This material is provided as a courtesy and for educational purposes only from Olde Raleigh Financial Group, A member of Advisory Services Network and should not be construed as investment advice. All information contained in this video is derived from sources deemed to be reliable but cannot be guaranteed. All economic and performance data is historical and not indicative of future results. All views/opinions expressed in this video are solely those of the presenter and do not reflect the views/opinions held by Advisory Services Network, LLC. Advisory Services Network, LLC does not provide tax advice. The tax information contained herein is general and is not exhaustive by nature. Federal and state laws are complex and constantly changing. Please consult your investment professional, legal or tax advisor for specific information pertaining to your situation.
Meet the Masters – Raleigh’s High End Residential Real Estate Market with Realtors Jill Rekuc and Sheri Hagerty. We discuss many topics including what role does your home play in your wealth plan? Downsizing your home after the kids move out? The Importance of Staging a Home to Sell and How Millennials Buy Houses.
Hey everybody. This is Trevor Chambers from Olde Raleigh Financial Group. Once again, we have our podcast. Another addition of our podcast. This is a real estate, specifically, residential real estate podcast subject that we’re going to cover today for our podcast Soundtrack to an Advisor’s Life. Once again, I have my co-host, Mr. Alex Mihajlov.
ALEX MIHAJLOV: Hey. Good morning.
CHAMBERS: How are you?
MIHAJLOV: Good morning, Trevor.
CHAMBERS: Good morning. Good evening, and welcome.
MIHAJLOV: Good evening and welcome.
CHAMBERS: Well today we have, Alex, two really successful realtors –
MIHAJLOV: And kind of friends.
JILL REKUC: Thank you.
SHERI HAGERTY: Thank you.
CHAMBERS: Welcome to Olde Raleigh Financial Group. Both of you have been in a real estate business for a long time and you’ve got some really interesting backgrounds. Jill, you’ve – I didn’t know this, you were a – a critical care nurse?
REKUC: I – I actually consider that I still am a critical care nurse.
CHAMBERS: Yeah. Yeah. Did you get called off the bench in COVID? Or what happened here?
HAGERTY: Only by friends.
REKUC: But truthfully, I spent probably two weeks seriously considering going to New York and I called other nurses that I know that are kind of my age that have maintained their license and we weren’t sure if we would be valuable. Like we knew we couldn’t nurse –
REKUC: — but, you know, could have done something helpful up there.
MIHAJLVO: That’s a cool volunteer.
REKUC: It was really – I was – I was so into it.
REKUC: My kids were kind of like, mom, you might want to rethink that, but.
REKUC: You know, didn’t do it and I probably wish I had.
MIHAJLOV: You’ll probably get another opportunity in something else.
REKUC: I probably will.
CHAMBERS: Absolutely. So, Masters degree in Health Education, fabulous. And then you – you were a founder in Olde Raleigh Real Estate.
REKUC: That’s right.
CHAMBERS: And you’re the Olde Raleigh’s resident real estate expert. So, you —
REKUC: I am.
CHAMBERS: — know the neighborhood really well.
MIHAJLOV: It’s an awesome neighborhood.
CHAMBERS: It is. It is. Absolutely.
HAGERTY: It is.
CHAMBERS: Can I get the code to the gate? I don’t know.
MIHAJLOV: No. No, you can’t Trevor.
REKUC: I’ll give it to you later.
CHAMBERS: Sheri, tell us about you. You have a – your firm is a long name so I’ll have you talk about that.
HAGERTY: So, yes. I’m with Hodge & Kittrell. I have a group, Sheri Hagerty Group at Hodge and Kittrell, Sotheby’s International Realty. A long name. But I have actually just – I’ve been in the business for 16 years and joined Sotheby’s probably now almost three years ago for the marketing platform and for what it can offer, you know, predominately – well any listing but definitely the luxury end. So, that’s where I landed.
CHAMBERS: I love it. Well, so today’s discussion, you know, real estate plays a huge roll in peoples wealth plan and, Alex, if you want to comment on this a little bit, but, you know, is the house paid for, is it not paid for, is it appropriately sized, these types of things. And we just wanted to bring in you two and talk about the market and talk about real estate in general and the business and things like that. So, we’ve kinda (sic) covered your background. Let’s – let’s talk – let’s actually start right from the start. How’s the market? What’s going on with the market in Raleigh? What do you guys want to talk about? What do you want to share?
REKUC: Well, I mean, as you’ve heard all over the media, our real estate market it’s a banner year. It’s explosive. It’s fantastic. It’s wonderful but we are very hesitant to – to count on that and – and we just – as real estate brokers, we prefer not to generalize about the market in general. We really prefer to discuss, or to analyze it by price point and by areas within the town and new construction versus resale homes. We really dissect the market before we will over – over instate, right?
HAGERTY: Right. I would say the same – I would say we’re always hesitant to give like a blanket statement of, “oh, it’s just everything is just, you know, just exploding.” I mean, while we kind of leave that to the national media, I would say, because it is true that our area, you know, we’re voted one of the top three places to move, always, consistently in almost every survey so it’s – we’re very lucky here in the Triangle. But again, because we practice in this every day, we see plenty of situations where the competitions is, you know, harder and stronger and, you know, maybe the higher end in the certain area of town when you’re up against all kinds of new construction. So, we – we – we definitely dissect it.
REKUC: We see both sides.
HAGERTY: So, yeah, we can’t, you know, you never want to overpromise as a realtor. We’ve learned that long ago that, you know, when you do that, you kind of –
REKUC: Get yourself in a little trouble.
HAGERTY: — get yourself in a little trouble. But, you know, depends – it’s definitely a price range location type. You know, we dissect it more that way.
HAGERTY: But overall, yeah, we are.
REKUC: Overall, yes. Overall, we’re – we couldn’t be any happier.
CHAMBERS: So, you two are – you two are in the luxury –
REKUC: We’re like every broker. We list and sell every price range, but due to our maturity and due to our years in the business, we have graduated to where we are fortunate enough that a lot of our clientele is the luxury end.
REKUC: And we – I love listing and selling in the high end.
REKUC: It’s just a – it’s – it’s a different client, as you know. You know, and I appreciate that.
