Jason Bramblett Real Estate Show Podcast
Jason: Good morning and welcome to the Jason Bramblett Real Estate Show. Hope everybody is having a fantastic week and your weekend is off to an excellent start. We are going to pick up from last week's show. We kind of got a little series going on here about, well, getting the house ready, but alternative ways in which to do that. And of course, when should I update my house? That is where we left off last week. We are going to dig into that. Should I hire someone? Should I do it myself? And of course, that question is going to get answered. The quick answer is, well, maybe if you know what you are doing. We are going to get into that. And then do I need a permit? A lot of work gets done that needs permits, and a lot of work gets done that should have had a permit and maybe you fall it, well, you are going to fall into one of those two categories. So we are going to talk about permits, and are they necessary, what is the point? It is a simple repair to do. Why should I have to get a permit? We are going to talk about that, especially when it comes to selling the house, which is a key thing. So all that and your emails, your questions is coming this way. You can give us a call at the office at 553-0796 or go to JasonBramlett.com.
Keith: So we left off here last week, and I think this is a great place to start. We were talking about if you have got one of those houses that maybe you have got some carpet that is out of date, maybe a couple of paint colors that just are not appealing.
Keith: Do you lower the price of the house do you fix the house? It seems like lowering the price at the house might be the way to go. I do not know. Talk a little bit about that.
Jason: Yeah, it would seem on the surface that hey, just discount the house. Hey, if it needs $5,000 worth of whatever you perceive it needs and you do not want to do it, I am going to lower the price, five grand and everybody is happy and all that wonderful. Maybe not. And the reason being is about 80% of the buyers out here today, whether they are moving up or first-time homebuyers, but it also we are seeing the boomers coming down. They do not want to mess with anything. They want that turnkey ready product, which is why you are seeing new construction go through the roof as far as demand. Because even the boomers that actually did a lot of fix up, they are like not this one. We are done, especially the spouse.
Keith: Why do it twice?
Jason: Right, why do it twice, or that is just said they have done it on every single home. And now they are financially in a position where they are just like I am not doing anything. I just want to relocate my clothes, and I am done. And that is it. And they do not really want to move or change anything, I guess I should say with the house. So when you remove about 80% of the people, you also remove the demand on your home. Two things are going to happen. It is going to take a longer time. So, a longer time, though, typically means even a lower price, the longer it is amazing to me. With the market and the technology that we have the day, so we actually get people that will email into the office and they are like, hey, the house has been on the market for 42 days. What is wrong with it? And it is like, nothing. It is just 42 days on the market. And three years ago, that was like, no big deal. Average time on the market is still actually right around 120 days. So the fact of the house on the market 42 days, it is not out of line. Perception, it is way out of line. And what is interesting is how people’s search behaviors have changed over the years. And now with so many different portals out there, so many different websites, if it is not fresh and new and just hot off the press, then it is like, something is wrong with it. It is really interesting.
Keith: Listen, I am guilty. My wife and I did the same thing. I started looking. We looked at everything in the first couple weeks. But then once we kind of excluded a bunch of homes. all we did was look at the five new homes that were posted every day and never even bothered to go back.
Jason: And never went back. We see it when we see it time, you are in that camp, or were in that camp for sure. The longer it sits out there, so you have reduced the number of people that are going to put eyeballs on it because you have not really updated it or done the changes that need to happen. You diminished your buyer pool, and to Keith’s point with behavior the way it is now, you could end up like nobody looking at your house. Yeah, for the simple fact that you have only got a, let's just say you have got 20 new people in your price point entering the market a week. That is only 20 eyeballs. That is typically not enough. Nowhere even close to enough to create the demand to get what you want. So if you are struggling or have struggled, maybe you had your house on the market before and everything has kind of fizzled out, we got to go back and look at well, what is the product that you have to offer? Are people satisfied with it? And maybe it is time for a change. We look at these allowances, that basically is what we would call someone giving an allowance, that I do not want to fix it up. I will give you $5,000 off the house. The issue is typically the allowance always costs more than actually doing the work.
