Tricks Sellers Play

I was out with a client this week looking at old houses in Chevy Chase, Fairway, Lakewood, Lansdowne,basically 40502.  One house in particular stuck out to me because it was a FRAUD!!!

What do I mean by that?  Simply that the seller had done everything possible to make the house attractive……….except making it a good house.  They had all the lights on, a fire going in the fireplace, they were simmering an orange in some type of cinnamon gue on the stove.  It was decorated with small scale furniture to make the small rooms look bigger. I can over look that stuff, but what got me miffed was that the whole house was nothing more than a beautiful faux finish. 

The ceiling in the bathroom looked like tin……but it was just wall paper.  The counter top had a neat design on it…………but it was painted plywood.  The flooring in the kitchen was left over parquet flooring from an 80’s remodel, but they had painted a light green and white diamond pattern over it.  All the vanities in the bathrooms were ancient, but were painted a trendy flat black.  There was panelling in the basement and a little in the kitchen that had just been painted.

None of this would bother me in a $100,000 house………….heck, not even in a $150,000 house.   In fact, I would probably give them credit for all their effort.  But this was a $350,000 house.  I just felt like somebody was trying to fool me!

My advice for this seller is to put in some granite and do some updates that aren’t in liquid form and can’t be poured out of a can.  Make your house honestly good!  Location is only one third of the known real estate principles.  Condition and price are part of it too!

My advice for buyers is to watch out for this kind of trickery.  Until you started to look closely at what this house really was, it looked stunningly beautiful.   But, none of that comes with the house.  The decor will be gone.  The new owner will then realize that the house was really just cheap updates inspired by those HGTV shows where they make over an entire room for $1000.

But it won’t be my clients that fall for this!!

LEXpert Neighborhood Tour: Brookhaven

Here is a tour I did for a great neighborhood called Brookhaven.  Shot it on a dreary day in February, so the area doesn’t look as good as it does when all the mature trees have their leaves and the big lots have grass that is green!

Moving downtown trend doesn’t apply to Lexington

Since I get all kinds of newsletters and magazines about real estate, I’ve read a lot of predictions about buyers leaving the burbs and buying downtown.  Sorry, not in Lexington.  I guess the people that  build the condos in downtown Lex a few years ago must have been reading the same articles.  I predicted in 2006 that there wasn’t enough of a market to support all the new condos.  Back then, everybody was buying them to flip.  That wasn’t a real market.   Just goes to show that what may be happening in many other places doesn’t mean it applies here.

Why?  For starters, Lexington just isn’t big enough.  The people that are returning to downtown are in big cities and want to escape a long commute.  When you spend 3 hours a day just getting to and from work, it becomes a quality of life issue.  You can get from one end of Lex to the other in 35-40 minutes even in bad traffic.  A lot of  Lexingtonians have moved here from  rural areas in Kentucky or transferred here from a larger area.   They always tell me they are used to driving much more than we do here, so it is a non-issue to them. 

The next reason is Lexington doesn’t even have suburbs for people to leave!  We have suburban type neighborhoods, but it is all still Lexington.  The furthest developed point in Fayette County is still only 20-25 minutes from the core of downtown.   We just don’t have the sprawling suburbs that are miiiiiiles away from anything like a true city does.

The last reason is a pretty big one too.  There isn’t enough area downtown for all those people even if they did want to move there.  There just isn’t enough good existing housing downtown.  You pretty much have very small houses in areas people don’t want or very nice houses that are out of reach for the average buyer.  We do have some nice areas just outside downtown, but in reality, they were just as much a suburban type neighborhood when new  as what we have on the edge of town.  Plus, they aren’t the kind of  areas that the articles are about.  Places like Gardenside, Southland and Meadowthorpe are close to downtown and still affordable.  Spending more gets you into Ashland Park, Chevy Chase, Fairway and Kenwick.