MIHAJLOV: You guys, because of your experience and value, client, etcetera, etcetera, you guys have formed this group, The Luxury High End Marketing Group.
MIHAJLOV: Why don’t you talk about that, Jill. Tell people about that.
REKUC: All right. This group – our group was formed in 2004 and it’s called the Luxury Home Marketing Group. You may see it as documented as the Triangles Luxury Home Marketing Group, but we are a coalition of 14 female brokers from a representation of at least six, seven companies.
REKUC: At least. We have folks like myself that own their own private firm versus brokers like Sheri that are in big firms and we list and sell each other’s listings, luxury listings. We – we – we network amongst each other and we are competition, yes, but it’s, believe it or not, it’s just a strong healthy competition. It works. We work. We meet every month and, I’m a past president. Sheri’s currently the vice president.
HAGERTY: Vice president.
REKUC: And wonderful networking group. Wonderful.
MIHAJLOV: You probably help each other a lot by knowing about each other’s listings etcetera, etcetera.
REKUC: We do and with what’s coming up on the market, we kinda (sic) have an in that –
REKUC: — we can at least prep people that this will be on the market soon. We love selling each other’s listings.
HAGERTY: I would also say that, you know, when they’re challenges, which there are in every industry, when they’re challenges it’s a great network to speak to one another about, hey what are you seeing? Or what do you – what would you do in this situation with something that could be a little tricky to market or, you know, tune in the price and things like that.
REKUC: That’s right.
HAGERTY: I mean, we just have a great sounding board with one another so –
REKUC: And regulations. And –
REKUC: — the real estate commissions positions we really count on each other to – what I don’t know, someone else may know very well. And I take it as the gospel and I trust these 14 girls wholeheartedly.
HAGERTY: Right. I would agree. It’s a good group.
REKUC: Good group.
MIHAJLOV: That kind of leads to, you know, so let’s do a hypothetical, or actually let me ask you, what are some of the common mistakes you see high net worth homeowners make? Not only in buying and selling but improving, etcetera, etcetera. I know Sheri does some – some cool stuff to prep houses to sell.
MIHAJLOV: I’m familiar with that from my own background. So, why don’t you guys talk about that?
REKUC: Well, the – not the first mistake we see but a strong mistake is they over build. We have in the last ten years or 15 years; a lot of very large homes and the trend now is this is not small but more five to six thousand square feet versus our 12,000 square feet and our 10,000 square feet homes. They are – they have been overbuilt because the mcmansion (sic) was more –
HAGERTY: Of that era.
REKUC: — of that era. That’s right. And in turn with that is over finishing and over customization. Very personal, very high-end finishing’s that the next buyer will not want.
CHAMBERS: Like green tile or something?
HAGERTY: Well —
CHAMBERS: (Inaudible 8:59:7) you know what I mean.
HAGERTY: You know, you think about it. Like if you can build and have – build or buy and have anything you want, price is not an issue for you. We’re talking about real high net worth buyers and, you know, they can build, they can customize, they can have 12,000 square feet. It’s what they want at the time. It’s what they think they need for their family at the time and they can do that. But is it always, you know, is it always when you go to resell something that way, is it always the smartest move they’ve made? No. And you guys know their moneys making money elsewhere but sometimes they just accept it and take the hit and they’re never happy but, you know, when you over customize and build these big houses, it’s not always – I mean the next person that comes along that has the kind of money that can buy that can do exactly what they want.
REKUC: (Inaudible 9:43:9).
REKUC: For example, not the green tile, but like an indoor pool.
HAGERTY: Indoor basketball courts.
REKUC: Indoor basketball.
HAGERTY: And we’ve seen everything.
REKUC: We saw, you know, I mean an indoor hockey rink that – that the floor freezes and then they unfreeze it and freeze it. I mean.
HAGERTY: There’s all kinds of those, yeah.
REKUC: All kinds of those so not the tile but even lets go down to the tile level. When you have a three to four-million-dollar home that is over customized and the broker comes in and says in order to sell this home we need it to have current taste, current – just bring it down to –
REKUC: — neutral.
REKUC: That costs a lot of money in a ten thousand, 12,000 square foot – so you’ve got a three, four-million-dollar listing that could take 350 to 500,000 dollars to bring it back down to where we can sell it. That’s all day long, our job.
CHAMBERS: Really. It’s that – that common. Wow. Well, that makes sense.
REKUC: Colors. I mean, it’s subtle. It’s just paint colors all the way to building a bar with a certain wood from a certain country that their uncle brought back. I’m just saying and they’re gorgeous. They’re drop dead gorgeous.
HAGERTY: But it’s just not everybody’s specific —
REKUC: But the next buyers not going to —
MIHAJLOV: I’m not interested.
HAGERTY: — taste. Yeah. Yeah.
CHAMBERS: What are they moving to? So, they’re going from the ten, 12,000 and then they’re going down to five thousand square feet. What are those features of that house now that are coming – is there – when they’re building that next house or buying that next house? Is there any –
HAGERTY: It’s funny because sometimes we see them start all over with another one.
CHAMBERS: Right. But just –
REKUC: They make the same mistake.
HAGERTY: Yeah. They just go on and do something else and build something else that just as them, you know, because they can. But, I would say when you’re talking under the three mark, under the three million mark, I think that, you know, being a dated home is tricky like we were saying so and the trend as ya’ll mentioned before, today we’re seeing new construction all over the place that’s, you know, six thousand square feet roughly highly appointed is that – that’s more of the trend and it – and, you know, if you go back to 2005 it was ten thousand square feet, or –
REKUC: With elaborate media room, theaters.
HAGERTY: Yeah, that kind.
REKUC: And wine – wine cellars and –
REKUC: And outdoor – outdoor kitchens even – of course outdoor living is huge now. But the outdoor living in the past was, I don’t want to say more extravagant, but –
REKUC: No, I mean, it – it’s just as important now to have high end outdoor living but they want it all now. They want the pool and they want the basketball court.
HAGERTY: Yeah, we’ve noticed that –
REKUC: — maybe the size.
