What’s that gonna do to my property value?

It’s a questions I get asked often, so I thought I would share some examples about what affects property value and what doesn’t….most of these have been asked by friends and clients, for which I am thankful they deemed me to be enough of an expert to ask!

“The golf course behind my house went bankrupt and I’m worried about it getting developed”

I got this one a lot since I lived in such a neighborhood where this happened. People that lived on the course were worried that their values would drop if there wasn’t a golf course behind them. If the land got developed to be single family homes that were priced about the same as the rest of the neighborhood, it would not impact value. Sure, if it was your house you would know the view you used to have, but to the person buying your house, all they know is that there are houses behind your house just like most of the rest of the neighborhood. (BTW, when this happened in my former neighborhood, there was no value difference for the lot. Houses of similar size and similar condition were selling for the same regardless of whether the house sat on the course or backed to other houses in the neighborhood.)

“The city is taking part of my lot for storm sewer runoff.”

This friend of mine lives in a historic neighborhood where all the houses on his street have large, deep lots. He showed me where the city was going to install underground drains and described what it would look like. It wasn’t going to be ugly. Fortunately his lot was big enough that his backyard was still huge by today’s standards. I said it wouldn’t impact value at all since there was still plenty enough backyard for future buyers to have room for kids to play, a pool, etc. It was functionally the same before and after.

“My neighborhood got redistricted to another school”

This one happens a lot. If the school you are losing performs equal to the new one you are getting, then it won’t impact value. If you are going from one of the highest performing schools to a lower performing school, well, that isn’t so good. If you are going from a poorly performing school to a better one, your values could go up!

“They are going to build apartments in my neighborhood.”

This seems to be happening a lot. Density in Lexington is only going to get worse as we attempt to fill every square foot inside the urban service area before entertaining the idea of expanding it. People in Lexington are used to this. While the increase in traffic in your neighborhood will be annoying compared to what it used to be, future buyers won’t know how good you used to have it. Plus, people in Lexington are used to traffic. Unless your house backs up directly to the new apartments or you are on the road that everybody living in the apartments will use, it won’t impact value.

I think when it is YOUR house, it is easy to think any change will be negative. You will remember backing to the golf course, when you used to have a bigger backyard, the school your kids went to and what that vacant field looked like before it became apartments. The thing to remember is that when you go to sell your house, the buyer has no idea how things were. They only know how things are now. A prime example of this in my own house is noise. When I moved here, there was a lot of undeveloped land around me. It was very quiet. With all the new development around me came things like hearing fire trucks or ambulances, dogs barking in the distance, the sound of kids playing. I miss the peace and quiet but you know what? All the changes are things most people see as being normal in any neighborhood, so it doesn’t hurt my value one bit.

Which builder would I pick?

Before I spill on which builder, let’s establish the criteria:  Priced between $200k and $400k and brand new.

Ok, you ready for it?

To keep me out of a lawsuit, lets just say it is the big one in town.  Four letters.  You know the one.

I can already feel the tension in the air.  It is because I get it all the time when people ask me who to use and I suggest this builder.

Sure, everybody in town knows somebody who knows somebody who knows somebody who has had a bad experience with this builder……but nobody ever knows “That” person first hand.  I own 3 of their houses myself and have sold 60 of them of all ages.

It has been my personal and professional experience that they build as good of a home as anybody.  Am I saying they are perfect?  No.  I am just saying that after selling new homes built by other builders and selling hundreds of “Used” homes built by other builders,  their homes seem to have fewer issues caused by the construction of the home.

Any house is something with thousands of pieces assembled by lots of different trades that has to withstand both time and mother nature.   Things go wrong with them.

I think one reason this builder has so many detractors is just because of their scale.  If you have build maybe 25,000 homes in the Bluegrass and 5% of those people had a bad experience, that is a lot of people.  If you are a smaller builder who has maybe built 100 homes in the Bluegrass, that same 5% complaint rate is only 5 people.

All I know is that if I were wanting a new home in the $200-400k range, I would rather go with a builder whose 50 year old houses are still standing verses somebody without much of a history.

