Shhhhh….Don’t tell anybody this

I’m going to let you in on a little secret.

The market has slowed down in much of the Bluegrass.  I don’t mean that it is dangerously slow or anything.  It is still a hot market with too few houses for sale.  It just isn’t the crazy frenzy it was earlier this year.  That is to be expected since it does slow down a little after school starts, then a little more the closer you get to Thanksgiving, then a little more the closer you get to Christmas.

How much?

In Fayette County, sales are down 6% when comparing August 2016 to August 2017.

I put two new listings on the market last week.  I try to put my listings on late Friday afternoon so we get lots of showings on Saturday.  That way everybody is off work and they can all see each other come and go from the house….it makes it feel more like an auction.

I knew it had slowed down some, so I was expecting only 4-5 showings at each house, and probably at least two offers on each.

House A did not get any showings the first day on the market and only one showing was scheduled for the second day on the market.

House B had only one showing scheduled the first day on the market.

Fortunately both sold to the first buyers who saw them, but I imagine they and their agents would be surprised to know this.

Both houses were priced right, presented well and in the most popular price range.

I sold another house this week too.  This time I was working with a buyer.  We saw a very affordable house the very first day it was on the market.  Throughout most of this year, I have shown a house and had another agent showing it before and/or after my showing.  Sometimes there has been a line, prompting me to consider a side hustle of selling snacks and drinks while I am there waiting.  I was at this house for an hour.  No agent was there before me.  No agent was waiting for me to leave.

I am noticing home inspectors have been able to get to jobs in fewer days too.

When I scroll through the pending sales every day, I am seeing fewer and fewer 1 day on the market sales.  Most are still selling in less than a couple weeks, but that is a big change from earlier this year when almost every house sold the first day.

All of this makes me think it is a great time to buy.  Probably the best time all year.

 

 

 

My Miata teaches sellers a lesson about color

IMG_2208

 

Ok, what is the first thing you notice about my Miata?  It’s the red top on a blue car, right?

I thought this picture may help on future discussions I have with sellers regarding their paint colors.

FYI, the top won’t always be red.  Plan is to paint it a metallic silver.  These original hardtops are hard to get, so you buy the first one you find.  This one happened to have come off of a red car.

So, this is my car.  I’ve gotten use to the red.  So much so that I don’t even really notice it, which is why I haven’t painted it in the 8 months I’ve had it.  Same happens with sellers with bold colors…..it is their normal and they don’t really see their house in the same eyes as a buyer.

But buyers notice bold colors just as the first thing you noticed about my car were the colors.

Do you care that the car only has 67k miles since 1990?  That all the suspension is new?  That it is all original?  No, you’re just giggling about the Wonder Woman/Superman/Papa Smurf color scheme.

Let’s say I wanted to sell it.  I might say that I don’t know what color the buyer would want it to be, so it is best to let them decide.  That is what a lot of sellers say when you tell them they need to paint.  The problem with leaving a boldly painted house alone is that you either need a buyer who can see past it or has your exact same taste, both are maybe 5% of the whole pool of buyers.  The most popular car colors are white, black and 50 shades of silver.  For houses, gray, beige or greige are the crowd pleasers.

I guess if I were selling it, I could offer an allowance for painting it.  Maybe $2000.  Then I still need a buyer who wants to paint a car as their first act as the new owners.  My experience is that people never know what painting will cost.  They are usually way high on what they think it will be.  So if you offered a $2000 allowance on your house for painting, most buyers will want twice that.

What happens if I were to do nothing about the paint and try to sell it like it is?  If selling a car with a bold color scheme is like selling a house with a bold color scheme, what will happen is that it would sit on the market for a long time and then finally get a low offer because the buyer wants a bargain price if he is going to have to do the work.

It’s a good thing I have no intentions of ever selling my Miata.  I’ve owned it twice.  I sold it to a friend and bought it back.  Unless you feel the same way about your house, you are wise to get rid of the bold colors.

 

Is building the answer?

A lot of people think that we need to build our way out of the shortage of houses for sale.

I don’t.

The only places left to build in Fayette County are on the edges of town at a time when there is more and more interest in living closer in.  No builder is going to use the little bit of land we have left for anything less than a $173,950 house, which is the base price of the cheapest model Ball Homes will build in Masterson Station.  A quick search on LBAR shows the cheapest actively listed new construction home is $202,900.

