real-estate

What to do when you’ve gotta sell your old house first

by John Rice

I feel for people in this situation. I mean, the market is so tough right now. Even buyers who do NOT have to sell their old house before buying their next one are struggling to be competitive in multiple offers.

The odds of you finding a seller who will work with you when they have other offers without a similar contingency are equal to winning the lottery. Hoping for the best isn’t realistic. Here are some not so fun options that will ultimately end up with you getting your next home.

  1. List your house. Sell it. Pack up. Move out. Rent or stay somewhere short term until the house you want hits the market. Then buy it. This gets you where you wanted to be, the only negative is that you will end up moving twice.
  2. List your house. Sell it. Only take offers from buyers who will let you rent back after the closing. Then begin your search and only move once. Most buyers will give you maaaaybe 30-60 days after closing before they will want to be able to move into their new home. This allows you to buy something but you’re under pressure to find and close one within that time period. If you can’t, you’ll have to move out and stay somewhere short term.
  3. Only look at houses that have been on the market for more than about a week. Often these are the less desirable homes since the rush of buyers who saw it when it was a hot new listing decided they didn’t want it. The beauty of this plan is that you only move once and likely are not competing at all with other buyers. This is a good thing. A seller who only has one offer is much more likely to accept a contingency offer than one who has better choices.

So there you go. None of these are exciting. All are a lot of work. But they are real solutions to today’s real estate issues.

The single most important thing when selling your house (or anything really)

by John Rice

I did it again.

I bought another car. For people who know me, this is par for the course. I am always falling in and out of love with cars and trading them like crazy.

If you’re wondering how me getting a new car is related to real estate, it is because of pricing.

The car I bought was not expensive. It is just a little Japanese sports car that is fun to drive. A new version came out during COVID and they have been in short supply ever since. You never see one on a lot. Most are sold before they arrive. Dealers are taking deposits on them and telling people they will call when the car arrives.

I went to a Volkswagon car show with my oldest son and his girlfriend last weekend. We had lunch on the way home. They asked about the deposit I had on another one of these cars at a local dealership. I replied that I was told it should arrive later this month. He then went on a mission of finding me one that was immediately available. He found one about 250 miles away in Indiana.

He called to confirm that it was in fact in stock. It was. I remember thinking to myself “Why is this car in stock, collecting dust on a dealer’s lot when every other one is pre-sold???”

Ahhhhhh……the price!

This dealer wanted $9000 over the MSRP price.

I told the salesperson that I was definitely interested in the car but there was no way I was taking it at $9000 over MSRP. He started telling me what a hot car it was and how many calls they get on it. I am totally sure all that is true. I’m a realtor, so I know how markets for things for sale work. This is a super hot car in high demand, but the reason it hasn’t sold is that it was overpriced.

Here are some truths about any market:

  1. You cannot sell something for more than it is worth.
  2. The whole market determines the value, not just the seller.
  3. A buyer is defined as ready, willing and able. (At $9k over list for a very affordable car, that price pushed the total cost well over budget for the target buyers, thus knocking out the “Able” part of those three requirements.)

Like real estate, you cannot sell the most gorgeous $500k house in a highly sought after neighborhood for $750k. If you try, it will sit on the market and you will reduce the price until those ready, willing and able buyers think it is worth it.

But isn’t the market still hot? Yes, it is. Prices are still going up in our area. That means you still, like always, have to price a house for something a buyer will pay. A hot market doesn’t mean you can sell it for more than it is worth. It just means it will sell quickly and many buyers will want it and be eager to pay top dollar….not more than top dollar. If you ever see a house that is sitting on the market and wonder why it hasn’t sold, literally 100% of the time it is due to price. It may have some odd feature or be in bad shape, but it will definitely sell when the asking price is in line with what Buyer’s think it is worth.

So what happened with the car? They came down to $6k over MSRP and I drove up and got it yesterday. I suspect had they priced it at that from the beginning, it would have immediately sold.

Always make this your first priority when picking a house

by John Rice

Let’s face it, most houses in any price range are all pretty similar. It is rare in Lexington to get something unique in the sense of a feature or design that is different from anything else. We have old houses that mostly have the same character from the time period they were built. We have new houses with their open floor plans. We have updated houses. We have outdated houses. We mostly have houses with average lots. We also have houses with less than average lots. Basically you can pick what part of town you want, what age house you want, whether you have to have it updated or not and just like that, you’ll find about every house that makes your list is pretty darn similar to every other house on your list.

While this isn’t necessarily a bad think, it can make your house harder to sell whenever the market softens……which right now appears will never happen.

Tastes change. Things go out of style. The 90s saw a bread drawer in the corner of every kitchen plus a built in desk. Cherry cabinets were the rage. It won’t be all too long before white shaker cabinets and shiplap will become negatives to buyers rather than something that makes them want the house.

What should you do to make your house be among the best when you go to sell it? The best thing to do is pick a good lot. Why? It never goes out of style and never needs updating.

I recently sold a townhouse in a nice complex on the edge of downtown. The location is great and always will be. The thing is that about half the units are totally identical to each other. The one I sold was an end unit. That means you only share a wall with one neighbor. It also gives you windows on the other side. This unit backed to the houses in a historic neighborhood. You looked out your rear windows and saw trees and grass with the neighboring houses far away. The other units all backed to each other. This unit was on the edge of the complex. It had some greenspace across the street out front. All the others faced other units. There was plenty of guest parking and since it was on the edge of the complex, it is the least likely to be used. This was the best lot in the entire complex.

I told my buyers to picture it is 2008 all over again. They decide to sell when there are 15 other identical units for sale at the same time. Which unit is that one buyer in the market going to pick? Their unit, because the lot will never go out of style and never need updating.

$30k over list and STILL wasn’t the best offer??

by John Rice

Yesterday was sort of a bummer.

It began with a sale falling apart. My buyers had a contingency contract on a house since they needed to sell their old one first. Somebody else came along without a contingency and kicked them out. Time to start all over.

Then late last night, I found out that another buyer did not get a house on which we had submitted an offer. We went $30,000 over the list price, which was close to 10% over list. There were 22 offers on that house. My poor buyers will likely be competing with those other 20 buyers who didn’t get the house on the next new listing in their price range.

I did at least get one of my listings sold for $5000 over the list price.

It’s shaping up to be another crazy year in real estate. It’s a tough market. It’s tough for everybody except the sellers.

Why say NO to a perfect house?

by John Rice

I showed a house to a family yesterday. It was a perfect house. It was in move in ready condition. Had character. Even a salt water pool. It was on 5 glorious acres in a great location in Woodford County. It was even priced really good.

The buyer didn’t like it.

And that was okay. It wasn’t as good of a fit for he and his family as he had hoped.

He realized that having a primary bedroom on the main level was very important to him. He also realized he didn’t want to maintain that many acres.

It was a good day because we learned something. We narrowed down what he wants in a house. The simple fact is that the more houses you see, the more you learn about what you want/don’t want in your next house.

Often Buyers will apologize to me for wasting my time to show them a house they aren’t interested in buying. I always tell them that finding the right one is a process. It’s really not even about the houses. It’s about self discovery…..learning what’s most important. This Buyer now wants a big yard, but not acreage and a house with a primary bedroom on the main level. Had we not see this fabulous house yesterday, neither of us would have known this.

We are one step closer to finding HIS perfect home.