MORE similar neighborhoods at different price points

Let’s say you want to be in that sweet spot of the Tates Creek area where you’re equidistant to Hamburg, Fayette Mall and downtown.  You want a traditional house.  Southern Living.  Nice yard with big trees.  I’ve got three more neighborhoods for you at three different price points…..Here we go:

Hartland

I remember when Hartland was brand new.  It was way the heck out there.  (It hasn’t moved closer-I mean that it seemed way out at the time.)  Man O War was a two lane road.  There was no Tates Creek Shopping Center.  Who knew back then that this neighborhood would age so wonderfully.  The design is like nothing Lexington has seen since Chevy Chase.  The main roads have a tree lined median.  All the cul-de-sacs have landscaped islands.  It just feels wonderful out there. The price range for Hartland and all the derivative sub-neighborhoods is about $250k through close to $2,000,000.  Most are in the $300-500k range.  For that, you get a nice big house from the time when J.R. Ewing was shot on Dallas.  Big yards are the norm.  Most I’ve seen are 1/4-1/3 acre.  There is a neighborhood pool/clubhouse.

Here is what you can expect:

 

Cumberland Hill

Built about the same time as Hartland, just on the other side of Tates Creek Road.  Cumberland has a more casual, less pretentious vibe to it than Hartland.  Its the neighborhood for somebody who can afford a Mercedes but drives a Volvo instead.  Being on the other side of Tates Creek turned out to be a good thing, because it gets the very desirable Veteran’s Park Elementary school.  Most of the houses range from the low $200s to the low $300s.  For around or just over $300k, you should expect a nice basement.  One of the coolest things about this neighborhood is that it backs up to Veteran’s Park (The park-not the school.)  At the end of Rockbridge, there is a small parking lot with an entrance to the park.  There is a walking trail and a creek through the wooded areas.  There are a couple of bridges across the creek.  It is very cool.  A pool/clubhouse are at the corner of Tates Creek and Rockbridge.

Here is what to expect:

Contemporary homes were still a little popular in the 80s, so you see a few like this.

 

Ashmoor

This neighborhood is just south of Cumberland and is also across Tates Creek Road from Hartland.  You get the same close proximity to Veteran’s Park and it is in Veteran’s Park Elementary district.  Ashmoor has always seemed like a lite version of Hartland to me.  The houses are similar, just smaller.  My favorite thing about this neighborhood are the huge Pin Oak trees than line most of the streets.   You’ll be around $200k to maybe $250k out here.

Here is what you will see:

It was the late 80s and early 90s, so you do get some houses that are like a mash up of Traditional and Contemporary.

 

There you have it.  From $200k to $2,000,000, there is a house for you in this area!

 

 

Mold and $5000: Why I feel like Superman

“Do something a person can’t do for themselves or something they don’t want to do and you will always have a job.”

I think my dad said this when I was about 11 years old or so.  It is one of the many things he said to me that has always stuck with me.

I had a lawn care business when I was younger and stronger.  That was clearly something anybody could do for themselves, so what I was doing was something my customers didn’t want to do.

Now I’m a realtor.  To some people, it can look like I am doing something anybody can do.  Sure, people do sell their own houses, buyers do buy without the assistance of a realtor.  The funny thing about it is that those people never really know how well they did…..what did they have to compare it to?  Often, a bad buying decision isn’t discovered until you go to sell.

That is where experience comes in.  I kind of feel like all my life has been preparing me to be a realtor.  I was into architecture as a kid, always drew floor plans, went to open houses and model homes as my hobby.  Took drafting and construction classes in high school and college, worked around building materials at Lowe’s, was an estimator for a construction company.  It’s all helped me to offer something beyond opening doors and filling in the blanks on a contract for my clients.

I recently had 2 experiences that I am pretty proud of:

  1.  I have a client who is building a new home.  We just did what is called a pre-drywall walk-thru.  The builder’s goal is to make sure they have the buyer sign off on where all the outlets and such go before the drywall gets hung.  My goal is to check out the house.  I like to just walk around and look, and look and look.  Besides a few little things, I noticed what looked like mold on the roof trusses.  I sold a newer house to some friends a few years ago.  The home inspector found mold on their trusses.  The trusses are delivered to the site in bundles and sit outside until the workers begin the roof.  If it is really wet, those trusses get mold growing on them and are installed before they dry out.  Ever since then, I am always looking at roof trusses when I have a client building a new house.  It was a real pain for the seller of the house my friends bought, and I don’t want my clients to go through that.  We got lucky this time.  The builder at first tried to say it was dirt, but then agreed to spray something on them that would kill any mold.  That’s a win for my client on several layers, the most important one is their health.  (By the way, the truss in the picture  is cracked, which is also being addressed!)img_1756
  2. One of the most common things I get asked from a seller is what needs done to get their house ready to list?  I had a client whose house had a 27 year old roof.  That is pretty old.  I rarely see a roof that old.  And it wasn’t really in that good of shape either.  He was ready to spend $5000 to replace it before we listed it.  I came out and looked at it.  I told him we should put the house on the market as it is.  If we get lucky, nobody will ask for it to be replaced.  There weren’t a lot of listings available at that time and buyer’s could not be that picky.   We got the home inspection repair list.  Nothing at all about the roof.