Jason: The other thing is, if you do the work, then you create more demand because now you have a bigger audience of more people that want to see your house. So doing the allowance actually is kind of the double whammy. You lose in the fact that you are isolating a good percentage of the people that would even consider buying your house. Plus, most people do not ever agree with the amount of money you came up with. It is interesting over the years, especially dealing with new buyers or first-time buyers. Most people have no perception of what anything costs. I can remember years ago showing a young couple a house and I need a new carpet. And it did. And he thought was going to be like 15 grand. And I was like, man, I could carpet the whole block almost for $15,000 in this particular price point. It is almost like whatever you come up with in the amount of money, the perception is, it is never enough. So it always is going to end up costing you more. Now, you may be one of those owners that just want to sell as is, and that is fine. But the marketing strategy for as-is is totally different than just putting the house for sale on the market. There is actually a method to the madness for an as-is, take it or leave it type sale. We do not handle that the same way we are going to do with somebody that is looking for that retail number, somebody who wants to get the most money out of their house. There is no right or wrong decision. Really what it comes down to most of the time is convenience for the seller. It is what they want to do. We do not care either way we can sell the house in any condition in any price point in any way that you want. But our marketing strategy changes, it is night and day and how we are going to present that home and market that home between having a home that is very modern, updated, ready to go, or something that has maybe missed a couple generations updating, and we have had some of those over the years. So what we have to do is look at what is your goal, what is your timeframe, and what you want to accomplish. And if it is all about price-driven economics, then we have to create the product that the most people are going to be interested in. You get the most people through the door, you create the higher demand, you will get a higher price. Then we have to take a look at all those things. So owners have to make those decisions. We have a plan for them, and it does not really matter to us, but we just need your guidance on, hey, I want to squeeze every dollar I can get out of this house or I just want to move and do not really care.
Keith: You mean burnt orange is not moving houses anymore?
Jason: Interesting. In some very, very few neighborhoods. We sold a house earlier. I guess it has been a year ago, every single room in this house was a different color. Every room and I am not talking like we went from beige to darkish beige to lightish beige. I am talking extreme burnt orange to plum to Duke Blue to whatever, extreme colors and I thought, oh my goodness. But location, location, location. It was in the best school district in a price point in which there was not much inventory. And this particular owner well, they were able to get through that. That does not work for every house though. Truthfully in 20 years, it may be the one.
Keith: That was the one.
Jason: It may be the one. It is kind of interesting, but it was some good friends and I laughed because I was like, holy smokes, what in the world have you guys done? Anyway, it worked out, but really it did come down to location, location. And there are there are certain homes in certain locations that can just get away with less or more however you want to look at it because of that location.
Keith: Well, you mentioned projects, and clearly painting is one kind of project or putting in carpeting is another kind of project, but what kind of projects are we talking about? Knocking down walls putting on roofs?
Jason: This is not the way to demo your house. Maybe your friend's house but not your house, but it does look cool on TV when you are busting through the wall.
Keith: It is fun.
Jason: Yeah. Typically, most guys that rehab want to take things out in big pieces, not little bitty thousands of pieces. So big ticket items. This is where we see some challenges with remodeling is these houses in that 16-20-year range. They have a unique obstacle in the fact that that next owner knows they are probably going to be the one that is going to end up putting that roof on replacing the heating and cooling systems. And those are not hundred-dollar items, right? These are thousands of dollars that they are going to have to put out. So, houses with older HVAC systems, with a roof that is 20 years old, they present additional challenges. They may be the difference between selling and not selling depending on the price point. It is interesting in real estate, Keith, a lot of people we were talking about this at one of our team meetings. Consumers shop based upon the price of the house, and they negotiate based upon the price of the house. But at the end of the day, the price of the house makes no difference at all. Because everybody lives on what their monthly payment is. It is how much it costs per month. When you went to get a mortgage, you did not go at it looking at it like, okay, I am going to stroke a check for $250,000. You looked at it as hey, how much is this going to cost us per month? Does it fit into our family budget? It is kind of a teeter totter, if you will, because psychologically what we know when we look at it, and what we do is we negotiate 5,000 or 10,000 or $20,000 off the price, but it really means nothing because your monthly housing allowance is your monthly housing allowance. Most people get caught up in big chunks of money, when and with interest rates the way they are today, $10,000 is 50 bucks a month. It is not a lot of money.
