Category: Selling Advice

Advice for home sellers in Lake Oswego, Oregon

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News & Notes

Real Estate News ~

Have a wood stove?  Planning to buy or sell a home with one? Note that beginning August 1st, 2010, in an effort to control emissions from smoke, when selling a home you will be required to remove the wood stove if it is “uncertified” by the DEQ.  Here is a link for more information: Woodstoves in Oregon

Greece and Mortgage Rates – MBS Quoteline reports: ” Despite stronger than expected economic data, the financial situation in Greece held the greatest influence on mortgage rates this week. A flight to quality and prospects of slower economic growth in Europe were favorable for mortgage markets and negative for the stock market, and mortgage rates ended the week lower.”

Current Mortgage Rates and Mortgage Insurance Updates – According to Pat Goodell of Academy Mortgage:

  • “Some of the Mortgage Insurance companies have gone to tiered pricing based on credit scores which is good news to those with good credit scores.  Mortgage insurance companies also will now allow “up front mortgage insurance” (in lieu of monthly mortgage insurance) to be paid by the seller.  The potential advantage of this is that the seller can pay the up front mortgage insurance as part of any allowable closing costs that a buyer might negotiate for a seller to pay.  Then the buyer has no mortgage insurance premium to pay as part of their mortgage – this may or may not be an advantage to the buyer depending on their situation; but it does help for qualifying by reducing their monthly mortgage payment.  There are qualifying parameters for this option and the lender also has to approve this option as well.”
  • “Interest rates are holding steady now with the 30-yr fixed still hovering around 5% — 30-yr fixed today is actually available at 4.875% with 0 pts, depending on the buyer’s qualifications.”

    • Community Notes ~

    Farmers Market opens this Saturday, May 15th in Lake Oswego. (yay!)  This is the 10th Anniversary Celebration.  You can find the food  & fun at Millennium Plaza Park from 8:30AM – 1:30PM on Saturdays through October 9th.   Local musical group, Southern Nights, will perform from 10:30AM till 12:30PM at the kickoff, and the Bike Gallery will be there to check your kids’ helmets!

    May is Sustainability Action Month. Take advantage of these local events:

    • Free screening of the film Deep Green with local film-maker Matt Briggs. This is an insightful look at “uncovering the best people with the best solutions for “de-carbonizing energy and restoring the natural world.” It will be held Saturday evening, May 15th at 7:30Pm at the Lake Grove Presbyterian Church, 4040 Sunset Drive.  Bring your family and friends!
    • Get a good look at Lake Oswego’s Century Trees on the Century Tree Bike Ride, May 22nd.  The bike ride is hosted by the Planning Dept.’s Green Team, and more information can be had by contacting Laura Weigel at Lweigel@ci.oswego.or.us .

    Lake Oswego’s city council created the Sustainability Action Board (SAB) in 2008. For more information on sustainability, visit: The Sustainability Resource Page

    To Move or Not To Move / Lifestyle Options for Older Adults , an educational program for seniors and their families is designed to give information on housing options and resources in Lake Oswego.  You are invited to attend on May 16th, from 2:00PM to 5:00Pm at the Lake Oswego Adult Community Center, 505 G Avenue.

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    Double-bottom-line Thinking

    I have had an idea swirling around in my head for a few weeks now. It comes from my personal experience with clients as they interact with the current economy and the housing market. This idea really jelled in my thinking when I read Ted Leonsis’ article in the April 12th issue of Newsweek.

    My observation with clients, both buyers and sellers, is that there is a tremendous amount of attention and focus put onto the dollars involved in buying and selling. This is nothing new. Real estate is, for most people, the largest financial investment they will make in their entire lifetime. So what is different is that the weight being put onto the investment is in many cases causing people to forget that real estate is also about a home. Yes, I am addressing this to houses that people live in and not to rentals or portfolio properties. What I am seeing is that people are so driven to get the right deal, that they are passing up properties that are far superior in amenities.

    Ted Leonsis is a former vice chairman of AOL and the author of a book, The Business of Happiness. His theory is that a company who wants financial success needs to not only think in terms of making money, but also in terms of doing what is often difficult but what is ultimately the right thing to do. This in turn keeps the company on a path of happiness that will ultimately also bring greater financial success. In other words, there is a link between pursuing happiness and also finding financial success. His case in point is the recent move by Google to route Web users from China to an unrestricted search page based out of Hong Kong. While this move may, in the short term, stifle the financial growth of Google in the biggest Internet market in the world, Leonsis believes that in the long term it will have greater financial success by placing its core values to do the right thing for humanity ahead of it’s short-term interest in its bottom line.

