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What’s it really like living in the country?

by John Rice

I’ve been in the sticks for almost a year now. I get asked this a lot. For the most part, it has been everything I hoped. I enjoy it. I did have some concerns before we moved, and of course there are a few things I had not thought about.

My biggest concern was getting stuck out here in the winter. I don’t know why, but for some reason ice on my street in the country bothered me more than ice on the street at my old house in a neighborhood. It was about two miles inside the neighborhood at my old house before I got to well maintained road. Well, I live about the same distance from a major state highway. Guess what? Two miles of ice is still two miles regardless of where you live. The good thing for me is that my road gets plowed and salted faster than my old neighborhood road did. My next door neighbor out here is the police chief, so I guess they want him to be able to get out easily if there is an emergency.

I was worried about crime. That is probably because having grown up in neighborhoods, the thought of nobody being close by was scary. That’s been a non-issue. Only your neighbors drive past your house unless you live on a main road and there seems to be a real strong sense of respecting the property of others out here. And for those that aren’t so respectful, they assume everybody has a gun so they don’t really want to risk getting shot at for your stuff.

There are really only two things that I didn’t think about. Neither are big deals thankfully.

The first is that most people in the country keep to themselves. My neighbors will wave to me. Several stopped and introduced themselves to me when I was new. But most of the time it is just like a neighborhood where you mostly just smile and wave. I guess small talk is harder to do at the mailbox when your houses are so far apart.

The other thing, and this one is what bothers me the most, is that there are no storm sewers. In a neighborhood, the rain water runs neatly down the curb into the storm sewer and disappears. Out in the country, the water runs down a hill, crosses the road leaving mud and gravel for daaaaaaaaays after it quits raining. This probably wouldn’t bother me if I wasn’t trying to keep my cars clean. As soon as it all dries up, here comes another rain to do it all again.

And that’s it. Other than these few things, it really isn’t that much different than I expected. Sure, I have to drive longer to get anywhere and I have a lot more grass to mow. That is totally worth it to me to get the peace, quiet, calmness and beauty that county life offers.

I love showing rural properties. Nothing like a fun drive in the country and then getting to see a house and some land. Here are the counties I work in for both rural and neighborhood properties: Fayette, Scott, Jessamine, Clark, Madison, Woodford, Bourbon, Montgomery, Franklin and Garrard Counties.

Best way to get top dollar

by John Rice

It’s sort of a given that almost any house is going to get multiple offers, but how do you get buyers to do even better than the offer they submitted?

Common these days is the quickly becoming old school way of having a deadline for submitting offers. That makes it easy for the realtor, but doesn’t really give the buyers much motivation to get an amazing offer in as quickly as possible.

What I like to do is have the deadline, but add that the seller reserves the right to accept their ideal offer at any point prior to that.

This does a few things: 1. It gets you an offer in hand fast so that when realtors ask “Do you have an offer yet?” you can say yes! 2. It usually gets at least one buyer thinking they might get the house if they throw out a crazy high offer. Sometimes this works if the offer is higher than the seller and I expected or if it is that high and cash. 3. It also helps you if you don’t get more than one offer at all…..but more on that in a minute.

If I have more than 3 offers, I will let the realtors who sent the offers know I have several offers and I will highlight some of the best terms. You have to have 3 or more offers to do this though since each realtor knows what their offer was. I might say “I have 3 offers, all over list price, 2 of them waived the home inspection, etc. This lets realtors know that somebody has a better term than they did on their offer. I usually can get realtors to revise their offer with more competitive terms.

From here it is mostly waiting for the deadline.

But what do you do if you only have one offer and it isn’t that good? Well, a few hours before the deadline, you call up the realtor with the only offer. You let them know that you are willing to cancel the remaining showings and not wait for the deadline if they agree to whatever counter your seller wants to make. I have NEVER had a realtor not take me up on this. If you wait until the deadline and then try to counter, you have lost all leverage because they know they had your only offer. There has to be the fear that one of those remaining showings could be the buyer who outbids them.

So that’s it. It has never failed me and unless every realtor in town reads this, it will be our little secret.

How to make a good choice in a frenzied market

by John Rice

It used to be real estate was all about “Location, location, location.”

Today real estate seems to be more about “Finishes, finishes,finishes.”

This disturbs me. Why? Because one day there will be enough houses for sale that a buyer has a choice on location. Right now, with so few houses for sale, buyers are considering ANY house in their price range. When you only have one or two choices, you can’t afford to be picky.

Something else that disturbs me are all the houses that have been extensively renovated and are selling for twice what a similar non-renovated house is worth in the same neighborhood.

I am not sure why this is but I suspect it has to do with the speed of the market. Nobody has time to do a market analysis and see what the house is worth compared to other recent sales or see if it is overimproved for the neighborhood

This is what I tell my buyers:

  1. Location is still important. Any house can be updated but you can’t easily move a house to a better location.
  2. Only buy at the top of the neighborhood’s price range if there are several other homes equal in finishes and value. You do not want that $400k house that looks like the reveal at the end of an HGTV show and is surrounded by $200k houses. In a balanced market, or even worse in a buyer’s market, potential buyers will love your house but will not buy it. They will be in a $400k price range and expecting a $400k neighborhood. They won’t like the cheaper houses around it. Remember when you buy a house, you are also buying stock in the neighborhood.
  3. Don’t compromise on the lot. Right now nobody cares. Buyers are just excited about any house in their price range. You don’t want the house with the tiniest or oddly shaped lot in the neighborhood. Remember neighborhoods are about conformity……fitting in among the rest of the houses. It’s okay to have the biggest or best lot in the neighborhood of course, but if most of the lots in the neighborhood are flat, you don’t want one that isn’t. If most are large, you don’t want the smallest one. Avoid driveways that are pretty steep. It is better to have a lot where the backyard slopes downhill away the house verses sloping uphill.

