Buying Advice Archives - Page 34 of 36

March 11, 2009March 11, 2009

3.875% Fixed Rate Mortgages

There is currently in Lake Oswego a very large volume of new construction, “spec” homes that are for sale. A spec house is a house built by a builder who does not yet have a buyer at the time it is built. The idea is that they will be able to sell the house while it is being built or as soon after it is constructed as possible. In a good real estate market it is pretty low risk and allows builders to make a good living. But when the market is slow, like it is right now, it is extremely high risk and forces builders into bankruptcy and the unsold homes into foreclosure. There is a local lender, Banner Bank, that is trying to do something about this problem.

What they are doing is offering 30-year, fixed-rate mortgages, at 3.875% (APR is 3.973%) to buyers who purchase one of the spec houses on which they are holding the construction loan. They have over 250 houses that this applies to in Oregon and Southwest Washington, 46 of which are here in Lake Oswego.

These loans are made possible because Banner Bank has borrowed money from the US Government that is available as a result of the TARP (Troubled Asset Relief Program) money. While I hate the fact that our country is in the mess that it is currently in, I am pleased to see that the government stimulus is finally trickling down to a tangible level.

The properties upon which these loans can be made here in Lake Oswego inlcude some very nice condominiums in First Addition, a great new neighborhood in Palisades, and quite a few luxury homes. It really is an opportunity that will benefit people who are ready and able to buy right now. While standard interest rates are currently hovering at right around 5%, getting an interest rate at 3.875% would have a direct impact on how much house you can afford to buy. Here’s an example: buying a $600,000 house, putting 20% down, and getting a standard loan at 5%, would give you a house payment of $2576 (principle and interest). Using the same scenario, but using the 3.875% interest rate, that same home would now have a payment of $2,257. The savings in over $300 per month.

This program is available in amounts up to $1,000,000 with no increase in rate for a jumbo mortgage. A jumbo mortgage in standard lending is a loan amount that is greater than $417,000 and can have interest rates that are substantially higher than rates for homes that are under $417,000. So the savings becomes even greater if the loan is in the jumbo category.

Buyers do need to qualify for these mortgages with verifiable income and sound credit. If a buyer has less than 20% to put down, there are additional options for them that involve a slightly higher interest rate of 4.875%.

It is also important to know that this program is currently being offered with a deadline of March 22nd. The program exists because Banner Bank wants to get these houses sold and they want them sold now.

If you would like additional information about this program, please visit the Banner Bank website by clicking here. If you would like addtional information about the homes that are for sale and that are offering this financing, please contact either Linda or myself, and we would be happy to send you a list of properties.

March 4, 2009March 4, 2009

Real Estate “No No’s”

A while back Dianne wrote a post on the Realtors Code of Ethics. I loved that post because I don’t think most people are aware of all the standards to which Realtors are held. It really is great to be in a profession where we are mandated to treat each other and the general public with respect. That mandate then becomes a part of our culture. I notice it in the conversations I have with other Realtors. There definitely is a flavor of deliberate respect that is not always the experience for most of us in the day-to-day “non-real estate” wider world of affairs.

I read something in the recent REALTOR magazine published by the Portland Metropolitan Association of Realtors (PMAR), and written by Jo Becker of the Fair Housing Council of Oregon on subject matter along the same lines that made me think you’d find it interesting. This is regarding words Realtors may and may not use in promoting properties, and the overall guidelines of the Fair Housing Act.

HUD is the federal regulatory body with the power to enforce the Fair Housing Act. Generally speaking, the Fair Housing Act is in place to ensure that discrimination and something called “steering”, among other things, do not inhibit peoples’ right to live wherever the heck they want and are qualified to. It is also set up to ensure that the public receives information about housing that is fair and as free as possible of inaccurate and/or unduly influencing or discriminatory language. “Steering” is essentially trying to influence buyers to live in, or not live in, certain areas based on something other than the buyers’ own parameters for what they want in a new home & neighborhood. Basically, a Realtor is to supply a buyer with options for potential homes based on the information a buyer supplies to the Realtor regarding their wants & needs. A Realtor will often refer a buyer in the overall Portland area to this website: www.PortlandMaps.com where the buyer can enter the address of any property and view all kinds of facts on a property including statistical, demographic and crime information. Buyers are ultimately choosing a home that fits their particular needs, and Realtors are there to assist with service, information and real estate expertise.

The Fair Housing Council of Oregon’s website states plainly:

The Fair Housing Council of Oregon (FHCO) is a civil rights organization with a mission of eliminating housing discrimination through enforcement and education across Oregon and southwest Washington.

