Smith Lake Rentals and Sales

Vacation Rentals and Assisting Buyers

Jeff Thomas

Lessons learned from losing a property in 2022!

Clients came in and looked at 4 properties. Two days later they decided to make an offer on one of the properties (the only one that checked most of the boxes.) While we were discussing I pulled it up on MLS only to find it was already under contract….crap!! Search continues. Two days later, the property comes back on the market for some reason. We jumped on it. Clients made an offer 3% below asking and asked for the furniture to be included. Seller countered saying price is good but no furniture at that price. Clients thought about it for 4 hours and decided to accept the offer. We communicated to the seller’s agent only to be told there was another offer in play and maybe a third. We felt we should have been able to accept the offer but the sellers were just looking for the highest price….heck with the bird in hand “cash” offer. Sellers accepted one of the other offers and we lost the property!

So what did we learn from this: 1) always ask yourself if the house is worth losing over the amount of money you are negotiating down 2) keep the offer as clean as possible (eg don’t ask for anything that is not in the listing unless it is critical (can always work to get it later), 3) move fast…time is not your friend and thinking about it can kill the deal, we are talking minutes in some cases. Think about what you are willing to do before the counter comes back and be as ready as possible to accept or counter. 4) as of August 2022 the market has softened a little as rates rise but there is still a lot of pent up demand and cash on the sidelines. Never believe you are the only one in the picture…right now, it is a competition to see who can cross the finish line.

All of this being said, try not to get desperate. The above scenario has made a lot of people compromise to the point of disappointment. Patience in waiting on the right house and quick action when you find it is the right recipe.

Give me a call if you need assistance in finding your Smith Lake home. Jeff Thomas, Smith Lake Rentals and Sales, 205.492.3211

What the $%^& is going on with property at Smith Lake?

Covid Summer, 2020. Since the stay at home order was lifted at the end of April the houses have been flying off the shelf!! Go to setup showings for 10 houses and 5 are under contract. Even the houses you thought would never sell are selling…and close to listing price! What is going on….

My theory has some factual basis and the rest is simply my opinion based on conversations with clients looking to buy and clients who have bought. Here is what I think is happening: rates are low….great start, people are scared of the stock market after the covid drop so they are looking for more stable investments and the real reason…everyone was locked up with their family in their house/apartment/condo and they saw their neighbors with lake houses headed to the lake to play! I just know that has to be it…I can almost hear the conversations now. Husband to wife or wife to husband…”and why don’t we have somewhere to go when the world locks down?” We love our families but you know that was said….by a lot of people.

So now everyone is at the lake looking for lake properties. Those of us that sell property are like…awesome!!!…have 10 new clients but the problem is we don’t have anything to sell. The reality is there are about 3 houses in the 300-400k range worth showing (and they need fixing up). The numbers double as you move into the next $100k range but they are still not perfect. Once you get to the 700s you start to see the inventory get better…because this is where the spec homes are starting these days.

So…if you are looking for property on Smith, be patient, get educated and ready to pounce when something new hits the market. Call me and I will get you ready. OK rant over. JT

Best house for my family to use and to make a vacation rental?

“I would like to purchase a lakehouse for my family to use but also want to maximize the income I can generate from it via vacation rentals. What is the best house for this?” I get this question a lot! The short answer is…buy a house that allows the most sleeping possible for the price. Think of things like: is there a BR I can put multiple sets of bunks or beds in? Can I put beds in the basement? Is there a bonus room for beds. Bottom line, the number of people the house can handle is USUALLY the primary driver of the price per night. One thing is for certain…THE BIGGER THE BETTER. Big houses make the best rentals because multiple families can go together and when they do they typically stay longer (5-7 nights vs 3-4 nights).