Basically, the best thing to remember as you frantically are trying to decide how much over the asking price you want to go is that one day you will be selling the house. The market may not be as tight. You won’t know whether the house you picked was a good decision or a bad one until it is your time to sell it.

So, always go into a purchase being mindful of your exit plan.

Of all the emerging trends, this is my favorite

by John Rice

I’m as tired of talking about COVID as anybody else in the world, but I’ve got to bring it up because it has fueled two trends in the real estate market. One is that everybody is moving up the real estate ladder due to low interest rates and the boost in equity the market has given them. I am seeing far more sales over $1,000,000 in the past year. Some of these buyers are wanting to get into their favorite neighborhood and a lot of them are wanting a place in the country.

The other trend is scaling back. Many people just want a more simple life and/or are into the F.I.R.E. movement…..meaning Financial Independence Retire Early.

I’ve been wanting to scale things back myself the past few years…….including myself since I was so overweight. Here’s my story. I think sitting around the house during the lockdown got me thinking about it more.

I grew up in the 80s. I’m a Gen Xer. I wanted the American Dream just like everybody does. I never considered myself all that materialistic. I knew stuff wasn’t going to make you happy if you were not already happy. I viewed stuff as icing on the cake of life. I have had a good life. I married when I was young and still am happily married 30 years later. I had great kids who I love in a way they will never know until they become parents. Life was and still is good. I thought stuff would make it better. As my real estate career took off, I got the chance to do a lot of things I couldn’t before, some of them I never thought I would do. I took nice vacations. I had a big house in a prestigious neighborhood (that was very outdated because I hate remodeling a house while living in it.) I was able to collect cars and waste a fortune on them. I was able to write 5 digit checks to one of my favorite charities.

The more stuff I had though, the more stress I had. Stuff needs your attention. Stuff needs maintenance. I started realizing that this stuff I thought would be fun to have was actually making my life worse. My friends would tell me to hire people to take care of my stuff for me. While that saves the time of doing it yourself, telling somebody what to do and then checking that they did it still takes a little time and mental energy.

As I was considering upgrading my Porsche 911 S to a 911 GT3, I realized that better stuff wasn’t the answer. Why? Better stuff is still stuff. Remember, stuff needs your attention. Stuff needs maintenance. So, I jumped off that train and decided that I only wanted stuff in my life if it made my life better. I still have far too many cars and I think it is time to let a couple of them go even though I really enjoy them. I just think my life would be better with less since good stuff is still stuff.

Those are the two trends I am personally seeing with my clients. Most of them want to get the biggest and best house they can afford and others are wanting less house than they have had. I’ve personally done both so I get the appeal of each one. It’s fun working with both of these type of buyers since they are both getting what they want.

What would it take to crash the real estate market?

by John Rice

A lot of people subscribe to the “What goes up must come down” theory on markets. I don’t. I tend to just use that one when describing gravity.

For real estate, we have only really ever had prices go down twice in the history of tracking such stuff. Once was the Depression which caused ALL markets to go down, and the other was the Great Recession which was largely caused by bad mortgages that were toxic to the stock market. Neither time actually had anything to do with just the real estate market.

Today’s market is probably the healthiest it’s been in a long time. Prices are high due to supply and demand. Sure, low interest rates help but not as much as you would think. People acclimate to interest rates. I remember bragging about getting 6.625% on my first home when all my homeowning friends were over 7%.

When people on Youtube or those who write for the news look at the real estate market, they tend to not look at the whole picture. I am sure you have seen headlines about how all the people in mortgage forbearance would crash the market once they got foreclosed. Didn’t happen. All those people who needed to sell had enough equity to sell and avoid foreclosure. What about all the Baby Boomers who would leave a huge void in the real estate market as they sold their homes and went into retirement homes or to reside on the other side of the Pearly Gates? No mention of the youngest generation of buyers entering the market who would keep the wheels of the whole market greased so everybody can move. Years ago I described this like a baseball game where the bases are loaded. The Player on 1st base wants to run to 2nd. The Player on 2nd base wants to run to 3rd. The Player on 3rd wants to run home. What needs to happen in order to keep all those Players moving? For the Batter to hit a home run. The first time buyers are the most crucial element of the market. Without them, no homeowner can part with their old house in order to move up to their next one.

Everybody knows how Supply and Demand works, right? Let’s apply it to real estate. Most people involved in selling or buying will be doing both. Most sellers are also buying. Most buyers are also selling. That means there is no net gain or loss in the supply/demand ratio regardless of the market. This is why the supply/demand ratio got so bad during the Great Recession-You had so many foreclosures where the previous owner did not reenter the market as a buyer. Other than in such catastrophic times, the only people who are doing one side of a sale are first time buyers or those who have passed away or are going into some form of assisted living. Historically there have been more first time buyers than there are those who are exiting the market permanently. (I am excluding those well off enough to purchase second homes since that is a smaller market and we are not in a big area for that like Florida or any other vacation destination.)

So then, what would it take to tank the real estate market if it has nothing to do with real estate? It would take something terrible to happen with the economy…..meaning something bigger and broader than just the real estate market that is like a Tsunami and wipes out everything in it’s path. Let’s hope that doesn’t happen any time soon!