I also don’t see the condo market getting off the ground anytime soon, even if we returned to a good economy and real estate market.  The thought is that the retiring baby boomers will want to be there and walk to everything and enjoy the low maintenance lifestyle.  My parents are boomers.  They and all their friends like the idea of it all.  Why just the idea?  Like other articles we have all read, this is the most active and affluent group of senior citizens ever?  Where do you keep your canoe, boat, bikes, motorcycles, extra cars when you have one parking space and 800 square feet?  At best, I can see really wealthy boomers having a downtown condo as a second home.

So, in a nutshell, this trend will only apply to cities with a big enough downtown and sprawling suburbs.  That just isn’t Lexington…..right now.  What do I predict?  For the short-term, more of the same.  Lexington has 3  types of buyers:  Those who want something closer in town and an older house, those who go for something further out to get a newer house with the features they want, and those that look at everything in their price range.  In the long-range, Lexington will eventually use all of its available land.  When that happens I think we’ll start to see a huge price difference between Lexington and the surrounding towns.  When the land becomes that valuable, we’ll see a lot of what are now cheap areas redeveloped.

Negotiating Repairs after an inspection

You know, you can find out a lot of people’s motivation if you just listen to their realtor.  Most are big talkers.  Most of them view the deal as practically done once you settle on a price.  They seem to forget that there is usually one more thing to negotiate:  The repairs after the inspection.

Here are some examples of what agents sometimes say right after a contract has been accepted: 

1)  “The sellers have a contingency contract on another house that they were about to lose.”

2)  “The buyer needed to close on a house in time for him to get his family moved down here before he started his new job .”

3)  “The seller is making 2 mortgage payments.”

4)  “The buyer’s lease is up at the end of next month.”

Now, repairs are always the trickiest part of a deal.  The seller is thinking that they have lived happily in the house for so many years and that they let it go too cheap.  The buyer is always thinking that they didn’t get the house as cheap as they wanted and they don’t want to buy the seller’s problems.  That’s just human nature.   It gets rough sometimes.  Usually there is a little compromising, meaning neither party is truly happy.

But when the agent pretty much discloses that their client can’t afford to lose your client, it makes negotiating a little easier.  I’m nice about it and all, but the reality is that the only person whose interest I need to promote is that of my client’s.  If my client gives me a list of things they want repaired, I’ve got to try to get as much of it done as possible.

So, negotiating repairs is really about knowing what is happening with the other party while keeping tight lips about what is up with your client.  It is a lot easier to draw a line in the sand if the other party doesn’t know enough about you to predict what you’ll do next.

How to ask the seller for repairs

I’m in the middle of a deal and we just had the inspection done.  The place has some medium sized issues.  Nothing that is too too bad, but stuff that still needs to be addressed………..and addressed soon! 

As I was explaining to my client how I write a repair list, I thought that might be something good to blog about.  Most realtors just list all the deficiencies and ask them to be repaired.  That sounds easy enough.  Just give them a list of tasks to do and move on.  Buuuuuuuuut, there is a potential problem in doing it that way.  Granted, it rarely comes up, but when a problem does happen, it really sucks!

The problem is that if you ask for a task to be done, you can have a situation where an action was performed, but the problems wasn’t solved.  Don’t get it?  Think of it like this.  You get a home inspection, find out the faucet leaks because it needs a new washer.  You write on the repair list that the seller has to install a new washer.  Seller agrees.  Seller goes to Lowe’s, buys a washer.  Seller installs new washer.  The faucet still leaks.  You tell the listing agent that he didn’t fix the faucet because it still leaks and the agent tells you that all you asked him to do was replace a washer.  See it now?  I don’t see this kind of bickering as much now that we are in a buyer’s market, but it still happens some.  If it is for something minor like my example, the seller and their agent know that you aren’t going to walk away from the deal over something so small.  Even if they agree to go back and fix the faucet, it still causes a lot of stress for the buyer.

