to do, but only your realtor will know if the work you’ve done added value. And let me tell you, NOTHING you do to your house will get a 100% return on your investment.

Here are some things to think about as you plan a renovation:

  1. Don’t over improve. If you live in a half million dollar neighborhood, don’t pick million dollar neighborhood materials. Yes, buyers will love the unexpected upgrade but you will be effectively giving it to them for free. Always keep the level of materials suitable to what people expect for the price range of the neighborhood.
  2. Don’t add too much square footage. I have seen some crazy additions where people end up with the biggest home in the neighborhood. That’s never a good idea. The buyers that want such a big house will probably want to be in a house surrounded by similar sized homes. The people wanting to be in your neighborhood probably aren’t going to want to pay you top dollar for the extra square footage. Also, appraisers usually give credit for square footage tiered to the price range. That means the more affordable your neighborhood is, the less an appraiser is going to value your excess square footage because they will be using recent sales from the neighborhood for comparisons.
  3. Don’t make crazy compromises. I have seen some wonderful additions but due to the existing floor plan of the house, you have to do something crazy like walk through a laundry room to get to the amazing new space. Buyers don’t like that. Yes, you’ve gotten used to it and it works for you but it will be a deal breaker to a buyer. The flow of the addition is very important.

The bottom line is that you want your house to still fit the character, size and price range of your neighborhood. Be sure to go over your plans with your realtor before committing to the job.

3 similar neighborhoods for any budget

by John Rice

What if you want a big lot, close in, something older, maybe Tates Creek Road area.  Well, you have three good options at 3 different price points.

All these neighborhoods are either just inside or just outside New Circle Road by Tates Creek Road.  All are close to things like The Lansdowne Shoppes, Malones, Fresh Market and The Signature Club.  One of the best things about this area is that you can get about anywhere in town easily.  UK/Downtown/Chevy Chase are close.  You are between Hamburg and all that the Fayette Mall/Nicholasville Road corridor offers…..plus, this is arguably the prettiest part of Lexington.

1.  Lansdowne

This is where you go if you have $300-700k to spend.  You’ll get one of the swankiest locations from the 1960s that use to be on the on the edge of town.  I’m taking about roads like Cahaba, Kirkland, Overbrook, etc.  Getting a half acre lot is no sweat here, some are even larger.  Overbrook Circle and Brookhill Circle are my two favorite streets since some of the houses have a view over The Lansdowne Shoppes.

Most of the houses are ranches, but there are 2 story and split foyer/split levels too.  Here is what is typical:

But sometimes you get lucky and find some real architectural gems like:

2.  Lans-Merrick

This is where you land if you want to stay in the $200s-$300s, although there are a few super nice ones that have gone for over $400k.  This neighborhood is right across Tates Creek Road from Lansdowne.   You get a great city park in the middle of the neighborhood which is right beside Julius Marks Elementary school.  Lots out here are usually in the 1/4-1/3 acre range.  Still big by Lexington standards.  Most of the houses were built in the 70s.  Lots of ranches, splits and traditional two stories.  The main roads are Pepperhill and Montavesta.  Fleetwood and Heritage are my favorite streets.

 

Here is what to expect:

But there are some that are like:

 

3.  Gainesway

This neighborhood is beside Lans-Merrick, but is just across New Circle.  It seems just as close in though, so don’t let being outside the circle mess with you.  The oldest part of Gainesway harks back to the 50s.  All the streets were named after local horse farms.  Getting a 1/4-1/2 acre lot is easy here.  Most are ranches.  The beauty of this neighborhood is that you get a similar location and lot size as the other two, but you’ll only drop $150-250k for a house.  Castleton Hill and Castleton Way are my favorite streets here.

This is what to expect:

And you might get lucky and find one like these:

 

So there you have it.  Whether you have $150k or well over $500k, you can enjoy an older home on a large lot in Lexington.

Neighborhoods with good design

by John Rice

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:

  1.  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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.