HAGERTY: Well, years ago when, you know, you heard pool. You thought oh god, I’ve got to list a house with a pool. You know, it’s never – it’s going to be tough. You know, people didn’t want them but now, not just since COVID, but that has definitely increased the want and, you know, people feel like they need pools. But I think the influx of people coming from all over the country to land here having had pools, maybe, where they lived before, I mean, it is almost like you can’t sell one of these big homes –
REKUC: You can’t sell without a pool.
HAGERTY: — that are nine thousand or eight thousand square feet if you don’t have a pool. So that’s something interesting that we’ve seen change, yeah. So.
MIHAJLOV: Where are people – so today in Raleigh, North Carolina, where are most people moving from. Or what are the – are they moving out of high tax states?
HAGERTY: The feeder markets, yeah.
MIHAJLOV: What’s the rational for —
HAGERTY: I think we get a lot from California, a lot from New York. I see some from Texas. I see some from Florida.
REKUC: I would say the Northeast and the West Coast.
REKUC: I mean –
HAGERTY: Yeah. Both.
REKUC: Not so much from Florida.
HAGERTY: I do see some back from Florida.
REKUC: Some from Florida.
HAGERTY: They come back from Florida.
MIHAJLOV: Too hot down there.
CHAMBERS: And they’re doing exchanges. They’re getting out — are they doing that? Are you seeing where they’re doing, you know? What do they call those?
REKUC: Not – not –
HAGERTY: A 1031.
REKUC: 1031 exchanges.
CHAMBERS: 1031, yeah.
REKUC: No, not so much.
CHAMBERS: Oh, okay. Okay. Yeah, that’s right.
CHAMBERS: That’s right. Yeah. Yeah. Yeah.
HAGERTY: Those are our investors. We get to help those with those fun 1031s.
REKUC: Woo. That’s a separate podcast.
CHAMBERS: Yeah. Yeah, okay.
HAGERTY: That’s another podcast. Yep.
CHAMBERS: You got it. You got it.
MIHAJLOV: Speaking of 1031s and investments, what do you guys think about – what role does a home play in a person’s – you and I talk about this all the time. About in a family’s net worth, what is –
MIHAJLOV: — what do you see that as? What do you tell your clients?
MIHAJLOV: I know what I tell my clients.
REKUC: I know and I’m starting to lean a little bit towards what you tell your clients. No, I mean, of course, we’ve all heard the old adage that your home is your biggest investment, biggest asset and for a lot of people it is. It is, yes. Now, when it comes time to resell, is it – did it really make you much appreciation? Did you do well on it? We can site examples every day we go to work of either scenario.
HAGERTY: So, I just had –
REKUC: I’m thinking of your person.
HAGERTY: — a client who, in 2008 purchased a house in Lakemont which is near North Hills. And that was, you know, North Hills was up and coming and becoming what it now is today and then it kind of moved across Six Forks to the area Lakemont and – and that side. So, they bought at the right time. They didn’t – it was in terrible condition. They bought at the right time. Paid little over 200. Put about two to 250 into it doing a big addition. And about two weeks ago, we sold it in four days for 700. So, I would say, that was a good investment.
REKUC: They did – they did pretty good.
HAGERTY: And that played a nice role in building some wealth and, you know, they’ll either, you know, I’m not privy to all their financial decisions but they are buying another house and. But I think that, you know, they’ll chose to invest some of that money in different places now. But it was a wealth builder for them, you know. It was a good investment for them. But we see all kinds of examples of both sides of that.
REKUC: The other side is, especially large high-end resales. There’s a lot in North Raleigh where they’ve – after the sale has completed, they realize it just didn’t – it didn’t appreciate. They just couldn’t get their money back out of it or very little.
MIHAJLOV: Well and the other thing is I think a lot of clients forget to factor in taxes and maintenance and –
HAGERTY: All of that.
REKUC: Homeowners insurance.
MIHAJLOV: (Inaudible 16:13:3) lawn keep and all that stuff.
CHAMBERS: The (inaudible 16:16:8).
HAGERTY: Is it truly, when you look at all that, has it truly been a good investment? You know, what is your real net after you look at all of that.
REKUC: Well and your right, Alex. We bring that up right away when we’ve gotten an offer that they may not be happy with, we figure up the carrying cost real quick.
REKUC: And just say –
MIHAJLOV: As you and I discussed for sale real estate never appreciates.
REKUC: Right. For sale real estate never appreciates.
MIHAJLOV: It never appreciates.
REKUC: That’s right.
REKUC: That’s right.
CHAMBERS: Quotes from Alex Mihajlov?
MIHAJLOV: Oh yeah.
CHAMBERS: Mark down that at the – what’s the time to get to 16:48 minute. I love it.
MIHAJLOV: So, I’ve been friends with you for – what is about –
REKUC: How long has it –
MIHAJLOV: How did we meet? Did we meet in the neighborhood?
REKUC: We never can remember – we never have been able to remember —
MIHAJLOV: Well, we’ve been friends for at least ten years.
REKUC: I was going to say nine, but you’re right, it’s probably at least ten, yeah.
MIHAJLOV: And I’ve watched you through your career. You’ve watched me through mine. What – what – what are some of the challenges you guys have faced that may not – one of the interesting things you brought up and you can touch on this. The other day when you and I sat around chatting, you talked about fraud in your industry.
MIHAJLOV: What’s going on with fraud?
MIHAJLOV: I found that – that level to be pretty fascinating. Why don’t you talk about all that, like cash flow and that sort of thing.
REKUC: Right. It is – in a – in a – in a morbid way, it is fascinating how – when fraud enters into real estate. Just in the – in the ultra-high end, I think I’m safe to say that there is more of an opportunity for fraudulence. We have to vet and prequalify and preapprove the buyers before we can allow a showing. In the – in the ultra-high end we have to make sure we are representing our sellers by vetting the buyers. And – and a normal good buyer has their problem with that.
REKUC: They’re very forthcoming.
REKUC: But, um –
HAGERTY: We’ve seen a few circumstances where and look if you’re – if you’re committing fraud these days, you’re good. I mean –
REKUC: They are so good.
HAGERTY: We see letters that look —
REKUC: It could slip through us.
HAGERTY: — yeah.
REKUC: Very easily.
HAGERTY: They look authentic and, you know, you can call and try to authenticate them yourself and, I mean, there’s just situations where, you know, you’re not always 100 percent covered. But we da a – we try to do a really good job of weeding that out before we even let people go see a property that’s, you know, over a certain range.
