Category: Selling Advice

Advice for home sellers in Lake Oswego, Oregon

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Moving to Oregon

migration_map_2012

United Van Lines, the nation’s largest household goods mover, has just come out with their annual study of migration within the United States. This study is not based on total moves. It is based upon percentages. They have been doing this study since 1977.

So what happened in 2012? Oregon is the leading state for in-migration in the country. The only part of the country with a greater percentage of moves into their area was the District of Columbia. Oregon made this list with 61% of Oregon-involved moves being people moving into the state and just 39% of moves from people moving out of the state. Here are the top 5:

1. District of Columbia
2. Oregon
3. Nevada
4. North Carolina
5. South Carolina

Michael Stoll, an economics professor at UCLA, sights factors such as lower housing costs, temperate climate, diversified economies, and high-tech clusters as reasons that people choose to move to the leading states.

My opinion? I think it can be attributed to Microbreweries, Food Carts, easy access to snow boarding, hiking, camping, the beach, and Oregon wine country. And then there is the cult-hit, Portlandia. Portland, and the Portland food scene, have been written up several times in the New York Times with glowing reviews. This is a wonderful place to live, and it’s getting discovered.

In this past year I have personally helped two families make the move to Portland from out of the state. In both cases, they did some research and chose Lake Oswego because of the schools.

I think all of this is good news for our real estate market. It’s pretty basic economics of supply and demand. High demand supports high property values, and after the recent recession it feels good to hear some encouraging news.

If you are considering a move to Oregon, take a look at Lake Oswego. I think you’ll like what you learn. And if you need a great Realtor to help you with the move, please give Linda or myself a call. We would love to hear from you.

Best regards,
Dianne

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News & Notes

A few tips from Linda:

* Be cautious when looking into a “Lease Option” opportunity if one presents itself. For the Seller, it most always means that the bank can, at any time, call for all monies owing from you on the property per your mortgage’s “Due On Sale” clause, as you are technically transferring a form of ownership in an Option. I.e., you could be called upon to pay in full. Contrary to popular belief, setting up a Trust does not get you around the Due On Sale clause either. Best to consult with your Realtor, and/or attorney before embarking on an adventure like this : )
* Remember that all repairs agreed to in a transaction in the State of Oregon must be performed by a licensed, bonded contractor.
* Make sure to give your Lender plenty of time to “close” your transaction when writing your offer. Talk to your Realtor, and make sure to consult with your Lender to see about how long they need. Lately it is typically around 45 days, but each situation is different. Should you not meet your “on or before” closing date as per your Offer contract, the Seller could possibly accept another offer and keep your earnest money… just sayin’ : ) Now, most people will compromise and agree to an addendum extending the closing date, but you cannot guarantee that the Seller will agree to that… If they have, let’s say, received a better verbal offer than yours during the time it has taken to get from agreement to “not meeting” the closing date, they may just decide to opt to take that larger offer. Just a note of caution.

Let’s take a look at the recently released data on real estate for 2012.
Below is some information for you on the overall Portland area, as well as specific Lake Oswego/West Linn (RMLS lumps them together) activity:

According to the RMLS Market Action Report for the Portland Metro Area December, 2012. At 1,760, closed sales were 9.2% higher than December 2011 sales of 1,612. pending sales (or “Accepted Offers”) were down, however, with 1443 in December of 2011, and 1384 in December 2012… putting the market down by 4.1%.

  • 2012 racked up 32,300 new listings, 24,010 accepted offers, and 23,438 closed sales.
  • Compared to 2011, new listings are down 5.2%, pending sales are up by 16.2% overall, and closed sales are up 19.1%.
  • The average sale price in 2012 was $275,000, which is 4.4% higher than 2011’s $263,300.
  • ***AND… Total time on the market has dropped by 21.5% from 143 to 112 days.
  • The overall economic improvement and increase in volume has positively affected the numbers for total dollar volume which rose to $6.45 billion in 2012 from 2011’s $5.2 billion.
  • For our Property Blotter readers, the combined area of Lake Oswego and West Linn reported the following totals for 2012:
    • 2085 New Listings (68 in Dec’12)
    • 1389 Pending Sales (81 in Dec’12)
    • 1364 Closed Sales (108 in Dec’12)
    • An Average Sale Price of $434,800. ($512,100 in Dec’12!!)
    • Prices rose 1.5% in 2012 over 2011’s totals
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A New Year!