    “Google aims to make money, of course, but it also has a motto (“Don’t be evil”) and a higher calling: to organize the world’s information and make it universally accessible. By refusing to participate in Chinese censorship, the company imperiled billions of dollars in future profit. More important, it protected its status as a happy company at peace with its values—and happy companies are more, not less, likely to continue being successful.”

    Ted Leonsis goes on to call this way of looking at business double-bottom-line thinking. In other words, success should be measured by the financial growth of the investment, but also by the positive out come for the happiness of human beings.

    It is probably my liberal arts education coming out here, but I find this to be really important. As a Realtor, when I represent buyers my job it to get them the best possible deal. When I represent sellers, by job is to get them the highest possible sales price. I never loose focus on that. But it is hard when I have a buyer who is saying to me “show me foreclosures and short sales because I’ve heard that they are the best deal”. Or when a seller passes up a lower offer that is all cash for a higher offer with a buyer who is only putting down 5%. Focusing strictly on money may cause you to pass up the house that was lovingly cared for and is priced $10,000 higher than the beaten up foreclosure down the street. And in this lending environment, cash buyers are a real blessing.

    I guess I think that there is value that needs to be also given to things like timing (short sales take months to close, if they happen at all), good will (they buyer will take the house with the big pile of yard debris in the yard because it doesn’t bother them to have to clean it up), and livability (the big kitchen is ideally designed with loads of cabinets and counter space). For some reason this economy and this real estate market has got both buyers and sellers fixated on money, money, money. And that has them acting blindly to happiness. I thinking buying the right house, where you will live and grow, is just as important as buying the right deal.

    The perfect sale does both: the house will be bought or sold at the right deal and it will also be more than a house, it will be a home. That is double-bottom-line thinking and that is a good way to approach both a property purchase and a property sale.

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    News & Notes

    State of the Market:

    • Have We Hit Bottom? The experts agree that generally speaking, the country has “hit bottom”, with various areas lagging behind a bit.   CNN.Money.com predicts that the Portland area will hit bottom in Q3 of this year. Our latest RMLS Market Action Report for the Portland area indicates that Portland metro area closed sales increased 18.4% when comparing 2009 vs 2010. Pending sales rose 45% and new listings rose 12.4%. The average sales price declined 8.5%.

    (Money Magazine) — The drama is nearly over. After a decade of extremes — the ebullient highs of the real estate boom, then the devastating lows of the bust — calmer forces are beginning to prevail in the housing market.