Couple of examples:

  1. Three BR home. Setup for 2 families (sleeps 8-10) to rent….2 adult BRs (Queen or King beds), 1 kids BR (lots of beds). Add lots of amenities: kayaks, paddle-boards, pedal-boats, lillypads, etc.
  2. Four BR home. Try to buy one that 3 families (sleeps 12-14) can use….3 adult BRs, 1 kids BR and maybe additional sleeping in a basement/bonus room/hallway/etc.
  3. Five or more BR home. These homes will probably have a lot of room and each will be a little different. Usually these can be setup to easily handle 3-4 families (sleep 16-20). Just make sure the living areas (hopefully 2) can handle the numbers. You want to ensure everyone has a place to sit down to eat and to lounge during the day and after dinner.

I have put in previous post but there are a few rules of thumb in determining rate per night: $100/nt/BR or $100/nt/$100k of home value, $150/nt/family you can sleep. Examples: 3 BR house averages $300/nt, $400k house averages $400/nt, house that sleeps 3 families (12 people) averages $450/nt.

As always, call me to discuss specific properties. I am glad to go out and evaluate a property pre or post purchase.

Jeff Thomas…205.492.3211 or Jeff@SmithLakeRentals.com

It’s a sellers market on Smith Lake!!

Why? couple of quick stats: 183 residential homes (condos, houses, mobile homes) currently on the market…most of which were added in 2019. 253 homes SOLD over the last 12 months…most of which were added the previous year. If you remember anything from economics class it is supply and demand….if supply is low and demand is high the price is….you guessed it…high! This is how I came to my conclusion.

So what does that mean for property buyers/sellers. If you are BUYING you better be prepared to jump on a property you like as soon as it hits the market. This almost means drop what you are doing and go see it (or if you have a good realtor, get them to go video for you). If you are thinking about SELLING, now is the time. Prices are higher than ever and the supply of quality homes is very low.

If you have questions about either side of this discussion, feel free to reach out to me at 205.492.3211 or jeff@smithlakerentals.com.

NEVER use the listing agent to help you BUY the property!

Why you ask…they know the most about the property, right? Probably so but that does not mean they will tell you and more importantly, they represent the SELLER. The listing agent will rarely recommend you offer a low price or negotiate hard as they will have to explain that to the SELLER. Buyer’s agents are not trying to get the best deal for the SELLER or trying to walk the fine line between BUYER and SELLER where both MIGHT be happy.

Quick story….I am part of a group that gets together once a week to play ping pong and socialize. We have been doing this for years and rarely discuss business but we do know what each other does for a living. The other night one of the guys said he just purchased 2 lots next door to him and, of course, I ask who he bought it from. He responded that he called the name on the sign and worked with that agent to buy the lots. I asked him why he did not call me and he responded “could you have helped me?” At that point, I realized that I am not doing a very good job of explaining the value of using a Buyer’s Agent when BUYING property.

With very few exceptions, the real estate commissions paid (e.g., let’s use 6% in our example) in a real estate transaction is paid by the SELLER. The commission was negotiated up front between the SELLER and the listing agent. The commission is split between the realtor representing the SELLER and the realtor representing the buyer, or 3% each. The BUYER does not pay any commissions. When an agent represents both the SELLER and the BUYER then the agent receives all (or 6%) of the commissions.

First, what is a Buyer’s Agent? In every real estate purchase there is a listing agent and a buyer’s agent. The listing agent is the name on the sign and represents the SELLER of the property. A listing agent can represent you but they have to disclose to you that the represent the seller (typically done on a document you sign that you don’t ask about). In this case, they now have a fiduciary responsibility to both parties which can create a conflict of interest. The biggest areas for this potential are in negotiating the price and inspection results. I really cannot see how a listing agent can represent both BUYER and SELLER in these two parts of the transaction.

My recommendation to BUYERS….do your homework online and when ready to actually start looking for a property, call a Buyers’ Agent who will help you with questions (answering without worrying about offending the seller), negotiating the deal (again, not worried about offending the seller, and inspections (helping you understand your options and making recommendations).

Feel free to contact me at Jeff@SmithLakeRentals.com or 205.492.3211 to answer any questions about this. Thanks for reading.