What James Bond Can Teach You About Willamette Valley Real Estate

With That Suit & Tie, James Bond Resembles A Well-Mannered Realtor

Compared to the life of famed superspy James Bond, buying or selling Willamette Valley real estate is dull and monotonous, right? Au contraire. You might be surprised to see how such a  comparison actually sizes up.

Click here or on the play button above to hear the audio podcast of this article.

Not So Mundane, After All
How could the seemingly routine tasks associated with Willamette Valley real estate possibly compare to the life and adventures of ultra-suave Agent 007? Initially, it seems like a ridiculous question. Of course Bond’s life is far more treacherous, risky and ‘on the edge,’ right? As we’ll soon learn, not exactly. Buyers and sellers of Willamette Valley real estate have a lot more in common with the famous spy than first meets the bullseye.

Willamette Valley Real Estate is More Daring Than You Might Think

Deceptively Daring
Many actors have played Agent 007 in film, yet each brings to the Bond character their own unique imprint on the multi-faceted Bond persona. But while each person playing 007 is unique, in each iteration of the well-known agent we recognize Bond’s uncanny ability to ‘land on his feet’ and ‘avoid being bested,’ while inching (or sometimes speeding) toward his well-defined goal. Let’s examine some of the super spy’s cinematic character traits and how they might relate to your next Willamette Valley real estate transaction.

Spies & Realtors Both Use Photography to Their Advantage

Turning The Tables
To a Willamette Valley homebuyer or homeseller, ‘landing on your feet’ might not equate to jumping from a high rise building. Instead, it might mean effectively dealing with endless surprises…like a low appraisal, or poor home inspection.  It’s helpful to understand that one of Bond’s classic techniques is to shift bad odds to his advantage. Your way to ‘avoid being bested’ may not mean beating the tables at Monte Carlo like James Bond. Instead, it might be skillfully negotiating the terms of your Willamette Valley real estate transaction. And to a Willamette Valley homebuyer or homeseller, Agent 007’s ‘inching to his goal’ could simply mean patiently completing key tasks in order to close the sale. It’s nice to know that unlike the production of a Bond film, Willamette Valley homebuyers and homesellers typically complete their ‘mission’ substantially under budget and in a relatively short time span, with no loss of life or limb. This makes you arguably ‘better than Bond.’

Diamonds Are Forever…And So Is Real Estate
Here are some factors that make the so-called ‘average’ Willamette Valley, Oregon homeseller or homebuyer more daring than even Agent 007. 

Risk
Agent 007 is frequently seen as daring and a tremendous risk taker. But while it’s true some of Bond’s actions are potentially perilous, it’s helpful to realize that his risks tend to be thoughtfully calculated. 007 is usually well-armed, whether that means carrying his Walther PPK, or preparing mentally for the task at hand. If he’s without a gun, James Bond is able to adapt and improvise, like using a fire extinguisher in the middle of a firefight to provide cover and escape.

You Don’t Need A Gun to Effectively Buy or Sell Willamette Valley Real Estate

Charmingly Disarming
But if James Bond gets into a ‘jam’,  he usually has his trusty sidearm to help take care of business. Yet using a small caliber handgun to get your way is not an option for Willamette Valley homebuyers and homesellers. As a result, your options are limited to less obviously coercive means than Agent 007 can wield. Requiring the use of ‘wits, not weapons’ takes certain things off the table for you, since Oregon real estate demands non-lethal resourcefulness. By having to use safer and more creative methods of persuasion, it’s fair to say that once again, the ‘average’ Willamette Valley homeseller or homebuyer is arguably ‘better than Bond.’

It’s Wise to Effectively Manage Risk

Casino Royale
For an example of Bond’s risk reduction techniques, have you ever seen Agent 007 gamble great sums of his own money on a dice throw? The usual answer is ‘Not a chance.’ That’s because Bond virtually always plays with his government’s money, not his own. Yet you, as a Willamette Valley homebuyer or homeseller, are laying your very own hard-earned capital on the table.  So once more, in comparison you can arguably be seen as ‘better than Bond,’ or at least every bit as daring.

