Up on the roof …

The classic, oh so mellow, tune of the same name recorded by the Drifters (in 1964, and yes, I remember when it hit the charts, and yes, you can do the math if you wish), was a love song to the peace and solace available when sitting on the roof on a warm night and gazing at the sky, far above the noise and hassle of the daily urban grind. A wonderful song, and a big hit.
 
That was then. This is different.
 
The condition of your roof is becoming an inspection flashpoint, an insurance problem, and a possible roadblock to closing ­– something both buyers and sellers need to aware of. 
 
It all starts with insurability. Climate change is causing all sorts of weather issues these days. In our part of the world, it’s tornadoes and hail. We’ve had a lot of both in the past decade and the vulnerability of roofs is making them difficult and/or expensive to insure. If this is news to you, you are not alone. It was news to me, and the situation isn’t going away. Eventually it’s going to affect pretty much everyone.
 
Read on …

Late last year, I helped a client couple get into a deal on a house that seemed perfect for them and their family. As it turns out they are happy with their house, but there was a big bump in the road.
 
While they were under contract, their insurance agent emailed and said that an inspector was going to have a look at the house before they would agree to insure the property. I hadn’t heard of this before, so I called my insurance agent and she told me two things: 1. Get used to it. This is becoming the new normal. And 2. It’s all about the roof. 

As it turns out, even though the roof was sound and not leaking, my clients had to replace it, or they could not get insurance, and therefore would not have been able to close. The inspector did a drive-by, saw that the roof was three-tab shingles, not dimensional shingles,* and declined to cover the house. Boom! He didn’t even get out of the car.
 
My clients were aware that the roof was getting old and would need to be replaced sooner rather than later, but they weren’t planning to deal with it right away. An unpleasant surprise!
 
So, what did we learn?
 
One: It’s about the roof  Changing weather has made roofing riskier for underwriters, and therefore more difficult for owners, to insure. This is not going to get better.
 
Two: It’s about the cost of insurance  Homeowners insurance, when you can secure it, is getting more expensive because of these factors. This is not going to get better, either.
 
Three: Forewarned is forearmed  Buyers need to go into a deal ready to take a hard look at the roof during inspection, and have a clear idea of how much homeowners’ insurance will cost. It’s possible that insurance expense could move a monthly payment beyond what a buyer can afford. 
 
Sellers need to know that buyers will be taking a hard look at the roof, and may demand compensation for repairs or replacement in order to close the deal.
 
*A word about shingles: Three-tab shingles lie flat on the roof slope and do not appear textured. Dimensional shingles – also called architectural shingles – at more typical these days. They have a textured appearance. 

The road ahead …

We are beginning a new year. That’s actually a fairly arbitrary distinction, of course, but with the holiday hoopla behind us, we do tend to refocus on the rest of life. The new year always brings questions about what’s up ahead.
 
Aside from the givens – we’ll have some more cold weather, the gym will be crowded until mid-February when the resolution people give up their resolutions, the Super Bowl with happen on February 9, and we will spring forward again on March 9 – it’s hard to say.
 
We look at the past, we look at developing trends, and we make our best guess. As I’ve said – with regret – so many times before, a real estate license does not come with a crystal ball. Not even as an optional extra. 
 
So, what does it look like from here? A few thoughts. A few caveats. Some counsel.

Stats Local inventory is still tight. The local economy is strong, and our population is still growing, placing upward pressure on prices. 

Days on the market are creeping up – nationally as well as locally. But that may change in the spring if a lot of buyers come out of hibernation.

Interest rates have been drifting between 6% and 7% and will likely continue in that range – maybe drifting into the low-6% range, but not below 6% as we had hoped. So, will all those buyers come into the market?

Modest price appreciation (average prediction is 2.9% nationally) helps affordability, that but may also inhibit sellers who are wanting to cash out at a profit.