MIHAJLOV: That’s probably another great plus for your high net worth group because they all, I’m sure, if there’s fraud going on everybody knows.
REKUC: We absolutely. We know who it is. Where they are.
MIHAJLOV: Right. What’s going on. Yep.
MIHAJLOV: That’s great.
HAGERTY: Yeah, we can usually share with one another in the group like well, did so and so call you on this house? They called me on this house, you know.
REKUC: And for – and for – for – for really bad criminal –
HAGERTY: Almost protection.
REKUC: — activity, it will go company to company.
HAGERTY: It will. Yeah.
REKUC: I mean –
MIHAJLOV: What do you guys see as challenges in your career other than fraud. What else do you guys see? I mean, what do you – what’s been the hardest –
REKUC: Alex, it’s as simple as – I mean for me the day to day challenge is my high end resales that I just am struggling to get sold because of new construction.
HAGERTY: Yeah. There’s so much new here –
REKUC: So much new.
HAGERTY: — and in certain areas of town that, you know, we can share an example. There’s a neighborhood in North Raleigh that, you know, they sold 58 homes last year. She’s a member of our group. Great friend. But, you know, when you go and list a resale in North Raleigh, you’ve got to keep the mind that, you know, most of the resales that are coming on the market, are usually, and I’m not saying always, but like a typical story would be built in 2005. Large house. Maybe no pool. Could be dated. And then you have, like we said the trend is building a little less house very highly appointed so then you’ve got to consider that you’ve got all these – there’s probably six strong neighborhoods that you’re competing against in new construction in North Raleigh right now, if you’re a resale. So, you’re pricing has to be adjusted for that. And, you know, new construction is – is very romantic. When you walk in –
REKUC: It’s an allure –
HAGERTY: — you’re like it’s new. It’s shiny and bright and everything’s perfect. And people love that. I mean, I used to sell —
REKUC: And we don’t have anything we need to do.
HAGERTY: Yeah. I used to sell all – only new construction so I get it. But, you know, it’s that’s where we seeing sellers have to adjust their expectations when they have so much, you know, put into a larger home. The competition is what I think –
MIHAJLOV: So, let me segway on that.
MIHAJLOV: Because you’re talking about prepping a house to sell.
MIHAJLOV: Let’s talk about prepping a house to sell
REKUC: And she’s the expert.
MIHAJLOV: She is the expert.
REKUC: She’s the expert in our group. Sheri’s known for –
REKUC: — every listing she has. She said it so simply one time to me. You said, “I don’t want my sign in the yard or my face on the listing if it – if I’m not – I haven’t done my job if I haven’t –
REKUC: — helped my seller to understand it has to be in the best showing condition.”
MIHAJLOV: So, talk about that and some of the resistance. I know you get resistance.
HAGERTY: Oh gosh. It’s – it’s –
MIHAJLOV: — on that.
CHAMBERS: And you’re background? And the FIT and all that because it’s kind of helped right?
HAGERTY: So that explains a little bit about why I’m like that. You know, I grew up in a – my grandmother was a top producing real estate agent in Texas so and then, you know, so I kidna (sic) grew up around this. And then my mother –
MIHAJLOV: Now, did she ever take you – did she take you around and ask you to help her and stuff or not?
HAGERTY: I used to hear her on the phone. I was little.
HAGERTY: You know, but I heard her on the phone and I remember just the conversations. It’s like I think about my son hearing me now talking to clients but I definitely remember that and then we moved to North Carolina when I was probably nine or ten years old. And my mother was, um, has always been in interior design. She ran a tile company for 16 years and then went back to being just an independent designer after that. So, I always have grown up around it and, you know, I’m – I went to school for design. I came back and I was like what am I going to do with my life, you know. But I had a great design degree but it was – it was a different time in Raleigh. I think now it’s easier to become an interior designer or, you know, even a clothing designer in Raleigh than it was back in that day. But, you know, my whole career was about, I mean my whole education was about aesthetically making things look better. You know, marketing. So, when we go into a home we get – we do get tons of resistance. In fact, you know, I was competing for a listing not long ago in Cary and the husband called me because I had sold another house and it was the highest sales price in the neighborhood in three years. So that’s how I got the interview. So, he calls me and says the first thing I ‘m going to tell you is if you tell my wife that she has to paint everything gray and change all the countertops, you’re not going to get the listing. So, I said okay, well thanks for the heads up. But you know, so get met with resistance but we try to do what we can, you know, up to their comfort level to make the best of what is there and highlight the best features of the home. And I think that my background just helps me with that, so.
MIHAJLOV: I find that so fascinating because I would think someone, at least every time I’ve listed a home the only thing, I’m concerned about is selling the home. I don’t care if you paint the walls purple if it sells the home.
MIHAJLOV: But you have clients –
REKUC: They don’t –
MIHAJLOV: They don’t want –
REKUC: — they’re so attached.
MIHAJLOV: They don’t want to —
REKUC: — emotionally.
HAGERTY: The money. They don’t want to spend the money.
REKUC: They don’t want to spend the money. They’re so attached to a paint color.
MIHAJLOV: Don’t you also get – this was my Aunt Jean’s face; I can’t move that.
HAGERTY: We do get that.
REKUC: We do get that.
HAGERTY: Trust me. We get that. Yeah.
REKUC: But she – it’s in Sheri’s blood so she does it for her listings and we in luxury marketing group, when we tour each other’s homes, I’m always the first one to ask Sheri, where I have missed the mark? She has an eye for it.
REKUC: You either do or you don’t.
REKUC: I don’t. But I do — but I do –
HAGERTY: You do too.
REKUC: — I know I do from the business side and form the learning side and from all the sales. I know what works. But Sheri is – it’s in your blood.
HAGERTY: Well you just want to make sure that you’re not leaving money on the table for them. I mean, we try to look at –
REKUC: That’s right.
MIHAJLOV: That’s a good point.
HAGERTY: — like, you can always try to say, “is it – all right, what are your expectations on sales price?” We talk about that. Then we talk about, okay if we put in – if we spend ten thousand dollars, which is a lot, you know, depending on price range, to get this place ready, can we make you enough money – make enough of a return to make that ten thousand dollars, you know, effective. Like we’re not trying to spend all their money. You know, we want to do this cost effectively but we want to make sure we can get the return before we go in a do everything.