Even Agent 007 Might Find Willamette Valley Real Estate Challenging

Willamette Valley Real Estate Tip #1 From James Bond: Maintain Humor
A superspy like Agent 007 doesn’t  constantly walk around like a tough guy. It’s actually quite the opposite.  Bond knows how to work a room and deliver a well timed joke. ‘Breaking the ice’ to disarm and/or relax the other side with a joke takes some guts…especially when someone means you financial or physical harm.  

Savoir-faire
Savoir-faire is a French term that roughly means: knowing what to do in any situation. Those with savoir-faire respond appropriately in a wide variety of circumstances. One dictionary reference suggests savoir-faire as demonstrating “a polished sureness in social behavior.” In other words, classic James Bond behavior, whether it’s disarming a bad guy, nuclear device, or flawlessly ordering the best item off a French menu.

Ordering in French is an Acquirable Skill

Savoir-faire can be adapted to Willamette Valley real estate, where a wide variety of ‘tough to predict’ situations occur with surprising frequency.  For sellers, this could mean having a buyer’s loan fail, possibly due to buyer disqualification like a credit score drop, or job change. Or perhaps your home needs a new roof and there simply isn’t sufficient equity to pay for it. Or there’s rampant dry rot. Or severe mold. You get the idea.

How 007’s Savoir-faire Can Work for Willamette Valley Homebuyers and Homesellers
A prepared and practical approach to problem solving is what both James Bond and successful Willamette Valley homebuyers and homesellers bring to the table.  Agent 007 is able to adapt and navigate in almost any environment, whether he finds himself in a high-stakes casino in Monaco, a posh ski lodge in the Swiss Alps, or a poor fishing village in Asia, Bond knows what to do. When buying and selling Willamette Valley real estate, you can adapt and navigate in different environments, too, including such changing factors as housing inventory (which can indicate if you’re in a buyer’s or seller’s market) and fluctuating interest rates.

Just realize that no matter how things appear, some factors and outcomes are not completely determinable and sometimes virtually unknowable. For example, let’s say you’re selling your Willamette Valley home and have three offers on the table to consider. In this scenario, let’s suppose all buyers appear well-qualified and each offer is very similar to the others. Which one do you decide to accept? Which will actually close? Which buyer will be reasonable to work with? Which lender will have even-handed underwriting and not require needless delay or costs?  Working with your Realtor, you can reduce risk, perhaps by focusing on how much each buyer is willing to pay, their down payment (where a larger down payment makes it easier for them to get a loan) and even the earnest money deposit and time to your closing date. Such an analysis can help boil things down to those that might make the most difference.

Willamette Valley Real Estate Tip #2 From James Bond: Have a Backup Plan
The key is to limit your downside risk by making the best decision possible under the circumstances and remain alert. For example, if after accepting one offer on your Willamette Valley home, the buyers begin loudly complaining about minor issues, have your Realtor stay in touch with other prospective buyers who expressed interest. That way, you keep the door open for a ‘Plan B’ and later, possibly a ‘Plan C’ if initial buyers bail on your home sale.

James Bond Defines Debonair

Debonair
Agent 007 is often described as debonair. How can that term possibly apply to your next Willamette Valley real estate transaction? There are varied definitions to the term debonair, but related terms include courtesy, graciousness and having a sophisticated charm. These traits can be powerful and disarming when dealing with the other side on a home sale. An example of courtesy might mean allowing buyers to schedule a tour before closing for measuring room dimensions or determining paint colors. Being gracious could mean as a buyer you allow the home sellers an extra day to move out, particularly if their moving van broke down. Sophisticated charm might mean leaving a box of chocolates or champagne after you sell a home for when your homebuyers finally move in.

Small details perhaps, but such activities are often long remembered. If after moving out, you remember leaving priceless heirlooms in the attic of your former home, imagine how much nicer it will be to request the return of your precious items from the current owners with whom you’ve been civil and friendly. They are also more likely to even contact you if they find something you mistakenly left behind.

Willamette Valley Real Estate Tip #3 From James Bond: Secrecy
There’s good reason undercover agents are also known as secret agents. ‘Don’t let them see you sweat’ is an adage Agent 007 works with aplomb. So you don’t want to lose out on your home purchase and are willing to substantially increase your offer, yet don’t want to overpay? Keep those cards discreetly close to your vest and understand that by doing so, you’re modeling James Bond, who can definitely keep a secret. He’s a spy, after all.  