 
The Outlook Pretty murky! It looks like we might be moving (very) slowly toward a more balanced market. If not totally neutral, less tilted toward sellers than in past years. But as above, there’s a lot of push and pull – factors moving in opposite directions.

A Caveat We have a new presidential administration, and if the past is a preview, we are in for a wild ride. If Trump 2 is as predictably chaotic and unpredictable as Trump 1, all bets are off. 
 
A Word of Counsel Is this a good time to buy or sell? My answer is, as always, yes! Trying to game out the market – waiting for things to move in your direction – almost never works out. It might happen by chance, but rarely by design. A lot of this is just plain dumb luck. 
So … if you need and/or want to buy a house, if you need and/or want to sell a house, now is always the right time. Know – with great clarity – your objectives, get the best realtor you can find (I can give you a suggestion on that), make a plan, and go for it.  

Gratitudes of the Season

This is the time of year when most of us give things, get things, and give thanks. All my shopping is done. Everything is wrapped. I’ve attended and hosted all the parties, and I’m finally slowing down.
 
Time to say thanks …
 
To my clients 
Over my 10 years in this business, with 130+ deals under my belt, I can honestly say that about 99.5% of my clients have been fun and gratifying to work with. Crises and emotions and speedbumps do occasionally come up – that’s part of the process – but, on the whole, it’s been a fabulous bunch. Grateful for all of you! Keep it coming!
 
To Onward RE 
When PARKS sold itself to Compass RE, I knew I didn’t want to go with the sale, so started looking for a new place to hang my license. And Onward was absolutely IT!  So, thanks to Bob and Marie Parks and Jenni Barnett for starting an all-new, all-local brokerage where individuals still matter. And thanks to Scott Cornett, my broker and all the other happy realtors who made the jump and make Onward the best place to work. More of you are coming. Welcome, and believe that the best is yet to come!
 
To friends and family 
You are the bedrock of my ongoing life. Love you all!
 
To Nashville … 
for being such a dynamic, expanding, interesting place to live and work. It wasn’t always this way. When I arrived in 1976 fresh out of grad school, Nashville was so dead, I thought I’d moved off the edge of the planet. What a difference 48(!) years makes. Sure, traffic sucks, but show me a dynamic, expanding, interesting American city where it doesn’t. We’ve joined the big leagues and I’m happy about that – traffic and all. 
 
To everyone who reads this 
Thanks for reading. And thanks for your nice comments, and for trying the cocktails and giving me feedback. More of the same up ahead …
 
Happiness, peace, and prosperity to one and all!

Goodbye Coppertone Kitchen

Last month I said goodbye to my all-original, 1962 coppertone kitchen. And the process was – for a moment or two, at least – surprisingly emotional.
 
Backstory: I live in a 3-bed, 2-bath ranch built 62 years ago by an African American family in College Hill, one of a few areas where affluent black citizens were allowed to live before housing discrimination was outlawed. 
 
When I moved in seven years ago, the house was almost completely unaltered. Stunning bathrooms – one yellow and blue, the other pink and green – in mint condition. Intercom. Beautiful hardwood floors. And a 1962 kitchen – coppertone cooktop, wall oven, and dishwasher, along with linoleum floor, original cabinets, and original Formica. 
 
This kitchen and I saw a lot of good times together: friends, food, cocktails and – during covid lockdown – cocktail videos posted on Facebook. I loved it! But when the dishwasher finally ground to a halt and the wall oven caught fire, I knew it was time to start over.

So, what’s the real estate connection? There are two: holding on, and letting go – and they both go back to the meaning of a house. What is a house really?
 
I’ve said this many times before: a house is more than the sum of its parts. It’s more than shelter from the weather. It’s more than dollars and cents. It’s a place to do your life. As both container and stage, it’s where so much of our lives unfold. And that’s why there’s often a great deal of emotion tied up in a real estate deal. 
 