REKUC: And we know it’s not a dollar for dollar if ten thousand dollars is in paint. We don’t think, am I going to sell this house for ten thousand dollars more because it’s painted. We don’t think like that but the seller might.
REKUC: We’re looking at the overall whole picture. We know we don’t have a chance —
MIHAJLOV: Well –
REKUC: — if it’s not.
MIHAJLOV: Plus, you only get one chance to make a good first impression.
HAGERTY: That’s true.
MIHAJLOV: So, if you don’t –
HAGERTY: It’s true. There’s some things that have changed out industry and you guys know this. Everyone hears this. But HGTV, when it came along and just –
HAGERTY: — set the expectation of move in ready. I mean, when they’re in the – and the other thing is when there is so much new construction that you’re competing with, which already looks like that, you gotta (sic) compete. You gotta (sic) get in the game and compete. So, I think it’s two-fold. It’s really the HGTV thing and then all the new constructions is what we really, you know, you kinda (sic) have to have that discussion now whereas before you could just say okay, well let’s just tidy up and take some photos. And it’s just a different way we have to handle it.
MIHAJLOV: That’s a great —
REKUC: But it’s seller specific, you know. There are people who won’t, still won’t accept that position and it’s tough.
HAGERTY: It can be tough, yeah.
MIHAJLOV: So, if somebody’s going to list their house or somebody’s going to work on their house over the years, what’s going to bring him back the biggest bang for their buck resale.
CHAMBERS: Ooh. Look at that question.
HAGERTY: Good question.
CHAMBERS: A zinger.
HAGERTY: Good question.
REKUC: It’s always the same answer.
HAGERTY: It’s the kitchen and the bath.
REKUC: It’s always the kitchen and the bath.
REKUC: Master bath.
MIHAJLOV: So, you know, what is somebody owning a home over the years and they would like to get a reasonable return on their investment. Where is money best spent in the home?
REKUC: It’s – it’s the same answer you’ve probably heard for the last ten years, Alex. It’s the kitchen and the master bathroom, secondary. Even for people who do not cook, it doesn’t matter. The – the entertaining is going to congregate in the kitchen and –
MIHAJLOV: According to my wife, the kitchen is the heart of the home.
HAGERTY: The heart of the home.
REKUC: The kitchen is the heart of the home.
HAGERTY: It is.
REKUC: It is the heart of the home.
MIHAJLOV: I always had a kitchen that I always liked to look at before I went out to eat.
CHAMBERS: Yeah, right.
HAGERTY: Very good.
REKUC: I actually have that kitchen right now.
CHAMBERS: Kitchens sponsored by the local restaurant.
HAGERTY: Yes. That’s right.
CHAMBERS: I understand completely.
REKUC: My take out looks so pretty on my new plates in my new kitchen.
MIHAJLOV: Let me ask you –
HAGERTY: That wolf range doesn’t have a mark on it does it?
REKUC: It doesn’t.
HAGERTY: I’m just kidding.
MIHAJLOV: Well, let me ask you this question. You guys were talking about pools and COVID.
MIHAJLOV: Okay. And everybody wants a pool right now because they’re staying home around the COVID thing. Do you guys see two years from now, COVID’s a distant memory, we’ve moved on, there’s all these homes sitting around with pools and everybody’s going I’m older. I don’t want to buy a house with a pool and maintain. Is that – is that going to be __
REKUC: It’s interesting. We talk about that. We actually did –
MIHAJLOV: Because it used to be pool was a liability.
HAGERTY: It was.
REKUC: And it was. That’s right.
REKUC: Our – our group – our thinktank is sort of split. We can see both sides but I think we air on that we’re going to be okay with all these pools.
REKUC: In the high end it’s – if you – there aren’t a lot of people who say I do not want a pool. There’s just people who say I don’t have to have one but then they look at the house and they love the house and they go okay. It’s gotta (sic) pool —
HAGERTY: I think the other –
REKUC: — I’ll take it.
REKUC: You know.
HAGERTY: The other thing that’s changed is they’re not – they’re made differently. You know, I mean they’re salt water and they’re pebble tech —
REKUC: No liners –
HAGERTY: — on the bottom. Or you know, made out of really different materials these days so the maintenance becomes a little less, I believe, you know, then when we used to have liners and things would, you know, just all kinds of issues.
REKUC: And smaller.
HAGERTY: And they’re smaller.
REKUC: They’re smaller.
HAGERTY: They’re smaller. Not always huge pools. Just something nice, you know, just to take a dip. It’s not –
MIHAJLOV: To stick your feet in.
REKUC: That’s right. And but I do want to over emphasize new construction all day long they’re putting in pools in the high end. Really don’t want to build a house without it.
REKUC: For new construction.
REKUC: And for – for the resales, we have clients who are getting quotes and preparing to tell their future buyers this – you can put a pool in this backyard. You’re doing the due diligence.
MIHAJLOV: Is having a community pool impact that decision?
REKUC: Amenities. I’m sorry. Decision for the homeowner?
REKUC: No, I mean, in our neighborhood we have a beautiful amenities. We have an indoor pool, outdoor pool and our neighborhood I think we have 18 pools.
MIHAJLOV: Do we, really?
REKUC: Yeah. People just don’t know that there’s little tiny ones back there.
HAGERTY: It’s funny to take an arial view of a neighborhood whey you’re getting ready to list a house without or with, you know, just to kind of see where you land and how many pools are actually in the neighborhood. There’s – there are a lot more today than there ever have been.
REKUC: That’s right.
MIHAJLOV: You guys probably doing a lot more drone technology, now taking photographs and stuff and –
HAGERTY: One hundred percent.
REKUC: Expected in the high end.
HAGERTY: Yeah. Video expected.
REKUC: Video. No more virtual tours. It’s all video. And walking tours of the house through each room.
HAGERTY: Yeah, there’s a 3-D camera called a matterport camera that has been around. I mean, it’s been around but we were not as, you know, as every – it can get a little confusing because they show you a doll house view of with a home where you can see the top and see in all the rooms and it’s a useful platform. It’s just that we kinda (sic) didn’t feel like we needed it as much but now with people not travelling as much and you want to put a high end listing out there and have somebody truly be able to walk through the home virtually, that’s what we’re using it a lot more now.
