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As touched upon in the essay by Fayette County Property Valuation Administrator David O’Neill in the previous pages, the housing market in Lexington currently has a greater demand than supply, largely due to low interest rates and a low inventory of houses for sale. This makes it a great season to sell a house, because there are more buyers than sellers.
The prospect of buying a new home or selling your current home can be quite daunting in any market, and we’ve tapped several local experts in the industry to give some tips on how to approach various elements of the process, giving special consideration to the context of a “sellers’ market” as we’re in today.
Remodeling
Should you put money into your home after buying it or before selling it? While Suzanne Elliott, a Realtor with Berkshire Hathaway HomeServices de Movellan Properties, recommends trusting your gut, it doesn’t hurt to check local and national trends. Elliott provided the following tips when it comes to answering the question of how to approach the potentially financially risky task of renovating your home:
• If you plan to live in your home for a while, design and decorate to your own tastes. Live with the things you like.
• Kitchens and baths sell homes, so spend your first remodeling dollars there.
• Gray is the latest “hot” neutral color. For a white and gray kitchen or bath, consider replacing granite countertops with Carrara marble.
First-Time Buyers
Buying a home is typically the biggest financial decision people make in their life. The entire decision-making experience can be fraught with questions, concerns, second-guessing and what-ifs. After going through the qualification step with a lender, it’s time for a first-time buyer to choose a Realtor for the rest of the purchasing process.
When it comes to working with first-time buyers, Becky Reinhold, principal broker and vice president at Bluegrass Sotheby’s International Realty, sets out to manage her clients’ expectations. She offers these tips for anxious buyers:
• Be patient. You will be able to buy a house.
• In this market (specifically with houses priced under $200,000), sellers are getting multiple offers, some of which are over asking price. You’re going to lose a few, but there will be others.
• Make sure you have financing in order and a pre-approval letter ready to send with an offer.
• Make offers with as few contingencies as possible.
“This is the same advice I’ve been giving any year the market is this hot,” Reinhold said.
Alexander Raths
Discussion with a real estate agent
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Investment Property
With overhead and upkeep being a big part of the equation, the cost of an investment property goes beyond the asking price. Before jumping in with the questions of “where” and “how much,” start by asking yourself this: Why do you want to buy investment property in the first place? Clarifying your reason for the purchase will help guide other decisions along the way, such as location, price and the condition of the property.
For some parents of out-of-town college students, it often makes sense to buy a house in the city instead of paying for a dorm or apartment, especially if they will have two or three kids going to the same school for several years. The same rational would apply to buying a condo or house locally for children attending an in-town school. Roommates can even pay rent and help offset expenses.
Purchasing property as a like-kind exchange, or 1031 exchange, is a capital gains tax deferment, allowing a seller to invest the proceeds of one property into the purchase of another one. For investors looking at an income-producing property, any income generated on a monthly basis will need to exceed upkeep expenses like utilities, repairs and appliance replacements.
Lexington Realtor Rick Queen, vice president and partner with Turf Town Properties, suggests discussing these follow-up topics with your partner or financial adviser when considering the purchase of an investment property:
• Determine the bounds of the locations or neighborhoods where you are willing to own property.
• Decide who will manage and maintain the property – is this something you are willing and able to do yourself, and if so, do you have a list of service contractors readily available? Or will you hire a management company to handle everything?
• Do your due diligence by researching neighborhood guidelines and restrictions. Some HOAs prevent rentals, which could preclude turning a condo into an Airbnb, for example.
Andrey Popov
Person Filling Document In Front Of House
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Appraisal Value
Whether you are a homeowner thinking of selling a home this month or in a few years, there are simple and affordable ways to improve the appraisal value of your house. Whitney Pannell from Team Pannell Real Estate with Keller Williams Greater Lexington taps on 24 years’ experience in the real estate industry to offer the following sage advice for sellers.
• Make sure your front entrance is in excellent shape. That includes a freshly painted front door, new mulch and freshly trimmed landscaping.
• Today’s buyers have been spoiled from watching HGTV, so they expect new carpet and neutral paint. If your budget doesn’t allow for new carpet, then it’s important to have your carpets cleaned.
• Ensure that your home is watertight. If you have a leak anywhere in the home, it’s important to have it fixed and make sure any mold that is associated with it is professionally removed. The presence of mold can ruin a sale quickly.
• Make sure your home is devoid of pet and smoke odor. If there is an odor, it’s best to hire a professional company to bring in an ozone machine. Cleaning your air filters and deodorizing your home may also involve having your air ducts professionally cleaned.
Unfortunately, appraisers do not give a dollar-for-dollar price for improvements made by the homeowner. Pannell has had clients asking about a “price per square foot” approach, but there are many other variables to consider when pricing a home, such as lot size, amenities and location. She urges sellers to look at comparable sales in the neighborhood to price their house right the first time.
“All the marketing in the world won’t sell a house if it’s overpriced,” she said. “I think buyers are much more picky now than they were two decades ago. It’s important to price your home within the range of recently sold homes.”