My Blog

Overgrading, Oh No!

6/23/2015

What’s Overgrade?

We’ve all thumbed through architectural digest, seen an HDTV episode or been on vacation and thought “Oh man, I really need THAT in my house!” Those remote control blinds are just too darn cool, but unless you have a high rise condo, or a custom home, they can also burn a hole in your pocket. Upgrading your home is not only fun and adds value, but it certainly can be expensive, depending on your scope of work. Just don’t overgrade it!

Clients regularly call me when they need a tradesmen or advice about their home and the upgrades they’re doing. I just got a message just yesterday from my friend Andrew asking whether he felt it was necessary to keep his master bathroom tub, or if it’s okay to remove it, and expand the shower to make it the focal point. I always appreciate when people confide in me to help provide guidance about home updates. Personally, with a moderately priced Las Vegas home, I don’t think it’s critical to have a bathtub in the master, but it is important to have at least one in the home, whether it’s for kids, your pets, or your sore legs after a good Hike on Mount Charleston or Red Rock Canyon.

I’m always recommending to my clients that if they want to do home upgrades, that they should do their homework first on their neighborhood and see what other people have done. It’s as simple as calling their real estate agent and sending over recent listings or sales in your neighborhood to see where other homes have been selling at. You don’t want to be the nicest home in an average neighborhood because other homes will have a tendency to drag your value down.

Focus on high value items like kitchen and bathroom updates, flooring and fresh paint and lighting. Generally custom upgrades are meant to make you happy versus getting them back dollar for dollar when you sell. Pools are a great example in Las Vegas of losing value over time. Generally depending on the pool, appraisers will value them somewhere between $15,000 and $30,000. Yet to have a pool built from the ground up costs usually between $25,000 for the basic pool and it goes up from there quickly. Unless your dream is to build your dream home from scratch, try and find a home with a pool rather than build one yourself. My caveat here being, custom high-end homes may be able to recoup the cost more easily than track homes in Summerlin or Southern Highlands.

When looking to upgrade the kitchen or bathroom or flooring, DO YOUR HOMEWORK. Don’t take one or even two quotes. Make multiple appointments and get lots of feedback. Ask for referrals and see how past customers have fared with their work. You’re planning on spending thousands of dollars, so it’s worth the extra effort. You can even save dollars by purchasing raw materials yourself and quoting the labor. I get great enjoyment from picking out my own slab of granite at the stone yard and paying basically wholesale prices.

If you’re looking to upgrade the yard, that’s always a great decision. Curb appeal and greenery add enormous value to a home from a marketability perspective. You likely won’t get every dollar back, but proper landscaping makes a home much more inviting. Visit the tree nursery in the wintertime when business is slow, and prices come down significantly. You can save hundreds, if not thousands of dollars!

Remember, upgrades are great but don’t overgrade. Homeownership is expensive already and when you’re ready for your next adventure, you don’t want to regret the decisions you made to update.

Thinking Outside the Real Estate Box

6/9/2015

If you live in Las Vegas, you know that this city has a lot of unique types of homes. Flying over the city from anywhere, it looks like a plethora of stucco homes with tile roof after tile roof. The beautiful thing about Las Vegas is we have so many amazing kinds of property. High rise condominiums like Panorama Towers, Palms Place, Trump Towers, and Veer Towers at the famous City Center. Classic Las Vegas homes are found more inside the city core in neighborhoods like the Scotch 80’s, McNeil Manor and the Las Vegas Country Club. If you’re looking for a rural ranch home, Las Vegas and surrounding areas have many horse properties and even farms. Of course, we’re most known for our exclusive communities inside MacDonald Highlands, The Ridges, Queensridge, Anthem and Southern Highlands. This city has something for everyone.  

One thing I hear over and over from buyers is “my last real estate agent kept showing me things they wanted to see, instead of the homes we wanted to see”. Few things bother me in my job, but hearing that definitely ranks high on my list of issues with other agents. Realtors are in the relationship business, and once you close on a home with your client, that relationship continues long after you close. You want to make absolutely sure, your client is happy with their decision and have gone in with their eyes wide open.

When buyers come to me with a list of criteria, I always review their list, refine and provide recommendations within 24 hours. I also look upon it as my responsibility to find a couple listings outside the box to make sure they’ve considered all their possibilities. I’ve had buyers looking in Summerlin, and ended up buying a mid-century modern home in Paradise Palms. I’ve had buyers looking in Providence, and ultimately buy in Rhodes Ranch. It’s not about what I want, it’s about what the client wants.

I also like to remind my buyers of things they may not think about. Home geographic orientation, dog noise, proximity to schools, time of commute and many other things that make your home decision important.

Sometimes I’ll even have my clients speak with neighbors in their prospective neighborhood to ask them about their experience living there. It’s better to find out now, before you are fully committed. I recently had a buyer very concerned about the strict HOA rules I delivered to him from the HOA management company. He wanted a personal assurance from someone in charge that his plans for a pool and landscaping wouldn’t be an issue. I arranged for a board member from the HOA to meet us at the property and speak with the buyer directly. Not only did the meeting go extremely well, they even hit it off and my client has a face in the neighborhood he knows now.

I remind myself to listen more and speak less. It has guided me well in my real estate career.

