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A good realtor is like using the Waze App

by John Rice

I’ve seen a few sellers lately make some bad decisions.

I get it. Selling your home is something you only do so often and I don’t expect them to understand the market and all the obstacles between sticking the sign in the yard and the closing. All they know is that the market is hot and selling your house is easy.

What they don’t know is that keeping it sold can sometimes be a lot of work.

I recently had a friend decide to list with some less experienced agent who was going to reduce the commission. I was going to reduce my commission to ZERO since this person was a friend and they had some circumstances that required them to move, guess I should have told them that sooner. I had been giving advice and working towards getting this done for close to a year. To this seller, all they were thinking about was saving money. Well, you only realize that savings when you close the sale. The house sold and is back on the market. Usually when a house comes back on the market, it doesn’t get the same attention from buyers. Most buyers in the market have already seen it and either said no to the house or made an offer that obviously wasn’t the best one or they would have gotten it the first time. This is where experience is worth every penny, even though I wasn’t planning on getting any pennies from this sale.

I am currently working hard to keep a deal together for a house where the buyer went to do the final walk through before the closing and found the ice maker had been leaking and has caused $12k in damage to the house. I know if my listing goes back on the market, we will never again catch such a fantastically qualified buyer who was the highest bidder, so I better put on my thinking cap and get this done.

These are just a couple of current examples of where experience can make or break a sale. The goal is to get to the closing. I am thinking about the entire process, not just the beginning. Not just the next step.

As I was making my second cup of coffee and thinking about writing this post, it reminded me of the early days of GPS. You’d enter the destination and take off. I think that is how most sellers view this process…….”I’ve got a realtor and they just stuck a sign in the yard. It’s all downhill from here!” If nothing goes wrong, then that is very true. But how often have you had your GPS take a crazy route or not know about construction, wrecks or other annoying delays? It’s the same with real estate. A lot of inexperienced agents don’t know what to lookout for along the way or don’t know how to negotiate. Sometimes you have to take an alternate route. Sometimes you need to change lanes along the way. A good realtor is more like the Waze app……not only are we watching out for delays, we are looking for speed traps and doing it all in real time as we get you to the final destination, which is the closing.

When to walk away after the home inspection

by John Rice

The home inspection is the toughest part of a sale I think.

It can be hard to get past the condition, even a house that inspected pretty good, since your inspector gave you an entire book containing everything that is wrong with what is about to be the biggest purchase in your life.

What I try to tell my buyers is that no house is perfect. They are all in various stages of Mother Nature trying to destroy the home and reclaim the property. Everything has a life span and given enough time, everything on a house will need replaced or some maintenance.

I’ve probably been the Buyer’s agent on well over 400 inspections and gotten repairs lists for hundreds of listings I have had. Know what I have found? Most of the issues that turn up from a home inspection are either deferred maintenance or things that the inspector noted were done a little less than textbook perfection.

Here are some things that are on almost EVERY home inspection report: Windows or door that need caulking, faucets that drip, loose outlets, cracks in sidewalks and driveways, downspouts that are not out far enough away from the house, air conditioner condensation lines that drain too close to the house. Minor plumbing issues are common. Minor electrical issues are common. Often the flashing on a roof needs some attention. Older houses tend to not have grounded outlets. Few houses have weepholes in brick to allow moisture behind the brick to escape. Few houses have flashing where a gutter ends at an exterior wall to prevent water from splashing on the side of the house………and the home inspector I recommend always seems to find loose toilets, lol!

I think the hardest thing for buyers is that they think they have picked a loser house when they have 20-30 of these common issues. It is easy to assume that the house you picked to purchase is the only one with these issues. That you can walk away from this one and the next house you buy will be perfect. I don’t know how successful I have been at convincing my buyers of this, but I normally tell them that 80-90% of the same issues found on their house will be found on any house. I have also joked that there needs to be a rule that the inspector has to inspect the Buyer’s old house first, and anything found at their old house can’t be asked to be repaired at their new house.

Since the topic of this is when to walk away, I guess I better get into that.

If you are a first time buyer or don’t have a lot of money, I guess you walk away if the the big ticket items don’t have much of their lifespan left. If you have a 22 year old roof and won’t have any money to replace it in the next few years, it might be best to walk away.

If you have a house with a problem such as a major structural issue that will impact your ability to sell the house to the next buyer when you move, might be good to skip that house.