Keith: It is a great point because we live week to week and month to month. We do not typically live year to year or 10 years to 10 years. We just do not look at it in those terms.
Jason: No, not at all, and of course, I will maybe get some flack over this or some people may disagree, but if you look at interest rate, it does not matter either. It matters in that it only dictates how much you can afford to buy. But in 1982 interest rates were 18% and guess what? People still bought homes.
Keith: But you are right. I checked the interest rate every single day because I wanted to know how expensive of a house I could afford and still be comfortable.
Jason: Yeah. But comfortable within your monthly,
Keith: Right. Within my monthly budget.
Jason: Yes, absolutely.
Keith: Every time that interest rate went down a little bit that meant I could afford a little bit more.
Jason: Yeah, absolutely. It is also a great test of figuring out who owns the asset, right? I kid people sometimes because they talk about how great of investment their personal home is, and I say great, yeah, stop paying for it. And then you will get real clarity on whose asset it is. Yeah, because when the sheriff shows up to lock you out of your asset, you will figure out oh, maybe it is the bank’s. Maybe it is not actually mine. Right? Unless you can, again now kiddingly, if you can get the kids to start, if you can get somebody else to pay for it, hey, then that is an asset and by all means, we got to look at what is the true purpose in buying a home. But getting back to the meat of this is really what should I do? What can I afford, and where is the best place to put my money to ensure that my house is appealing to the right amount of people? Big ticket items, those do impair some houses and we have to look at those. But now the good thing is, is if you got a new roof, and let's just say your house is 18 years old and you are in a neighborhood, everybody’s house is 18 years old, but you are the guy with a new roof. Your house is going to whip everybody.
Keith: That is, a huge thing. It is the first thing I asked.
Jason: Absolutely. Because you realized that, hey, that is not a $100 item if something goes bad, right? And of course, obviously roof leaks and all that create all kinds of other problems and nightmares and all that. And of course, if you are buying in the summer, the most important thing you want to know in July is does the air conditioner work and does it work well, and how old is it? Sometimes those bigger ticket items will weigh over, trump out color and carpet and all that type of stuff because those are more things that we kind of like to have this color of wall. But come July and August, air conditioning is typically not optional. We have got to have it in our society today. Most people do not really even open the windows in the south. We go straight from heat to AC, and there are not many people that actually even open the window. I cannot tell you how many houses we sell, and we asked the folks, one of the questions we asked in our interview is everything okay with the windows. I have no clue. I have never opened them.
Keith: It is probably true.
Jason: It is something we hear a lot of. We have to look at these things. Floor coverings is another one that is a big one as we are talking about carpet and different types of things. At the minimum, you want to make sure your carpet is clean. And get it steam cleaned or whatever you want to whatever process dry, wet. There are 100 different arguments on that. The trend is getting away from carpet. Most homes, new construction, you are either getting all hardwoods up and down. Luxury vinyl plank, something that is getting away from carpet. It is just a fad, if you will, right now. And, and maybe it is allergies or maybe it is upkeep or whatever it may be. I do not know. We go through these trends and these changes, but right now carpet is not the most popular thing. We see a lot of owners investing in different types of floor products, which does appeal to more people. Again, if you are going to make a change and the money is similar, go with a product that is going to reach more people. You really have to think like a retailer when you are selling your home. What can I do to get the most people through my door to create the most demand, which typically leads to a better price? Those are the things that we go through in our information interview we do with you, we go through all the pros and cons and we look at is this a good investment, should we do this, is their return, and we look at every single aspect of that. We are going to take a quick timeout. We are going to go pay some bills. You listening to the Jason Bramblett Real Estate Show. We will be right back in just a few minutes.
Welcome back to The Jason Bramblett Real Estate Show. So we are digging into all things real estate, but really what should I do in order to get my house fixed, up ready to go, appeal to the masses, all those kind of things. We talked about some big-ticket items and now let's talk about maybe some small ticket items.