The simple solution came from my Dad.  He is the smarted man I know.  He is also a lawyer, so he is pretty good about getting things worded correctly.  I remember asking him to help me word one of my first repair lists.  I started to do it just like everybody else.  Then he said to me that I should word it where a result is to be achieved rather than just a task performed.  It was like a revelation or something.  As soon as he said that, I totally got it.  Since then, I always state the problem that needs fixed and usually add something like “so that it functions properly” at the end.  That way if there is some issue with the work that was done, I can always claim that it isn’t functioning properly.  Also, for plumbing, electrical, and HVAC work, I always state that the work has do be done by licensed, qualified contractors.  That keeps the roofer from working on your furnace and a handyman from getting inside your electrical panel.

Thanks Dad!!

LEXpert Video Tour: Gardenside

Well, I’ve finally done it.  I’ve been talking about getting an HD camcorder and making video blogs about different neighborhoods in town.  For anybody that has ever been in the car with me, this will be familiar to you.  I’ve always commented on houses, neighborhoods, etc as I drive.  I am just glad that I get to use my lifelong interest in real estate to help people.

This is the first video I’ve made.  I hope to get better at them as I do more.  This one is about Gardenside.  I just sold a house over there and took the camcorder with me…………..Hope you enjoy it!!

4 Things that will get your house sold…Fast!

Here we are at that time of year when people are about to put their house on the market.  Selling is all about online presentation and making your house look good.  No magic.  No light show.  No fireworks.  Since anybody who has ever watched HGTV knows to declutter and do some fresh neutral paint, I’ll just skip all that.

1.  Pricing your house correctly is the best thing you can do.  You house is worth what it is worth.  There is no need to leave “wiggle room.”  I often just round up to the nearest $5000 mark since most people search in those increments.  The strategy is that your house will appear to be a better value than the house that is worth the same amount but priced higher for that wiggle room.  When sellers let me do this it has always worked and they have always got about 99% of their asking price.

2.  The internet.  Something like 80% of buyers and 100% of realtors use the internet these days for their search. A lot of people (and realtors) think getting the most exposure is the goal, but the quality of the exposure is what counts.  Way back in the day, you had to make exposure happen.   Now, just about every place online that let’s you search for houses is fed from the MLS.  Zillow, yahoo, even brokerage sites like Re/Max.com, are all fed from the MLS.  About the only places it won’t be is on for sale by owner sites.  Just for fun, try googling an address of a house that recently sold.  Quality is what matters.  If it doesn’t look good online, people assume it doesn’t look good in person either.  Gone are the days when people would take the time to see a house just in case.

3.  The pictures have to be right.  First, make your house look as good as possible.  Then get somebody that knows how to take good pictures, rather than somebody who just owns a camera.  If a picture looks shady and dark, buyer’s will think the house is shady and dark.  The pictures are to make somebody want to see the house.  The pictures really sell the showing.

4.  Buyers need to know what makes your house special.  Every house is special.  There is more to your house than just the square footage and bedroom count.  Got a great shady spot in the backyard?  Is it on a peaceful street?  Does it have any storage space?  Buyers need to  know about things like that.  Here is a hint, it is almost always the same reason that you picked it when you were faced with a decision.

There you have it

How to find out what Lexington is REALLY like?

Somebody who may be moving to Lexington asked what all places he should visit to get a vibe for the town.  Naturally, some replied places like Keeneland, The Horse Park, Ashland, etc as.  All the places that most people who live in Lex never really go to.  I piped in that if he really wants to get a vibe for what Lex is like, he should go to Wal-Mart, a grocery store and drive around New Circle.

I mean, think about it.  If you are trying to decide if a town is right for you, shouldn’t you go to the same places that you spend most of your time going to wherever you now live?  All those places I mentioned are nice, and surely help define Lex, but I wouldn’t move here because of them, and I am probably not going to get a feel for how I’m going to fit in here either.

So, I figure most people are like me.  You go to the bank, the grocery store, do some shopping, some eating out, deal with traffic.  I think those are the things that will either make your life better or worse since you use them daily.  I drive by Ashland (The home of Henry Clay) everyday.  I would gladly trade that to be 5 minutes closer to my kid’s school!