Oswego-LakeGreetings to all of our loyal and new Property Blotter readers!

As we enter our 5th year of publishing this insiders’ look at the Lake Oswego community and Real Estate scenes, we want to take a moment to thank you so much for your interest and patronage through the years! Dianne and I are as committed as ever to bringing you the micro-focused real estate information you count on, and also the perspective of Lake Oswego as part of the larger Portland Metro Area from time to time. Context is good… at least we think so : )

We both specialize in Lake Oswego property, considering the time we’ve spent living and working here, and we both also have been working all over the Greater Portland Area for many, many years, so please remember us if you know someone who needs a really experienced and reliable Realtor for any property “selling or buying adventure” in this larger geographic area!

Though our lives have changed through the years, the Property Blotter has remained constant, and we hope that you enjoy it as much as we do. Recently we have made one BIG change, and that is that we are now working with Oregon First Real Estate Company!  A change like this is the kind of thing that only occurs once in a very great while, and while we have been very pleased with our previous affiliation and will miss those with whom we’ve worked closely for some time, we are thrilled to be joining this vibrant, established local company with offices all over the Portland area and Vancouver!

Just for fun, I’ve pasted below our very first post from 2008, and after reading it, am feeling both nostalgic, and satisfied with the work we’ve committed ourselves to, and all we’ve accomplished with so many of you.

Happy New Year to each of you…. We toast YOU in 2013!

Welcome to the premier edition of the Property Blotter!

This blog is intended to be a fun and useful forum pertaining to real estate issues in the City of Lake Oswego. It will bring you information that directly reflects current market conditions.

It will also provide you with history of the area and insights into Lake Oswego’s vibrant community. You will find plenty of statistics and details about houses currently for sale and recently sold. You will also find neighborhood profiles and featured homes. And, yes, you’ll get commentary on local events and neighborhood happenings.

What you will not find is endless self-promotion and unneeded advertising. This is going to be a place to learn about Lake Oswego real estate and not a place that will waste your time. We don’t care for that sort of thing any more than you do.

And just who are we and why do we have any right to be doing this? We are Realtors who have each lived in Lake Oswego for some time and have been directly a part of this community. Between us we have 30 years of experience selling real estate in this fine community. Between us we have lived in Lake Oswego for 20 years. Our children have attended school here. We participated in sports here. We volunteered with local non-profits here. We know this town.

Lake Oswego is an amazing place to live. It is also seriously misunderstood. Yes, there are million-dollar homes in Lake Oswego. But more than money, Lake Oswego is a town that has people who care. It has always had great schools and so attracts families looking for excellent public schools. There are modest homes as well as lakeside estates.

If we are doing our job right, you’ll come away from this blog feeling like you know a bit more about what prices of homes are like, what is going on with local businesses, and what it is about LO that makes it a great place to live and to work. If you currently live here, you’ll know more about what your home may be worth. If you are thinking about moving here, you’ll know more about what to expect when you buy a home and what this community is like as a place to live.

So come along with us on this “blog-mobile”. It is going to be a great journey.

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Home Warranties 101

It has become common practice for both buyers and sellers to want a home warranty included in the sale of a home. It can be paid for by either because it is negotiable. Why are they popular? Because even with a good home inspection and full seller disclosure, problems can pop up after the buyer moves in. The warranty helps smooth the buyer through these issues during the first year of ownership.

What does a warranty usually cover? Warranties generally cover the mechanical functions of the house, but not the structure. So it covers the water heater, the plumbing, the electricals, etc. It does not cover the structure which is the roof, walls, windows, and foundation. Think of it like this, if it moves or affects temperature, it is probably covered. Most plans do not include the washer, dryer, refrigerator, or air conditioning, but for an additional cost, these items can be added to the policy. You can even add things like swimming pools and hot tubs.

