Supply and Demand

I thought this was a seller’s market?

by John Rice

It is, but that doesn’t mean all price ranges are super hot right now.

I was doing a market update for a listing I have.  I try to keep my sellers up to date with what has been listed, pending sales, price reductions and closed sales that will become comps for an appraiser.

 

Check out these stats for single family homes in all of Lexington:

$100-150k has 34 listings.

$150-200k has 52 listings.

$200k-250k has 67 listings.
$250k-300k has 64 listings.
$300-350k has 106 listings.
$350k-400k has 68 listings.
$400k-450k has 38 listings.
$400k-500k has 40 listings.
If you’re a buyer in the $100-150k range you better do whatever it takes to get a house, your market is sizzling.
If you’re a seller in the $300-350k range, I would suggest a price reduction because you are not really in a seller’s market at the moment.
Why is this?  Nobody can say conclusively, but my experience is that most sellers in the $100-200k range move up to the $200-300k range.  Most sellers in the $200-300k range move up to the $400k and up range, so that leaves a vacuum in the $300-350k range.

What working with buyers is like now

by John Rice

Working with buyers these days feels like this guy:

You beat the same bushes everyday in search of something for your people.  It is even harder if somebody needs a certain neighborhood or school district.  It is the toughest market I have ever seen for buyers.  It is harder right now to be a buyer than it was to be a seller after the market crashed.  Most houses get multiple offers.  The deciding factor often comes down to something minor like which buyer has a better closing date, or which buyer has stronger financing.  That is about all you have left to differentiate one buyer from another when all the offers are full price.  I recently got 7 offers on a listing.  The top 4 of those offers were the exact same price.  We went with the one that had a local lender I knew.  That was what got that buyer a signed contract.

 

And when you do finally have a house to show your people, this is what it feels like:

When a house that meets your buyer’s criteria hits the market, you get them in it ASAP.  If they like the house enough to make an offer, you rush to make sure you’ve got a current preapproval letter, you find out when the sellers would prefer to close, what their occupancy needs are….anything the sellers want that might help your buyers look more appealing since you know the best offers are going to be similar in price.

Being a buyer’s agent these days is equal parts boredom and excitement…..but it is all very rewarding when you do get your people a home they love.

What I did today between cups of coffee

by John Rice

It’s been an interesting day.

Like all my days, it begins with a cup of coffee.

A client wanted to see a new construction town house again.  It was 60 degrees today.  When we get a temperature like that in Kentucky this time of year, we usually get something not so fun to go with it like wind or rain.  It was rain today.  My client and I ended up with severely muddy shoes.  Thankfully I had my emergency pair of socks in the car so I could enter the last house I showed her.  When you wear sandals year round, you’ve got to keep a pair of socks in all your cars.

There are about 5 recent pending sales within this upscale townhouse complex.

The last house I showed her was one I had been very interested in seeing.  It has been on the market for a loooooong time.  I found out today that it recently got a contingency contract and was being kept an active listing for a buyer without a contingency.  I also found out that flooring made from distressed barn wood pulls the threads in your socks.

Then on my way home, I returned a phone call from an agent friend.  She and her husband are considering moving to my neighborhood and wanted to know what it is like living here.  I probably disappointed her a bit because I told her it is the most unfriendly neighborhood I have ever lived in.  She told me that the house she is interested in, which has been on the market for several months, got an offer this morning.  The current list price is well over $500k.

As I am coming home, talking to her in the car, I drive past a house in my neighborhood that I thought would only sell if it were the last house for sale in all of Fayette County.  It has a SOLD sign plastered across the sign in the yard.

Another house (not in my neighborhood) that looks like a Spanish Mission style version of the Brady Bunch house recently went pending.  The list price was over $450k and it was pushing a full year of being for sale.

I am really amazed at all the higher end sales between Thanksgiving and Christmas.  Could it be that people feel good about the economy and are ready to spend?  Could it be that rising interest rates have pushed some 2017 spring buyers to act now?

All I know is that I was happy to spend the day checking out some pretty nice properties and sliding around in the mud with my client.

It’s the end of my day now.

Time for my evening cup of coffee.  Decaf this time.

Winter really IS the best time to sell

by John Rice

There are two kinds of listing:

  1.  The listings that are so desirable based on price/condition/location that EVERY buyer currently in the market wants it.
  2. All the other listings.

If you have one of those houses that makes people hear angels sing as soon as they walk through the door, are in an extremely desirable neighborhood, have priced your house to sell, or any combination of all that, congrats, your house will sell quickly any time of the year.  You have nothing to be worried about.  Spring is good.  Summer is good.  Fall is good. And yes, winter is good too.

If your house isn’t one of those, then you need to tweak everything you can if you want the coveted “SOLD” sign in your front yard.  You have what I call the Bridesmaid house because you know that saying, right?

Every year, people ask whether they should wait to list, or take their house off the market until spring.  My answer has always been no.

Why?

Because if you have a Bridesmaid house, there is always going to be a better house on the market all other times of the year.  I see it happen all the time.  A listing that is always the buyer’s second or third choice stays a second or third choice as long as those better houses keep coming on the market in the spring, summer and fall.

In the winter, there are far fewer buyers but there are also far fewer great listings.  Winter buyers typically have to settle for what is left over from the fall.  Picture this…..you’re at a Chinese buffet for lunch.  It’s 12:55.  There is one greasy looking Crab Rangoon.  All the General Zhao’s Chicken left are those thin, hard looking pieces that you think are really cat meat.  You are the only one at the buffet and nothing looks good.  Then, somebody comes out from the kitchen with some fresh food.  Even if it is just Pork Lo Mein, you eat it because it is the best thing available.

That is how the winter market works.

So, if you are ready to sell your house now, there is no need to wait until spring.  If you have been on the market without an offer, now really is your best shot at selling.

 

Common mistakes sellers make

by John Rice

Besides thinking the people on HGTV really know a lot about real estate, below are the most common ways sellers shoot themselves in the foot.  Granted, we are in a hot market and buyers are easier to please these days, but there are 228 houses in Lexington in the $100-500k range that have been on the market for more than 60 days…..not EVERY house in town is selling in multiple offers the first day on the market.

Here goes:

1. When sellers don’t finish moving out. If you are no longer living in the house, get ALL of your stuff out. You know you are going to have to do it anyway, right? It will make your house look better. Better looking houses sell quicker. Time is money.

2. When you don’t paint because you think you are somehow doing the buyer a favor by leaving it up to them to paint. I hear this a lot: “I don’t know what color the buyer will like and most buyers always paint after they move in anyway.” I can tell you that bad paint keeps a buyer from making an offer. If it doesn’t look good, they don’t want it. Fresh neutral paint is the cheapest thing you can do you make your house easy for a buyer to say YES to.

3. Leaving a lot of room for negotiating. An over inflated price usually drives buyers away. I see all the time where a seller will list for far more than the house is worth and eventually sell it for a little less than it is worth. The best model is to price it right from the start. If a house has been on the market for a long time, buyers assume there is no risk of losing it so they make a low offer just to see what you will take.

4.  Not doing any obvious repairs.  As a seller, your goal is to make it easy for a buyer to say yes to your house.  You want them to be excited and fall in love.  If a buyer walks in and immediately sees work that needs done, they begin to subtract whatever they think it would cost to change it, and they usually overestimate the cost.  You want your buyer to be walking around your house falling in love with it rather than subtracting repair costs off your list price.

I hope this helps you when it is time to sell.  The worst thing that could happen if you did all of this is that you sell your house for top dollar in multiple offers the first day on the market.