CHAMBERS: I just want to go back to process a little bit on helping stage a house. I assume that you, like when you go to a new – an owner of a house that you’re trying to sell, you’ve got the supply chain set up to get the house where it needs to be. You have the go to –
CHAMBERS: — all set up.
HAGERTY: Yeah. We do. And I also have, embarrassingly, probably four very large storage units of furniture. I used to list a lot of new construction and it was, you know, not expected but it helped sell those homes.
HAGERTY: You know, they weren’t furnished. And they didn’t have – you know it just helps create the emotional connection.
HAGERTY: Yeah. And that’s what it is with a home –
HAGERTY: — you know, that’s not commercial real estate. It’s not a building, it’s a home and it – emotional buys are truly what, you know, I mean –
HAGERTY: — that’s happening all the time, so.
REKUC: But let me state that Sheri’s the exception. Most brokers have to hire Sheri.
REKUC: I mean, we don’t –
CHAMBERS: Or should.
REKUC: — we don’t know many brokers that have –
HAGERTY: That do that.
REKUC: — do what you do.
HAGERTY: And for me it’s not like –
REKUC: We hire staging companies.
HAGERTY: Yeah. And there are plenty of companies. There are plenty of great staging companies.
CHAMBERS: Of course.
HAGERTY: Out there that we, you know that wasn’t a really a thing that many years ago. So now we have that option too so if you have a big high-end listing that you have to list or truly any listing. And you want to give it – I mean we did one for four hundred and change in Valley Estates, which is a great neighborhood and we redid the entire house. He gave us a budget and we staged it and got well over what he thought he would get. So –
MIHAJLOV: And probably sold it quick
HAGERTY: And sold it, I think it was 15 days which is quick.
HAGERTY: And I thought it would actually be quicker but it was just over –
REKUC: And staging –
HAGERTY: — the fourth of July.
REKUC: — up a little bit. You know. Very nice furnishings. Just –
CHAMBERS: So that segways actually, so part of your business plan is that you stage it, can kinda (sic) compartmentalize it internally but – so talk about the part of being a realtor, especially in the high-end market. What are – what are the – some – some of the things that you need to be successful. And what are some of the challenges you face, like cash flow, you know, and these types of things. So, I heard you say, you gotta (sic) good CPA and you gotta (sic) have a good lawyer. Is there anything else that you want to expand on that?
HAGERTY: Well, I don’t – I don’t do anything unless I ask my CPA.
HAGERTY: If I should do it. You know, you just have to, I think when you get started in the business and you’re young you don’t know all that. And I would say that to anybody who is starting out in real estate or any younger person starting a career. I mean, it’s just you got to get that foundation set up for yourself. Wouldn’t you?
REKUC: I mean, my husband is a CPA so I kinda (sic) use him a lot.
REKUC: My first phone call is to my attorney.
HAGERTY: Yeah. Yeah. But I mean just managing our own cash flow.
HAGERTY: I mean, I think that –
REKUC: Not for cash flow, I’m sorry.
HAGERTY: You know, I’ve have him – I pay them a monthly fee and I just let them help me –
CHAMBERS: Yeah. Help me get through the year.
HAGERTY: — figure out and how to make the decisions. Like is it time to buy this. Is it time to buy that for the company? I mean, I really do ask a lot of questions.
MIHAJLOV: That’s good. That’s smart.
MIHAJLOV: That’s really smart.
HAGERTY: Just learned over the years you have to do that, you know or you really do end up, I mean, because you can spend a lot of money in this business to market yourself, market your properties and –
REKUC: Time and money.
REKUC: In the beginning we – we do sorta (sic) think about the – the progression of this home being on the market and we – I know I do, we’ve talked about this –
HAGERTY: Yeah. Yes.
REKUC: — if I have it on the market for two and a half months here’s where I am. If I have it on the market four months, here’s where I am.
REKUC: If I have it on the market nine months, okay I gotta (sic) little trouble here –
CHAMBERS: So you gotta (sic) project that out and see where you’re at.
MIHAJLOV: Well, I think that –
CHAMBERS: That’s smart.
MIHAJLOV: — gets back to your staging thing.
MIHAJLOV: A well-presented home is usually a quickly sold home.
REKUC: And a well-priced home.
HAGERTY: It can’t be well staged and not well priced.
REKUC: We have to put –
HAGERTY: That is for sure.
REKUC: — price above staging.
HAGERTY: Yeah, we do.
REKUC: Because it will – even if it’s staged beautifully.
HAGERTY: And staging is really just the allure to get the showings. I mean, what could — because there’s now on, you know, in our MLS we can enter 30 photos and in, you know, most of the internal platforms that companies use, like I know our Sotheby’s internal site, we can put up to 50 photos. And then you have all the third-party feeds that we all, you know, know consumers search on like Zillow and different things like Realtor.com that they can hold, 30 to 50 photos. So, it’s just become more important to –
HAGERTY: — to get – to have good photography and good staging gets the people in the door. If it’s not priced right, you’re going to know either way.
REKUC: It’s the sense – it uses your sense.
CHAMBERS: Yeah. It’s so competitive and that’s the part that people don’t — I think clients just don’t understand. We are, especially Raleigh, it’s a competitive world and you have to have the little things that you all provide –
REKUC: You have to have all –
CHAMBERS: — to make the difference.
REKUC: You have to have all of them –
CHAMBERS: Lined up.
REKUC: Because we don’t know which one is the –
REKUC: — item that made it work.
REKUC: But price is first.
CHAMBERS: And the gray paint.
REKUC: And the what?
HAGERTY: And the gray paint. Gotta (sic) have the gray paint. Agreeable gray.
HAGERTY: I’m just kidding.
CHAMBERS: That’s so interesting they’re so tied sometimes to that. It’s just like some people are really tied to particular stocks because, you know, dad –
CHAMBERS: — or mom or whatever.
CHAMBERS: They got it.