How long do they last? Home warranties begin the day of closing and last for one year. At the end of the year, most warranties will offer the home owner an extension if they wish to purchase it.

Can I chooses the contractor to do the work? No, the warranty company contracts locally with service providers. If you need to make a claim, you call a 1-800 phone number to place a request. The warranty company then contacts their local contractor who will come to your house to do the repair. Each time you call there is a service charge. It runs from about $45 to $75. I suppose this is to keep people from just willy nilly abusing their policy. You aren’t going to call someone to change a light bulb for the cost of a service call, right?

What does it cost? Last week I telephoned 3 well-known providers and got quotes. You can get a quote on-line, but I just think it’s quicker and easier to pick up the phone. The cost will vary from location to location. This quote was for a house in the Portland metro area, but if you live outside of this area, it may be a different cost.

American Home Sheild 888-429-8247
This is the big boy in the game. This was the very first home warranty company I had ever heard of quite a few years ago. I had an American Home Sheild policy when I bought my own home.
The basic plan: $370
Add appliances: $480
I also know that AHS offers an option to cover the house from the moment it is listed for sale. So in other words, if something is found before closing, it can be covered. I recently sold a house in Lake Oswego that had an AHS policy that covered the basic, the appliances, the central air, and was retroactive to the date of listing. The total cost was $510.

Fidelity National Home Warranty 800-862-6837
The basic plan: $260
Basic plus air conditioning: $320
Basic + air + washer/dryer/refrigerator: $425
Fidelity National Home Warranty charges more than this if the house is larger than 5000 square feet. That may be true of the other plans as well. Pretty much the rule of thumb is that you need to call and get a direct quote for each specific property.

First American Home Warranty 800-444-9030
The basic plan: $290
Value plus which includes air conditioning: $420

I honestly think all of these companies are comparable. The pricing is competitive, but please call to get a direct quote. There are so many variables that affect the pricing. I’ve put this up to just give you a sense of costs.

Do these policies get used? Yes. I recall hearing that they get used an average of 2.7 times for each policy.

Let me tell you about my own experience. In the first year of owning my home I had trouble with my dishwasher. It was an older model, so I wasn’t surprised. I called American Home Shield for the repair. The cost of the repairs was going to be about $300. It seemed silly to spend $300 on an old dishwasher. I opted to apply that $300 towards a new dishwasher instead. I also used my policy for a furnace repair.

Be aware that the policy is for repair. As in my example above, it won’t necessarily help you to get all new appliances. Also, read through the policy so that you know what is covered and what is not.

I do recommend home warranties. I think if you have one, you are likely to use it. And that first year in a new home, when you have had all of the expense of the purchase, it makes the first year less stressful.

Let Linda or I know if you have any questions. As always, we are here to help.
Dianne

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Distressed Properties

The RMLS recently provided this graph to Realtors and I found it interesting. It occurred to me that you might as well.

It clearly shows that while distressed sales make up 17.2% percent of the new listings, they make up nearly 29% of the closed sales. Of that the shortsales are pretty consistent being 15% of the new listings and 13% of the closed sales. Whereas the foreclosures are just 13.2% of the new listing but account for 25.6% of the closed sales.

I do think that the banks are throwing houses out onto the market at pretty rock bottom prices. I’ve seen a few houses lately, priced so low, that half a dozen offers get written within days. Then the bank takes a week to respond and even more offers get written. This is a very negative thing for surrounding property values. What I am describing here is happening in much greater numbers outside of Lake Oswego, but I’ve seen some of it here as well.

The other interesting characteristic on this graph is the non-distressed properties. They represent 71.2 % of the new listings, but 61.1% of the closed sales. That 10% difference? I think that’s over-priced housing that has not adjusted to the reality of the current market.