    • Local Lake Oswego Data The RMLS Market Action Report lumps West Linn and Lake Oswego together, but here is some interesting data:
      * In February 2010 the average sales price was $457,700.
      * The average time on the market was 153 days.
      * Pending Sales rose 52.7% in Feb 2010 as compared to Feb 2009.
      * The average sales price has declined 9.7% in a rolling 12-month equation (i.e. 3/1/08 – 2/28/09 compared with 3/1/09 – 2/28/10)
    • Rates are Rising I have clients asking  “Is this the right time to buy or should we wait?”  One thing we know is that rates are rising. Right now they are still in the 5% range…  actually they are up a bit today at 5.125% but overall they’ve been fluctuating between 4.875% and 5.125% for 30-yr fixed.  As for more foreclosures to come, and prices lowering… interest rates are rising, some say 7% is possible NY Times… so if you ARE planning to finance, all the experts agree that this is the time to be buying, because even if prices go lower, the fact that the interest rates go up effectively nullifies your benefits.
    • Portland Area Rating Improves “Mortgage insurance companies have upgraded Portland’s property value housing trends, meaning that they predict values to be stabilizing in the Portland market.”  Pat Goodell, Academy Mortgage
    • Tax Credits For first-time home-buyers and “moving-up” buyers, there is still time to find a property you love & get a mutually-agreed deal in place before April 30th. So….  hang in there if you are still looking for that “right” one.  Work with your Realtor to narrow the field, or give Dianne or me a call if you are not working with a Realtor.  (I love working with Buyers…. it is actually the reason I originally got into real estate.)
    • USDA Loans USDA anticipates running out of funds to lend by end-April 2010.  If you are thinking about rural properties and considering a USDA loan, now would be the time to ink an offer.
    • FHA Mortgage Insurance Premiums Rising FHA’s upfront (financed) mortgage insurance premium increased to 2.25% effective April 5. And/but, if you are anticipating taking advantage of an FHA loan, don’t fret too much. You WILL now have the higher premium, however,  it’s not anything that should get you in a tizzy, as it will make very little difference in your mortgage payment.  For example, on a $300,000 loan amount, your payment will only increase by approximately $8./month adding in that higher mortgage insurance premium.  (This according to Pat Goodell of Academy Mortgage  503 380 0953.)
    • “The Deal” One thing I am noticing is that many people are becoming so enamored with “the deal” these days, that some are missing the point of why they decided to purchase to begin with, so I am simultaneously always trying to meet my clients needs & desires in a *property* (i.e. what they are trying to accomplish for themselves in their lives w/the purchase… what they truly like), while at the same time being cognizant of the “deal factor” for them.  Keep in mind these things regarding “deals”…  there are basically three kinds:
    1. People who are pricing their homes to sell. They have their own circumstances (down-sizing/relocation/up-sizing/on & on & on), and they are wanting to move on in some fashion.  There are plenty of these out there these days, especially as home owners look around and face the fact that they are now competing with so many homes in or approaching foreclosure.  There are some very real advantages to buying your home from these folks.  Some include: Often these homes are in tip-top shape / You are dealing directly with the owner of the home and as long as the agreed-upon sales price does not dip below what they owe on the property, you are in “Pending” status when you reach mutual acceptance, and /You are negotiating only with the Seller.  / You proceed through a normal closing process if you are taking out a loan, and notwithstanding any negotiations or hoops you need to jump through for the underwriter, you will most likely close in 30-45 days.
    2. Short Sales. These homes’ owners owe more to the bank than what the property is worth in today’s market. The bank is agreeing to take less than what is owed from the Seller.  There are many, many banks in existence and each has its own methods and processes, so there is no uniformity of what to expect, with a few exceptions that I will get into in a moment.  There may be more than one bank involved if there is a second mortgage or more. There are a few things that you can expect, and they are:   * Even if the Seller accepts your offer, the bank is the one (or ones) to give final approval considering that what they will receive is less than what was contracted with the Seller.   ***The bank (s) will usually have paperwork that you must sign if you want to be in the running that will change how the property proceeds through the sale process including: Notifying you that they will only accept an earnest money check & no promissory notes/ They will keep your money and wait to see how many other offers they receive / They will not give you a time line on when they will respond to your offer / You are usually on your own with regard to any repairs / It is usually several months before you find out if your offer was the one accepted & get to proceed to close / During this process the property very often stays in “Active” position on RMLS / Very often the paperwork you must sign includes a provision wherein the bank retains the right to accept another offer right up to closing.   ***For these reasons,  I counsel clients that they must REALLY be in love with a property to proceed through this process.  Also, depending on the property, you may be entering territory wherein you know that you will be competing with other offers, so the best advice, if this is the case, is to make this your best offer… especially if you plan to sit out the long process and want to have a happy ending.  Don’t try to “wing it”… these are complicated times & even the professionals involved are still feeling out the landscape.  There are all kinds of people calling themselves “experts”.  Make sure you know what you are doing and ask for licenses if you think people on the periphery are operating outside of their scope of expertise. Talk to your Realtor as to what your options are, and rely on that trusted professional relationship for guidance.
    3. Bank-owned properties. These homes have usually been through the short sale phase unsuccessfully.  The property has either been on the market & not sold, or the owners opted not to try a short sale and have simply stayed in the property until they had to move on as the bank proceeded through their legal remedies to regain the property due to non-payment.   These properties are sometimes in sad condition due to hardship (i.e. deferred maintenance), but many times these days, they are in very good condition… a sign of the times & the large numbers of otherwise responsible homeowners who simply found themselves in an untenable position through job loss or other factors. The thing to remember about these properties is that the price is ALWAYS lower than either short-sales or standard “good deals”. The bank wants to move on and prices the home low.  The bank is now the Seller and usually acts just like a normal Seller, i.e. Negotiating (tho usually not for repairs)/ accepting or rejecting an offer/Moving on to close with the property going to “Pending” status once it’s mutually agreed-upon/Proceeding through a normal closing process for the Buyer. For this reason: Investors and others are waiting in the wings to pounce on these very often with cash offers, so you have to be quick, and you want to be very careful about low offers, though this can sometimes still be a viable option. Talk to your Realtor about options as they will vary from property to property.

    Hope this info is helpful!

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    Financial Returns on Remodeling

    ImageChef.comI think this time of year is rather conducive to taking on remodeling projects. Spring cleaning is part of it, but timing is also important. If you aren’t headed out of town for spring break, you may be considering taking on some projects around the house. And if you are thinking that you are going to sell your home this year, you are certainly looking around and wondering what you need to do to get your house ready.

