retire in lexington

Who will buy your house when you are done with it?

by John Rice

You know, I think too often realtors and the public operate out of “one size fits all” generalities. Case in point is resale value. If asked which is better, a house with a first floor primary bedroom or one with all the bedrooms upstairs, most people and realtors would agree that the one with the first floor primary has broader appeal, and broader appeal is what resale value is all about. True…..but what if both houses are in a neighborhood that many people pick because of a good elementary school? That means that the target buyer has young kids. Very few parents I have shown houses to with young ones feel okay about sleeping on a different level from them. So, I think in this case, the one with all the bedrooms upstairs is a safer bet.

I used to live near a house that has 4 bedrooms and is about 2500 square feet. Being in a good school district, who do you think will be attracted to that house? Right, a family with kids. But, this place has zero back yard. The deck is about a foot from the property line. So now this poor house will always need to  find a family that doesn’t care about the yard or a couple/single person who wants a big house. A smaller house would have been better suited to that lot, and would probably have taken up less space too.

Many years ago I listed a 3rd floor condo in a complex that was mainly retirees. Did I mention there was no elevator? That was a hard sale. The typical resident didn’t want all the steps and it wasn’t the type of place to be on the radar of most people who weren’t retired.

I had a townhouse listed a long time ago whose target buyer would be a person downsizing.  The place sat right between a pharmacy and an elementary school on the same road. Which one did I emphasize in the marketing remarks? That it was close to a pharmacy.

So, when you’re buying a place, always think about the whole picture. Will the floor plan work for the most likely buyer? Is the yard too big or too small for the most likely buyer? Is that buyer going to even care about the school district? I always find when you start asking yourself a bunch of questions, you can always make a better decision.

Did you pick the right house?

by John Rice

How do you know if you’ve picked THE right house? What IF a better ones comes on the market after you make a decision? How do you know you WON’T regret your decision?

There is no way that you or I can really answer those questions, so I am not going to try. What I can offer are some tips based on my experience that might prevent you from feeling this way. 

How do you know if it is THE house? I think any house you are afraid somebody else will buy out from under you shows it is pretty high on your list. If you can just totally see yourself  living in the house, it may be the one. Same thing with comparing other houses to it. If you are doing that, it means that one is at the top of your list.

How can you prevent regretting your decision? I think the best thing you can do is to take your time in reaching your decision. Granted, sometimes when everybody else wants the house too, you don’t have that luxury. I like it when people get to see a house for the second time. You always notice more of the bad stuff on the second visit. It is even better if you come back at a different time of day. Rooms will look different with the sun on the opposite side of the house. Something that I’ve always told buyers to do, and not many actually have done it, is to drive around the neighborhood on a nice warm Friday or Saturday night. That will bring out anybody that will be annoying, so you won’t have any surprises later. Tough luck if it is winter.

There are a couple other things that bring on regret: Having a tight timeline and getting so tired of looking that you just want it over with. If you have a tight timeline, preparation is the key. I have done a lot of work for people moving form out of town. They’ll only be in town for a few days and have to pick a house. I try to work with them as soon as I know they will be coming here. It all usually happens by e-mail or text, but we chat about neighborhoods, parts of town I think they’ll like, etc. Then I’ll start previewing houses for them. At this point it is all about eliminating houses. You’re not really looking for the right one, you’re trying to whittle down the list to a manageable amount for them to see when they get here. 

Now, about getting tired of looking. If you find yourself here and can do it, just take a break. It is a really scary place to be. It sneaks up on you like a sunburn. Ignore your Zillow app. Maybe have your agent preview houses. By the time you get to this point, your agent should really know what will work for you and what won’t. 

Okay. One more question left?  How will you know a better house won’t come on the market as soon as you sign a contract? Simple answer. You won’t. I tell people to quit looking at houses online once you get past the inspections. If you don’t look, you’ll never know. And if you are the type that won’t take this advice, remember that sometimes houses look better online than they do in person. You are comparing your house in reality to the select pictures that the listing agents wants you to see……So that other house probably isn’t as good in reality as you are picturing it in your head. You got a good house, now just enjoy it.