We promote equal access to housing by providing education, outreach, technical assistance, and enforcement opportunities specifically related to federal, state, and local fair housing laws. These laws protect against illegal housing discrimination based on “protected class status.”

The federally protected classes are:
race, color, national origin, religion, sex, familial status and disability

There are additional state and local protected classes.

When a Realtor enters listing information into RMLS, it is scanned for potential “no no’s” that are most always either unintentional or erroneous, i.e., as the article I mention elaborates- the RMLS program may highlight the word “white” for the Realtor’s attention when it is only being used as a description for a picket fence etc. A real human at RMLS who understands context always reviews these issues, according to the article. There is no “list” of unnacceptable words as many people believe. It’s all about intention, and about upholding our highest societal values… as well as the law. Some terms can seem to be either benign or on the edge but for their context, for instance, the term “Walk-In Closet” is commonly understood to describe a well-known feature in many homes. As long as the Realtor is not trying to imply a limit on access to someone who is not ambulatory this term is not a problem. “View Property” falls into the same category as long as no one is limiting access to the “view property” to sighted individuals only. The same goes for “Mother-In-Law Suite” and “Bachelor Apartment” according to the article. Where it can become trickier is with words like “near”. Often a house will be described as “Near shopping, transit” etc., which is OK. What is not OK, due to implications that certain people may or may not be welcome in that neighborhood, are things like: “Near ABC Mosque” or “Close to the XYZ Church” or “Near the LMN Jewish Community Center”. It is also not considered proper to refer to specific schools due to the potential for using this technique to promote some schools over others for the same kinds of reasons. It is generally considered all right to refer to school districts as long as this is done consistently throughout a Realtor’s listings.

The article refers to a few blatantly illegal and discriminatory statements that have evidently actually been published on a popular local online service. These are obviously examples of absolute “no no’s” and you will not see these or anything like them on RMLS:

“No minorities”,
“African Americans and Arabians tend to clash with me so that won’t work out”,
“Ladies, please rent from me”,
“Requirements: Clean, Godly Christian Male”,
“Will allow only single occupancy”,
“No children”,
“Christians only”.

These are all clear violations of the Fair Housing Act. Fair Housing Act laws apply in newspapers, flyers, yard signs, verbal statements, and online advertising among other instances & places.

For questions about Fair Housing Laws visit: www.FHCO.org

or call: 503 223 8197 or 1-800 424 3247.

February 25, 2009

Foreclosures vs. Shortsales

With the state of the current economy, there is a lot of attention being paid to the volume of foreclosures as well as shortsales. These are two different situations that are often confused. I thought it would be helpful to clarify what they are.

A foreclosure is a bank-owned property (also referred to as an REO property). The process of foreclosing on a delinquent home owner has been completed and the bank has the full title to the property and the right to sell that property. A quick look at foreclosures.com shows the very sobering statistic that in Lake Oswego right now there are 90 bank-owned properties, there are 17 properties in pre-foreclosure (behind in their house payments) and 587 properties scheduled for auction. When a home owner falls behind in his or her house payments, there is a multi-month process where the homeowner is notified of the delinquency. The final step of the forclosure is public auction where the mortgage holder takes the property back for the amount of money that is owed on it. Bear in mind that the process takes about nine months. Many of the people currently delinquent or scheduled for auction will find a way to either bring their payments up to date, renegoiate the terms of their loan, or sell the property. So not all of the homes currently delinquent will become bank owned. I’d also like to put these numbers in perspective. Lake Oswego has a population of about 35,000 people. With an average of 2.3 people per household, that is about 15,000 households. And with 694 households either in pre-foreclosure or already bank owned, that is about 5% of the households. Yep, that is sobering.

A shortsale is a house that has a market value of less than what is owed on it and the home owner is attempting to negotiate with their mortgage holder to take a discounted amount so that the property can be sold at current market value. In this instance, the sale of the home will require a third-party approval (the bank), and may or may not happen. The process to get this third party approval can take months (I worked with one that took 6 months), so if you are wanting a home that is a shortsale, be prepared to be patient and realize that the approval may or may not occur.

I am often asked how a buyer can find foreclosure and shortsale properties. The reality is that 99% of them are listed with Realtors and made available on the RMLS. People who are in distress and trying to sell their home as a shortsale hire Realtors. And banks with bank-owned properties hire Realtors to sell their inventory of foreclosures. You don’t need to buy a secret publication or pay for a special list. These properties are available to the public on the RMLS and any Realtor can gather information on them to help assist you with finding that great deal.

Having said that, I have two areas of caution. First, a foreclosure is a much better prospect for purchase if you have a time-line you are trying to accomplish. A foreclosed property that is listed for sale can be purchased within a normal transaction period of 30 to 60 days. Whereas a shortsale can take months and then may not occur at all. Second, when you buy a foreclosure it really is buyer beware. Banks make no representations about the condition of the property and often have their own sale agreements with extensive waivers to protect them from any future liablity. In both circumstances you should be able to make your offer subject to a home inspection.