    The National Association of Realtors publishes an annual report on cost vs. value. This year it was published in the January issue of Realtor Magazine. The report breaks down the results by regions of the country: after all labor and materials costs do vary depending upon location. Oregon is in the Pacific region of this report. I also want to point out that every project is going to have a range of value. A kitchen can be remodeled for a couple of hundred dollars with a can of paint and a weekend of your time. Or it can be remodeled for $100,000 with slab granite, sub-zero stainless refrigerator, and commercial quality appliances. This report is based upon “averages”. In the case of kitchens and baths, it also shows “upscale”.

    Here is a look at the estimated current cost vs. the resale return on the money spent:

    Job Cost Resale Value Cost Recouped
    Additions
    Attic Bedroom $60,135 $52,749 87.70%
    Back-up Power Generator $16,351 $9,462 57.90%
    Bathroom $47,052 $32,057 68.10%
    Composite Deck $16,956 $13,922 82.10%
    Wood Deck $12,838 $11,744 91.50%
    Family Room $100,023 $73,551 73.50%
    Garage $69,912 $51,882 74.20%
    Master Suite $124,579 $90,616 72.70%
    Sunroom $83,463 $45,245 54.20%
    Two-Story $184,839 $143,073 77.40%
    Upscale
    Bathroom $88,000 $58,557 66.50%
    Composite Deck $41,428 $29,687 71.70%
    Garage $102,955 $68,334 66.40%
    Master Suite $257,770 $164,278 63.70%
    Remodeling
    Basement $74,974 $68,648 91.60%
    Bathroom $18,864 $14,517 77%
    Home Office $31,479 $17,801 56.50%
    Major Kitchen $63,803 $53,923 84.50%
    Minor Kitchen $23,210 $21,991 94.80%
    Upscale
    Bathroom $59,456 $39,648 66.70%
    Major Kitchen $120,379 $89,764 74.60%
    Replacements
    Entry Door $1,353 $1,732 128%
    Roofing $24,712 $18,839 76.20%
    Vinyl Siding $13,114 $10,674 81.40%
    Vinyl Windows $12,760 $11,328 88.80%
    Wood Windows $13,804 $12,175 88.20%

    These figures are calculated by NAR and I do find myself wondering about some of them. For instance, the return on a roof is shown to be 76.2%, but I know from experience that a house that needs a new roof is very difficult to sell. So it will take longer and it will receive low offers because of the roof. So I personally think that replacing a roof is critical prior to selling in a way that goes beyond the simple return on the cost of the new roof. However, for the sake of comparison, using these figures it is easy to see that the return on a wood deck is 91% whereas the return on a composite deck is 82%. So if the deck is being replaced purely for the purpose of selling the home, it makes more sense to replace the deck with wood.

    My final thought on all of this is that you will see that there is only one item that returns `100% of its cost: replacing the front door, which actually returns 128% of the cost. Everything else, even the items with the higher returns, do not return 100%. To me, this means that if you are going to do remodeling, additions, and improvements to your home, do them so that you can enjoy them. Do them now. Don’t put them off. The value of your remodeling is something that you will enjoy every single day that you live in your home. And that is a value that goes beyond anything you can calculate in dollars.

    Let us know if you have any questions. Linda and I are always here to help.

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    Lake Oswego Market Trends

    I thought it would be interesting to do a couple of snap shots of various price points in the Lake Oswego real estate market. These each cover all listing/sold activity for the last six months and are divided into value ranges. These are for single-family, detached homes and are all located in the 97034 and 97035 zip codes.  Click on any of the graphs to see a larger, easier-to-read version:

    Houses priced from $200,000 to $400,000

    • 166 were offered for sale
    • 88 sold
    • There is currently a listing inventory of 6.3 month
    • The average sales price was $324,773
    • Among the sold homes, the CDOM (cumulative days on the market) averaged 129 days

    Houses priced from $400,000 to $600,000

    • 156 were offered for sale
    • 71 sold
    • There is currently a listing inventory of 10.7 months
    • The average sales price was $480,964
    • Average cumulative days on the market to sell was 165 days

    Houses priced from $600,000 to $800,000

    • 76 were offered for sale
    • 36 sold
    • There is currently an inventory of 10.7 months
    • The average sales price was $701,924
    • Cumulative days on the market to sell was 234

    Houses priced from $800,000 to $1,200,000

    • 76 were offered for sale
    • 30 sold
    • There is an inventory of 17.2 months
    • Average sales price was $947,899
    • Cumulative days on the market to sell was 373 days

    Homes priced $1,200,000 to $2,200,000

    • 52 were offered for sale
    • 16 sold
    • There is a 24.5 month inventory
    • Average sales price was $1,552,281
    • Cumulative days on the market was 323

    I like these little snap shots.  It allows you to visually see the market.  It is very apparent that the first-time-home buyer tax credit that was originally supposed to expire in November had a big impact on the less expensive homes (we will probably see something similar this April with the extension).  It’s also very easy to see that less expensive homes sell more easily than more expensive homes.  Cumulative days on the market in the expensive homes is out and out ugly.