Negotiation and (Gulp) Compromise

6/8/2015

I’m in the middle of negotiating an offer for a seller today in Summerlin, so I figured now is as good a time as any to cover this juicy topic. Unless you have your own TV show or are a hard core business person, no one really likes to negotiate. Let’s face it, we want what we want, and we want to pay what we think is fair. The problem is, that perspective changes, depending on which side of the table you’re on. Sellers love to play up all the benefits of their home, the views, the amenities and all the bells and whistles they’ve done since they’ve owned it. You can bet we’re going to stand proud when I sell our next home and talk about the countless dollars we’ve spent upgrading the entire property from the short sale nightmare it was when we bought it. Buyers love to downplay all the benefits, point out the flaws, traffic, and updates needed. Buyers want to pay as little as possible, and sellers want to net the max amount. It’s capitalism and it’s a beautiful thing.

Now don’t get me wrong, upgrades and updates have lots of value, but with any hard asset, they only have value to someone willing to pay for them. Just because we’ve added 25 mature trees to the property, plantation shutters, new paint and flooring, may not bring the return on investment that we’re hoping for. When we place our home on the market, we’re hoping based on our research that the home will garner the figure we have in our heads. Sometimes it does and sometimes it doesn’t. That’s where negotiating comes in.

Houses aren’t just our real property or assets. They’re our homes and where our memories are. It’s where Christmas happens (yes we have Christmas in Las Vegas), where kids grow up and where wonderful meals are cooked and shared. Parting with those emotions and memories has a price. As a seller, we oftentimes hold firm to those things, not wanting to discount them. But in reality, we can oftentimes be short-sided and sabotaging our own progress as we move on in life. Las Vegas is a city of people on the move. Buying, selling and chasing dreams.

I always tell my sellers that ultimately, their home is only worth what someone is willing to pay, and sometimes not even that’s completely accurate, since an appraiser oftentimes has the final say. It’s important to have an honest and open conversation with your real estate agent/broker before you list the home. Know where your heart and head are, and compare that with the market. Listing your home for sale is a big jump, but doing it with your eyes wide open is important. Unless you have something so unique that it cannot be found elsewhere, or the market is so tight on inventory that every house sells, you’re likely going to have to negotiate.

If you’re a buyer, don’t offer too low. It only gets you really high counter offers. Sellers, don’t counter too high, it can be like having a fish on the line, and suddenly they’re gone, and you’re left wondering if you made the right decision. Negotiation takes compromise and sometimes that’s really hard to do. As a buyer you’re really stressed about spending too much, and as a seller, you want to net the max amount for your next adventure. Having an agent who understands the delicate nature of negotiation and when to budge and when to stand firm is important. You want to bend without breaking. Being stubborn in your position can cost you a lot of time and money and keep you from moving on with your life in a new direction. Sometimes moving forward has more value than the few dollars extra you’re pursuing. How valuable is progress?

Remember to be tough, be smart but more than anything, be reasonable.

 

Knowing Your Market

6/4/2015

Everyone has heard the old financial adage, “buy low, sell high” and many other phrases when it comes to managing your assets. As a real estate professional, I’ve always looked at property as the best asset you can own. You’d like to think it’s stable, fixed and will always have value. Of course the Great Recession taught us a little about preconceived notions!  Arming yourself with knowledge and keeping current on the global market and your local economy are really great ways to begin. Of course not all of us are Warren Buffet’s, but knowing what’s coming is better than getting run over and wondering why we didn’t see that one coming.

Being in Las Vegas, we felt like nearly ground zero for the recession. I’ve lived here for more than 40 years and living in a city that is nearly top in growth year in and year out, you begin to think you’re pretty invincible. We’re the place that everyone comes to have fun!  Honestly, nothing catastrophic ever seems to happen here and that sense of invincibility disappeared in 2009 and really hit us hard. Visitation was crashing as were our highly overinflated property values, and as they fell, so did our confidence in Las Vegas as a whole. Who were we if we weren’t the place everyone flocked to for vacation?

In 2009, we stood around and took a proverbial look at ourselves in the mirror. As Southern Nevadan’s we weren’t used to things coming to a screeching halt and wondering “well if we’re not bringing in tourists, than who are we now?”  Las Vegas isn’t known for technology, education, manufacturing, farming or anything else that drives the economy. In a strange way, I think the recession helped us. It helped the resort corridor reevaluate their whole identity and they figured out how to operate with less. How City Center was able to open at the end of 2009 with a total construction cost of $9.2 billion and remain afloat is a testament to this cities perseverance and long term success. As the largest privately financed development in the United States, we now can look at City Center and know we’ve survived.

It’s now 2015 and unemployed is down, wages are up, and visitation is way up. Lake Mead is down, but that’s a blog entry for another day. We’re not sure whether to hold our collective breath, or exhale at this point. The economy is chugging along at a slow growth pace, and new development here in Las Vegas is churning along. The newest resort to open on the Strip, Resorts World built by the Genting Group (http://en.wikipedia.org/wiki/Resorts_World_Las_Vegas) will open in 2016. Cadence is a new 2,200 acre master planned community in Henderson (http://cadencenv.com/) and Skye Canyon is another 1,700 acre development in the Northwest part of Las Vegas (http://skyecanyon.com/). It feels like the life has returned to Las Vegas along with property values. During the boom it felt as though property values didn’t make any sense, and likewise during the 2009-2012 years, property values were so low they were going for less than replacement value. Things have normalized with small upticks in growth since 2013.

Keeping an eye on the market, educating yourself and becoming a discerning buyer/seller is critical to managing your real estate. As always, I’m happy to help my clients navigate the market and make the smart decision instead of the impulsive one.

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