Eat. Pray. Love. And buy a house.

“It’s too hard for buyers these days! I’ll lose my mind if I lose another bidding war. Maybe I’ll just keep renting.”

Yep. Heard it. I feel your pain.

Another one comes up now and then, and I’ve heard it more often lately: “I don’t want to overpay! What if I pay too much?”

In the context of our explosive residential real estate market, those are understandable questions. Prices keep rising. Houses keep selling for above asking price. How much is too much?

There are a couple of quick answers. Things are worth what people will pay for them – so, technically speaking, you can’t really “overpay.” And, while we can’t predict the future, the smart money says things won’t go down – or even level off – any time soon. So, your house is likely a sound investment.

But there’s a more nuanced answer that I offer when I counsel nervous buyers. It involves life itself­ – above and beyond the purchase of a house. 

Yes, a house is an investment, but it’s more than that. It’s the place where you live. And there’s a lot about living your life that really doesn’t involve dollars and cents. If you get too hung up on the money end of things, you may miss getting the house of your dreams.

I recently closed with buyers on a great house. Perfect for them and their young daughter. Like most buyers, they were working with a finite budget, and typically these days, we had been on the hunt for a long time. We were all getting pretty tired of the process when they beat out six other buyers by offering 7.5% above the asking price, a pass/fail inspection, and no appraisal contingency.

Celebration! A deal at last! And then the angst set in.

As it turned out, the house appraised for even more than contract price, but they were still nervous. “We don’t want to overpay for this house. Are we making a big mistake?”

There was still time to walk away on inspection issues, so we talked about it. I trotted out the advice I give buyers about value and getting what you want. This is about having the right place to live!

Can you see yourself chatting with your neighbors on the front porch? (This house has a fabulous front porch!) Can you see Thanksgiving dinner in the dining room? Have you located the spot for the Christmas tree? Can you see your daughter coming down stairs in her first prom dress? Yes, yes, yes, and yes. So, they bought the house.

Do you love the house? Can you afford the house? Buy the house! And rejoice!

Selling your house? One size does not fit all …

Selling is certainly easier than buying these days, but it’s not as easy as falling off a log. Strategy is critical. The approach for getting the best offer on one house isn’t necessarily right for another. One size does not fit all.

The general rule: present the house to the public as an easy, no-fuss purchase. Assume that buyers have literally zero imagination, and deal with anything that could get in the way of them seeing themselves in the house.

Get it spiffy and market ready, and do not over-improve. Fix-up minor things, de-clutter, paint if necessary, refresh the yard, and clean, clean, clean. Maybe stage it if it’s empty. Don’t do anything major.

But sometimes the general rule isn’t the right rule. There are times when the best approach is to do nothing at all.

I had a recent listing that had been a rental for 20 years. It was in sound condition, but a little tired - a kitchen upgrade from 20 years ago, vinyl siding over the original clapboard, a deck that needed repairs and re-staining, a whiff of lingering cigarette smoke.
 
The sellers asked it they should do things like replacing the deck, washing the windows and siding, and reworking the tile in the bath. I recommended a thorough cleaning, and deck repairs to prevent actual danger, but nothing more. The buyer of this house would either leave it as-is and rent it again, or would do an all-out rehab. In either case those improvements would be unnecessary.
 
We had six offers and got a deal at well over asking price.
 
Another recent client was an elderly lady moving to assisted living. She had owned her house for 53 years, and apparently had never thrown anything away. It was absolutely stuffed with stuff. There was no way to know what needed fixing, and clearing everything out would be a major undertaking.
 
So, what to do? Clear it out, fix it up (to what extent?) and put it on the open market? Or look for a buyer who would buy it to flip? 
 
The former could take months and the seller needed the cash from the sale asap. And the underlying condition of the house was a gigantic unknown. So, the seller and her guardian chose the latter approach. I worked off-market and got three offers. The winner took the house at a very fair price without an inspection contingency (a relief!) and offered to dispose of anything the seller wanted to leave behind. A win for the seller!
 
If you are thinking about selling, now is a great time, but it takes the right strategy to get the best deal. I’d love to talk with you about the best approach. I might even make you a nice cocktail while we chat.

Working with What Is

Everybody over three feet tall knows this is a wild real estate market. Unlike anything most of us have ever seen. And because it’s so slanted in favor of sellers, it’s hard on buyers. And their realtors.

There are all sorts of strategies for getting an offer accepted. I’ve talked about a few in previous months. And that’s good, but it still may take months and a whole lot of offers to land a deal on the house you want.

So, how do we handle the process? That has a lot to do with attitude.

Over years of working to bring more clarity and happiness to my life, I’ve read a lot of guru writers – you know, the folks who love to tell us how to think and live. Some of this stuff is nonsense of course, but some of it … well, skeptic that I am, I’ve discovered that some of it is very, very good.

