How real estate really works

Maybe it is because this is the only industry I have been in, but there seems to be a lot of misconceptions about what it takes to get a house sold.

Before I begin, let me tell you how it doesn’t work:

  1.  Open Houses and/or Broker Open Houses.  I will occasionally have sellers ask me about these.  Open houses used to be a non-committal way for the public to see inside a house before the internet.  Today, all you get is neighbors, thieves and buyers so early in their search that they are not yet ready to make any decision….which is why realtors that need work love to do them.  They get to meet unrepresented buyers at your house and hopefully sell them something in the near future.   Broker open houses are for social realtors who want to win a $50 gift card and hang out with their realtor friends at your house.  Same deal as open houses, these worked best before any agent can look online and see if your house is a good fit for their client.
  2. Marketing.  Again, thanks to the internet, exposure is never a problem.  Google your address right now and see how many websites your house is on…even it if isn’t for sale, it will be on tons of sites.  Something like 98% of buyers find their house online.  I guarantee you that those remaining 2% have a realtor who is online looking for them.
  3. Gimmicks.  These are things that agents do to make themselves stand out.  Many years ago it was those QR codes.  That trend didn’t last long.  Today it is the 3-D house.  I mean, most people have a hard time figuring out a 2 dimensional floor plan.   They will soon go away and be replaced with something else.  Companies come up with these things to sell  us realtors to make us feel like we are cutting edge.  There is a house listed in town that has a unicorn and a dinosaur in many of the pictures.  It has been shared many times.  Everybody loves it.  It is a lot of fun.  The house has been on the market for 38 days.  Do you think it is helping to sell the house in a market where houses in it’s price range rarely last 3 days?

There are 3 things to selling a house.  If you do all of them right, your house will sell fast in any market.  How do I know?  I have been doing them for nearly 15 years with great success.  Every day I scroll through the old posts on Facebook I made on the same day over many years.  I was posting about selling houses the first day on the market or getting multiple offers back in 2009 when I joined Facebook.    It was a buyer’s market back then.  Selling fast and for top dollar is common now.  So much so that I don’t even bother to post it when it happens.  Any agent can do it since there are so many more buyers than there are sellers.  It is nothing to brag about these days.

The 3 things that matter are price, condition and presentation.

If the price isn’t right, then no amount of work can make a house sell.  You can post it all over social media, have dedicated websites, have a hot air balloon over the house, have Drake make a video at your house…none of it will matter.  The public thinks exposure will sell an overpriced house.  Trust me, nothing will make an overpriced house sell.  I have tried to do that when I was a newer agent and I see many agents try today.  Usually it doesn’t sell.  The seller thinks it is the realtors fault.  The seller gets a new realtor, who talks the seller into reducing the price a little bit.  It usually sells AFTER the price reduction.

Condition is the next big thing.  Buyers are looking at every house in their price range.  If your house isn’t one of the better ones, it won’t sell.  I often see an average to below average house sit on the market  because there is always a better house for a buyer to pick.  Sometimes these houses sit on the market until late fall or winter when there is no new competition.  I have always said the best time to sell a below average house is in the late fall and winter.  That time of the year is like going to a buffet right before the restaurant closes.  All that is left are the least popular items.  Of course, price trumps everything in real estate.  Often, getting real about the value can make a house sell.  A below average house listed for $200k might be an average house when reduced to $190k, and an above average house at $180k.  You can also improve the condition of your house to make it sell.  I often work with sellers and tell them some small adjustments they can make that will make their house more attractive to buyers.

Presentation is twofold.  The house has to look attractive online to make somebody want to come see it in person, and it has too look as good in person as people imagine it does from what they saw online.  I think the big takeaway here is that the public loses interest quickly.  You want to grab their attention and keep it as they look at all the pictures.  That is why I order the pictures beginning with the most interesting one first.  Whatever the best feature of the house is, that is what I use as the lead picture because I know as soon as people get bored, they stop looking.  You won’t see 14 pictures of the water heater in my listings.  The words in the description are very important too.  I try to use those to tell a buyer what they can’t deduce from the pictures and what isn’t already mentioned in the listing.  If the specs say the house has 4 bedrooms, I see no need to tell the buyer again that it is a 4 bedroom house.  I want to use that space to tell the buyer how the house feels while they are inside.  The goal of the listing is to attract a showing.  You’re not trying to sell the house from the listing, only make somebody want to come see it in person.

So, that is how getting a house sold really works.  Get those 3 things right and it will always sell.  Anything else is just a waste of a seller’s time.

Masterson Station: A legit part of Lexington

I’ve got a long history with Masterson Station.

Long before I was The LEXpert, I was a one man lawn care operation.  I had a few customers out there in the mid 90s.  Masterson Station ended one house past Gateway Park.  My wife and I would go see the new model homes by builders such as PSC and Barlow Homes.  We would marvel at the trendy finishes like green counter tops and pickled cabinets that were sort of a pinkish white.

