real-estate

What to look for in your next Realtor

by John Rice

I had a friend contact me on Facebook about the possibility of finding a new agent to sell their house that is outside of my market. They were not asking me about listing it for them, just advice on what to do. Seems they have had a lot of showings, and obviously no offers yet. I though this would make a good blog post.  

“Sorry to take so long to get back to you. This isn’t an easy one to answer so I wanted to have time to give a thorough response.

I’ve got a few questions.

Question 1: Is your current agent presenting it well online? Go online and take a look at the listing. If the pictures and marketing remarks wouldn’t make you want to see it, odds are everybody else feels the same way. While you are there, double check that everything is accurate.

Question 2: Is it priced realistically? If you have had that many showings, it may be priced high. I don’t know the market where you live, but to have that many buyers look and not make an offer could mean that the price is too high or………Question #3!

Question 3: Is the feedback you are getting from showings that there is some fatal negative that buyers just can’t look past? If you keep hearing the same thing over and over again, you might have a big negative. Most big negatives can only be conquered with a price reduction.

So, if you do part ways with this agent, here is what I would look for next. Ideally, an agent that works with at least as many buyers as they do sellers. Most agents prefer to list. Agents that mostly only list houses don’t see as many houses. An agent that works with a lot of buyers has probably been in a lot of the houses that you will be competing against. That agent will be better able to tell you what your house offers to buyers that are out there right now! I’d also look for somebody that deals mostly in your price range. It always kills me when I see an affordable house listed by agents that deal almost exclusively in high end houses. What does an agent really know about a $250k house and $250k buyers when 98% of their work is over a million?

I’d also look for somebody that has a plan. Don’t go for the agent that spits out their average days on market unless they can specifically tell you what they did to acheive it. You want somebody that will do a market analysis and will show you how they came up with what they think your house is worth, even if you don’t like the number. Some agents will list a house for whatever price it takes to get the listing. Then they start hitting you up for price reductions. I kind of think it is better to deal with reality now, since you’ll have to at some point down the road.

I hope this helps. Let me know if you have any other questions…..I may turn this into a blog post. (No names of people, places, things though.)”

100% fool proof way to time the market

by John Rice

“Is now a good time to buy or sell, or should I wait?”

I get asked this a lot.

My reply is that while there might be times that are statistically slightly better or worse to buy or sell, the timing has more to do with you than the market. I secretly think it is us Realtors who came up with the whole timing the market thing. Ever notice we always have a good reason for right this minute being your best time to buy or sell? Prices could go up, buy now! Rates could go up, buy now! Rates dropped an eighth of a point, buy now! There will be fewer houses on the market in winter to compete with, sell now! More buyers are out in the spring and summer, sell now!

Is there something in your life making it a good time for you to buy or sell? Maybe you are getting married, got a job in a new town, getting divorced, having a child or any personal reason for a move? Then the time for you is now.

Another reason is when the perfect house hits the market.

No two houses are totally identical. Sure, some new ones can be extremely similar, buy even they are not 100% the same. I recently had a friend and his wife find a house for sale on a street they have always dreamed about. We viewed the house. They fell in love. An offer was made and accepted. The time was right because they wanted it and it was suddenly available. Who knows when the next one on that street, which only has 30 homes, would be available?

Sometimes you have no control over the timing.

I recently had a similar experience but with car buying. I am really into older BMWs. A friend of mine had a 1987 BMW 535i that had been in his family since new. It was bought locally and has been in Lexington ever since. It has been maintained by a shop owned by a friend. A family friend was the sales manager at the dealership and I have a document signed in 1987 by him in the glovebox. I had always drooled over this car since it was in really good cosmetic condition. There are few left that are as nice as this one.

My friend called me up one day out of the blue saying it was time to sell it. He asked if I was in the market. I told him I was not actively looking, but I was in the market NOW since the right car presented itself to me. He knew the time was right for him. I knew the time was right for me. He did not wonder if he could have gotten more by waiting. I did not entertain the thought of waiting for the next one.

You are in the center of your real estate decisions. Do what is best for your needs and don’t worry about it…..and according to us Realtors, now is always a good time, LOL!

Where are the entry level brand new affordable homes?

by John Rice

When the ink on my real estate license was still drying, Lexington was already getting pretty expensive for first time buyers. Yes, I know $150k for a brand new home in Masterson sounds absurdly cheap right now, but there was a time when that was just beyond the reach of your then millennial first time buyer. Back then, your choice for entry level new construction money was a 2 bedroom/1.5 bath townhouse in Lexington or a 3 bedroom/2 bath ranch in Nicholasville.

Nicholasville was close to Lexington. Even closer now. It was just another 20 minutes of driving to get a better house. That was enough for all those My Space loving kids to pull the trigger. You got your own yard, a two car garage and didn’t have to share a wall with anybody.