Why you shouldn’t care about average days on market

by John Rice

I met with a cool family a few weeks ago. They were going to interview a handful of realtors. I’m always a little freaked out at listing presentations. See, there are agents that come with power point presentations full of market wide data available to every realtor in town, and then blurt out something like “After looking at the statistics for this neighborhood, your house will sell at 5:46 P.M. next Tuesday.” That impresses some people I guess. I’m not one of those that throws out a bunch of statistics. I kind of like to look at the house, assess the positives and negatives that I think buyers will see, then do a market analysis to find what I think the house is worth. I usually do all this wearing a pair of shorts and sandals, often forgetting to give the people my business card. I ordered 5000 back in 2016 and still have about 4983.

Why don’t I worry much about DOM and other statistics? It is because I am only dealing with one house. Yep. That’s right. The only numbers I care about are the ones for your house. We never really know when your Buyer will arrive. All we can do is price it realistically, make it look as great as possible, and present it well online.  When I get such a seller, their house usually sells quickly.

So, back to the listing appointment. I’m on the tour of the house and the husband asked me the average DOM question. I told him that I didn’t even look at that because I don’t care how long it took other houses to sell in the recent past, I only care about how long it is going to take his house to sell right now. As soon as I said that, I knew I either had this listing or I had just totally blown it.

Fortunately this cool couple saw my point and went with me.

Best question to ask your Realtor

by John Rice

Where is the best place to spend (insert your budget here)?

That is the single best question to ask your real estate agent if you are buying in an area you know nothing about.

I recently worked with an out of town buyer who found a for sale by owner home in a town not too far outside of Lexington. It was a very nice home. Seemed to offer a lot for the money. Large lot. Great view. Nicely updated.

I could not recommend this house though.

My buyer asked me a few questions about this home. I told them that while it is a very nice house, it is NOT in a neighborhood most people in this small town pick at this higher price point. I then mentioned a very popular neighborhood in this town, saying that is the one most local people find the most desirable. I then said that to local people, that super desirable neighborhood is the one they grew up with as the pinnacle place to live. If they reach the point of being able to afford that neighborhood, they move there. I also told them the house they were interested in will likely sell to an out of town buyer who doesn’t know anything about the local real estate market.

Well, when I went to check on the comparable recent sales in this price range, guess what? Almost ALL of the recent sales were in that exact neighborhood I mentioned. Know what else? My buyer told me that the seller had told them that almost everybody who has seen the house was from out of town.

And all this is why you should ask your real estate agent where is the best place to buy within your budget. You do not want to get stuck with a house that will later be hard to sell because you knew nothing about the local market.

Nailed it! See how my predictions turned out

by John Rice

I’ll try to remain humble here, but I called exactly what is happening in the market today.

I have always said there will always be a market. There will always be demand. Some times the demand will be pent up with people sitting on the sidelines, but they are there, waiting to feel comfortable about making a move. (Typically these people wait until enough other people dive in and effectively end up jumping into a hot market, which is what they were hoping to avoid.)

I have been saying for months that I thought the market could still be very good with interest rates around 6% or less because historically, the past several super hot markets we have seen in our area had those rates and adjusted to average income, real estate values in our area are similar. I’ve said that rates over 7% won’t last forever. I’ve also been saying for years that once rates start going up again, people would be reluctant to give up their super low rates which would create a shortage of listings and would keep prices stable regardless of the market conditions.

I’ve suggested people buy real estate as soon as they are able regardless of the rate since you can always refinance when/if rates go down but you can’t go back in time to get yesterday’s home prices.

And now you know what stories are making the headlines? That mortgage applications are up recently due to rates dropping below 6%. That refinancing applications are up too. That rates are down. That prices aren’t really dropping in areas that didn’t see crazy stupid price increases.

I am seeing all this myself with my clients. I had two listings that went on the market right around Thanksgiving. One of them was modestly priced, totally updated and in a desirable neighborhood. I really thought it would go fast even though that time of year is usually slow. It hardly got any showings, which is very strange. Then once rates went down we had 5-6 showings in a matter of days and it sold. When I go to show listings to my buyers lately, most of the time there is another realtor showing the house when I arrive or one that shows up as I am leaving, sometimes both!