    One reason for doing this post, this week, was so that I could play with the new statistics function being offered to Realtors by the RMLS.  Our local multiple listing service was the first in the entire United States to go completely web-based about 8 years ago.  Since then they have continued to push the functions of the website and the new statistics function is the latest enhancement.  It still has some limitations, but it is really cool.  Linda and I can now take snap shots of pretty much any part of the market, depending on what our clients needs are, and produce these spiffy graphs and statistics.  Besides being fun, I think it’s going to be extremely helpful.

    I hope you found something useful in the information presented today.  If you have any other areas of the market you’d like studied or questions you’d like answered, just let us know.

    Dianne

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    Linda’s “News & Notes”

    1) Some Interesting Updates on the Portland Area Market:

    –       (According to RMLS)

    • Home sales in the Portland area showed marked improvement when compared with the same period (December) a year prior. “Closed” sales were up 52.6%, “Pending” sales rose 40.9%, and “New Listings” rose 11.9%.
    • In addition, the average sale price was down 2.5% compared to Dec. 08.
    • The average sales price for the 12-month period of 2009 was down 12.1% from the previous year.

    2) Tax Credits: The “First Time Home Buyers” tax credit was extended to this Spring (yikes… getting close) and there has been an additional tax credit extended to those “Buying Up” who have lived in their current home for five years and are buying a property of less than $800,000.  Both of these tax credits expire in April: The contract must be inked by April 30th, and the closing must be by June 30th.  If you or someone you care about are considering taking advantage of this amazing opportunity, you really must start looking for a home now to make the timeline.

    3) Interest Rates to Rise: According to Carrie Bay of DSNews.com (among many others), interest are projected to begin rising, and have risen .25% already within the past month.

    4) F.H.A to Raise Standards for Mortgage Insurance: No date has been set yet, but the word is “summer”. (ANOTHER reason to put your home-buying plan in motion now…)

    –      (excerpted From David Streitfeld of the NY Times)

    • Borrowers who get an F.H.A.-insured loan will soon have to pay a higher initial insurance premium. The new premium will be 2.25 percent of the value of the loan, up from 1.75 percent. 
    • Starting this summer, sellers will not be able to offer as much help to buyers to pay their closing costs. The maximum amount of assistance will drop to 3 percent of the value of the property, from the current 6 percent.
    • Left largely untouched by the changes is the most controversial aspect of the agency’s program: a provision allowing buyers to make a down payment as low as 3.5 percent. Private lenders these days require at least 15 percent.
    • Borrowers who want to put the minimum down will now be required to have credit scores of at least 580. Previously, there was no minimum score. (This is a relatively decent bar though, so this rule may have little effect.)

    5) Attention Investors: Yay! HUD has decided to waive the 90 day seasoning financing contingency for buyers!

    -(From Pat Goodell of Academy Mortgage ~ 503 380 0953)

    Effective February 1st,  2010, there will no longer be a requirement for a seller of a property to be on title for 90 days or more in order for approval of an FHA backed loan. This is incredible news, since the majority of buyers in today’s market are FHA buyers! The 90 day seasoning issue has long been an issue for investors and agents when working with short sales. This is changing on Feb 1st. The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.”

    –          ***Linda’s note: There are a few minor restrictions on this.  Let me know if you’re interested & I’ll send you the entire document with more detail.

    6)Credit Card Companies Get Slapped w/Restrictions: We all know how hard the new mortgage guidelines have hit some potential home-buyers.  Sometimes it seems like every time you turn around the consumer is facing yet another hurdle from the banking industry.  Well, this time the consumer is being offered protections that should make it easier, less expensive, and less confusing to do business with, or work to pay off credit card companies.   Here’s an excerpt from the Federal Reserve’s Announcement:

    The Federal Reserve Board on Tuesday approved a final rule amending Regulation Z (Truth in Lending) to protect consumers who use credit cards from a number of costly practices. Credit card issuers must comply with most aspects of the rule beginning on February 22.

    “This rule marks an important milestone in the Federal Reserve’s efforts to ensure that consumers who rely on credit cards are treated fairly,” said Federal Reserve Governor Elizabeth A. Duke.  “The rule bans several harmful practices and requires greater transparency in the disclosure of the terms and conditions of credit card accounts.”