OK, I have a third thought. Be aware that people who loose their homes are people in financial distress. They go through an extended period where they have no resources to make their house payment much less fix the leaky roof or remodel the ancient kitchen. So be prepared to see houses that are dirty and in need of repair. In addiiton, it is not uncommon for these houses to be stripped of appliances and fixtures. Not all foresclosures and shortsales are project properties, but many are.

So you are looking for the great deal? Sure, check out the foreclosures and the short sales, but don’t close your mind to the good old homeowner who needs to move and is motivated. These people will also often sell at great prices, close in a reasonable time frame, and maybe even vaccume the carpet and polish the granite on their way out. To make the most of the market, look at the entire market.

February 18, 2009February 18, 2009

What’s Your Sense of Style?

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When searching for properties on RMLS, you will first be asked to specify the type of property you are interested in finding. The main property categories include:

Attached- This refers to a townhome which is usually 2-story, part of an HOA, and includes ownership of the lot as well as the structure.
Condo- This refers to a dwelling in an HOA, wherein ownership includes the individual unit together with an undivided interest in common with all unit owners in the “common elements”, which are the land and those parts of the building or buildings intended for common use. Condo ownership is of the interior of the structure, and exterior maintenance is provided by the HOA.
Detached Single Family- This refers to a house on its own lot. Ownership is of the house, inside and out, and the lot itself. Technically, ownership extends up into the atmosphere as well!

When you choose one or more properties for more detailed information, the “style” of the detached homes will be included. Indicating a description of the style of a home for a Realtor is more of an art than a science. This is because a home will potentially contain elements of one style, and also elements of another, particularly if there has been any remodeling of the structure.

I thought it might be fun to give some detail on the characteristics of house styles, and want to thank Judie Teal who contributed data and photographs to RMLS, which RMLS is allowing me to mine and use for your informational pleasure.

There are many, many house styles from which to choose. Here are some significant ones applicable to the larger Portland area:

2-Story: Two-level home with main entrance on lower level. (Photo)

Ranch: Long, low, rambling single-story with simple construction, usually a large picture window in front and an attached garage.

Daylight Ranch: Rambling home with a lower level basement that is partially above ground.

Split-Level: Two-story home split at the entry with one set of stairs going up and another going to the lower level. The entry is not considered a “floor” or story. (Photo)

Tri-Level (NOT to be confused with Split-Level): Usually a ranch style home with a full story added on one end… so, three full floors.

Bungalow: One to one & 1/2 story w/gabled roof & porch across front.

Cottage: Gabled roof line, but lower than the bungalow style, sash windows, and a plain front door. Front porch is either very small or non-existent.

Contemporary: Simple, Uncluttered lines with a non-traditional design. (Photo)

Craftsman: Home has a low pitched gabled roof with wide eaves and exposed rafters. One or two story with a decorative brace and full front porch. Inside there is usually an array of built-in wood cabinetry, often with glass & leaded glass features. (Photo)

Colonial: Two-story home with a steeply pitched roof, small casement windows, and often columns across the front.

Dutch Colonial: This variation has a gambrel or mansard roof and often a side wing. (Photo)

English: Steeply pitched roof, prominent cross gables and tall windows sometimes half-timbered. (Photo at top of post)

Tudor: Similar to the English home, with steeply pitched roof, low doors, small-paned windows and decorative half-timbering. (Photo)

Victorian: Two stories with steep gables, ornate wood detail, Gothic style windows (pointed top), and brackets under eaves. Some also boast turrets.

A-frame: One or two story with peaked, high pitched roof line in the shape of an “A”.

Chalet: A rustic style home featuring projected roofs, large windows and raised foundation. (Photo)

Georgian: A formal square box-like structure with a hipped roof, decorative crown or pediment over the front door with columns on each side, and/or cornice mouldings. (Photo)

Saltbox: Distinctive sloping roof line from the top of the gable which can plunge from 2 and 1/2 stories in the front too a single story in the rear.

Farmhouse: Simple, uncomplicated 2-story construction with a front porch, and sometimes wrap-around porch. (Photo)

Old Portland (Four Square): Very Distinctive style popular in the early 20th century. Large & square two to two & 1/2 story with low hipped roof and deep overhang, large central dormer, full porch w/wide stairs. (Photo)

There are many more styles, but again, these represent the bulk of what you’ll find in the Portland area.

February 11, 2009

Observations on Current Inventory

lake-photo A few days ago I spent some time analyzing inventory. I thought I’d share with you some of my observations.

