sell

$30k over list and STILL wasn’t the best offer??

by John Rice

Yesterday was sort of a bummer.

It began with a sale falling apart. My buyers had a contingency contract on a house since they needed to sell their old one first. Somebody else came along without a contingency and kicked them out. Time to start all over.

Then late last night, I found out that another buyer did not get a house on which we had submitted an offer. We went $30,000 over the list price, which was close to 10% over list. There were 22 offers on that house. My poor buyers will likely be competing with those other 20 buyers who didn’t get the house on the next new listing in their price range.

I did at least get one of my listings sold for $5000 over the list price.

It’s shaping up to be another crazy year in real estate. It’s a tough market. It’s tough for everybody except the sellers.

Why say NO to a perfect house?

by John Rice

I showed a house to a family yesterday. It was a perfect house. It was in move in ready condition. Had character. Even a salt water pool. It was on 5 glorious acres in a great location in Woodford County. It was even priced really good.

The buyer didn’t like it.

And that was okay. It wasn’t as good of a fit for he and his family as he had hoped.

He realized that having a primary bedroom on the main level was very important to him. He also realized he didn’t want to maintain that many acres.

It was a good day because we learned something. We narrowed down what he wants in a house. The simple fact is that the more houses you see, the more you learn about what you want/don’t want in your next house.

Often Buyers will apologize to me for wasting my time to show them a house they aren’t interested in buying. I always tell them that finding the right one is a process. It’s really not even about the houses. It’s about self discovery…..learning what’s most important. This Buyer now wants a big yard, but not acreage and a house with a primary bedroom on the main level. Had we not see this fabulous house yesterday, neither of us would have known this.

We are one step closer to finding HIS perfect home.

How old neighborhoods become desirable

by John Rice

There are really two types of old neighborhoods. The kind that always were desirable. Think Chevy Chase Then there are those that became desirable. Think, in varying degrees, Kenwick, The Meadows, Meadowthorpe and Southland.

Chevy Chase is rare. It has never ever gone though any type of normal cycle where there is a decline in desirability. It has the perfect combination of location and character.

What is most common for older neighborhoods is to have gone through one or more cycles of decline. Most were solid middle class neighborhoods when new. Sometimes worse neighborhoods surrounded them and brought them down. Often the owners moved away to newer, more modern suburban neighborhoods in the 1950s through the 1970s. These types of neighborhoods became more and more affordable to subsequent buyers since their spot on the preferred neighborhood hierarchy dropped. Some eventually stabilized. Some keep sliding all the way to the very bottom…..like it if were a Totem Pole, they would be the part that is in the ground.

Kenwick is the perfect example of one that declined to became a stable “C Grade” neighborhood. It worked its way up to “B Grade”, then “A Grade” and is now a legit “A+ Grade” neighborhood. My family moved to Kenwick in the mid 1980s. It was just a blue collar, working class neighborhood. My parents picked it because they loved Chevy Chase but couldn’t afford it at the time. It offered 80% of the location and style for 30% of the price. Over the years I have watched Kenwick go from being the affordable second choice to standing proudly on it’s own two feet. People today pick Kenwick because they love Kenwick, not because it is all they can afford.

The modern equivalent of Kenwick is The Meadows. The Meadows saw a pretty rapid decline in the 70s as most of the new schools, shopping and dining moved towards the south end of town .What was once a solid neighborhood built in the 1950s for returning vets and first time buyers saw a lot of neglect. Many houses became cheap rentals. The foreclosure crisis hit it hard about 15 years ago. With very few affordable older neighborhoods left, it has become a good way to get into an older house and get the old neighborhood vibe for cheap. I don’t really know where future generations will go to fulfill their desire for an older house in an older neighborhood. There aren’t many left. With all the tiny 1000 square foot generic spec homes of the 60s and 70s aging, maybe we will see neighborhoods such as Woodhill, Rookwood, Cardinal Valley and Idle Hour become the trendy spot for affordable older homes. It’s the same formula after all.

Sometimes new development around an older neighborhood helps it become more desirable. Meadowthorpe is prime example of this. When new, it was on the very edge of town. It was probably originally viewed like Masterson Station was in the early days. I remember when Masterson Station was new, people we like “Nice, but why is it all the way out there in the middle of nowhere?” I think few people were even aware of Meadowthorpe when I moved here in the 1980s. It was just some random, cool, neighborhood on a forgotten end of town. Back then, being close to downtown wasn’t as cool as it is now. There was no Distillery District. There wasn’t even that shopping center with Kroger. I think what really helped Meadowthorpe was Masterson Station. Sure, the Distillery District and it’s proximity to downtown contributed, but the continuing development of Master Station solidified the west end of town being part of Lexington instead of feeling like you’re midway to Midway.

Southland is a good example of how a nice, middle of the road neighborhood becomes trendy. It already had a good location on the south end of town between everything out Nicholasville Road and UK. It has always had a good school district. It has always been a nice choice for affordable homes. It seemed like a logical place for people to live and fix up their houses. More and more people starting buying and renovating their houses just as many of the long time owners were leaving. This made prices really shoot up quite a bit in recent years. Today it is common to see extremely nice renovated homes selling for over $500k.