    Among other things, the rule will:

    • Protect consumers from unexpected increases in credit card interest rates by generally prohibiting increases in a rate during the first year after an account is opened and increases in a rate that applies to an existing credit card balance.
    • Prohibit creditors from issuing a credit card to a consumer who is younger than the age of 21 unless the consumer has the ability to make the required payments or obtains the signature of a parent or other cosigner with the ability to do so.
    • Require creditors to obtain a consumer’s consent before charging fees for transactions that exceed the credit limit.
    • Limit the high fees associated with subprime credit cards.
    • Ban creditors from using the “two-cycle” billing method to impose interest charges.
    • Prohibit creditors from allocating payments in ways that maximize interest charges.

    Consumers can learn more about changes to their credit card accounts by accessing a new online publication. “What You Need to Know: New Credit Card Rules.” It explains key changes consumers can expect from their credit card companies as a result of the new rules. The Board plans to release additional “What You Need to Know” publications in conjunction with other major rulemakings

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    First Impressions

    Front doorFirst impressions seems like the ideal subject for my first editorial post of 2010. It’s time to take that big step forward and I don’t know about you, but I want to make the most of it.

    So, as a seller of a home, how can you maximize the first impression that your home gives? Of course you want to mow the lawn, clean the roof, trim the bushes and trees, but is that all? And, in fact, are those items even the most important? No, they aren’t. I believe that the single most important area of your home that you need to spiff up and get ready, is the front door.

    When ever I take a new listing I give my little talk about getting the front door ready. Think about it. Typically a buyer is waiting at the front door while the Realtor is finding and opening the lock box. The buyer will pause there for a minute or two and have the opportunity to look at every little detail. Is the area clean? Is the paint fresh? Or is there a sofa and a big bag of Alpo on the front porch? And if there is a pile of rubbish to step around, what do you think that the buyer is anticipating finding inside? I really believe that buyers make their decision about the house at the front door. If they like what they see, they go into the house seeking to reinforce that opinion. They go inside looking for things to like. If they have been put off at the front door, they enter the house feeling critical. Will the bag of Alpo be accompanied by crates of rabbits and a barking dog chained in the back yard? This is just a very, very important place to spend a little time getting your home ready for marketing.

    First I recommend a good cleaning and fresh paint. Get out a scrub brush, some soap, and take the time to really clean. Wash not only the door but the threshold, the weather-stripping, the light fixtures and everything around the door. Sweep the porch. Wipe away the moths and spider webs around the light fixture. Make certain the paint on the door is fresh with no scuffs or scratches.

    Make sure the door knob and the key work easily. You may want to consider updating the hardware for the knob and the lock.

    The National Association of Realtors publishes an annual report that is specific to every region of the country telling what sort of re-sale return can be expected from remodeling. The only item on the entire list, including kitchens and bathrooms, that returned of 100% of the investment was the purchase and installation of a new front door. Seriously. It will make you money to do this right. The estimated cost in the Pacific region is $1353 to install a new door and a return on the sale of your home of $1732. That’s a return of 128% on the original investment.

    Once you get the door clean, painted and ready, do a little staging of the exterior entry area. Be careful not to crowd the area with too much. People should not have to avoid or step around anything you display. I recommend a pot or two of seasonal flowers (at this time of year you can display primroses and pansies) or perhaps a wreath on the door. Be careful with holiday decorations not to leave them on too long, but they are certainly appropriate during each holiday of the year.

    Take a little time as you get ready to sell your home, and be sure to take time at the front door. Your efforts will help you to realize a better sale and probably even make you some money.

    Looking forward to a great 2010, Dianne

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    Looking Back at the LO Real Estate Market of 2009

    Red man statueI think the best thing I can say about the Lake Oswego real estate market of 2009 was that it wasn’t 2008. Remember a year ago? We’d seen the collapse of some of the Nation’s largest banks, the first bailout/stimulus package had been put into play, and the entire Nation was in a wait and see mode as the country transitioned to a new Presidency. It was a very difficult time. And it makes today’s market feel, well, pretty darn good.

    Let’s start by looking at the Portland Metro area.

    • At this time last year the RMLS was reporting 19.2 months of inventory.  In other words, to sell all of the active listings at the pace that properties were then selling, it would take 19.2 months.  Today that same inventory is just 7.1 months.  Whew!
    • Closed sales from November of 2009 (the most recent report available at the RMLS) are 72.4% greater than they were in November of 2008.  Don’t get too excited about that one.  It’s a reflection of just how horrible sales were in November of 2008 and how great they were comparatively in 2009.  Putting better perspective on it requires doing a 11 month average of January-November for 2008 and then 2009.  When this is done the closed sales are greater in 2009 by 2.6%.  Still, an improvement.
    • November of 2009 compared to November of 2008 has pending sales up by 19.9%
    • November of 2009 compared to November of 2008 has new listings down by 7%
    • We have continued to see a decline in home values of 11.4%, year over year.