On the day that I did this, February 6, 2009, there were 418 single family, detached, homes for sale in Lake Oswego. Here is the breakdown by price:

$100,000-$199,999 = 3
$200,000-$299,999 = 13
$300,000-$399,999 = 41
$400,000-$499,999 = 48
$500,000-$599,999 = 44
$600,000-$699,999 = 38
$700,000-$799,999 = 28
$800,000-$899,999 = 30
$900,000-$999,999 = 37
$1,000,000+ = 136

If you have been reading the market activity reports on Mondays here at the propertyblotter, you have probably noticed that for the last several months there have been very few properties sold in the million dollar and over price range. In fact, it has been since early December that a sale has closed at that price point. 136 houses priced over a million dollars just seems like a lot of high-end inventory. In all of 2008, 45 houses sold that were priced at a million dollars or greater. At that rate, it will take a little over 3 years for the current inventory to be sold. What does that mean? It means that if you are in the market for a high-end, luxury home, you have lots of houses to choose from and motivated sellers will be making sacrifices to get their properties sold. I think that the sellers who truly have to sell quickly will be dropping prices and making concessions to secure a good sale.

Having said that, you will also have noticed that in this Monday’s market activity report two high-end homes went sale pending: one for $995,000 and one for $1,995,000.

It is very typical that the market is slow during the holidays. Seeing the two pendings this week can be seen as the market gearing up as we approach spring, which is a very active time for sales.

In doing this, I really enjoyed seeing the break down of the numbers in the more affordable price ranges as well. There are quite a few really nice homes that would not require jumbo loan financing. A jumbo loan is $417,000 or greater and typically has a higher interest rate than a conventional loan.

I also have from time to time compared the inventory of homes priced at $350,000 or less in Lake Oswego to the inventory available in Sellwood, a neighborhood in SE Portland. I have done this because I believe that Lake Oswego is often over-looked for affordable housing because of its reputation for million dollar housing. The first time I made the comparison, last April, there were 20 houses for sale in LO and 18 in Sellwood. The next time I did it, last August, there were 28 in LO and 32 in Sellwood. At the time of this current analysis I have found 36 in LO and 27 in Sellwood. So both areas have more houses for sale priced at $350,000 or less than they did 10 months ago, and Lake Oswego continues to be strong in this price range.

The least expensive house for sale in Lake Oswego, that is not a tear-down fixer, is priced at $189,900. It was built in 1955 and has 1320 square feet with 2 bedrooms and 1 bath. It’s on a very large lot in Lake Grove.

The most expensive house for sale in Lake Oswego is Jantzen Island. A private island in the lake of 5.5 acres with a 10,000 square foot main house and a 3500 square foot guest house. It’s priced at $19,500,000.

I am curious to see how our inventory changes as we go into the spring. With the current economy it is bound to be slower than normal. If anything, the current economy is increasing the number of homes in the more modest price ranges. And for buyers who want and are able to purchase a high-end home, there is great selection and some great deals to be found.

February 4, 2009February 4, 2009

No Loans?

You hear it every day: “There are just no loans out there. No one is lending.” Well, I’m here to tell you that this is just not true. While it is true that all lenders have become more restrictive, and the news media asks “Where did all that money go?”, there are still indeed lenders staying focused on moving forward through the morass, and doing good business with qualified home buyers.

I think we all agree that the changes in qualifying standards are good for the community at large, and good for individual buyers. Sometimes it is also helpful to have a program that takes a holistic approach to the individual applicant. There has been a lot of light shed on the downsides of 100% financing, but a buyer in good credit standing with a qualifying debt to income ratio along with other complying factors, first-timer or not, can really benefit from a good 100% program.

I work with a variety of lenders I trust in order to be able to recommend good lending sources to my clients. I say this to make sure you understand I am not recommending any one lender, and encourage any buyer to check out all their options (there are more than you think!). That said, I was struck by the program at KeyBank, as were my cohorts, and thought it worthy of some blog space. I am particularly encouraged when a lender in today’s economic climate makes a point of supporting the local community, and that is what we appear to have here. I’ll give you some details below, and would be happy to point you to a contact person at KeyBank if you’d like more info. As always, if you are working with a Realtor, please do consult them for advice and recommendations on lenders they trust.

