The LEXpert

Driving this car makes me a better listing agent

by John Rice

Here is my latest ride.  It might look familiar to you because I’m standing beside a similar car in the picture on my blog, but they only look alike.  This one has a different engine, transmission and suspension.

My youngest son found it.  It was going to be a project both my boys could work on and then they sell for a little profit.  That plan changed when I drove this broken down 17-year-old car home from western Tennessee last fall.  I knew I wanted to keep it and I knew that I wanted to rescue it from becoming a parts car.  So I bought it from my boys.

I really liked the lighter blue one I use to have, but I LOVE this one.

Why?

M Roadster

Because the way it feels while driving it.

When people ask me why I like it so much, I don’t quote the weight of the car, I say it is very agile.  I don’t mention the steering ratio, I say the steering feels lightening quick.  I don’t tell people about the high flow throttle body and cold air intake, I say the engine sound is intoxicating.

I try to do the same thing when I list a house.

A home is much more than some cold list of features.

When I describe a house, I want to convey the vibe of the place.  I want people to get a feeling about what the house is like as they read my description and see my pictures.

How do I know buyers think like I do about my car?  Because I have never heard anybody describe a house they love by quoting the square footage, bathroom count or other features.  They always tell me how all those things make them feel.

Oh, and like a lot of real estate pictures, my car looks better online that it does in person.

Real estate lessons from a bird?

by John Rice

Something happened in my yard yesterday that made me think about how important location is and why buyers need somebody with experience to guide them.

A robin built a nest in one of my bushes.  I have like 50 bushes in my backyard.  This poor robin picked the one right by my backdoor.  And she built it about 2 feet off the ground.

I am sure she thought it would be great to be over there by the dryer vent on these cool spring mornings.

She worked hard building a really nice nest.  It was a great place, she thought, to lay her 3 eggs.

If this robin had asked me, I would have told her I have a dog.  I also would have told her about the neighbor’s cat named Stewart that walks down the fence several times a day.  Stewart is the reason my wife can no longer feed the birds.  Our feeder area became an all you can eat buffet for that stupid cat.

Had she asked, I would have suggested one of the taller bushes at the back of my yard, on the far side of where Stewart cuts between my house and my neighbor’s house to get home.

But there are no realtors for bird houses.

You probably see where this is going.  My dog knocked the nest out of the bush and the eggs fell to the ground.  I can’t really blame my dog for being a dog, but we were looking forward to watching this robin’s journey to motherhood.

When you are buying a house, there is a lot of stuff to process.  It is easy to focus on what you like and assume you are seeing the whole picture.  Even more so when you have to make a quick decision in a fast moving market.  I always try to make sure my clients know everything I know about a location or house.

Some things I’ve told clients:

“I know you like that this house is right across the street from the school.  Between 2:05 and 2:50, there will be 500 moms parked in idling SUVs and minvans in front of this house.  Will that bother you?”

“I know you don’t mind that this house is on a busy road.  I know you’ll have 3 teenage drivers in the next few years.  I wanted to make sure you realized that they won’t be able to park on this street and this driveway is only one car wide.”

“I know this is a great house and any house will sell fast in this market.  I think that only having two bedrooms upstairs and the rest in the basement will make this house harder to sell in a soft market.”

I couldn’t do anything to help this robin, but I can help you pick the right place to live.

 

What amount should you put on the preapproval letter?

by John Rice

I was cutting edge back in the day.  I remember telling buyers and their loan officers why I wanted the preapproval letter to be made out for just the offer amount.  The logic back then was that it comes across better to appear like you “Can’t” go any higher than what you offered verses “Won’t” go any higher.  In fact, you can probably scroll through my blog posts from 7-8 years ago and read more about it.

Times change.

Now everybody does that.  When everybody does it, there is no point in continuing.  The strategy is lost.  Cliche.  Passe.

I don’t do it any more.

Now I spend my time telling buyers and their loan officers why I want the preapproval letter to be made out for the MOST the buyer could purchase.

Today’s market is not only hot, it is fast moving.  You often get one shot to make an offer.  You want to be as attractive to the seller as possible since they likely have multiple offers….and all the offers are good, so the winning offer often comes down to some secondary thing like possession date, waiving inspections or, wait for it, your financing.

