retire in lexington

NEVER sell your house “As-Is”

by John Rice

Why? It can keep people from wanting to see your house. Plus, nobody knows what it really means!

Let’s clear the air first about what it means. Did you know that ALL houses are sold “As-Is”? The contracts all the realtors use in my area say on line 202 that the buyer is purchasing the property “As-Is.” That means just as they see it and where they see it. The house is going to stay there and no warranties, no promises of something happening differently in the future are expressed or implied……So reason #1 to NEVER sell “As-Is” is because you already ARE selling “As-Is.”

I have had several buyers in the past tell me that they were interested in a house but saw the seller was selling “As-Is” and didn’t know why. A lot of buyers think that means there is some big issue the seller knows about and wants to pass their problem on to the buyer…..So reason #2 to NEVER sell “As-Is” is because it scares off buyers from even coming to see your house. It is hard to sell a house to somebody that won’t come see it.

Somehow, “As-Is” has come to mean that the seller prefers to not negotiate any repairs after a home inspection. Wise realtors say something like “Seller welcomes inspections but prefers to not do any repairs.” Still, I say there is no need to even do this. Just as the price is negotiable, the inspection terms are negotiable as well. The contracts in my area say that if the buyer elects to do a home inspection, they have the option to ask for repairs. It also says the seller has no obligation to do any of them…..So reason #3 to NEVER sell “As-Is” is because you as the seller do not have to do any repairs. There is no need to state this to a buyer before they even see your house and know if they want it. This is something that can come up during the contract negotiations. If you were on a dating app, would you put on your profile that you’re lactose intolerant and have bad breath? Of course not. The goal of presenting the listing is to get a buyer to schedule a showing. Nothing else.

How much value do improvements add? Depends on the rest of the house

by John Rice

I often get asked what improvements can be made that give the biggest return. I think a lot of folks are hoping I will say new flooring, new counter tops, stuff like that. I say do those if they are common for your neighborhood and/or price range, and only if your house does not have big negatives that future buyers will have a hard time overlooking. Not all improvements add more value than they cost. Keep in mind that you are focusing on that one new improvement. Sure, it is exciting. You are removing one negative from your house. When you go to sell, the buyers are looking at your whole house. They are weighing the positives against the negatives.

Many years ago, I had two older home listings that both had fabulous features. One of them had a reaaaaally narrow staircase to what had been the attic. It had a new kitchen, great deck, and 2 fantastic bathrooms. Another listing had the smallest living room I have ever seen, but the whole upstairs was brand new. I mean the seller took the roof off and had it rebuilt all new by a very reputable remodeler. It had a walk-in closet and master bath like a new high end house. It was totally superior to any other house in the neighborhood and its price range. Both of them took a while to sell. I would call the agents that showed them for feedback and they would go on and on about how much the buyer loved certain features and what a nice job the sellers had done with their improvements. I was always tempted to interrupt them and remind them that the house was for sale. I let them finish and they always started their last sentence with the word “But”. It was like this: “Buuuuuuuut that living room was too small.” Or “Buuuuuuut they just couldn’t handle those stairs.”

(Since I brought up the whole adding value verses cost of the improvement thing, would you like to know what is the highest return when getting your house ready to sell? Paint. Nobody ever gets excited when I tell them this, but it is true. Fresh paint always make any house feel better.)

Selling? What you like doesn’t matter

by John Rice

A long time ago, my wife decided she wanted a Subaru Outback. We looked at a few on used car lots. I did a lot of research to find out what trim level we had to get for her to have the sunroof and heated leather seats that she wanted. There really weren’t a lot of used Outbacks in or around Lexington at that time. This was so long ago that I found a classified ad in a newspaper that said “2008 Subaru Outback, SI Drive” with the price and the seller’s phone number. That was it. Not a lot of info to work with. Definitely nothing to make the guy’s phone start ringing. But to me, this car having SI Drive told me a whole lot more about it. Having done the research, I knew that was only offered on the top trim level. It had the giant sunroof, heated leather seats, and the bigger engine. When we went to see the car, the seller kept talking about the SI Drive. I could tell it was very important to him.

A lot of home sellers are like that too. They want to focus on what is important to them when selling their house, rather than focusing on things that are important to the buyer. I see it a lot in the marketing material of For Sale by Owner listings. I once read a flyer where the seller spent a lot of space talking about how level the sidewalks are.