OK, here are the main points pertaining to the KeyBank 100% program:

Financing is 100% w/no mortgage insurance
30-year fixed w/no prepayment penalty
620+ credit score
On the job for 2+ years
Primary residence only
Seller contribution allowed to a maximum of 3%
Must have at least $500. in the bank
Must also have one month’s PITI available (this, however, can come as a gift)
Fees are: $395./appraisal, $300./processing, $300./underwriting
Max 42% debt-to-income ratio
If self-employed, must give 2 years’ tax returns
Must have 2 years’ satisfactory rent or mortgage payment history
Rates vary all the time, but today I’m told you’re looking at approx 5.5%
(for more info, email me and I’ll put you in touch w/a rep for KeyBank)

Now, there is another component, and that is geographical area. There are certain areas that have been identified as fitting into the program’s guidelines. To find out if a property you are interested in fits the guidelines, enter an address here: http://www.ffiec.gov/Geocode/default.aspx

Granted, in order to meet the guidelines in Lake Oswego, you are probably looking at homes in lower price ranges and/or condos in order to qualify. If a property of interest does not fit into the geographic guidelines, you can still take advantage of this program, but would most likely need to have an income of less than $52,000. according to the KeyBank rep. with whom I spoke. This is a great program for first time buyers or those wishing to purchase a condo or starter home in Lake Oswego!

I hope this info was helpful. Please do feel free to contact me with any questions. There are still lots of programs out there with several lenders suited to those who meet credit and debt to income standards that vary with each institution.

Very Best,

Linda

January 21, 2009January 21, 2009

Personal Kitchen Experiences – Share Yours!

kitchen_a Tuesday was such a momentous occasion, and many of us took time off from work to watch the inauguration and the rest of the exciting events of the day. In the afternoon I took one of the many photographs I’d shot from the television screen and emailed it with my best wishes to a huge list of family and friends. I called the photo and email “New Day in my Kitchen”.

It occurred to me that many of us spend important moments in our kitchens. Some of our best times with loved ones are spent there, and of course there is a lot of talk lately about those discussions of family budgets etc. occurring around kitchen tables throughout the nation. I took a look around my kitchen, and thought of some of the decisions I’ve made pertaining to it through the years. I also thought about comments from some of my clients lately as we look at homes they are considering.

My kitchen is very large and, as I enjoy entertaining, it is perfect for large or small gatherings and tends to be where the laughter and conversation is always liveliest. In the beginning when I purchased my home, I wanted to “gut” it as it has very 50’s white pine cabinets with that unmistakable “country kitchen” flavor. I like to think of myself as more Mediterranean than “country”, and so made some major modifications along the way to nudge the look that direction. But the cabinets actually grew on me, and now I love them and wouldn’t think of touching them. Other aspects of my kitchen did not win me over however, and so I had some decisions to make.

The counter tops had to go. I chose granite, and/but had to consider a few things as I made that decision. First of all, I decided on granite tile rather than slab. I did this because I had so many projects going on at once throughout the house and granite tile, being more economical than slab, allowed me to accomplish much more on my budget and still have that beautiful gleaming look that I love. In the process though, I had to take practicality into account and consider a few things about granite:

If choosing granite tile, be sure to select product that is cut for minimal grout lines (some are cut in such a way as to necessitate wider grouting between tiles).
Think about the whole kitchen, and how the granite contrasts or matches other elements such as flooring, cabinetry and fixtures. It should all work together.
Know that granite requires careful cleaning and upkeep- You will want to seal, and then re-seal your granite every year or so to protect the integrity of the stone.
Grout between granite tiles needs to be sealed and re-sealed as well as the granite.
If you use lots of lemons in your cooking, know that the acid from citrus can damage your granite severely. My installer informed me that if you left a half- lemon lying upside-down on your granite counters overnight, it would eat a circle into the granite. I have not tried this to prove or disprove what I was told, but suffice it to say that you are now forewarned as was I. You will also want to eliminate citrus cleaners from your collection… and/or tell your cleaning service not to use them.
Remember that, unlike laminates or even stainless steel which are both very popular and good options, things usually break when they hit granite. Now, tile of any kind will cause breakage as well, but with granite you at least generally do not have to worry about it breaking, which can be a problem with regular tile.
Remember that there are other options such as quartz, poured concrete, and man-made granite look-alikes, all with their own charm and benefits. Talk to a qualified professional about your choices as I did.

The next choice for me was flooring. I was absolutely convinced that I wanted travertine in my kitchen. A very nice consultant talked me out of it explaining that it is very slick when wet, requires even more care and upkeep than granite, and can crack when heavy things drop on it. (Me? Drop things?!) Now, I was really hard to convince but I finally gave in. (I did put it in one bathroom however… so I got my travertine “fix”, and also chose rough travertine for my back splash in the kitchen getting some of the Mediterranean feel I was after.) He tried to talk me into the practicality of laminate for flooring, but in the end approved of my selection of porcelain tile. I achieved the Mediterranean look I wanted, and got a durable floor that requires less upkeep. I do still have to be mindful of dropping bowls etc., but for a different reason- porcelain is just plain hard, so unlike the more practical laminate surface, shattering is what happens when you drop ceramics or glass on it. Remember also- grouting needs to be sealed and re-sealed, and the grout color should take into consideration the fact that it is being walked on… all the time, as well as the unavoidable effects of gravity.

