sellers market

Do this if you never want your house to sell

by John Rice

I showed a pretty nice house last night that is going to be very hard for the listing agent to sell.

It was one of the lower prices for a huge house on a gorgeous lot in a very desirable neighborhood.

You’d think that would be enough in any market, yet alone one starved for listings.

This is what it was like seeing the house.  You walk up to a freshly painted facade with recently mowed grass and fresh mulch.  You are feeling good about it.  You go inside.  The foyer is nice.  It is a little strange that you can’t see any rooms from the foyer, but not the end of the world.

You go towards the left and see the dining room.  Wall paper from the 90s.  You go into the kitchen next.  Red wall paper from the 90s.  You go into a really nice sunroom.  What do you see?  Murals painted on the walls.  You go back through all those rooms and then you enter the great room, which was super nice.  Then you see a bedroom.  Ok.  Then you see a bathroom that not only has wall paper, but wall paper boarders on the ceilings and top of the walls, as if they were making crown molding.  The shower curtain is heavy, like the dress Scarlett made in Gone with the Wind.  Then you enter the living room which is set up as an office and has way too much furniture in it.

Heading upstairs, you notice that all the bedrooms are painted a different color.  The basement is pretty normal.

The sellers furniture was nice, but they probably bought all of it when the house was new in the early 90s.  I am not bashing anybody’s stuff because my own house is probably the most boringly decorated house in the whole world, but I am not trying to sell it.  I would need to stage my own house if I were selling because my stuff would make my house feel as dated as this one did.  All of my furniture is stuff my parents gave me and that my wife and I put together from a box.  I’m just not into decorating……maybe that is why I can always see the house past the decor.

It sort of made me sad because I could picture the house vacant and with a coat of fresh paint.  It was nice.  Sure, the house would have still been a little outdated since it was about 25 years old, but it wasn’t terrible at all and typical for the neighborhood.

There was a stack of realtor cards on the table in the foyer.  That means all those people in addition to my buyers said “No” to this house.

What sellers never realize is that a buyer will walk through their entire house in about 20 minutes.  Having too much furniture in a room may suit the sellers needs, but it makes the rooms feel smaller to the buyer.  It is also hard to see the room past the furniture.  I always say that when you live in a house, the room exists to show off your decor.  When you are selling, the decor should show off the room.  Also, colors make a big difference.  A seller may be in one room of their house for a while and then go to another.  The buyer, when walking through the entire house, gets sensory overload if every room is drastically different.  A uniform color can also help when the house has a choppy floor plan too.

I am sure all the feedback on this listing has been that it needs too much work.  If this were my house, I would remove as much furniture as I could stand.  I would put a fresh coat of neutral paint everywhere.  People ask me all the time what is the biggest bang for the buck.  I always say fresh paint.  Nothing makes as big of an impact as fresh paint.

With all the wall paper gone, most of the dated furniture out, and a coat of fresh paint, the house would feel so much better.  The 25 year old finishes were neutral enough that buyers would find them acceptable in the absence of the 25 year old furniture and wall paper.

When I go to sell my current house, I am taking my own advice since my place is very similar to this one.

Where are you going to find anything better for that price?

by John Rice

I remember the day.

I was in a two week class for new agents.  One of those days the topic was CMAs.  That stands for Comparative Market Analysis.  It was how to figure out what a house is worth based on recent sales of similar houses.

Long story short, you start with the subject house.  If a comparable recent sale was better than the subject house, you deducted money from that sale price.  If the comparable recent sale was inferior, you added money to the sale price.  In the end, you had a bunch of debits and credits for the differences that you either subtracted or added to the sale price of the recent sales….. and then you know what the subject house is worth in comparison to the recent sales.

Very logical.  This is how it has been done for years.  This is how appraisers do it too.

In that class, one of the other newbie realtors asked how it was done before CMAs became the standard.  The teacher said that you just guessed a value.

I sort of feel like we are back to the guessing days now.

I’ve seen recently remodeled houses sell for up to 50% more than what the second highest sale price was in the neighborhood.  Granted, a remodeled house SHOULD sell for more than the average house, but not by 50%.

I sold a house for $160k.  The comps pointed to it being worth about $143k.  We got several offers between $137k and $143k…..then we got one for $160k.  That is $17k MORE than the second highest offer.  Those buyers were desperate.  They had lost several bidding wars and were not going to lose again.

There’s definitely been a shift in how we calculate value, and it appears that it has less to do with logically analyzing recent sales and more to do with it being a tight market.  Something I hear buyers and agents say a lot these days is “Where are you going to find anything better for that price?”  So, value is now determined by availability, just like the lobster prices at a restaurant.  A good day on the water might end up with lower lobster prices.  The very next day the fishermen aren’t as lucky and you pay more for the exact same dinner.  That is sort of scary to me because what happens when the market slows a little and there are more houses for sale?

 

 

 

Best way to get top dollar for your house

by John Rice

I don’t really know how to say this without upsetting some of my realtor friends, but most of the current marketing trends are just hype.