I do a lot of work for people relocating here.  When I first starting getting all these people, I had these visions about driving them around, pointing out things like Triangle Park, explaining that the grass field in the middle of downtown might someday be called Center Point, a quick tour of UK’s campus, etc.  But just about all of them want to roll up their sleeves and see the neighborhoods where they may be living.  (If you want the tour, just ask or it!)

My advice to anybody would be to first decide what type of neighborhood you want to be in:  Older?  Newer?  Urban?  Suburban?  Which is more important, being close to work or activities?  What activities do you think you’ll end up doing?  Want to be close to a park?  Your kid’s school?  How much drive time can you handle without going crazy?  Once you answer a few questions like that, it gets easy for somebody who really knows Lex to narrow down a few parts of town that would work for you.

When 2 out of 3 Ain’t Bad

Now that winter is here, I finally have some time to blog about some of my recent experiences.  Guess I’ll start out by telling you about a couple that was referred to me last Spring.  Great young couple.  First time home buyers too.  They were looking for something pretty specific.  The wife reminded me of myself, because she wanted to be on her deck/patio and not see another neighbor.  I am like that too.  I’m probably worse since I have this thing about having a lot that sits higher that the houses around me.

Anyway, we looked at a whole lot of houses, which is always fine with me.  My attitude is the more houses I get into the more useful I am in the future to folks.  It really helps me to know what is typical for the area.  Especially when I am doing comps.

I had been telling them they should by a house that they can see themselves in for a long time.  The way the economy is, who knows what the interest rates would be when they wanted to sell.  If we have inflation like the 1980’s again, there will be a lot of people who can’t afford to move up to a bigger house if interest rates shoot up.  I kind of shot myself in the foot I think since that upped the ante for the house.  But hey, it’s about them not me!

Like everybody, they wanted a move in ready house.  Off topic here, but if all the houses on the market were move in ready, we could pull ourselves of the housing slump.  There really aren’t that many move in ready………I mean MOVE IN ready houses out there.    Well, real estate is all about Location, Price, and Condition.  Those are the 3 realities we have to work with.  It is pretty rare to get all 3 in Lexington for under, well, just about any amount, especially under $200k.

So, I started dropping hints that it would  be easier to update a house than they thought……….if we found one that had everything else right about it.  At first, I don’t think they were that interested in that.  Like all home searches that go on for a bit, they started to get tired of looking.  That can be a dangerous point cause then people sometimes compromise toooo much just to end the search.  We didn’t go that far.  If somebody is near that edge, I’ll usually look at houses without them and decide if it is worth showing them.  People can only take so much disappointment.

They started to entertain the idea of painting, new carpet, updating lighting, etc.  Somehow we found the 2 most unreasonable sellers in their price range.  We made offers on these houses, I mean offers that I thought were VERY fair, only to have them rejected or countered on the far side of reality.  (One of those houses was taken off the market and rented and the other one is still sitting there vacant!)

Third time is the charm.  We found a great ranch with nice rooms, a nice lot, in a fine neighborhood.  We also found a seller who smoked, had multiple cats, and probably didn’t own a vacuum.  The place looked pretty bad.  It smelled and it was messy.  If I had taken this couple to this house any earlier, it would have become one of the forgotten ones.

So, we made an offer, it was countered by an agent who kept calling me “Babe,” and yes it was another guy.  I thought that was kind of an odd thing to call another guy as opposed to “Bud”, or “Dude”, but I took one for the team.  Finally they had a house!!

Since I got them into this mess, I figured I better help them with the worst part, which was pulling up the carpet.  Man, it was nasty.  Come to think of it, I don’t remember seeing a cat box in that house!!

While they were painting and making daily trips to Home Depot, I would occasionally get a text from the husband.  It always scared me a little since I never knew if it was going to be something like this:  “Curse U John Rice!  WTH.  Y did U sell us this house.  I’ll get U L8er for this!!”  But it was always just an update of how the reno was going.