All decent realtors know that your preapproval amount is based on your debt to income ratio.  You make an offer of $200k and produce a preapproval letter for $200k, the listing agent either knows you’re bluffing OR $200k is going to use all your debt to income ratio and the loan has more risk of not making it through underwriting.  You produce a preapproval letter that says $275k on that same $200k offer, and suddenly that listing agent knows that you aren’t eating up all your debt to income ratio.

Also, there isn’t any time these days to make an offer with a matching preapproval letter amount, then go back to your loan officer to revise the letter when the offer gets countered for more money.  You’ll lose the house while waiting to get a piece of paper that says you can go a little higher than your first offer was.

A couple of people have wondered if letting the seller know how much you have been approved for somehow means you’ll pay more since they know you could do more.  Well, I’ve been on both sides of that since I do list as many houses as I sell to buyers.  I have never had a seller think that.  And even if they did, you don’t have to pay more than you want……meanwhile it could be the thing that gets you the house in this time of so few houses on the market.

 

911-What is your real estate emergency?

by John Rice

Like Tom Petty said…..The waiting is the hardest part.

That is what I am doing today.  So is my buyer.

We finally found the perfect house for her late last night.  It is everything I want for her and she is in love with it.  She is doing an FHA loan, so I have to be more mindful of things like peeling paint, painted shut windows, loose handrails and all.  This house had none of those issues since the roof, windows and HVAC have all recently been replaced.  It really is everything I could hope to have found for her.

The house had just come on the market.  In fact, there was another agent standing at the front door the whole time waiting to show it.

Sometimes being a realtor in a hot market is like responding to a 911 call.

I had been out all day.  I had just come from showing another client a house.  I hadn’t eaten anything since lunch and it was now close to 8:PM.  That’s a long time for a fat guy.

I rushed to my office (okay, the room over my garage) and fired up the computer.  Ran the comps.  Sent them to the buyer.  Suggested an offer strategy.

Ran downstairs and shoveled down some of the City BBQ my wife had brought home for dinner.  Back up stairs.  Buyers says to pull the trigger.  Tell the listing agent an offer is on it’s way.  Write the offer.  Buyer signs the offer.  Tell the listing agent offer has been sent.

Then I tell the buyer the offer has been sent and I will let her know when I get a response.  Since she is a first time buyer, I detailed what the rest of the process should look like.  I told her it is customary for clients to name a son after me since most people are so thankful for getting a chance to work with me.  I forgot to tell her that if she ever has a girl, LEXperta would be okay too.

Then I ran back downstairs.  Made a cup of decaf.  Watched Designated Survivor with my wife and went to bed.

We should know today about 5ish if we got the house.

My fingers are crossed for my buyer.  She is a super nice person and I have enjoyed working with her and her boyfriend, and I am thankful for the mutual friend that sent her my way!

Best First-Time Buyer advice ever

by John Rice

A lot of my first-time buyers from 2008-2011 are beginning to sell their houses.

Most of them probably remember me telling them that I wanted to find a house that would be easy to sell regardless of the market when that time comes.  I would tell them that right now, they are just thinking about finding a house they like.  While I wanted that too, I’d tell them I was also thinking about their exit plan.  I would tell them that one day they may have some big life changing event that requires them to move.  I didn’t want the sale of their house to stand in the way of their plans……picking a house that would be easy to sell again and not paying too much for it would set them up for their next move.

See, back then I would see sellers who paid too much and would have to bring money to the closing just to get out of their house.  Since they didn’t have any equity, they ended up renting rather than buying when they moved.  I would see people turn down job opportunities because they couldn’t afford to sit on a vacant house while it was on the market.  I would see a couple where one stayed in their old house while on the market and the other was renting a small apartment in another state for a new job.

Real estate can be a real blessing to your life or a noose around your neck.

Right now we are back to the frenzy of the early 2000s where everybody is all rainbows and unicorns.  Buyers feel lucky to get any house these days.  It doesn’t matter if it has a steep driveway and backs to a loading dock.

But you know what I am saying to my first-time buyers today?  I tell them that I want to find a house that will be easy to sell regardless of the market when that time comes.  I tell them that right now, they are just thinking about finding a house they like.  While I want that too, I tell them I am also thinking about their exit plan.  I tell them that one day they may have some big life changing event that requires them to move.  I don’t want the sale of their house to stand in the way of their plans……picking a house that will be easy to sell again and not paying too much for it will set them up for their next move.

And this advice is all the more important in a seller’s market.