real estate market

The first rule in real estate

by John Rice

The first rule in real estate today is that there are no rules.

In the past, there was a general thought that certain times of the year were better to sell, you had to do a lot of prep work before listing your house, and other things that HGTV still perpetuates.

Back when the market was terrible, I would give people huge lists of things they needed to do to sell their house.  Now sellers are amazed when I tell them to do as little as possible.  I’ve had clients who were planning on putting on new roofs, replacing front doors, replacing old carpet.  I tell them not to worry about it.  As long as these items are in at least average shape, buyer’s don’t mind.  An average house is appealing when there are only like 12 other houses for sale in your price range all over town and you’ve lost out in multiple offers on the last 3 you wanted.

We are so starved for listings that even if a few people don’t like your house, there will be several more that do.  About the only time I see a house not sell is when it is grossly overpriced.  It’s a Seller’s Market for sure, but you still can’t sell your house for more than it is worth…..although if you wait long enough, it will have appreciated into your asking price.

When the market was bad, the value in having a realtor was in knowing what all you had to do to sell and presenting the listing so that it stood out among the multitude of other listings.  Now, having a good realtor is about knowing the least you have to do and the most you can get for your house.  I’ve often paid for myself by saving the seller from spending money that they did not need to spend.  Back then, working with a buyer was showing them 40 houses and helping them pick the best one and getting it for as cheap as possible.  Today, working with buyers is about getting them in a house ASAP and coming up with a winning bidding strategy.

So, as long as it is a Seller’s Market, put your house up for sale any time of the year.  Fix anything that is broken and give it a good clean, but there is no need to sweat the details like you had to when it was a Buyer’s Market.  Today’s buyers can’t afford to be too picky.

Who do I have to thank? YOU!

by John Rice

11.

After the last one this Friday, that is how many closings I will have had in July.  That’s the most I’ve ever done in one month.

Funny thing is that all this came from 8 clients.

Clients #1 & #2 were people that used me several years ago to buy their house.  They wanted to move, we found the right ones, then we sold their old houses.  (Client #2 has used me a total of 4 times now.)

Clients #3 built a new house and used me to sell their old one too.  They were sent to me by a past client I have become friends with that has used me twice.

Clients #4 bought Client #3’s house.  This client was sent to me from a friend who has used me twice before.

Client #5 is a past client who I have become friends with.

Client #6 was referred to me from a good friend who has used me twice.

Clients #7 & #8 are old friends.

I love thinking about how all this happens.  I feel like my career is a big tree that just keeps growing new branches.  It keeps me humble too because I realize that so many great people have taken the time to recommend me to their friends and family.  There is no way I could do what I love without them.

I needed them to accept our counter offer…this is what I did

by John Rice

I love thinking.  It’s one of my favorite things about this job.

I put on a new listing a few days ago.  We pushed the pricing envelope a little.

We didn’t get any showings the first day, which is a good sign of how far we pushed it.

The second day we had several showings scheduled.

We got an offer from the first showing.  It was for less than the full amount.  Another sign we were pushing the asking price a bit.  It was still a really good offer though.

My sellers asked about countering for full price.  We really didn’t have much to lose by asking, so I said sure.  I had a few things running through my mind though.  I was thinking about how soft the market responded to this house at this price.  I was thinking about how the buyer’s agent is somebody I know.  She is a great agent.  She knows that in this market, you have to make your best offer right off the bat…and their offer was below the list price.  I was thinking to myself “What can I do to motivate these people to pay full price and not weaken our position to negotiate later?”  I was afraid they would stick with their original offer and wait and see if we even got another offer.  If we hadn’t gotten another offer, they would know that their offer was at least the best one we had or why would we be countering it?  I also know the buyer’s agent would have asked if we had multiple offers.  By saying no, it would be further proof that their offer was still the best and maybe the only one we would get.  The buyer’s may have said no to our counter.

So, the only thing I could do was create a situation where they had to respond to our full price counter offer BEFORE the remaining showings happened.  Once the last showing happened, we didn’t have anything to motivate them if we had not gotten another offer.

Then all the sudden, a thought popped in my mind.  I asked my sellers if I got the buyers to go full price, would they be willing to sign off on it immediately.  They said yes.

I then told the buyer’s agent that if her people would go full price, I would cancel the remaining showings and my people were holding their phones in their hands right now ready to electronically sign off on the deal.

A few minutes later, it was all done.  The sellers are happy.  The buyer gets a house in a tight market.  And I get to work with an agent I trust and respect.

My very first listing

by John Rice

Back to the summer of 2005 on this one.

I had already sold my first house, which you probably read about in my last blog post.

I was eager to list a house and see what that part of being a realtor was like.  Most new agents end up working mostly with buyers.  It’s later in your career when you tend to get more listings.

I had gone to the paint store for a house I was remodeling.  While the manager was mixing the paint, he asked what I did.  I said I was a realtor.  He told me how he was having a house built in Versailles and would need to sell his old house soon.  We made some other small talk.  He helped me load the paint in the back of my SUV.

Just as I was about to put the key in the ignition, I remembered that I WAS A REALTOR?!?