So, if you’ve made it this far, you can see that most old neighborhoods typically become more desirable in these ways:

  1. They already were really desirable-Chevy Chase.
  2. They declined enough to become super affordable and were rejuvenated-Kenwick and The Meadows.
  3. New development and/or changes in the areas-Meadowthorpe.
  4. They were always nice, but became even nicer and more desirable for a variety of reasons-Southland.

Today is a big day for me

by John Rice

E I G H T E E N YEARS.

That’s how long I have been a Realtor as of today.

I’ve been a Realtor through the worst market in history, the best market in history and every market in between. Sometimes I miss those early days when everything was new and there was so much to learn….but most of the time I am thankful that those 18 years have provided me so much experience that I am rarely caught off guard by anything.

My most vivid memory after getting my license was joining the Lexington-Bluegrass Association of Realtors, AKA, LBAR. I went to their office on Regency Road, plunked down my membership dues, filled out some paperwork then I rushed back home as fast as I could to log into the “Realtor only” side of the MLS and see what that was all about. The office is still there. Only one person from my early days remains. LBAR is now just called Bluegrass Realtors.

I got my first listing while buying paint for the basement of my home that I was remodeling. The manager was mixing my paint and as people often do, he started talking about real estate. He said he and his family were building a new home and would be needing to sell their old home very soon. As I got in my SUV after loading the paint in the back, I thought “Wait!! I’m a realtor now!!!” So, I went back inside and talked to him. I got the listing. I remember being so amazed that somebody was going to pay me to do what I had been waiting so long to do. The Buyer’s realtor for that listing and I became best friends and still are.

My first Buyer’s Realtor experience was a townhouse that some friends bought as their first home. They knew it was my first sale ever. I will always be thankful to them for that. I remember being so anxious about the closing, as if somebody’s life depended on me getting everything perfect…..which didn’t happen. I had gotten their $500 for earnest money when they signed the contract and given it to the nice older lady at my office (who was probably the age I am now.) I guess I thought the check would just magically appear in my mailbox the day of the closing. Turns out I had needed to request it. Fortunately there was time to get the check at the main office and off I rushed to the closing. I was such a nervous wreck. The closing was at 5:PM on a Friday. Back then the market was pretty crazy and the lady doing the closing had probably done 20 others that day. I walked out of the closing about 5:45. I was so relieved. I had done it! I thanked the clients who would use me several other times in the future and started walking to my car. Wait!! Something was missing. It was MY check. In the closing attorney’s rush to end her day and in MY anxiousness over the closing, both of us had forgotten that I needed a check. I caught her as she was about to back out of her parking spot and got it. I used what was left to buy a leather couch after my broker and Uncle Sam took their share of that check. My oldest son still has that couch today.

On that day in 2005, all I had was a future. Everybody told me I would do great in real estate. I had hoped they would be right. Today I’ve got a past, present AND a future. Looking back, I can see sooooo many people who helped me along the way. These people said encouraging things, trusted me when I had little to no experience, watched my boys on short notice so I could rush out to show a client a house. My parents, The Ponders and The Boyds ALWAYS were happy to let me drop off my kids at their house and usually yelled “Go sell a house!” as I was backing out of their driveway. I’ve got a client who is about to use me for the 7th time. I’ve got many who have used me 3-6 times and regularly send me their friends. Last year was my best year ever…..and you know what? I’m not done yet.

Know what I like about this market?

by John Rice

If you just want the answer but don’t care to know why, it is because this market is LOGICAL.

If you want to know what I mean, here we go:

Other than the past few years, the real estate market has always been logical. The best houses sold for the most money and sold the quickest within their price range. The second choice houses sold for less than the more desirable houses. Location mattered. The lot the house was on mattered.

For a few years there, nothing mattered. Any house was selling for more than it should have and it didn’t matter if one house was in a second choice neighborhood or had a terrible lot. It was tough being a realtor back then. You could look at recently sold comparable homes and determine what a house should be worth, but it always sold for more, sometimes waaaaaay more than that. I would tell my sellers “Here is what your house is really worth but here is what it could sell for…..expect anything to happen!” I would tell my buyers “Here is what the house you are bidding on is worth, but here is how much of a convenience fee you may have to pay just to end your misery of losing in multiple offers.”

Today’s market is about logic again and I am glad. If two identical houses come on the market on the same street and on the same day and one of them backs to the interstate and the other doesn’t, the one with the better lot will sell for more. If a house is overpriced, it won’t sell at all.

Why is this? It is because today’s buyer has choices. Yesterday’s buyer had one shot at the only active listing in their price range. Having a little inventory makes a difference. It is still a good market. It is an even better market if you have one of the better houses in your price range. This has always been true. I remember back in 2009. The market sucked yet I was getting multiple offers the first day on the market for some of my listings. Buyers will always pick the very best house that is available and take a pass on those that aren’t. That’s just the way logic works.