Humility
Though James Bond can swagger with the best of those who hold the ’00’ license to kill designation, he’s usually discrete and avoids attention or bragging about his prowess.  Such meekness is supremely beneficial in situations to disarm adversaries, while catching them off guard.  Agent 007 doesn’t often talk about how many people he’s put in the hospital, or his annual income. Simply by observing him, it’s clear Bond has gravitas.

Courage
Having courage when buying or selling Willamette Valley property doesn’t mean you don’t feel fear. It does involve pushing that fear aside to rise above whatever obstacle you are facing. Agent 007 pushes himself out of his comfort zone to face serious fears on a daily basis. This gets him used to feeling comfortable with the uncomfortable. As a Willamette Valley homeseller or homebuyer, once you desensitize yourself to fear, it will become easier to perform courageous acts, like counteroffering that offer you really don’t want to risk losing, or agreeing to substantial repairs in order to pass a home re-inspection and close the deal.

Be Patient
In the middle of a real estate transaction, it’s easy to be overwhelmed. To be successful, it helps to have a well defined plan executed with patience. You also should allow sufficient time for your plan to work. For example, if you’re a Willamette Valley homeseller who doesn’t receive an offer in the first few days on the market, understand that if you’ve already examined the latest market data and the average market time is measured in months and not days or even weeks, realize your anxiety may be premature. Keep cool.

‘Q’ Is On Bond’s Team to Keep Him Out of Trouble

Consult An Expert
When buying or selling Willamette Valley real estate, it doesn’t hurt to have an experienced Realtor as your own ‘Q’ to keep you out of difficult situations. An experienced Willamette Valley real estate broker is someone who has been ‘over the road,’ thereby saving you needless expense, time and worry.

So rather than having Bond’s sidekick ‘Q’ demonstrating gadgetry and armory (like a blowtorch on Bond’s Aston-Martin convertible), Willamette Valley residents can rely on the calm, cool and collected experience of a proven Realtor to more successfully navigate pitfalls sometimes found in Willamette Valley real estate. 

Do You Have Questions About Willamette Valley Real Estate?
For a free consultation, contact our WillametteValleyHomes.com sponsor, Certified Realty using the contact form below, or call them at 800-637-1950.

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The Willamette Valley’s ‘Magic’ Real Estate Number

Grasping Willamette Valley Real Estate Information Can Seem Like Drinking From A Fire Hydrant

TMREI: Too Much Real Estate Information
Sometimes absorbing the sea of Willamette Valley real estate information is more like drinking from a fire hydrant. Yet, out of all the seemingly helpful real estate data bandied about, there is one especially helpful number, which when understood, can provide near-magical clarity to both homebuyers and homesellers.

You Needn’t Be a Magician to Understand Housing Inventory

What Is It?
What is this ‘magic’ number and what does it represent? Simply put, it’s the current figure for housing inventory, typically expressed in months of projected home supply.

Listen to the audio podcast presentation of this helpful program on Willamette Valley real estate by clicking here or on the above link.

Understanding Real Estate Inventory is Not Like Playing Bingo

Housing inventory is also sometimes known as home inventory or housing backlog. Why is this number so important? Once you understand the single figure that defines our current supply of local available Willamette Valley homes for sale, you have an instant ‘snapshot’ on whether you’re in a buyer’s market, seller’s market, or more of a balanced real estate market. Armed with that information, you’re far more ready to do battle in the real estate trenches and more likely to avoid some usual minefields. 

Normal Home Supply
Among real estate experts, a ‘normal’ range for home supply in parts of the Willamette Valley is frequently cited as somewhere between three to six months. For example, if the home supply figure is three, then hypothetically our market would be ‘out of homes’ in three months, provided no new homes were placed for sale. In other words, if our regional home inventory figure is within three to six months, we’re typically experiencing a normal market, meaning one not far from a balance of supply and demand, also called equilibrium. In a way, it’s kind of like an absorption rate for how fast supply is used up.