There is so much to talk about with kitchens, and I am not even going to get into sinks, appliances, range venting etc. in this post (another time : ) but I do want to look at the basics. The other day I was showing a property with a remodeled kitchen that had beautiful slab counters, tile flooring, and a great layout. My client pulled out a drawer and mentioned that her daughter noticed that the fixtures had been replaced but not the cabinets… just like she had seen time & time again on a popular TV design/remodeling show. She liked them anyway, but it is something to think about. Here in Lake Oswego, many homes were built in the 50’s, 60’s & 70’s, and if a remodel does not include new cabinetry, make sure you love the function aspect of the cabinets as-is. There is a reason people choose not to replace cabinetry. It’s expensive. Now, I made this same decision in my kitchen, and/but DO love my cabinets. There are times when I wish I could pull out smoothly rolling drawers and shelves, and spin in-cabinet lazy susans for easy access. I made a choice because I love the look of mine… they are rustic, and the iron handles are a feature I took into consideration when choosing the color of my granite etc. That said, if I ever choose to sell my home, a buyer will need to love them as well. If you are not so crazy about your cabinets and considering a remodel, know that the choices you make should appeal to the widest pool of buyers… that is if you know you will want to sell in a few years.

Lastly, as far as basics go, if you are shopping for a home, notice whether the layout of the kitchen fits your lifestyle. Do you use breakfast bars? Do you enjoy privacy while cooking or prefer “great-room” openness? Do you entertain? Do you enjoy cooking with your spouse or kids? If so, is there room for two or more people to move about in the kitchen? Just pay attention to how the kitchen matches your needs.

I would love to hear comments, personal kitchen remodeling experiences, or additional information you’d like to share. Please feel free to post a comment. Personal experience is valuable, and we’d all like to learn from yours!

January 15, 2009

What should I offer?

aressign1 This is probably the single most common question that buyers universally ask. After all, you want to get the property for a fair price that is not too high, but you also have other concerns that you want to address. How do you frame the offer to cover all of your concerns?

The first step, in my opinion, is to have your Realtor prepare a market analysis for the neighborhood in which the home that you like is located. You want to know what other homes have sold for. The houses that are used should have sold as recently as possible, going no further back than 6 months. They also need to be as similar as possible in age, size, and condition. There will always be a bit of a range in the value. Houses that sell at the low end usually have issues with either condition or location. Houses at the high end are in top-notch condition with recent upgrades and remodeling. Then there is the average. An average home is clean and in nice condition but does not necessarily have completely new kitchens and baths, or perhaps has upgrades that are not high-end. The home you are considering: where does it fit in this range? Knowing what the neighborhood is selling for, and having an idea of where your prospective home fits in the range, will tell you what the market is proving to be the value for the home. This method allows you to know if a property is over priced or a smokin’ deal. You also want to take into consideration the market history on the property. If the house has been on the market for an extended period of time without dropping the price, then it is obviously over-priced and the seller will need to negotiate down to get it sold. If it’s been on the market a long time, but the current price is a recent and large reduction, perhaps the seller has already come down enough to have the house at a fair-market value. And a house that is newly listed is less likely to take a dramatically lower offer. I believe the best way to estimate value is to take the time to do the market analysis. It will tell you what the house is worth in the current economic climate.

My next advice to a buyer is to decide what is important to them, price or terms. If getting the house for the absolutely best price possible is the priority, then make the offer clean in other areas. Sure, come in 10% below the list price but don’t ask for new carpeting, a closing date after your son graduates from High School next spring, and not subject to the sale of your current home. If you come in low and then ask for the moon, most sellers will get mad and reject your offer. On the other hand, if you really do need to make your offer subject to the sale of your current home, then to get a seller to work with you, you are going to need to be more generous on price. I do believe that most sellers expect to negotiate and when presented with a reasonable offer will respond in kind and try to make a deal work. But do decide if your priority is price or terms and then frame your offer to accomplish your priority.

I also feel that before a buyer can make an offer, he or she needs to see enough homes to develop a sense for value. What does a $300,000 house look like? When you see enough of them, you start to get a feeling for the market and sense for value. You can tell when a house is in better than average condition and yet priced the same as the ones that are a mess. That is a good deal. That is the best way to buy. I think it takes looking at about 20 houses for a buyer to develop a good sense for value.