Two who have had a big impact are Byron Katie and Eckart Tolle – respectively, the authors of Loving What Is and The Power of Now. They both advance the idea that life itself is not driving us crazy. The problem lies in our reactions to life. Simply put, they advise total acceptance of reality just as it is, and then working on our responses.

Denying or resisting reality only makes us less happy, and it can block efforts to improve the situation. Acceptance does not imply acquiescence. It simply means seeing things clearly so you can take appropriate action.

So, does this apply to real estate? Of courses it does! Doesn’t everything?

As we – buyers and realtors – work this crazy market, acceptance of what is makes life less stressful in the moment, and makes progress more likely. Accept that this is a tough market. Accept that this will likely take a while. Accept that there may be disappointments. Then work forward with energy and focus – with as much joy as you can muster, and without too much bitching and moaning. (This last admonition applies equally to realtors and clients.)

Working this way will lead to more clarity and flexibility in deciding on wants vs. needs, more rational offers, less anxiety waiting for a response from a seller, and more rational negotiations.

Let go of the pain of the moment. Let go of “the one that got away.” Let go of the summer heat and fatigue. Know that eventually you will find all of what you need, and most of what you want.

Snapshots from the Road - again

Verbose by nature, I frequently struggle to keep these messages down to about 400 words in the certain knowledge that if I overwrite them, no one will read them.

But sometimes I just don’t have 400 words to offer. That said, I’m neverwithout observations. So here are a few quick ones – snapshots from the road as we all travel this crazy market together.

Location, Location, Location
These days some buyers are finding themselves priced out of neighborhoods they want to live in. But, if a specific neighborhood isn’t absolutely critical, it pays to look for the same house in a different area. Looking at recent listings and sales (some of which have been my own) I find that a comparable 1500 sf, 1960s ranch can be up to 15% less expensive in Charlotte Park or Bellevue than in Crieve Hall. All three areas are nice and well located – but you get more house for your money in Charlotte Park or Bellevue than in Crieve Hall.

Looking for a plus-sized ranch or a mid-century modern on a big lot? Forget about Green Hills and check out Bordeaux or Madison. Looking for a new or new-ish tall-skinny? Try Charlotte Park instead of the Nations.

Take a Breather
I’m a crossword addict. I work the Sunday New York Times and LA Times puzzles every week, and always have a spare on hand if I finish early. But sometimes I get stuck. When that happens I put the puzzle down – usually overnight – and when I get back to it, the answers just seem to glide into place. Same thing with real estate shopping. It gets stressy making offer after offer and getting turned down! If that happens, it’s best to chill out for a week, or two, and then go back to it. It’s amazing what seems to magically turn up after a little down time.

Highest and Best – not always synonymous
This applies to buyers and sellers both. More dollars doesn’t always mean a better offer. Recently, I’ve advised seller clients to reject offers that were appraisal-contingent but were so high, there was no chance the house would appraise. I’ve gotten deals for buyers at fewer dollars than the competition because I read the listing remarks or called the listing agent for info, and then wrote an offer that included things the sellers wanted. Best beats highest every time!

And here we are. The words above clock-in at 397. Time to quit and have a cocktail!

Snapshots from the road

I’ve never seen anything like the residential market we are in right now. And I know people who’ve been in the business 40 years or more who say the same thing. 
 
We are barreling along at 90 mph on an unfamiliar road, and that can make it hard to understand what’s going on. The scenery is certainly interesting, but it goes by in a blur. Knowing what it all means can be a challenge.
 
That said, there are clues to the meanings if you look. I’ll stick my neck out and offer a few thoughts …

Are we in a bubble?
I think not. Prices will keep going up. I hope the rate of rise will taper off a bit as inventory begins to catch up with demand (new home starts are at their highest annual level in 15 years) but, barring some sort of global melt down, they aren’t going to collapse.

Is now a good time to buy?
Yes. Want a more expensive house? Wait a week and come back. If you want and/or need a house, now is always the right time to buy one. No one can predict the future and this is about more than investment. It’s about a place to live your life.

Is this a difficult time to buy?
Yes. It’s harder than it has been in a long time. Because inventory is so low, there’s a battle for almost every house that gets listed – as long as it’s sensibly priced. (See below about limits.) This battle is going on at all price levels – from starter homes to million-dollar+ listings. But patience and persistence will pay off. Brace yourself and jump on the roller coaster.

Think about buying new construction
New-builds are frequently listed before they are finished. In some cases you can avoid the bidding war stampede and associated brain damage by buying this way. You may have to wait a bit, but the process will be calmer.

Is this a good time to sell?
Duh!

Is there a limit to all this?
Yes. There is a limit. Overpriced houses do not sell. I’ve seen it time and again. Comps still matter. Appraisals still matter. And all those people coming here from California and New York work with realtors who look at the comps and think about appraisals.

Work with your realtor
No matter how weird it gets, your friendly, knowledgeable, indefatigable realtor will be there with encouragement and counsel.