sell

What to do when you’ve gotta sell your old house first

by John Rice

I feel for people in this situation. I mean, the market is so tough right now. Even buyers who do NOT have to sell their old house before buying their next one are struggling to be competitive in multiple offers.

The odds of you finding a seller who will work with you when they have other offers without a similar contingency are equal to winning the lottery. Hoping for the best isn’t realistic. Here are some not so fun options that will ultimately end up with you getting your next home.

  1. List your house. Sell it. Pack up. Move out. Rent or stay somewhere short term until the house you want hits the market. Then buy it. This gets you where you wanted to be, the only negative is that you will end up moving twice.
  2. List your house. Sell it. Only take offers from buyers who will let you rent back after the closing. Then begin your search and only move once. Most buyers will give you maaaaybe 30-60 days after closing before they will want to be able to move into their new home. This allows you to buy something but you’re under pressure to find and close one within that time period. If you can’t, you’ll have to move out and stay somewhere short term.
  3. Only look at houses that have been on the market for more than about a week. Often these are the less desirable homes since the rush of buyers who saw it when it was a hot new listing decided they didn’t want it. The beauty of this plan is that you only move once and likely are not competing at all with other buyers. This is a good thing. A seller who only has one offer is much more likely to accept a contingency offer than one who has better choices.

So there you go. None of these are exciting. All are a lot of work. But they are real solutions to today’s real estate issues.

The single most important thing when selling your house (or anything really)

by John Rice

I did it again.

I bought another car. For people who know me, this is par for the course. I am always falling in and out of love with cars and trading them like crazy.

If you’re wondering how me getting a new car is related to real estate, it is because of pricing.

The car I bought was not expensive. It is just a little Japanese sports car that is fun to drive. A new version came out during COVID and they have been in short supply ever since. You never see one on a lot. Most are sold before they arrive. Dealers are taking deposits on them and telling people they will call when the car arrives.

I went to a Volkswagon car show with my oldest son and his girlfriend last weekend. We had lunch on the way home. They asked about the deposit I had on another one of these cars at a local dealership. I replied that I was told it should arrive later this month. He then went on a mission of finding me one that was immediately available. He found one about 250 miles away in Indiana.

He called to confirm that it was in fact in stock. It was. I remember thinking to myself “Why is this car in stock, collecting dust on a dealer’s lot when every other one is pre-sold???”

Ahhhhhh……the price!

This dealer wanted $9000 over the MSRP price.

I told the salesperson that I was definitely interested in the car but there was no way I was taking it at $9000 over MSRP. He started telling me what a hot car it was and how many calls they get on it. I am totally sure all that is true. I’m a realtor, so I know how markets for things for sale work. This is a super hot car in high demand, but the reason it hasn’t sold is that it was overpriced.

Here are some truths about any market:

  1. You cannot sell something for more than it is worth.
  2. The whole market determines the value, not just the seller.
  3. A buyer is defined as ready, willing and able. (At $9k over list for a very affordable car, that price pushed the total cost well over budget for the target buyers, thus knocking out the “Able” part of those three requirements.)

Like real estate, you cannot sell the most gorgeous $500k house in a highly sought after neighborhood for $750k. If you try, it will sit on the market and you will reduce the price until those ready, willing and able buyers think it is worth it.

But isn’t the market still hot? Yes, it is. Prices are still going up in our area. That means you still, like always, have to price a house for something a buyer will pay. A hot market doesn’t mean you can sell it for more than it is worth. It just means it will sell quickly and many buyers will want it and be eager to pay top dollar….not more than top dollar. If you ever see a house that is sitting on the market and wonder why it hasn’t sold, literally 100% of the time it is due to price. It may have some odd feature or be in bad shape, but it will definitely sell when the asking price is in line with what Buyer’s think it is worth.

So what happened with the car? They came down to $6k over MSRP and I drove up and got it yesterday. I suspect had they priced it at that from the beginning, it would have immediately sold.

$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.