Keith: Well, funny story. And again, this is all really fresh to me because I bought my home about three months ago or so. When we first started looking at homes, the minute we would walk into home, my wife would immediately go gold fixtures, we cannot buy this house. I would be like are you serious? That is $400 to fix, right? That is not a reason to not buy a house. And then funny enough, the house that we found must have been actually perfect because some of the fixtures actually are gold.
Keith: Or have gold in them and she kept every day she tells me after the holidays you know we are going to replace those right?
Jason: Yeah, there you go.
Keith: Is it that big of a deal with everybody?
Jason: Yeah, it is like I got your Christmas list. Do not ask for anything because we are getting fixtures, right?
Keith: Imagine if I put fixtures in her stocking for Christmas.
Jason: There you go. Hey, she would probably absolutely love it.
Keith: Let’s be honest.
Jason: Again, it goes back to appealing to the most people. Just to Keith’s point, it did not appeal to his wife. It was just a quick turn off. And if you go look at the trends, so I always tell folks. If you do not know what to do look at furniture magazines, go to new construction, model homes. And they are all putting in everything that the masses want. They have got all the research done for you.
Keith: That makes perfect sense because they have spent tons of their own dollars to research the market and figured out what should be there and that makes a ton of sense.
Jason: I will promise you. You will not go into any new construction model home today and see it tricked out in brass. It is just not going to happen. They may have a brass instrument in there somebody is playing, but it is not going to be on the door handles, I will promise you that. The reason why, it does not appeal to the masses anymore, and they want to create the most demand, and how you do that is you give a product that they want, and this is actually something that most homeowners could do. You could tackle a couple of doors every night you get off work. You do not have to do the whole project in one day. You just pick a door or two. Most homes have anywhere between 21 to 23 doors. So in a couple weeks, you can knock out the whole entire house. They are pretty simple. You need a screwdriver. Now if you cannot use a screwdriver, then just do not do it.
Keith: No, not a good idea.
Jason: Not a good idea, but it is not that difficult. You can really spend a little time, and it is going to cost you most the average house cost about $7-800 to change out all the hardware, change the hinges, the knobs and all that. So not tremendous, but it really, really changes the overall look of the house, and it is some of the best money you can spend in getting that house updated. Now, when you get into plumbing fixtures and those type of things, we always recommend a plumber do that. Not because you need a license to change the faucet, but because the last thing you want to do is be getting ready to sell your house and then you end up flooding the whole thing.
Keith: I was going to say you might need a license and some other things to fix the damage you do.
Jason: Yeah, yeah, That is right. Yeah, after the after the ceiling collapses into the first floor, you are going to be thankful that you actually got someone that knew what they were doing. Those are key things. Those are key things. So, do you need a permit is something to think about, too. There are certain things that have changed in homes that you do need to get a permit. Now I know a lot of folks will argue about this. It really was not as big a deal as it is today. But now the banks are looking for this stuff. If you have got a house that is 30 years old, it probably does not have the original heating and cooling system or the roof. And one of the questions that may come up is what when you change out the heating and cooling system, did you get a permit? A lot of things have changed, like, the type of Freon that you put in a home now is completely different than what it was 30 years ago, and there are some pretty significant changes that have to happen there. So does everything need a permit? No, and we can have that conversation. Not on the radio, but there just are some things that are red flags. Basements are huge right now. Every bank is looking at the basement going, okay, was this finished when the house was built, and who finished it and was there permit and did there need to be a permit? These are questions that really people or the banks want to know, especially if they are using that as collateral. Right? If you have got XYZ builder extraordinaire built a home, but Joe the homeowner handyman did the basement and the quality is not the same, it could make a difference in their collateral, right, as far as the quality goes.
Keith: It can bite you down the road.
Jason: It could, and so these are questions that we ask, not because we are going to make any major decisions, but we need to be able to handle objections as they come. So we are going to talk about those things. But permits, it is simple. Just check with your local county or city and they will tell you actually, if you need a permit to do it. It is just a basically a tax that you pay, but it is just part of playing ball these days. So you can get more information on our website and go to Jason Bramblett dot com. You can always call the office if you have a question. We can get you in touch with the right people. It is 553-0796. We will be back here next week. I hope everybody has an awesome weekend and we'll see then.