I’ll work to find a happier subject for my next editiorial post, but I did find these graphs both useful and interesting.
Dianne

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Woodstove and Fireplace Inserts

Certification Sticker
My own woodstove
I am a huge fan of woodstoves and firplaces. My family actually ownes a mountain cabin that is heated with a woodstove. Building a fire is a skill and in my family we challenge each other to build one that is good enough to light with just one match. So woodstoves are near and dear to my heart.

So when the State Legislature passed a law in 2009 that affects woodstoves, I was very interested. This law, known as the Heat Smart for Clean Air Act, went into affect August 1, 2010. It requires the removal of non-certified woodstoves and fireplace inserts upon the sale of a house.

This law does not require the removal if a house is not sold. So you can continue to use and enjoy your non-certified stoves as long as you continue to own your home. It is only upon the sale of the house that they must be removed.

This law also applies to stoves and inserts that are in garages, shops, and out buildings.

Once the stove/insert is removed it can not be sold, given away or re-installed. In fact, it must be destroyed/recycled and evidence of this must be provided to the Oregon DEQ.

How do you know if your stove/insert is certified? There are 3 ways:

1. The Federal DEQ has been certifying stoves since 1992 and a stove sold after that year will have a Federal certification sticker on the stove.
2. The Oregon DEQ has actually been ahead of the Federal government on this and has been certifying stoves since the mid 1980’s. So, again, you’ll find an Oregon DEQ sticker on the stove.
3. A list of certified stoves by brands and models is maintained on line. Click here for that list.

Who’s responsible for removing the woodstove/insert? That is negotiable between the buyer and the seller. Either party can do it, but it has to be completed within 30 days of the sale. And be aware that many lenders would require it’s removal prior to the sale.

Does the woodstove/insert have to be replaced? No. Many older models were quite large. So removing them may benefit the house.

If you do replace it, the models made today are amazing and consist of pellet stoves, wood stoves, and masonry heaters. They are high efficiency with low emmissions. I have a client who heats his house with a pellet stove that he calculates saves him hundreds of dollars each winter.

Finding the certification sticker on your woodstove is easy. It should be on the back of the stove. Finding it on your insert can be tricky as you will have to pull the insert out of the fireplace opening to look for it. Try finding the insert on the approved list first. That could save you the work of pulling the insert out.

If you don’t find your make and model on the approved list, consider inquiring with a chimney sweep or the service department of a hearth product store. For a locator of these sorts of companies, click here.

Can you retrofit an old stove so that it can be certified today? No.

Why did this new law go into affect? The pollution caused by old stoves creates serious negative air quality that causes health problems, especially for older people and young children. It’s estimated that for every old stove removed, the savings in health care costs will be $3900. These old stoves can last decades. This law will speed up the process of removing and replacing these stoves. It is also believed that there are 80,000 uncertified woodstoves and fireplace inserts still in use in Oregon.

In addition, there are both State and Federal tax credits for installing new stoves. My understanding is that Oregon gives a credit of $300 and the Federal government is giving a credit of $1500. Please confirm these figures with your own inquiry or through your tax accountant.

Information for this post was obtained at www.ohpba.org/oregonlaws.htm

Good luck building your own one-match fire!
Dianne

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News & Notes

What’s Happening in Lake Oswego? ~

* Really Local Weather –   Three new weather stations installed at City Hall, the Golf Course and Westlake Fire Station are now recording temperature, wind speed & direction, relative humidity, dew point, soil moisture, soil temperature, precipitation and Evapo-transpiration.   CLICK HERE to access current local weather info.

* Portland International Film Festival in Lake Oswego – Feb. 10-16~  The Bank of Lake Oswego and The City of Lake Oswego are sponsors of the festival, and 16 films will be shown in Lake Oswego.  The festival showcases more than a hundred films around the world.  To see showtimes, location & purchase tickets CLICK HERE.

*Virtual Summit – To see the information presented at the Feb 2nd summit, and to add your own thoughts on “inspiring spaces & places”, and “Complete Neighborhoods & Housing”  CLICK HERE  .  The deadline for submitting comments is Feb 12th.