This couple spent about 6-8 weeks painting, changing light fixtures, getting new carpet and decorating the place.  I’ve been over there a few times and it really looks great.  They’ve been over to my house, and it is kind of embarrassing for me since their house looks so awesome and mine, well, just doesn’t.

I think they are really proud of their house and that they did all the work themselves.  When you find a house that works for you on so many levels but only needs a decor-ectomy, you should buy it.  Those things are easy to change.  So now they have Location, Condition, and all within their Price.  They got it all, and all it took was 6-8 week.  A happy ending, especially since I also made some new friends in the process.

The lowdown on Hunting Hills (Squire Oak)

I was in a lot of houses last year.  Just about all of my buyer’s in the $140k to $180k range looked at houses in a cool little neighborhood called Hunting Hills.  Well, it’s actual name is Squire Oak, but it is commonly called Hunting Hills by realtors.  If you look online, you may see it called by either name, so just remember them both.   Ever been there?  It is one of those neighborhoods that pinches the upturned noses of those that think you have to live inside New Circle Road for a neighborhood to have any character.

I think there are 3 factors that have kept this area on people’s radar and have brought stability to the neighborhood.   One reason is it has one of the coolest little neighborhood parks ever.  I always love to show people the park.  It runs between both sides of the road on Edgebrook Drive.  It is big enough to do just about anything you want.  It has a small creek running through it too.  There are lots of mature trees and landscaping.  It is owned by the Homeowner’s Association.  They have done a great job of maintaining it.   Google map “Edgebrook Lexington Ky”, then check out the satellite view.

Another cool feature is that it has a good performing elementary school right there in the neighborhood.  That always lends a good community feel to a place.  You could walk from just about any house in the area to the school in 5 minutes.   For people with kids, this is HUGE!

The last unique feature doesn’t benefit all the neighbors on a daily basis, but it sure does help to keep up the home values.  There are a lot of houses that back to Overbrook horse farm and a small neighborhood of 10 acre-ish estate homes.  That is one of the benefits of being on the edge of the Urban Service Area.  I have been in several of the houses with these lots.  Even the ones that back to the estate homes feel more like it is a farm since the houses are so far away.  Masters Lane, Hunters Rest Ct.,  Huntsman Ct., Hunting Hills Ct., Houndstooth Glen, Brook Park Dr., Oakbrook Dr., Oak Place Ct., and Farmview Dr. all have some of these lots.

In high school, I had a friend whose mother build a brand new house in this neighborhood.  I remember that I really liked it even way back then.  It just had one of those vibes that you can’t really explain.  I guess it was just the combination of all the good stuff that I saw.  That was 1986!  The neighborhood still feels the same to me, only a little better because the trees have grown.  I always say that if a neighborhood has that good vibe when new, it will likely age well.  That good vibe is something that usually can’t be added to an area later either.

So, here is the lowdown:

Typical Price is in the $140-$180k range.  Most fall in the 1400 to 2000 square feet range.   Most houses were built in the mid 1980’s.  Some traditional, some a little contemporary, some split foyers and a lot of ranches.  Some have those cool lots.  There seem to be a lot of houses with basements too.

Like anywhere, there are always at least a few negatives.  I guess the only one I really have is that you have to drive down Summerhill or Featerston Drive to get into this area.  Neither of those street are really good gateways into Hunting Hills.  Not that they are rough or unsafe, they just have much smaller houses and…………well……….Summerhill is just rundown looking to me.  But all you have to do is be on Summerhill for like 30 seconds before you come into this wonderful area.  I guess it is a positive thing that there are only two ways into the neighborhood!

There is an extra plus to this area:  Most of the hard core bicycle riders tend to ride on Delong Road.  Well, Hunting Hills is about a mile from Delong Road.  No need to ride through town or haul your bike.  I like to drive my old Mazda Miata out Delong, so if you have a sports car, it is a really nice road.  Just watch out for the bikes on a pretty day!