seller disclosure

It is rare, but this is the ideal type of sale

by John Rice

You know, we always think about the buyer for a house being somebody who wants the location, loves the house, or both, right? But there is another reason a buyer might pick your house among all the other competing listings. It is something I have only see happen 3 times in my 21 year career. It is when the buyer is a neighbor or the house is located next to a family member.

I recently sold a 7 acre parcel with a nice smaller home in Wilmore Kentucky. It got lots of showings. The location was great. The biggest issue was that it was a one bathroom house. Having sold a lot of rural property, I knew it was only a matter of time before somebody would want it. It was a lot of land for the price despite the smaller one bathroom house. We ended up getting an acceptable cash offer from somebody who owned land that adjoined this property.

I had a listing in a rural neighborhood in Madison County a couple of years ago. The place was so cool that I was thinking about buying it. It had a giant two car garage in the basement plus a HUGE detached two car garage with a loft. I was thinking of all the cars I could put in there. The buyer told us at the closing that they were moving here from out of state to be close to a relative that lived within walking distance of this house.

The last one of these I had was maybe 4-5 years ago. The market was crazy hot. This house was in a very prestigious part of Lexington on a well known road. I ended up getting several offers on it. All the offers had escalation clauses which means all the buyers agreed to pay a certain amount more than other buyers up to a fixed amount. Well, we got an offer that was $25k MORE than the highest maximum on any of those other offers. I wondered why the buyer’s realtor chose to do that. If they had used an escalation clause it could have saved the buyer some money. Turns out the buyer’s sister lived next door and that was the only reason for the move.

The wonderful thing about these types of sales are that the buyers are not looking at any other house. There is no “We will find another one if this doesn’t work out”. It is their only choice and they are not only going to pay the most, but also be the least likely to walk away after a home inspection.

Negotiating is a lot like playing poker

by John Rice

When I was a little kid, my dad had this old set of poker chips. There were red, white and blue ones built into a little round thing with a handle on top. I remember playing poker as a pre-teen with my friends. I also remember winning a lot. I didn’t do it by bluffing or anything that actually had anything to do with the game itself. What I got good at was studying my friends. It’s pretty darn easy to win when you can tell if your pals have a good hand or not. My dad always told me I was pretty good at reading people and seeing their motives. That has been a useful skill in my career as a realtor. 

I remember a sale many years ago with a great realtor. He did everything he should have done. My clue about the buyer’s motivation was the closing date.  It was the Friday before school started back after Christmas break. Sure, most real estate deals close on a Friday. What made this one stand out to me was how soon it was. Not the usual 30-45 days out. This one was just about 2.5 weeks out. So, I hit Facebook, and sure enough there was a person with the same name with school aged kids who lived in the same surrounding town that was on the check for the earnest money. I also knew that most seller’s wouldn’t want to be moving out of their home the week between Christmas and New Year’s Day. We stood firm and got our price.

I had another deal like that. My listing was in the only neighborhood in its price range to have the very desirable school district that it did. We got an offer so low that we didn’t even counter. The buyer’s realtor told us the reason for the low offer was due to the perceived poor condition of the house. I figured they must really want to be in this school district. I mean, there were tons of new/newer houses within walking distance of this one, but they were in a different school district. I don’t know why somebody would pick a house they didn’t like that much when they can get a better house for the same money. It had to be school district. I went online to see what all choices this buyer had in that school district. The only other house was one with a crazy steep driveway…….so I knew we could hold firm to our price. We did and we got it, despite the other realtor’s great effort to get it for less.

From the lines of that old Kenny Rogers song, “You gotta know when to hold ’em.  Know when to fold ’em.  Know when to walk away.  Know when to run.”

Is a view worth less if it is not as good?

by John Rice

I was driving through the new Peninsula neighborhood the other day. It is over off Richmond Road and backs to the reservoir. I could see the back of the houses on Dew Court, Rain Court and Coolwater Court. For decades the owners of those house have had a rare and fantastic view of the water and the woods where there are now these new houses.

But that has changed. The water is still there of course. The woods are gone.