CHAMBERS: And no, you don’t —
CHAMBERS: Right. You hear this story it’s crazy just the emotional. Hey, I want to ask you something and I don’t know if you deal with the millennials. Do you deal with millennials and how are they changing the market?
MIHAJLOV: That’s a good question.
CHAMBERS: Because I’ve heard from – I’ve heard from the people in the real estate world that especially more high net worth –
CHAMBERS: — okay. I live in North Raleigh and there’s a – there’s a neighborhood that popped up in the past couple years over at Ray Road. And it’s like the houses are 700,000 dollars and everybody in there’s 35.
CHAMBERS: With the 2.2 kids and –
CHAMBERS: — it’s just like crushing.
HAGERTY: It’s definitely different.
CHAMBERS: And they’re all working at home now, you know what I mean. And they’re working in the park or whatever.
CHAMBERS: So, tell me about the millennial –
REKUC: I love the millennial clients.
CHAMBERS: Because you have – you own millennials.
REKUC: I have two.
CHAMBERS: You have millennials.
REKUC: I have two millennials. I love the millennial clients.
CHAMBERS: This one too.
REKUC: Yeah, okay I have three. Number one is smart as a whip.
CHAMBERS: They think they’re the smartest —
REKUC: They think they’re smarter. But – but – but for the most part –
HAGERTY: We love you millennials.
REKUC: They’re smart.
CHAMBERS: Yes, of course. Of course.
REKUC: They’re smart as a whip.
CHAMBERS: They are.
REKUC: Number two, they move fast. They move fast. They think fast. And they move fast. And they expect you –
REKUC: — to move fast and think fast.
CHAMBERS: Why? Because of this?
REKUC: They’re used to — that instant gratification. Absolutely. Instant gratification.
HAGERTY: They have done so much work –
CHAMBERS: (Inaudible 10:31:7)
HAGERTY: — for you.
HAGERTY: By the time you – they’re with you, they have like, okay, — here’s a list of homes —
REKUC: They’ve summarized every —
HAGERTY: — here’s what I want to see. Here are the features I want and they’re not real flexible on what –
CHAMBERS: That’s what I hear.
HAGERTY: — you know, I mean they’re like, I want this and – and, you know, you’re like, you can try to tell them that you know all these things may not end up in the house. There may be a sacrifice of one or two things. And I think it’s just even hard for them to digest that. So.
HAGERTY: Yeah, just a little –
CHAMBERS: The sacrifice —
HAGERTY: — just a little bit but you might not have a three-car garage but you might have a two. Or, you know whatever it is. But they do a lot of the work for you.
HAGERTY: By the time they get to you.
HAGERTY: And then they just – you just walk them through a transaction that, you know, you help them, do the comps and the contract and the numbers and they don’t want any part of that. They don’t want to even have to worry about that. They do depend on you for that. So, we’re still useful for them.
REKUC: And the technology, I mean, we remember our first 700,000 dollar negotiations that was a text. I mean, —
HAGERTY: Oh yeah. They love to text.
REKUC: — they want to negotiate on text with numbers. They don’t want to talk, you know. Which the real estate commission had trouble with that.
MIHAJLOV: They have trouble with them?
REKUC: You have to convert it to an email, print the email or whatever. Load it to the cloud.
CHAMBERS: Oh yeah.
REKUC: You know, the real estate commission, but they’re coming around. Now we’re getting due diligence and earnest money, wired directly, never comes in our hands, you know. A lot of changes.
HAGERTY: They’re interesting young people. And I’ll tell you this like you mentioned, you know, I think one of the first millennials I helped was, gosh, I mean, probably six, seven years ago and they came to me and they’re like, this is their first home and they bought a parade home that I had that was listed for just under a million bucks.
HAGERTY: And I thought well our bid was like 999 or 925 and I thought, well I spent 99,000 on my first home.
HAGERTY: You know
CHAMBERS: Yeah. Yeah. Yeah.
HAGERTY: So, there’s a huge jump, right. So, but it’s just incredible the money that they’re making.
HAGERTY: I mean, they’re involved in tech industry.
HAGERTY: And different things like that have really —
CHAMBERS: And dual income, typically.
HAGERTY: Two –
HAGERTY: Yes. Very typical.
CHAMBERS: Both are highly educated.
HAGERTY: That’s right.
CHAMBERS: And they grew up in the mcmansions (sic) so guess what? Right?
CHAMBERS: They want –
HAGERTY: But on the flip side of that –
CHAMBERS: I mean, why – yeah, go ahead.
HAGERTY: — so interestingly some of them that have those great big jobs, you know, they’re very savvy though and they – the ones that don’t have that are still, you know, they come to you with a down payment. They’ve watched their parents go through –
HAGERTY: — the downturn of our – our last downturn in 2006, 07, 08, actually later but that’s when we talk about the hay day of selling. You could sell anything in 2005 and 06 if you had a pulse you could –
HAGERTY: — sell a house.
HAGERTY: And now it’s definitely more challenging but I think they watched their parents, you know, survive that so they are, you know, the ones that don’t have these great big jobs that have all kinds of money, they’re very careful and they usually have money saved. And even though they might not be buying a 700,000 dollar home, it might be 400,000 dollar home but they, you know, they make – the work is finding them something nice for that amount of money.
REKUC: And walkability.
HAGERTY: They do like that.
REKUC: They love walkability.
REKUC: — to restaurants and coffee shops and –
MIHAJLOV: That’s interesting.
CHAMBERS: And maybe a little place to put the designer dog out back, you know what I mean?
HAGERTY: Or, I’m not going – I’m not taking any – not going to –
HAGERTY: Yeah. I have designer dogs.
CHAMBERS: Yeah. Nothing wrong with designer dogs.
HAGERTY: I was trying to –
CHAMBERS: I know – I know – I know. It’s all good.
REKUC: I don’t have a designer dog.
HAGERTY: You do.
MIHAJLOV: Yes, you do.
CHAMBERS: You have a designer husband.
HAGERTY: Definitely that. Definitely that.
CHAMBERS: Yeah. Well – well, Sheri and Jill it is a pleasure to have you hear and we have to do this again.
REKUC: This is –
CHAMBERS: Review the tape.
REKUC: — so much fun.
REKUC: I know.
HAGERTY: I know.
HAGERTY: We enjoyed it.