The existence of this kitchen represented a significant achievement for the Driver family who built it. In 1962, the odds were stacked against African American home ownership. In addition to being barred from living in many areas, they often had to borrow at higher rates – assuming they could get a mortgage at all. This kitchen was a testament to the Drivers – they had beat the odds!

For me, it was a refuge from a storm. My business went bankrupt during the 2008 economic collapse, and I lost everything – including my house. It was a tough time, both financially and emotionally, and getting into this house was a signal that I was finally coming out of the woods. It felt great! I just loved my coppertone kitchen, and it was hard to say goodbye.
 
For both those reasons – and for just a few minutes the day before demolition started – I found myself wanting to hang on to the kitchen just as it was. However …
 
On the flip side there’s this: when it’s time to move on, it’s time to move on.
 
In spite of the legitimate and the totally understandable emotional entanglements we have with our houses, too often I find that sellers place too much value on these entanglements when it comes time to sell the house. 

Buyers care about their own lives, not about yours as it occurred in the house. Your attachments are not theirs. And no one wants to see closets and a garage crammed with your stuff – even if you promise to move it before closing. 
 
Treasure your memories, but keep on moving. 
 
As for me, I’ve said goodbye to the coppertone kitchen – both for myself, and for the Drivers. But a little bit of that coppertone will always reside in my heart. 

What are you looking for …

… in a realtor?
 
With the changes in real estate practice brought on by the recent class action lawsuit against our industry, that question may be more important to you than before.
 
Briefly, in case you missed all the noise, a class action suit against the real estate industry alleging price fixing and collusion among realtors was settled in March of this year by the National Association of Realtors. The NAR (correctly) admitted no wrongdoing, but the settlement mandates two changes in the way we do business.
 
First, listing agents are no longer allowed to offer commission to buyers’ agents via an MLS listing. Second, buyers’ agents are no longer allowed to show listed properties without a signed buyer representation agreement.
 
Simple. But the ripple effects are more complex.

Despite the accusations in the lawsuit, realtor commissions have never been fixed or mandated. But post-lawsuit, the question of how, and by whom, the buyer’s agent gets paid has gotten more fluid and open to negotiation.
 
Traditionally, buyer agent commission was factored into the price of the house, offered to the buyer’s agent via the MLS listing, and paid at closing. This allowed buyers to pay their agent as a part of the purchase price of the house and amortize it over 30 years through the mortgage. 
 
But now, there are lots of open questions …
 
Can sellers still offer compensation to buyers’ agents? Yes. Just not through the MLS listing.
 
Will they? Well, they certainly should – assuming they want to attract the largest pool of potential buyers.

If not, how will the buyer’s agent get paid? A good question! It is possible more sellers will now decline to offer compensation to the buyer’s agent. If so, how will buyers pay their agent? Out of pocket? Maybe, but that can be a big chunk of change for someone working hard to scrape up enough for a down payment. 
 
Will lenders lend additional money to pay agent commission? Nope.
 
Will buyer agents work for free? Not a chance!
 
Can buyer agent compensation be worked into the deal through negotiation? Yes, it can.
 
Will the practical specifics of all this stay fluid and evolve over the next year or so? Almost certainly, they will. 
 
 So, what do you want in a realtor? I’ve got a list you might want to consider.
 
Someone who is …

• Well-trained. Who knows the process, knows what’s in all the contract forms, and knows why it’s there.

• Well re-trained. Only someone with solid basic knowledge (see above) can fully grasp how to work with the recent changes, and the changes that might lie ahead.

• Is supported by great brokers. Something new comes up in every deal. Every. Single. Deal. So, having accessible, knowledgeable brokers on hand for counsel is critical.

• Not afraid to advocate – for his client and for his own value. Honoring a client’s value as well as the value of one’s own counsel is fundamental to getting the best deal for a client.

• Not afraid to advise. Someone who understands his duty to advise a client on the best way to market a property, and the best way to write a winning offer.

Hmmm. Sounds a lot like me.