Question is this: Are those older houses worth less since the view is not as good?

To those owners who have enjoyed the “Old” view, I am sure it is not as good now. They probably think these new houses have impacted the value of their homes. I totally get that vibe. I dealt with something similar. I used to have a peek-a-boo view of the Greenbrier Golf Course from my last home. Across the fairway was a beautiful hillside full of trees. About 6 months after I moved in, I heard bulldozers clearing the hillside. Now there is a neighborhood there. While I did not like the new view as much as the old one, it was still a view. It just didn’t extend past the golf course now.

And that is exactly what the 1980s houses have. They still have a fabulous water view. I mean, the new houses are going to be extremely desirable being on the water and they have the houses from the 80s on the other side of the water in their view. There is no reason to think that somehow the market is going to like the 1980s houses less because they now have a view of the new houses across the water, right?

Something else to consider. Whenever the 1980s houses come up for sale in the furture, no buyer is going to know that the view was better before the new neighborhood was built. All they will know is what is currently there, which is a very rare water view.

Is it turning to a Buyer’s Market?

by John Rice

Short answer: It depends on the house.

Long answer: I read an article this morning asking this same question. It had all the usual data in any article related to the nationwide real estate market. Average days on market, Average sale price compared to previous years, the number of listings compared to previous years……blah blah blah.

None of that really matters. Why? Because no two houses and no two markets are the same. There is no average house. Average means a composite of all data. It does not look at each house individually. Do you know who does look at each house individually? Buyers do.

A buyer looks at every house within their budget and decides which one they want to buy. Let’s say they look at 10 houses. They are only buying one so they pick the best one. Do you know what else happens? Usually every buyer in that same price range also picks the same best one. That means we have multiple buyers competing for the best houses on the market. Meanwhile, the rest of the houses sit there and dilute all those averages so the media can make illogical conclusions to share with the world.

I have been a realtor for 20 years. It was a Seller’s Market when I started. Then a Buyer’s Market. Then an EXTREME Buyer’s Market. Then a stable market. Then it slowly built into the strongest Seller’s Market ever. Now, more than ever, we sort of have two markets. If you want the best house in the best neighborhood, you better be prepared to go over the list price and be flexible on anything important to the seller. If you are not picky, make a low offer on one of those houses that nobody else has wanted. After 20 years of this, I can tell you that when you go to sell whatever house you decide to buy, picking the best one will always have been the wisest decision. The best houses will always be worth the most, be the easiest to sell, and will have the broadest appeal.

Is your yard fenced?

by John Rice

If your yard is fenced, do you know who owns it? Like 100% sure? If you are like most people with a fenced in yard, there was fencing on 3 side when you bought your house. Maybe you were told from the previous owner that all or part of it was your’s. But is it?

As a realtor, I advise my sellers NOT to make claim to a fence unless they are the ones who installed it or have some sort of documentation that they own it. I do not claim the fence as part of the property that conveys when listing a home. I simply state in the marketing remarks whether it is fenced or not. Absolutely zero claim of ownership, just that fencing exists.

WHY?

I bought my first house directly from a seller long before I became The LEXpert. I was a 20 something first time buyer who knew nothing. I was told by the seller, Will was his name, that the fencing belonged to him and would be mine with the sale of the home. I never thought about that statement from him again until I came home one day to find not only my dog missing but a large section of white picket fencing gone between my yard and the neighbor on the right. The owner of the home next door was a sweet little old lady who had lived there for 50+ years. When I asked why she removed my fence, she nicely told me that her deceased husband had put that fence up many years ago and she didn’t want it any more. (BTW, we soon found our little mutt named Edwina……which is not used anywhere as a password so no need for hackers to harvest this info.)

If I had any type of documentation that Will had told me the fencing was mine, I could have taken him to court to fill in the fencing void left when the rightful owner removed the fencing.

While I have never again had a similar issue in my 20 year career, I do not want my sellers to possibly be on the hook for buying the next owner a fence. Often being a good realtor is as much about what you prevent from happening as it is about what you make happen.