* Lake Oswego Rides Mink River – Feb 18th  ~  Join Mayor Hoffman for a themed bike ride that visits some of the city’s public work sites and runs along the river winding through Sister of the Holy Names & to the Art Spot. Gather at 9:45 for a 10:00AM bike ride at Millennium Plaza Park.  The ride is 10 miles, and registration is completed by calling 503 675 3730.

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Bouncing on the Bottom

I know this is risky. There are all sorts of possibilities that I’ll be wrong and you will be able to come back to me a year from now with “It’s only gotten worse. You were WRONG.” But I am going to take the risk and put this in writing. I think that the housing market is bouncing on the bottom. If there is downturn yet to do then I think it will be minor. And there is even a chance that there will be upturn.
No, I’m not a Nationally recognized economist. Really, what do I know? What I know is that I am down here in the trenches living in this house market. And I see 2 signficant changes.
First, the cash investors are out buying BIG TIME. I am working with 2 cash buyers right now both wanting entry level houses of $150,000 or less. This is partly due to low house prices as compared to high rent rates making the return on rentals look good. But this is the same formula that will turn renters into home buyers. It’s starting to make sense to buy entry level houses because the rents are now getting as high or higher than a house payment.
Second, when I show property I am now finding that more and more houses are going pending. It’s like Christmas is over, the prices and interest rates are incredibly low, so now is the time. Lockbox activity (meaning the number of times lockboxes are opened by Realtors to access listings)has skyrocketed. It always goes up after the holidays, but not like I’ve seen it in the last two weeks.
I am also seeing more positive economic news in the media, including this short article from the Oregoninan on January 10, 2010:

Home values in Portland are predicted to rebound
Portland-area home values fell 3.5 percent during 2011 but are expected to stabilize and even post an increase in 2012, real estate research firm Clear Capital reports.
The California company forecasts a 1.9 percent increase in home values in the Porltand-Vancouver-Beaverton area.
In the company’s ranking of 50 major metro areas’ home prices, that moves Portland from No. 27 in 2011 to No. 14 in 2012. Exactly half of the markets are expected to post home price increases. The Portland market is also among 20 considered to be stable in 2012 with predicted increase or decrease of less than 2.5 percent.
The company also reported 15.5 percent of homes sales in 2011 were bank-owned forcloseures.
U.S. home prices fell 2.1 percent in 2011 and are expected to gain 0.2 percent in 2012, the firm reports.
The Seattle area was one of the hardest-hit markets in 2011, posting a 15.1 percent decline in prices. Clear Capital predicted the city’s real estate would lose 7.5 percent in 2012.

Certainly time will tell. I understand I might be wrong, wrong, wrong. But there is also a pretty good chance that I am right. We will see…
Dianne

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The Repair Addendum

There are two major points of negotiations when you are buying or selling a house. The first happens when the offer is made. At this point things like price, closing date, disclosure of financing, and other items are worked out. The second happens about a week later when the buyer has completed any home inspections they wanted and are asking for repairs.

The preferred method by most buyers and sellers is to agree upon a monetary credit at closing from the seller to the buyer for the buyer to do the repairs themselves after closing. This is preferred because it’s super easy for the seller, and for the buyer they then have control over the quality of the work. However, banks don’t like to see money credited to do repairs after closing. What if the buyer never does the repair? So the method to create the credit is to have the credit be applied to the buyer’s closing costs. This allows the repair issue to stay out of the transaction and accomplishes the exact same thing as it leaves money in the buyer’s possession that they otherwise would have spent in the purchase. The buyer can then do whatever they want to with that money after closing. This then creates the limitation that the amount of the credit can not exceed the buyer’s closing costs. So what if the seller has already agreed to pay the buyer’s closing costs? If this is the case, or if the buyer just simply won’t take a credit for the repairs, then the seller is left with the responsibility to do the repairs before closing.