    Looking at the specifics of Lake Oswego:

    • There are currently 396 single-family homes for sale and 130 condos.  Of the single-family homes, 96 are priced at over $1,000,000 and 54 are priced at $350,000 or less.
    • There are currently 49 single-family homes and 12 condos with pending sales.
    • In the last 12 months 393 single-family homes and 95 condos have sold and closed.  Of those 42 cost $1,000,000 or greater and 93 were priced at $350,000 or less.  In those high-end homes, 7 were priced over $2,000,000.
    • At the pace that $1,000,000 and greater homes are selling, based upon the performance of the last 12 months, there is still 2.2 years of high-end inventory.  And that also means that the less expensive homes ($350,000 or less) has just 7 months of inventory.
    • The average sales price is $419,300.
    • Property values saw a decline of 12.9% in the last 12 months.
    • Average days on the market (length of time between listing a home for sale and accepting an offer) is 163 days.

    I just can not leave this subject entirely without doing my compulsive comparison of affordable homes in Lake Oswego versus Sellwood, a neighborhood in SE Porltand.  I like to do this because I used to live in Sellwood, so I think I have a good idea of the area, and because I remain convinced that Lake Oswego is misunderstood by buyers.  Many people assume that Lake Oswego is just too expensive for their budget.  This is, in fact, not true at all.  At this time there are currently 54 houses for sale in Lake Oswego priced at $350,000 or less, whereas in Sellwood there are currently just 27.  Lake Oswego is a good place to find an affordable home.

    • The least expensive home in Lake Oswego is a short-sale property that needs work.  It’s priced at $169,000 and has 1382 square feet with 3 bedrooms and 2 full baths.  It’s on a quiet street near Waluga Junior High School.  Offers have been submitted to the lender for 3rd party approval.
    • The least expensive home in Sellwood is a short-sale property that is being sold “as is”.  It looks to me like it needs some work but is in better condition than the LO property.  It is priced at $209,000 and has 850 square feet (120 of that in the basement) with 2 bedrooms and 1 bath.  It too has received an offer and is waiting for lender 3rd party approval.
    • The most expensive home in Lake Oswego remains the 5.5 acre private island in Oswego Lake that is priced at $19,500,000.  Built in 1929, it has 13,500 square feet with 5 bedrooms and 6 1/2 baths.  There are waterfalls and a lake side pool.  To arrange a showing, buyers must provide verification of funds. Yep, LO has those kinds of houses too.

    We will never be able to foresee the future.  We can only look at the present and the recent past to get an idea of what to expect ahead.  My prediction is that the tax incentives for 1st time buyers, and now for repeat buyers as well, will continue to boost sales.  I think people intending to sell who are serious will continue to price their homes at reasonable levels that will attract an offer.  I also think that people have been beat up in the last couple of years and realize that many mistakes were made.  Even if the economy improves, I predict caution from home buyers for many years.  People will shop carefully and make home choices carefully.  I will also tell you that from my perspective, having survived the housing market of 2008, and now the market of 2009, I am really looking forward to 2010.

    Linda and I want to wish you a safe, healthy, and happy New Year.

    Yours in real estate, Dianne

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    Notes & Scribbles

    Tax Credit ~ The First-Time Home-Buyers’ $8,000.  Tax Credit is, of course, the talk of the town (the nation, actually). It is acknowledged that it is and has been helpful in spurring the real estate market (activity in related price ranges is steady if not occasionally feverish… especially lately!)   There is much talk about extending the deadline from the current November 30th date to an as-yet-undetermined date in 2010.  While it is generally agreed that the housing market is turning the corner, and a large part of this growth is related to the tax credit, there is also concern being expressed about dispersing more government money in light of recent history.  So… nothing is decided as of now. There are talks about plans to:

    • Extend it to all home-buyers,
    • Not extend it at all,
    • Increase it to $15,000.,
    • Extend it and keep the terms the same,
    • Offer it only to service members who have been out of the country,
    • Etc.

    The important thing to remember if you are a first-time home-buyer, or care about one, is that right now there is an opportunity to get an $8,000. tax credit. That means real money coming to you when you file for 2009.  We do NOT know how the debate will play out regarding extending or not extending it… AND right now there is still time to take advantage of it, but you must act now.