Your Mileage May Vary
It’s helpful to understand that home inventory figures are more of an average for a region. In Oregon, major real estate regions include Portland, Bend, Eugene, Salem and the Oregon Coast. So if your property is located in Beaverton, you’re likely to use the Portland area figure as the bellwether for housing backlog. If your home is located in Keizer, you’re likely to see the Salem inventory figure as the closest approximation of local home supply. It’s also likely that your specific area could be somewhat different altogether, based on a variety of hyper-local factors affecting both demand and supply. That said, home inventory is a convenient ‘thumbnail’ sketch to help assess what kind of market you’re in.

Real Estate Inventory Resembles a Pipeline

What’s The Practical Impact of Housing Inventory?
Consider real estate and inventory like a pipeline. If more flows through it, the product is plentiful and therefore the cheaper it is to buy. So with a lower, dwindling home supply and the spigot turned down, the reverse is true. That’s when the local real estate environment favors sellers, because there are more buyers and it’s considered a ‘seller’s market.’ In that case, expect a short market time and an environment where homesellers receive multiple offers, often at or above listing price. If the supply of homes is higher, it’s considered a ‘buyer’s market.’ This means you can expect a longer market time, with homesellers seeing few, if any offers…and frequently for less than the asking price.  

Negotiation is Expected, But Most Homesellers Don’t Want to ‘Armwrestle’ With Homebuyers

It’s routinely a good idea for buyers to get a ‘heads up’ before making an offer to determine how ‘hot’ or ‘cold’ the market is. Otherwise, if you ‘lowball’ a just-listed home in a seller’s market, you may be lucky to even get a counteroffer instead of an outright rejection by sellers experiencing lots of calls and showings on their property. Coming in with an offer that’s too low sometimes causes offended sellers to refuse to seriously consider a possible follow up offer.

The Number of Competing Homes for Sale Affects Market Time

What’s the Big Deal About Housing Inventory?
One reason housing inventory is so important is because it helps buyers and sellers to better manage expectations. Most buyers are interested in how long it may take to find the ‘right’ house. Inventory affects this. Alternatively, most sellers are interested in how long it may take to find a qualified buyer. Inventory affects this, too.

Willamette Valley Homesellers Can ‘Jumpstart’ Activity with Property Pricing

That’s because a high home inventory tends to slow down the market time and low inventory frequently provides a ‘jump start’ to activity. One way sellers can help to avoid an excessively long market time is to review comparable local home sales information provided by their Realtor to ensure proper, market pricing.

Another reason housing inventory is crucial is because it can significantly impact so many other important factors. In other words, inventory is a ‘driver’ for market time, selling price, appraisal results, lendability and more.

Okay, So Inventory Is Important. What Does It Look Like?

Portland Metro Sample Home Inventory

The above image provides a good example of fluctuating home inventory. As the Willamette Valley’s real estate market bounced back from the severe market downturn of the Great Recession, the home inventory for some areas reduced from more than 20 months of housing supply to less than three.

It’s Wise to Consult An Experienced Realtor Before You Leap Into the Market

Contact the Experts
Thinking about selling your Willamette Valley property? Know the market before diving in! Contact veteran Oregon Realtor Roy Widing with your questions and for a free consultation on what your property could sell for today using the contact form below.

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Why Willamette Valley Homesellers Hire A Realtor

There are many good reasons why Willamette Valley homesellers hire a Realtor, including the handful who first try the ‘for sale by owner’ or ‘FSBO’ route. Here are ten of the most common reasons why Willamette Valley homesellers hire a Realtor to get the job done right. 

Hear the audio podcast version of this presentation by clicking here or the link above.

Selling Your Own Home? Prepare Yourself for Wearing Many Hats.

1. Selling Your Home ‘By Owner’ Means Taking on a Second Job.
Most homesellers are busy. So before attempting to sell property on your own, first ask yourself if you’re prepared to wear some extra hats. That’s because in addition to (1). preparing your property for market and (2). finding a replacement dwelling, along with (3). the task of actually moving, selling your home involves (4). abundant planning, (5). serious paperwork, (6). negotiation skills, (7). accurate scheduling, (8). diligent research, (9). considerable legwork (if done right) and (10). a lot of just plain toil. 