Now comes the part that most buyers and sellers are not aware of. Any repair done in the sale of a home must be done by a licensed and bonded contractor. The seller can not do the repairs themselves. This law went into effect several years ago and applies to all real estate transactions throughout the state of Oregon. The reason makes sense when you think about it. Work done by a properly licensed contractor comes with an automatic 1-year warranty. And the bond that contractors are required to carry guarantees money is available to repair shoddy work if a problem develops and the contractor does not correct it. So buyers, sellers, and Realtors are all protected by using licensed contractors. I can, however, see that this law can become impractical if the work is super minor like replacing a cracked light switch cover, or re-nailing a fence board. I think it makes sense, in light of this law, that these sorts of minor repairs really must be done as normal maintenance on a home long before it is listed for sale. Taking good care of your home while owning it will also get you a higher price when the time comes to sell it.

This law also applies to rental properties. So if you are a landlord, you are not supposed to do the work on your rentals unless you have a contractor’s license.

The home inspection contingency is written in our standardized forms to be an easy out for the buyer. A buyer does not even have to give a reason for disapproving of the property as a result of the home inspection. They can “unconditionally” disapprove. And that’s it. The deal is dead and the buyer gets their earnest money back. So for sellers it’s a pretty anxious time. They know the buyer can back out of the purchase and they also know that they can be asked to do repairs or pay for closing costs. It’s important that this part of the sale be handled properly so that buyers buy a solid home and also so that repairs are done correctly.

Not a very seasonal topic, I know. But important. And probably another good reason to use a Realtor when you buy or sell a house.

Cheers!
Dianne

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Worth the Price Fix-Ups

If you are in the position of selling your home, and don’t have a big pile of money to make improvements, are there things you can do yourself that are affordable? You bet! With the help of www.homesalemaximizer.com, I have compiled a list of simple things you can do inexpensively. I am also including an estimated return on your efforts.

Clean and declutter, please!
This one is the most obvious. You can not image how often I go into houses where the seller has left the house dirty and cluttered and the property is a total turn-off, even if it is a nice house. Wash, clean, vacuum, make the house sparkle. Put away personal items. You’re going to be moving anyway, now is the time to start packing. Go ahead and put boxes and extra furniture in the garage. It’s OK to fill the garage in order to have a decluttered house. Estimated cost: $290. Estimated return: $1,990

Brighten the house up
Make sure that all light bulbs are working. Open the curtains and turn on all of the lights. Wash the windows inside and out. Replace dated light fixtures. (No brass!) Move furniture so that it does not block the windows. Estimated cost: $375. Estimated return: $1550.

Stage the house
Rooms look bigger when they are not overcrowded. Move furniture so that people can walk through the rooms without bumping into furniture. Think about arranging furniture into 3’s: one sofa and two chairs, one bed and two cabinets, 3 is a balance that is appealing to the eye. Consider updating rooms with new pillows or area rugs. Estimated cost: $550. Estimated return: $2,194.

Landscaping
Cut back overgrowth in your yard. An over-grown yard just screams WORK. Mow the lawn and edge it. Spread new bark dust. Weed and trim. Plant new annuals and set out fresh and bright pots of blooming flowers. Be sure to cut back trees and shrubs that overhand walk ways or that block windows. Estimated cost: $540. Estimated return: $1,932.

Repair electricals and plumbing
Fix outlets and lights that don’t work. Consider having an electrician look over your main panel and fix wiring that does not work. I can promise you that a buyer will find this stuff and ask you to do it anyway. Get it done now and make your home not only ready, but fully functional. Fix dripping faucets and leaks under the sink. Be sure to scrub away any mold or mildew. Estimated cost: $535. Estimated return: $1505.

Replace or shampoo worn and dirty carpets
New carpet has a huge impact on a home. Everything else in the house can be out of date, but with new carpet the house feels fresh. In addition, soiled carpet is a big source of odors which are a big turn off. Stained carpet is also a problem. No one wants to buy someone else’s dirt. Estimated cost: $647. Estimated return: $1,739.

Even if you are not about to sell your home, consider doing these do-it-yourself fixes. You too will enjoy a home that is clean and well cared for.

Let me know if you have any questions or other ideas,
Dianne