Also, make sure that you are working with a Realtor who knows the neighborhood. Homes in Beaverton sell under different circumstances than homes in North Portland. You need to be aware how individual areas of town are selling. And even within Lake Oswego there are high-demand locations that sell for more money and more quickly because of their location.

Your home is likely the largest purchase you will ever make. You want to buy the home that you love, but you also want to make a sound investment, and the first step is making the right offer.

January 12, 2009January 23, 2009

Market Activity Report- January 5 – 11, 2009

Activity is picking up as evidenced by the number of new listings below. However, I’ll caution that roughly half of these are “freshened” listings, and though I like to pick through them and only display the truly “new”, scheduling did not allow me to do that for you today.

Your Realtor can answer any questions regarding a property’s history, and I’d be happy to advise you on that as well should you not have your own resource, and find something of interest below. Suffice it to say though, that the new year is providing inspiration to home sellers, and this is fairly common every year.

Here is the latest market activity for Lake Oswego (see below the tables for additional notes):

NEWLY LISTED (January 5 – 11,2009)

4 TOUCHSTONE DR	$ 114,000	2	2	984	CONDO	1/10/2009
65 GALEN ST	$ 129,000	1	1	689	CONDO	1/5/2009
3668 SPRING LN	$ 199,900	2	2	1,120	CONDO	1/6/2009
750 1ST ST	$ 225,000	2	2	1,350	CONDO	1/9/2009
6291 HARRINGTON AVE	$ 249,900	3	2	1,472	DETACHD	1/6/2009
6317 CARMAN DR	$ 275,000	3	1.1	1,344	DETACHD	1/5/2009
4664 FIRWOOD RD	$ 300,000	3	2	1,640	DETACHD	1/6/2009
18963 SW LONGFELLOW AVE	$ 339,900	3	1.1	1,232	DETACHD	1/5/2009
18959 KRISTI WAY	$384,400	3	2	1,778	DETACHD	1/6/2009
18971 INDIAN SPRINGS CIR	$399,950	3	2	1,525	DETACHD	1/7/2009
16018 WALUGA DR	$419,000	4	2	2,026	DETACHD	1/8/2009
142 KINGSGATE RD	$425,000	4	2.1	2,495	DETACHD	1/6/2009
1717 WOODLAND TER	$455,000	3	2.1	2,146	DETACHD	1/6/2009
17121 WALL ST	$525,000	3	2.1	2,187	DETACHD	1/9/2009
17622 BROOKHURST DR	$550,000	3	2.1	2,909	DETACHD	1/7/2009
3254 DUNCAN DR	$599,900	4	3.1	3,997	DETACHD	1/7/2009
668 MCVEY AVE	$599,998	3	1.1	992	CONDO	1/9/2009
5678 SW CHARLES CIR	$65,0000	4	4	3,455	DETACHD	1/5/2009
615 LAKE BAY CT	$669,900	3	3	2,542	DETACHD	1/5/2009
72 CONDOLEA WAY	$679,500	2	2.1	3,088	CONDO	1/9/2009
19524 RIVER RUN DR	$699,950	4	2.1	2,630	DETACHD	1/5/2009
15195 LILY BAY CT	$924,900	4	2.1	4,099	DETACHD	1/11/2009
3030 WESTVIEW CT	$959,000	4	2.1	3,415	DETACHD	1/11/2009
18682 WESTVIEW	$975,000	4	3	3,243	DETACHD	1/8/2009
662 9 th ST	$975,000	5	3.1	4,108	DETACHD	1/5/2009
2304 Oswego Glen CT	$1,395,000	4	2.1	3,896	DETACHD	1/5/2009
2793 POPLAR WAY	$1,995,000	5	5.1	6,300	DETACHD	1/9/2009

PENDING SALES (January 5 – 11, 2009)

3190 DUNCAN DR $304,900	3 2.1	2401 DETACHD 12/16/2008 24
5102 ROSEWOOD ST $341,900	3 2	1810 DETACHD 11/12/2008 54
4280 CHAPMAN WAY $469,000	3 2	1947 DETACHD 12/15/2008 105
17454 CANAL CIR $549,900	4 3	2275 DETACHD 4/19/2008 261
13581 GOODALL RD $550,000	3 2	1220 DETACHD 10/10/2008 490
5299 WESTFIELD CT $598,000	3 2.1	2865 DETACHD 8/2/2008 156
1141 TROON RD $648850	4 3	2522 DETACHD 7/2/2008 187

SOLD (January 5-11, 2009)

16250 PACIFIC HWY $269,850	$185,000	2 2.1	324 CONDO 433
5051 TUALATA LN $409,900	$400,000	4 2.1	591 DETACHD 114
16750 PHANTOM BLUFF CT$485,000	$430,000	3 3.2	267 DETACHD ,288
1971 PARK FOREST AVE $549,000	$549,000	4 2.2	180 DETACHD 13

Criteria: Homes in the 97034 and 97035 zip code, listed, pending or sold between the dates listed above as reported by the Regional Multiple Listing Service (RMLS). DETACHD refers to Single Family Detached Residence, MFG refers to manufactured housing, and ATTACHD refers to single-family residences with some portion of the structure attached to another property, but not constituting CONDO ownership. DOM stands for days on market, or the number of days from when the listing became active and when it received an acceptable offer.