I went back inside to talk to this guy.  He said he was interviewing agents and would be happy for me to see his house.  I was so excited and nervous.

I was scared to death they would ask me how long I had been a realtor.  I was trying to decide if it was more impressive to say just over 3 months or say 96 days.

I was with what was then the biggest brokerage in town.  I had no experience.  All I had to offer was the perceived value of the company.

I got all dressed up and went to their house to meet them.  As they gave me the tour, I noticed there were two calendars from different realtors on their fridge.  That’s why you’ve never gotten a calendar or sports schedule magnet from me.

I sat down with them and showed them everything that had sold in their area.  I took a copy of the previous week’s Homeseller.  I showed them that the first several pages were my company’s listings. I showed them where their listing would be when it was a new listing.  I told them I would do open houses every week until it sells. (And shortly after all this, I realized that NONE of these things help sell a house at all.  Even back then, print advertising was in decline and I learned open houses do much more to help the realtor than they do the seller…..but I was new and I thought all this meant something.)

I did open house after open house after open house.  I met lots of people.  One of whom bought another house from me and has used me two additional times since.

The showing that resulted in a sale happened one Saturday afternoon.  I was working in the basement of that house I was remodeling.  I had drywall dust all over the place.  My phone rings.  I dust it off.  An agent wants to see it.  I tell him to go ahead, it is vacant.

That evening I get an offer.  My first listing sold!

The house gets inspected.  It doesn’t need much.   The buyer noticed some gardening tools in the garage he wanted and proposed we trade repairs for tools.  The buyer’s agent and I worked hard on this.  Finally, we reached an agreement for something like an electric weedeater, a rake and two shovels.

That other agent was new too.  It was his first sale.  We had coffee one day after the closing and he’s been my best friend ever since.  In fact, he is the one that suggested I start blogging.

And once everybody got on Facebook, I found out that this first seller was related to my Dad’s former secretary who is like a little sister to me.

My very first sale

by John Rice

I was so green.

I was 100% dedication and 0% experience.

It was the spring of 2005.  A friend of mine knew I had just gotten my license and he was wanting to buy a house.

We looked at several houses.  It was fun using my electronic key to get in a listing.  This was back in the day when realtors dressed more like bankers, so many sellers didn’t know who was the realtor, since both the buyer and I were wearing shorts and sandals.

I had no idea at that time how seeing those houses and being in those neighborhoods would give me the type of experience I have today.  Every house I go in just makes me a better realtor.

My buyers decided to make an offer on a house off of Liberty Road.  It was late in the evening and this was back in the day when we had to get signatures in ink.  I called the listing agent and told her that I was going to write an offer.  She told me that her seller was an elderly lady in a different time zone, so I could get it to her the next day.  I was so excited.  I slept like it was Christmas Eve and I was 8 years old.  I woke up early the next day to get signatures on all the documents.  I went by the husband’s office on Buckhorn Drive, then went to the wife’s work at Julius Marks Elementary.

I was finally done.  I dropped off the offer at the listing agents office and left her a message that it was there.

About an hour later, she calls to tell me that she had already sold the house because she didn’t hear from me.  I was devastated.  I talked to my managing broker about this.  I gave her all the details of the conversation.  She said that it sounded like the listing agent had both sides of the sale, meaning she had the buyer as well as the seller, and my offer would have ruined her plans of getting a bigger check.  I found it hard to believe that an agent would put their needs over their clients because getting multiple offers is always good for the seller.

I went home, slightly doubting what my manager told me was true.  Then I looked on the PVA to see where the tax bill was sent.  It was sent to the seller in Bowling Green.  When I thought about the listing agent’s comment about the time zone, I began to believe that my manager was right.  Bowling Green is in a different time zone, but it is an hour earlier there than it is here.

I waited patiently until that house sold to see who the buyer’s agent was.  Sure enough, it was the listing agent.  To this day, I have no respect for her.

My people kept looking and finally bought a townhouse.

So we get to the closing day.  I am a nervous wreck.  I go to my office to pick up the buyer’s earnest money deposit and am told that they needed a 48 hour notice.  LOL, they rushed to get it to me.  Something else I learned quickly.

We go to the closing.  It was one of those 5:30 on a Friday closings where everybody is in a hurry.  Once it was all done, I was so relieved and proud to have closed my first sale.  As I sat in my car going through the paperwork to make sure I had everything I needed, I realized that the closing attorney did not give me the commission check.  She also did not take my buyer’s check for the down payment.

It’s been over 13 years and several hundred sales since all this happened.  I’ve learned a lot about neighborhoods, negotiating and human nature.  It’s given me the gut feeling that only comes from experience, just like my manager had.  Her name was Susan. She was a huge help to me when I was a newbie.  She always told me I had what it takes and was always available for advice.  I learned a lot from her.  She passed away from an aneurysm several years ago.  I still miss her.

I feel a little vulnerable sharing how green I was back then, but I was just sitting here thinking about how far I have come.  When I work with a new agent who is just as green, I think back on this time in my career.  It gives me the patience to let them learn the same way I did.