When I bought my current home, I had it inspected. It had all the usual issues. I did the inspection type that is very common in this hot seller’s market: I could inspect it but wouldn’t ask for repairs. I would take it or leave it. I of course chose to take it because to be honest, I loved the property so much that there wasn’t anything that was going to deter me from living there. I had all the usual items. Being a landlord, realtor and middle aged man who has owned lots of homes, there was nothing that scared me nor surprised me. It was just a “To-do” list that I prioritized and am getting it all sorted as I find time. Which brings me to something else I tell my buyers. If you will encounter pretty much the same items on any house, why not just stick with the sale of the one you fell in love with after looking at all the other houses you had to pick from? This is especially true in today’s market where you have so few choices and odds are you will pay even more for the next house as prices go up while you wait for it to come on the market.

How I have benefited from having the smartest Dad in the whole world.

by John Rice

It’s been a good week.

It all started when I had two buyers make offers on houses and they both got them. Both went over the list price of course as that is becoming far more common.

One of them was a house that had come back on the market after a sale fell apart. I called the listing realtor and asked why it fell apart. She told me that before the seller put the house on the market, he had a specific home inspector look over the house and repaired everything the inspector found. Well, the first buyer used a different home inspector and decided they didn’t want the house. The listing agent thought the buyer just cold feet and used the inspection as a way of getting out of the deal. That happens unfortunately.

I know nobody likes it when a house comes back on the market. The house often doesn’t have the same momentum the second time. I also know that sellers start getting nervous about selling their house even in this crazy hot market. It turns out that my buyer had told me who she was planning on using for the inspection and it was the same inspection company the seller had used. I saw this as an advantage. I knew it would be a huge deal to the seller and listing realtor if they knew we were planning on using the same company since there would be no surprises.

So, instead of writing an offer with an escalation clause, I called up the listing realtor and pretty much said “Hey, how about we give you so much above the last contract you had on the house AND we agree to use the same home inspection company your seller used before they listed it? Would that keep you from waiting to get more offers and just sell it to us right now?” Fortunately it was and my buyer got the house. She later told me she was prepared to go to a certain number if needed and that I saved her a lot of money. Close to $18k to be exact. Had it gone into multiple offers, odds are she would have paid much more than she did. I just knew what to do to make the seller accept our offer. My dad always said “Think like the other person’s perspective.” I knew the seller was anxious about the home inspection after the sale fell apart and having the same company he used do our inspection would make him feel like the house was really going to sell this time……thanks Dad and Happy Father’s Day!

What happens when we do see more houses for sale?

by John Rice

I read a lot of news about real estate. It is always a little funny to me to see what people who are not realtors have to say about the market. There are two things that I have read this week that have me rolling my eyes.

The first one is the headlines about how the number of sales have been declining. Gee, that’s just what happens when there are so few houses for sale. This does NOT mean that buyers are deciding not to buy a house. It means that they can’t get a house.

The other one is that it seems there is a projection that we should have more houses for sale later this year than we have in a long time. That would be great but let me tell you what it doesn’t mean. It doesn’t mean that prices are going to drop. They might stabilize prices a bit but when a hot new listing in Lexington can easily get 15 offers, we would need 15 times the listings for a balanced market. There is going to be more buyers than houses for a while.

A lot of the people who are fantasizing about what that market might look like are not old enough to have lived through the housing crash during The Great Recession. Back then we had more houses for sale than ever and do you know what? The best houses still sold fast and often in multiple offers. Do you know why? It is because everybody wants the best house in their price range. We could triple the number of houses for sale today and it wouldn’t change much. What would happen would be that the best houses sell fast and for top dollar while every other house languishes on the market. This flood of new inventory does not mean that every buyer will be able to get their ideal home.

The market is crazy but being a realtor isn’t

by John Rice

Everybody knows how crazy the real estate market is right now. Everybody I meet wants to talk about it. Everybody assumes every realtor is crazy busy right now. We are not. The reason is because you need houses to be on the market in order to sell one.

It’s super easy being the listing realtor right now. You put a house on the market and have a busy couple of days getting offers, then it is over. Being a buyer’s agent these days is a lot about waiting for a house to come on the market, then rushing out to see it. I used to show houses 3 nights a week and all day long every weekend when it was a Buyer’s market. I think the last house I showed was mid last week. Back then, people would look at 20-30 houses before making a decision. Today a lot of people are viewing 3-4 houses and picking one. I have sold many where the buyer bought the first house they saw. I’ve got plenty of buyers. Some of them are looking for a very specific home in a specific school district or neighborhood. I have worked with one of them for about a year and only shown them 6-7 houses. That’s because so few houses have hit the market in their price range and in the neighborhoods that will work for them.

So being a realtor right now is a lot of waiting. Waiting for sellers to get their homes ready to list. Waiting for the right house for your buyer…….waiting for something interesting to happen so you can blog about it.