REKUC: So much fun.
CHAMBERS: Well, I — we really appreciate it because obviously real estate plays a huge roll in what we talk about clients and so thank you so much. One last plug for your group.
CHAMBERS: Go ahead. Plug your group again – one – your company.
REKUC: My Luxury Home Marketing Group. Oh. Okay, two, my company. Olde Raleigh Real Estate.
MIHAJLOV: We love –
REKUC: Jill’s the – I’m the owner and it’s a full-service firm and I love what I do. I do what I love.
REKUC: I love every day.
MIHAJLOV: And suppose somebody didn’t want to text you. They wanted to call you.
MIHAJLOV: What would that number be?
MIHAJLOV: And what about you, Sheri?
HAGERTY: So, it’s the Sheri Hagerty Group. There’s three of us. Three strong agents. Not a big group but effective at Hodge & Kittrell Sotheby’s International Realty and if you want to reach us you can call 9-1-9-8-6-2-6-2-5-8.
CHAMBERS: And you’re going to google what? Just google Sheri Hagerty.
HAGERTY: Sheri Hagerty.
CHAMBERS: Yeah. And you’re Jill Rekuc or Olde Raleigh.
HAGERTY: Sheri Hagerty Group.
REKUC: That’s right.
REKUC: Olde Raleigh.
REKUC: O-L-D-E. Just like Olde Raleigh Financial.
MIHAJLOV: Exactly. Sister company.
REKUC: Sister company.
CHAMBERS: Hey, I forgot one question. I gotta (sic) tag – it’s a real easy question, I’m sure. We always ask guests even if they’re not from Raleigh. Sheri what restaurants do you love. I want to give a shout out to restaurants.
HAGERTY: I don’t know what to say.
CHAMBERS: Well, no you don’t – I know what you’re going to say but other than that. Other than that, is there –
HAGERTY: Oh gosh.
CHAMBERS: Because you know restaurant business has gone through – play a huge role in peoples neighborhoods.
HAGERTY: That’s true.
CHAMBERS: And they’ve gotten, obviously, pretty beat up, so –
HAGERTY: Yeah that’s true.
CHAMBERS: — where do you – where do you love –
REKUC: Especially this past weekend.
HAGERTY: Oh my gosh. Well –
HAGERTY: So, I will give a little plug to Bella Monica because I’ve been going there for a long time.
CHAMBERS: Oh, thank you.
HAGERTY: And I love that restaurant. I think one of my favorites, not new, but newer places is probably Crawford and Sons.
CHAMBERS: Oh yeah.
HAGERTY: Which is Scott Crawford.
HAGERTY: A great chef.
HAGERTY: And I think they’re only doing take out at the moment but I look forward to the day that I can go back and eat there.
HAGERTY: Such a great place.
CHAMBERS: Plus he’s got a new restaurant –
HAGERTY: Yeah, Joleen.
HAGERTY: Next door.
CHAMBERS: Which I haven’t –
HAGERTY: Which is also great.
CHAMBERS: Ms. Jill, what’s your plug?
REKUC: Well, you know what restaurant we like but it really got hurt this weekend was Sitti, downtown Raleigh.
MIHAJLOV: It got hurt.
REKUC: I don’t want to speak out of turn but I think the front of this with the protestors. It really got hurt.
REKUC: So, but I love Mediterranean.
HAGERTY: Yeah, it’s good.
HAGERTY: It’s a great place.
CHAMBERS: Greg does a – that’s a – yeah, grandma and the Lebanese and the bread is so good –
REKUC: The hummus.
CHAMBERS: — and the hummus. Greg knocked — Hatem knocked it out of the park.
REKUC: See I like Neomonde.
CHAMBERS: He did a great job. Yeah. (inaudible 16:54:7) Yeah, yeah. I love hummus. I can walk –
HAGERTY: I cooked it last night.
CHAMBERS: — a busy highway for hummus.
REKUC: Last night, that’s what we ate.
CHAMBERS: You know what I mean? If I had to.
HAGERTY: Who doesn’t love hummus. If you don’t, then you –
CHAMBERS: Yeah, I mean it’s just silly.
REKUC: If you don’t, you know, you don’t need to listen to this –
CHAMBERS: Give me a cracker –
REKUC: — podcast.
CHAMBERS: — and maybe celery and you’re in business.
CHAMBERS: You know what I mean. All right. Well anyway, well ladies thank you so much –
REKUC: Thank you.
CHAMBERS: — for coming and let’s do this again.
HAGERTY: Let’s do. Thank you.
CHAMBERS: All right. Thank you.
MIHAJLOV: Good job ladies. Nice.
Alex Mihajlo – Full Bio
The arch of his career has now landed his firm, Olde Raleigh Financial, to become a fee-based, Independent Advisory firm. Prior to that Mr. Mihajlov was a branch manager at A.G. Edwards, Wells Fargo and Raymond James. His career has been an evolution and, in turn, his perspective on service has evolved. “My team and I have experienced the large brokerage houses and banks. While they have carved out their spot in the marketplace, I can say it is not for us. We have evolved and we tend to attract those who have evolved away from cookie cutter to a world of customization. They want collaboration. They wanted to be listened too. They want a relationship and we want them to be excited about our relationship.”
Trevor Chambers – Full Bio
Trevor joined Olde Raleigh Financial Services in January of 2015 and his primary role is new business development and marketing. Prior to joining the firm, Trevor spent 12 years working at his family’s restaurant, Raleigh’s Bella Monica Cucina & Vino. “Exceptional service, no matter the industry, is paramount and we attract clients who value and take comfort in being taken care of.”
Jill founded Olde Raleigh Real Estate, a full service firm dedicated to serving the upper tier real estate market. Jill is affectionately known as “Olde Raleigh’s Resident Real Estate Expert” which is the result of her personal and professional lifetime commitment to the area.
Sheri is the founder of The Sheri Hagerty Group in Raleigh, NC specializing in the upper-end market. Sheri’s comprehensive understanding of Triangle trends and developments gives her clients a unique advantage in evaluating their options and making informed decisions.
Both Sheri and Jill have been elected too and are currently part of The Luxury Home Marketing Group of the Triangle, a coalition of only 14, REALTORS® specializing in the upper-end market.