Back then, Masterson Station seemed so far out that you felt like you were half way to Frankfort.  I remember thinking “Who would want to live this far out of town?”  I said the same thing about Hartland back in the mid 80s.  I had always lived inside New Circle back then, so I was one of those people who thought the “Real” Lexington was just inside New Circle Road and anything outside the circle didn’t count.

Since then, Masterson Station has grown and grown and keeps growing.  It is Lexington’s largest neighborhood and has had non stop construction for about 25 years.

At lot has changed.  To begin with,  nobody calls it Masterson Station any more.  It’s just Masterson now.   I’ve changed a lot too.  Instead of pulling a trailer full of lawn equipment, I am working inside the houses now and own a house in the neighborhood.  I just got an accepted offer on the 41st house I have sold in this area.

It used to be that you picked Masterson because you could get the same house for cheaper than anywhere else in town.  It was a good value.  As it grew and people didn’t view it as some random neighborhood hung out of the west end of Fayette County, the price difference became less and less.  Today the same 1300 square foot home in Masterson sells for maybe $10k less than an identical house in one of the top neighborhoods on the south end of town.

As it grew, a new elementary school was built in the neighborhood.  Then Citation Road was built, which was really great.  The new road helped with traffic flow and all the sudden, made sense of the way the neighborhood developed over the past couple of decades.

I have always said that all the whole Masterson area  needs is some commercial development and it would become a part of town people pick because they like it, not just because its a good value.  I drove through the area last night and the gas station/convenience store on Leestown Road is now open.  Meijer owns a big corner on Citation.  I am starting to see more development along Citation too.

Congrats Masterson.  You’re all grown up and we’re glad you’re a legit part of Lexington.

Coming soon: Hype or not?

I say hype.

I think it is more about winning listings than getting top dollar for the house.  It’s something you tell a seller in a listing presentation to make them pick you over another realtor, who isn’t going to sort of put your house on the market but not let anybody see it for up to a week.

The thought is that during the time between posting that the listing is coming soon and when it is available to show, you will be building a frenzy of buyers who will all see it the first day on the market and it will sell in multiple offers for top dollar.

Sounds good, right?

Well, that is already happening with just about every house that is appropriately priced.

In a hot market where there are more buyers than sellers, the “Coming Soon” approach is sort of like telling a bunch of piranhas that you are going to throw raw meet at them next week……whether you throw it now or later, the results are the same.

I think the “Coming soon” thing would work best in a slow market when you need to create a buzz around a listing to make it stand out.

Real Estate Proverbs

You know, I’ve been doing this for a long time.  You start to see patterns after a while.  I guess that is called wisdom?

Here are some things I have learned that are typically true in real estate:

  1.  If somebody says they are going to make an offer, every hour afterwards that you don’t have it in hand reduces your chances of getting it at all.
  2. If you are a seller and decline a showing, few buyers ever reschedule a time.  They say they will come see it later, but never do.
  3. Usually the best offer you are going to get is the first offer.  The times it isn’t the best offer, it will be the worst.
  4. If you get 10 offers on your house, 8 will be practically the same, one will be crazy low, and one will be the best.
  5. If 20 buyers have seen your house and given the same feedback about the condition and list price, odds are the next 20 buyers will say the same thing.
  6. If you get a full price offer the first day, that means you priced it just right.  Don’t wonder if you should have asked more.  When a house is priced too low, almost always does it get more than one offer and both will usually be above the list price.
  7. If you feel like you got a good deal on a house, most likely it is because it was a house nobody else wanted.  You will have to give a good deal when it is your time to sell.
  8. Crazy realtors have the craziest clients.  You can often tell a lot about a buyer by who their realtor is.
  9. The more complicated the deal is, the more likely it is to fall apart.
  10. The longer the time between contract acceptance and the closing date, the more likely it is to fall apart and not close at all.

What’s the market like right now?

I had an appointment to show a house this evening after my client got off work.

The listing hit the market at 7:38 this morning.  By the time the buyer and I worked out a time, the house already had multiple offers on it.  By 1:PM, the house sold.

I’ve got an out of town client who has been driving down from Ohio whenever a really good house comes on the market.  We had an appointment to see a house the first day on the market.  When my people had just crossed the state line into Kentucky, I got word that there were multiple offers and the listing agent wanted to present all the offers at the exact same time as my appointment to show it.  My people turned around and went home.

I had another client make a contingency offer on a house they loved.  The seller accepted it with a 48 hour kickout clause.  A couple days later, the house had a non-contingent offer.  Fortunately my people were in a spot to remove their contingency and purchase the house without first having to sell their old one.  This house is in a small rural community, not exactly where you expect houses to sell fast.

Meanwhile, every night before I go to bed, I catch up on news from an app on my phone.  Many articles say the market is slowing down.  They usually quote some statistic about the declining number of sales.  The reason there is a declining number of sales is because it is so hard for a buyer to actually get a house these days.  Last week I blogged about a house that had 14 offers.  Only one person will get the house.  That means there are 13 buyers out there waiting on a house.  Does that sound like a slowing market?

Unless sellers get in the game this spring, we are shaping up for another crazy year.  When 14 people want a house and every house goes in multiple offers, we will see prices go up.