So, a little experience got one client a mold free house and saved $5000 for another.  It feels really good to be able to do for my clients what they can’t do for themselves….often simply because they don’t have the experience to know what to do.

 

The house that made me a better realtor

There is nothing wrong with this house that can’t be fixed.”

Being a young, inexperienced home buyer, these words were soothing to hear from the home inspector.

What I didn’t realize was that fixing everything would take all my time and all my money.

It was April 1st 2002.  Closing on April Fool’s Day should have been all the sign I needed.  I bought what was called a “Fixer Upper” back then.  Now we seem to have shortened it to just “Fixer.”  This was before HGTV, but I had the same aspirations as the home buyers always do at the beginning of the renovation shows.

My house had T-111 siding, which is like grooved plywood and lasts for about 30 years if maintained.  My house was 29 years old.  And it hadn’t been maintained.

It had the old crank out Pella replacement windows.  The kind that after about 20 years, you one day crank to open and the aluminum mechanism inside snaps.  That day had happened on all the windows long before I had ever seen the house.

The roof had two layers on it.  On a positive note, the HVAC was only 2 years old.

As if all this wasn’t enough, the house had a lot of settlement.  That is a nice way of saying STRUCTURAL ISSUES.  The seller gave me an $8k credit for putting piers under the foundation.  The structural engineer (A.K.A.-SALES PERSON) told me the house needed 20 of them.  They were $1k each.  I told him there was no way I could do that since I only had $8k to work with.  Suddenly, he decided that 8 piers would be just fine.

I got what I thought was a bargain. I paid $118,200 and other similar houses were going for $145-150k on the street.

The evening of April 1st, after moving in all day and getting the boy’s beds set up, I decided to take a shower.  As the steam from the shower filled the bathroom, the pea green tiles in the shower slowly started to fall off the wall.  Many had been glued on to what little drywall was left behind them.  It kind of looked like a pizza commercial where the cheese is stretching as somebody pulls out a slice.  The shower had some goofy accent tile that must have been trendy in 1973.  I keep the tile that is pictured below in my office.

Tanforan Tile

Then there was the time we had family over.  I slept on the couch in the basement.  I woke up, ready for my first cup of coffee.  I knew it wasn’t going to be a good day when I heard a splashing sound and my left foot felt wet.  Turns out the basement leaked too.  The seller said they had never had a water problem, although all the neighbors knew otherwise.

But I got a great deal, and there was nothing wrong with the house that couldn’t be fixed.

Oh yeah, now that I am a realtor, I realize that all the other bidders I was up against for this house were investors who were probably offering no more than $90k and wanting to flip it.

So, over the course of several years, I gutted all 3 bathrooms and remodeled them.  New roof.  Some new windows.  New siding. Added a fireplace. Completely gutted the basement since it was wet and moldy.  With some help from my dad and uncle, we turned 2 paneled rooms into one massive space with all new drywall, can lights, new electric and all new trim.

To solve the water issue, I had the leafguard gutters installed, the basement waterproofed with two sump pumps and brought in 3 dump trucks full of dirt and regraded the back and side yard.  Now the house next door gets water in their basement.  I didn’t feel too bad though.  If the builder had graded my yard properly, he would have been getting the water for 30 years.  It was his turn now.

I have always hated this house.  It is sort of funny that I still own it.  We moved out in 2007 and I’ve been renting it ever since.  Part of that is because houses were not selling back then.  Part of it is because after doing all this work to it, I wanted to be the one who benefited from it.

This house was sort of like real estate college for me.  I am a much better realtor having having had these heartbreaking, time consuming and costly experiences.  Having had a house that had just about every problem a house can have and fixing it all has benefited every client I have ever worked with.

And I will never recommend a home inspector who says “There isn’t anything wrong with this house that can’t be fixed.

Before and after (Circa 2008):