I think the problem is affordability for first time buyers.  I have always said that it is the first time buyer who greases the entire real estate market.  They are usually the only group that doesn’t need to sell a house in order to buy.  It is like the bases are loaded and the first time buyer is the one who hits the home run so everybody standing on all those bases gets to move.

A lot of first time buyers are and will continue to look outside of Fayette County.  They will look in Lexington neighborhoods they would not have considered 10 years ago to make their numbers work.   They might even consider a townhouse or condo.

Like my baseball example, the bases are loaded.  The first time buyer is waiting to hit their home run, only there are no balls being thrown.  If more affordable houses come on the market, it will make sellers in all price ranges less worried about finding their next house.  Sellers know they can sell quickly but are worried about finding a house.  Remove that fear and we’ll have more houses for sale.

Common mistakes sellers make

Besides thinking the people on HGTV really know a lot about real estate, below are the most common ways sellers shoot themselves in the foot.  Granted, we are in a hot market and buyers are easier to please these days, but there are 228 houses in Lexington in the $100-500k range that have been on the market for more than 60 days…..not EVERY house in town is selling in multiple offers the first day on the market.

Here goes:

1. When sellers don’t finish moving out. If you are no longer living in the house, get ALL of your stuff out. You know you are going to have to do it anyway, right? It will make your house look better. Better looking houses sell quicker. Time is money.

2. When you don’t paint because you think you are somehow doing the buyer a favor by leaving it up to them to paint. I hear this a lot: “I don’t know what color the buyer will like and most buyers always paint after they move in anyway.” I can tell you that bad paint keeps a buyer from making an offer. If it doesn’t look good, they don’t want it. Fresh neutral paint is the cheapest thing you can do you make your house easy for a buyer to say YES to.

3. Leaving a lot of room for negotiating. An over inflated price usually drives buyers away. I see all the time where a seller will list for far more than the house is worth and eventually sell it for a little less than it is worth. The best model is to price it right from the start. If a house has been on the market for a long time, buyers assume there is no risk of losing it so they make a low offer just to see what you will take.

4.  Not doing any obvious repairs.  As a seller, your goal is to make it easy for a buyer to say yes to your house.  You want them to be excited and fall in love.  If a buyer walks in and immediately sees work that needs done, they begin to subtract whatever they think it would cost to change it, and they usually overestimate the cost.  You want your buyer to be walking around your house falling in love with it rather than subtracting repair costs off your list price.

I hope this helps you when it is time to sell.  The worst thing that could happen if you did all of this is that you sell your house for top dollar in multiple offers the first day on the market.

Was it me or St. Joseph?

Benz on snow

Back when the market was terrible and buyers had a ton of choices in any price range, I said that you had to have the online presentation perfect because buyers would not take the time to come see the house if you didn’t.  I’m embarrassed to admit this, but I also thought that if we ever had a hot seller’s market again that buyers would come see any house that was in an area they liked, regardless of the presentation.  I was wrong.

Here we are in such a market.  Good houses are selling very fast.  Overpriced houses and ones poorly presented are collecting dust.  It is like buyers are not willing to go backwards in their searches.  Like they see a new listing and either go see it or totally forget it forever.  I think some of this is because buyers are setting up saved searches on sites like Zillow or realtor.com.  They are only really looking at the new listings.  In the old days, you know, around 2011, people would scroll through all the listings everyday just to see the new listings.  You really need a price reduction or status change to get back in their portals.

Here is an example:  I’ve got a listing that we put on the market during all the snow we had this past winter.  The seller wanted me to wait to update the pictures until a certain tree was in bloom.  We hardly had any showing since the outside picture had snow on the ground.  This house has an amazing backyard.  Mentioning it in the marketing remarks did not matter much without a picture to show it.  The picture above was taken the day my photographer did the shoot.  There was nowhere to park so I made my own space.  Once the snow melted, we had maybe 3 showings in 45 days.

Finally, the seller agreed that it was time to update the picture.  The tree had pushed out it’s blooms.  I got my photographer back out.  I deleted the listing and put it back on as a new listing with the new pictures.  That was less than 48 hours ago and I have confirmed 4 showings since then.

The seller, a good friend of mine, credits the statue of Saint Joseph she buried.  I get no respect ;-(