Where is that happening today? Richmond. A quick search for brand new 3 bedroom/2 bath ranch homes under $300k shows that. Yeah, there are a few in Georgetown but not many. Forget about it in Lexington. Nicholasville? Nope. Nicholasville has become a legit suburb of Lexington. The market there is now more mid and upper level homes for new construction.

What’s an old house worth?

by John Rice

I had to run the comparable sales data for a house in the area between Chevy Chase and UK. My buyer wanted to know what I thought a house I showed him was worth. Usually comps aren’t too hard. In a newer neighborhood, they can be really easy since sometimes you can even find three of the exact same floor plans to use.

Older houses are a little harder to comp. For example, the 3 best ones I had to pick from today were all in the same area, but were very different. A lot of realtors would have just divided the sale price by the square footage, maybe added/subtracted for differences such as the number of bathrooms or a garage. (Or even worse, just gone with what Zillow says is the value.) It is all a very logical process of averaging data to come up with an opinion of value. The only problem is that it doesn’t always work.

Back to my story….

The cheapest one was on the edge of the neighborhood near where the commercial section ends on South Ashland. That corner of the neighborhood has a very different vibe than the one I saw with my buyer.  The next one was right around the corner from the house I showed. You’d think that would have been a good one. But, it was much bigger, had been converted to student housing a long time ago, had a surplus of bedrooms, and was handicap accessible. That isn’t going to attract anybody from the same buyer pool as the one we saw. Sorry if this is starting to sound like the real estate version of “Goldilocks”, but the last one was just right.

The last place was similar in square footage, was more updated, had newer systems and would attract buyers from a much broader pool. It sold for less than the asking price of the one we saw.  I had to tell him that I thought the one we saw was over priced.

I also had to tell him that with old houses, you just never know. Somebody could see that place and totally fall in love with it, with the end result being they paid more than any other buyer would.

All this reminds me of 2 houses I had listed on Wabash a long time ago. Both of them were totally and tastefully updated. The first one I listed was everything anybody could want in an old house, with the exception of very rough and very steep steps that went to the converted attic space. It was really nice up there, but getting there was posing a problem. Time after time (not trying to sound like Cyndi Lauper here) the feedback would be that the house was very nice but those stairs were a deal breaker. We did sell it however.  I should add that we actually sold it for much higher than the neighbors and a realtor who lived a few blocks away ever though was possible. The comps didn’t really support the asking price. We kind of pushed the envelope and it worked. The buyer was transferring from California, had a tight time line and everything in Lexington looked like a bargain!

The next house I listed on that road was equally nice. They had remodeled the upstairs, bumped out the roofline of the back and added a killer master bathroom and a walk-in closet. Those are 2 things you don’t see often in an older house, especially for the price range we were in. That house posed a different problem for me. See, the downstairs rooms were sooooo small. If you just looked at the comps, you’d have thought the house was worth about $20,000 more than it was. We had to sell it a little under the comps to make up for the small rooms because this time, there was no California transferee to be found.

So, you really have to have a feel for how buyers will perceive the house as a whole to know where to add or subtract value. That is the art part of the deal. Even to the most unemotional buyer, they still have to like the house to buy it. On the comp sheets that all the realtors use, it has the scientific stuff  like values for square footage differences, bathroom count, a finished basement verses unfinished basement, the number of garage spaces, etc. The problem is that if we don’t throw a little art into the comps we’ll just get them wrong…………unless the house is one of those where 3 identical houses have recently sold!

Do you know where your property lines are?

by John Rice

Based on nearly 20 years of experience, I am going to guess you will say you do.

There are two questions on the Seller’s Disclosure about property lines that make me think this.

One questions asks if you know the property lines. I do not think I have ever had a seller answer no to that quesiton.

The next question asks if they are marked in any way. Many sellers answer no to that question.

I have always wondered how they know where the property lines are if the boundaries are not marked in any way?

The truth of real estate is that most of the time, we do not know where the property lines really are. The only way to be sure is to have a pin and stake survey done. Many people assume that was done when a fence was installed but that is not always the case.

When buying a house, few buyers purchasing a home in a neighborhood care to find out exactly where the boundaries are. Most assume it is the fence or if no fence exists, it is the mutually agreed upon line where the neighbors stop mowing their grass.

And for all intents and purposes , if everybody is happy, then that pretend line is just fine.

Buy if you are going to add a fence or some structure that may encroach on the set back lines of your property, the best thing you can do is get a survey done. Nobody likes to spend a few hundred bucks on something they think they don’t need, but if a neighbor doesn’t like where you put your fence, you better hope your fencing company guessed correctly where the property line actually is. It can get even more expensive if you do something like build a deck within the set back line, which is the minimum space required along the perimeter of your property. If the building inspector finds out, you will either need to remove it or apply for a variance. Neither are fun and will cost more than a survey.

Plus, getting a survey done allows you to answer affirmatively that you actually DO know where the boundaries are because they ARE actually marked.