About this same time, I sold a house to a family that I have since become friends with. They found the house by driving around the neighborhood. They would have never come to see it if they had only seen it online. Why? Because of the marketing remarks. Instead of mentioning the hardwood floors, instead of mentioning that one of the upstairs bedrooms was huge, or that there were bedrooms on both levels of the house, or that the backyard was an awesome park-like oasis, the realtor used that space to tell you that the exterior was maintenance free, that the curtains stayed with the house, and that there was an allowance for water-proofing the basement as well as mitigating radon. The marketing remarks could only have been better if they said  “Must see! You get to keep the seller’s curtains AND fix some major problems with this house, but at least you’ll never have to paint the outside!! NOT a drive by!”

The hardest thing about real estate is getting sellers to think like a buyer and a buyer to think like a seller. I think if that ever were to happen, I’d probably be out of a job! Being a realtor these days is as much about mediation, negotiation and understanding differing perspectives as it is about houses.

BTW, “SI Drive” is a feature that has 3 settings for throttle response and transmission shift points.

Negotiating is a lot like playing poker

by John Rice

When I was a little kid, my dad had this old set of poker chips. There were red, white and blue ones built into a little round thing with a handle on top. I remember playing poker as a pre-teen with my friends. I also remember winning a lot. I didn’t do it by bluffing or anything that actually had anything to do with the game itself. What I got good at was studying my friends. It’s pretty darn easy to win when you can tell if your pals have a good hand or not. My dad always told me I was pretty good at reading people and seeing their motives. That has been a useful skill in my career as a realtor. 

I remember a sale many years ago with a great realtor. He did everything he should have done. My clue about the buyer’s motivation was the closing date.  It was the Friday before school started back after Christmas break. Sure, most real estate deals close on a Friday. What made this one stand out to me was how soon it was. Not the usual 30-45 days out. This one was just about 2.5 weeks out. So, I hit Facebook, and sure enough there was a person with the same name with school aged kids who lived in the same surrounding town that was on the check for the earnest money. I also knew that most seller’s wouldn’t want to be moving out of their home the week between Christmas and New Year’s Day. We stood firm and got our price.

I had another deal like that. My listing was in the only neighborhood in its price range to have the very desirable school district that it did. We got an offer so low that we didn’t even counter. The buyer’s realtor told us the reason for the low offer was due to the perceived poor condition of the house. I figured they must really want to be in this school district. I mean, there were tons of new/newer houses within walking distance of this one, but they were in a different school district. I don’t know why somebody would pick a house they didn’t like that much when they can get a better house for the same money. It had to be school district. I went online to see what all choices this buyer had in that school district. The only other house was one with a crazy steep driveway…….so I knew we could hold firm to our price. We did and we got it, despite the other realtor’s great effort to get it for less.

From the lines of that old Kenny Rogers song, “You gotta know when to hold ’em.  Know when to fold ’em.  Know when to walk away.  Know when to run.”

Is a view worth less if it is not as good?

by John Rice

I was driving through the new Peninsula neighborhood the other day. It is over off Richmond Road and backs to the reservoir. I could see the back of the houses on Dew Court, Rain Court and Coolwater Court. For decades the owners of those house have had a rare and fantastic view of the water and the woods where there are now these new houses.

But that has changed. The water is still there of course. The woods are gone.

Question is this: Are those older houses worth less since the view is not as good?

To those owners who have enjoyed the “Old” view, I am sure it is not as good now. They probably think these new houses have impacted the value of their homes. I totally get that vibe. I dealt with something similar. I used to have a peek-a-boo view of the Greenbrier Golf Course from my last home. Across the fairway was a beautiful hillside full of trees. About 6 months after I moved in, I heard bulldozers clearing the hillside. Now there is a neighborhood there. While I did not like the new view as much as the old one, it was still a view. It just didn’t extend past the golf course now.

And that is exactly what the 1980s houses have. They still have a fabulous water view. I mean, the new houses are going to be extremely desirable being on the water and they have the houses from the 80s on the other side of the water in their view. There is no reason to think that somehow the market is going to like the 1980s houses less because they now have a view of the new houses across the water, right?

Something else to consider. Whenever the 1980s houses come up for sale in the furture, no buyer is going to know that the view was better before the new neighborhood was built. All they will know is what is currently there, which is a very rare water view.