    Oil Tanks (Reminder & Update) ~ The standards for levels of contaminants are under review. In particular, ethyl benzene and naphthalene have been changed to a “carcinogenic” classification, and therefore cleanup requirements are also changing. There is now concern over the possibility of  fumes potentially penetrating a home from underground & causing harm. Remember, if you have an oil tank underground on your property that has not been decommissioned, or if you are a Buyer considering a property with one: Underground oil tanks have a life of approximately 40 years.  After that, they leak… and what they leak is toxic.  Homeowners can be held liable for damage to soil from leaking tanks, and therefore, proper soil testing and decommissioning through a DEQ-certified environmental service is the wise choice.  If you are a Seller in this situation, I would highly recommend just doing this now and getting it out of the way.  It makes your home more attractive to potential Buyers, removes an objection, and protects you and the environment at the same time.

    Loans ~ There are truly all kinds of loans out there right now for all kinds of Buyers.  FHA loans are a  current favorite, and the FHA 203 (b) is a little easier to qualify for than most conventional loans these days. There are also “Flex”  loans for teachers (administrators & school nurses can also apply!), police, and firefighters. Other than the FHA loan I mentioned, you usually want a credit score of 640 or higher, and for all of them you’ll need 3 to 3.5% down. Talk to your favorite mortgage broker for more information, or give me a call and I can refer you to some great resources.

    Homes on Slopes ~ Some precautions, in light of current information gained from recent slides in Portland, Lake Oswego and surrounding areas are worth noting:

    • At no point should drain water be discharged onto slopes in an uncontrolled manner. Investigate energy dissipation devices to prevent erosion at discharge points.
    • Make sure that any fill used on the slope is “engineer-fill”.  Not all fill is able to handle the specialized drainage requirements of sloped properties.
    • Make sure gutters remain clear in order to prevent over-saturation in areas not able to handle runoff.
    • Keep drainage ditches or berms clear during the rainy season so that they do not direct water into areas where erosion & damage may occur.
    • Keep drain inlets, outlets and weep holes at foundation, retaining walls, driveways etc clean at all times.  Remove debris to prevent clogging.
    • Notice any wet spots on the property.  This may indicate either natural seepage, or leaking water or sewer line problems. Seek professional advice immediately.
    • Regularly check irrigation systems. Drip systems are preferred on hillsides.
    • Make sure roof drainage is not connected to a subsurface disposal system unless it has been approved by a geotechnical engineer.
    • Keep water from accumulating next to foundations, retaining walls or basements.
    • Guard against over-saturation on the hillside, as once this has occurred, damage can result very quickly and without warning.
    • Seek the advice of a good Engineering firm. One source is:  GeoPacific Engineering, Inc.

    Posted on

    Why Open Houses Work

    open house signThe open house, a long standing tradition for marketing and selling a home, or a total waste of time?  It’s actually a pretty controversial subject among Realtors.  Some believe in them and others refuse to do them.  I fall into the first category.  I hold open a house pretty much every Sunday and some Sundays I will do a couple of open houses.  I make a commitment to people who list their homes with me that I will promise one advertised open per month, at a minimum.  I will do more if my time allows.  This commitment keeps me pretty busy.  It means that I do LOTS of open houses.  And that is probably why I think that they work.

    I would estimate that I sell one house per year that is directly a result of my open house efforts.  In June I had an offer written by another Realtor after her clients found my listing at an open house.  That open house was how I sold my listing.  Last Sunday I had an open house and I am now in very strong verbal discussions with another Realtor, again because his buyer came through my open.

    Please note that I said that I do “Advertised” opens.  Sure, I like meeting the neighbors, but I want people coming through who already know the price, how many bedrooms there are, and are actually buyers who are wanting a new home.  I think advertising is one reason that my opens are successful.  While I used to do a newspaper ad with each open, I have shifted my marketing to the Internet.  I advertise my open houses on Craigslist, on the RMLS, and when the house is in Lake Oswego, on the propertyblotter.

    Let’ s put it this way.  If I didn’t believe in open houses, I’d never do them, right? And then it is a no brainer that I could honestly say that they don’t work.  How can something work that is never tried?

    I also feel that in this economy, Realtors have to go back to basics.  In a hot market, where homes are selling quickly, homes will sell with just some simple Internet exposure in the RMLS.  In a slow market that is not enough.  There are so many houses for sale, and so few buyers, that just being a part of the inventory is not enough.  A Realtor has to use every possible tool to get exposure for a proprety.  I owe it to my clients to work on their behalf and use all of the tools in my arsenal.  And, as I have stated above, I know from experience that open houses work.

    Watch for my signs.  I’ll see you on Sunday!

    Dianne