Many agents are doing weekday open houses.  Like a Tuesday or Thursday from 5-7.  Often the house sells before the open house……and if the listing had hit the market that day, that is the exact time buyers would be scheduling their showing anyway.

Many agents are doing these “Coming Soon” listings.  After making everybody wait to see it, the house sells the first day on the market for full price.  Imagine that.  Just like every other new listing that is priced appropriately.

Some say that these are the best ways to expose the listing to a market that is already hungry for new listings, and at a time when there is a shortage of houses for sale.

Here is what I say is the absolute positively BEST way to know you got top dollar:

You put the house on the market late on a Friday.  Why?  So the listing gets fed to zillow and all the other real estate sites in enough time to get on every buyer’s radar but is too late to be shown that night.  Why again?  Because more people are available to look at a house on the weekend than they are during the week.  Why do you want that?  Because you want every buyer to not only see your house, but to also see every other buyer flocking to your house.  Nothing motivates a buyer more than seeing people coming and going during their viewing.

You show the house all weekend.

And this is where the rubber meets the road.  You tell all the agents that the seller is not making a decision until Sunday evening and to submit their client’s highest and best offer.  That gives time for the house to be seen by every interested buyer.  More interested buyers means more offers.  More offers means a better price and/or terms.

 

 

How a hot market really sucks

by John Rice

As I was driving home today after a closing, I got to thinking about how the market is always  changing.

When I got into this, it was much like today.  Buyers felt lucky just to get a house and sellers were drunk with power.

Then there was the looming threat of a nationwide crisis.  We were convinced it wouldn’t  make it to Kentucky.  We all said things like “We didn’t see the crazy appreciation like California, Arizona or Florida did, so we won’t see any changes.”  Only we said that with the same fear in our voices as the kids from that Stephen King movie when they talked about Pennywise the clown.

Then “IT” happened. (See what I did there?)

It slowly went from being a seller’s market to a buyer’s market.

Nobody was happy.

Seller’s were bringing cash to the closing to payoff their houses.  Buyers were afraid their new house would continue to depreciate.  Buyers were hitting sellers up with big repair lists.  They felt the seller should just appreciate that they picked their house among the other 50 houses in the neighborhood for sale.

Then in late 2012/early 2013 we had this euphoric time.  Sellers were happy because their houses were selling in less than 6 to 12 months.  Buyers were happy because prices had stabilized.  Sellers were okay to do whatever repairs were requested since they were happy to have sold their house.  Buyers weren’t asking for as many repairs since they were happy too.  They knew the house wouldn’t be worth less by the time of the closing.  It was great!

Only it didn’t last.

Prices started going up.  Fewer houses were on the market.

Prices kept going up.  Even fewer houses were on the market.

Prices went up even more.  And even fewer houses were on the market.

And now we are back to where we were when I started, only a little worse.  Prices are sky high.  Buyers resent it but know they have to pay the price.  So, they are hitting up the sellers with big repair lists.  Sellers feel like they are doing a favor to the buyer just by accepting their offer.  They don’t want to do repairs.

Basically, nobody is happy right now.

It was fun to be me this week

by John Rice

I kind of like the crazy days.

It’s been a busy week for me.  I’ve sold 3 houses, have 9 pending sales, and have been out with several new buyers.

This time of year always reminds me of that scene in Bambi where all the animals come out on the first day of spring.  I’m meeting new people and seeing old friends.  The days are getting longer and I am close to being back in shorts.

 

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Many of my past clients are calling to say they are thinking of moving.  Several of my past clients and friends have referred their friends or family to me.

I had one especially busy day this week.

I had to show a new construction home to a friend who has used me 3 times so far.  There was not a lockbox on the model home, so I had to find another model home with the same key, then return that key after the showing.

Then I had to rush to Winchester to see a house a friend and past client may sell.  It was out in the country in a beautiful setting.  I took my little M Roadster.  Back roads from Masterson Station to deep in Clark Co.  Lots of fun.

The whole time I was at that house, my phone was going crazy with texts and calls.  One was an agent telling me she was sending an offer on a listing of mine.  I already had an offer so I had to tell the other agent we were getting a new offer.

I check my email before pulling out of their driveway.  17 emails.  One was a new client who was referred to me from her daughter, who has used me a couple of times.  They were ready to make an offer on a house I had shown them in Clark Co the day before.

It was already well past dinner time and I had to get some work done, so I did the only thing that made sense.  I got a pizza and ate it in my car while I returned calls, texts, and emails.

 

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I’ve never eaten pizza in the dark, nor in such a small car.  All I can say is that I am glad the interior is black and I was wearing a red shirt.

I got home, wrote the offer for the Clark Co property, worked on the offers for my new listing, and finally got done about 10:PM.

This weekend looks pretty calm since I crammed about 3 days worth of work into that one day.  Saturday is Cars and Coffee, then Sunday I am going for a long drive in the country with some other car enthusiast friends.

The busy days make the not so busy days even better.

Glad it is almost spring!