If links to ACTIVE properties do not bring up property information, the listing may no longer be active, but rather expired, cancelled, pending, or sold.

January 8, 2009January 8, 2009

Insurance & Adventures in Home Ownership

slide_1b We’ve given you plenty of coverage of the exciting and unusual weather experienced lately here in Lake Oswego. I hesitate to scare the bajeezeez out of anyone contemplating living here, and/but believe that even though this is unusual weather, the story I’m about to share is extremely valuable for just that reason, and highlights the importance of giving great consideration to the type of insurance you decide to carry when purchasing a home.

Last Friday at about 1:00AM, 23-year old Sammy Abazzaz and a group of his friends were relaxing and having a late-night snack in the second-floor kitchen of Sammy’s Lake Oswego home when a mudslide hit its rear filling the level below with moving earth, throwing granite counters at them and opening a crevasse at their feet sending some plummeting beneath it. Sammy’s parents were in British Columbia celebrating the new year and rushed home upon hearing of the catastrophe. All the occupants are reported to have escaped and are deemed relatively “OK” with the exception of one broken arm and lots of nightmares I’m sure. According to the Oregonian, Sammy relates: “It came through almost like an avalanche, through the windows and the house”. Heavy rains and a plugged drainage point on the hill above the home reportedly caused the slide.

slide_6 Scott Burns, a professor of geology at Portland State University advises: “The important thing is to get people in Portland and the rest of this area to ask the question, ‘What can I do to prevent landslides on my property?’ ” “There was just a lot of storm water going down the streets and going in every direction,” said Bill Burns, an engineering geologist with the state Department of Geology and Mineral Industries. “There was just so much water, it was just over-taking the system.”

slide_3 The family reportedly had homeowners insurance, but not the additional protection of landslide coverage which is typically excluded from most policies. I would pose that in addition to being the most diligent and informed homeowner you can possibly be, you also need to acknowledge that sometimes “stuff happens”, and therefore it is prudent to assess any “potential” hazards (even if you believe them unlikely) and protect yourself with appropriate insurance. This means you may end up being the one inquiring as to the availability of such add-ons, and so need to come armed to any discussion with data to guide your inquiries and decisions. To that end, let me provide you with some basic information, which I suggest you view as a primer, and not as the replacement for consultation with your insurance agent who, unlike me, is the “insurance expert”:

Most homeowners policies will not include: floods, mold/fungus, earthquakes, mudslides/landslides, sinkholes, war or nuclear accidents.
If you do have, or are considering flood insurance, check to see if you are covered for a landslide should the slide be carried by a body of water. Some flood policies cover mudslides ONLY under these circumstances.
Cost of coverage is based on where you live & other factors. (visit: http://www.Floodsmart.gov). A typical quote for someone NOT in a flood plane according to my own insurance office only will cover up to $250,000 in structural damage, and $100,000 for content damage. ** For $200,000/structure and $80,000/contents in a recent “preferred location” quote in SW Portland, the price tag I’m told was $326/yr.
Generally speaking, “property damage” is not intended to include a detached garage, outbuildings, tool sheds etc. These may be covered, but usually at around 10% of the amount of coverage applicable to your home.
The most common policies in the United States cover losses due to fire, lightning, fallen trees, tornadoes, wind storms, hail explosions, smoke, vandalism and theft. The amount of coverage that you have is an item for discussion between you and your insurance agent.
Water seepage from the ground up into your home is usually considered a maintenance issue and not covered in standard or flood policies. Waterproofing and appropriate drainage work is recommended if this is an issue.
Although the term “Acts of God” is bandied about by most of us, it is not a term that’s actually included in homeowners insurance policies.

We all live on planet earth, so accordingly, we are susceptible to all kinds of unexpected occurrences. Importantly, let me repeat-

Get/Stay informed.
Gather information about your property and any “potential” hazards.
Take appropriate mitigating actions to remove any threat(s) if possible.
Consult your insurance agent for the best advice on protecting yourself, your home and your family.
Should you not already have a trusted insurance agent/advisor, request some references from your Realtor.

Home ownership is an adventure. Suit up, and enjoy it!