2. Legalese, Sometimes with Different Rules for Each County and/or Municipality.
Realtors use continually-updated forms written by experienced real estate attorneys designed specifically for regional transactions, with clarity and simplicity in mind. Such documents include important protections for both buyer and seller. While no document is perfect, Realtor forms include key clauses, like for home inspections and appraisals, along with arbitration/mediation mechanisms. These time-tested documents help prevent potential issues, while at the same time deterring ‘nuisance’ litigation.

3. More Accurate Pricing When Buying & Selling.
These days the average Willamette Valley resident moves about every 6 years years or so. As with any activity, it’s easy to get rusty. Realtors are in the real estate market all day, every day. This means an experienced real estate agent can provide significant market awareness to help you price what’s likely to be your single largest investment.

Armed with access to multiple listing, sales and tax data, Realtors provide significant pricing experience and real life insights, whether you want to know what the property you’re selling is worth, or once you sell, how much to offer on the home you’re buying.

4. Objectivity.
We all deal with subjectivity from time to time. Does your home smell? Perhaps you’ve gotten used to having multiple pets in your small home, don’t notice the mold growing in your bathroom, or haven’t realized how gloomy your living room appears. One role of a Realtor is to be helpfully honest. That means being truthful if there’s something you as a seller don’t see (or smell). 

Most Homesellers Don’t Like A Rapidly Exiting ‘Conga Line’ of Mum Buyers

Far better to be forewarned and forearmed by your Realtor, than witness a rapidly exiting conga line of mum homebuyers who don’t want to offend you. Or perhaps you don’t think disclosing settling water in your basement each Winter is a big deal. The reality is that disclosing such a potentially material fact is something dutiful agents will advise in order to keep you out of much hotter water after the sale. 

5. Junk the Junk.
Have you ever studied a real estate earnest money agreement (also called an EMA or purchase agreement), or seller’s ‘net sheet?’ Over the course of a transaction, it’s easy to accumulate an abundance of ‘junk’ fees. Sometimes seller-paid closing costs are necessary to make a transaction work. However, paying for a buyer’s home warranty is typically more of a buyer ‘want’ than a ‘need.’ Count on your Realtor to go over such factors with you for a ‘heads up’ of what to expect. An experienced agent knows what’s usually ‘routine’ and what’s not.

6. Marketing.
Even if a seller has a sense of what his or her home is worth, effectively reaching the the widest number of buyers increases your opportunity to find more motivated and qualified buyers, even creating a ‘bidding war.’ The simple act of listing your home with a Realtor means your property is immediately promoted on a host of proven, effective home marketing venues. But it doesn’t stop there. Successful Realtors use many different tools to reach buyers for your specific property.

Connecting your property with the right buyer can mean the difference between a fast close at full price (or higher), compared to a continuous stream of ‘sale-fails’ where your property is needlessly taken off the market by buyers who were marginally qualified. 

Calm Seas Never Made a Good Captain…or Realtor.

7. Experience.
There is simply no substitute for ‘hands on’ real estate experience. If your home hasn’t sold, at what point should you consider a price adjustment? How much of a price adjustment is necessary? Is there something other than price causing my property not to sell? These are not new questions to an experienced agent, who can help address these and other important questions.

When it Matters, Experience is Good to Have on Your Side.

It’s comforting in especially difficult situations to rely on an experienced Realtor, who is the duly able real estate ‘captain’ of your transaction. Most people prefer an experienced surgeon or pilot, so it’s understandable to want experienced representation with the important task of selling your home. It’s also helpful to know that a professional real estate agent makes the entire home selling process appear easier than it is.

Most people are nervous and ‘en garde’ when buying or selling a home.

8. Negotiation Skills.
If you’re like most people, you dread negotiating when buying a car. Consider how much higher the stakes are with your home sale. You want an experienced hand on your side. While real estate transactions are optimally a ‘win-win’ situation, it’s realistic to expect some friction. If you haven’t considered homeselling as a kind of ‘war,’ check out this unique perspective on the ‘battle’ of selling your home. 

The best way to navigate through a potentially difficult transaction is to be represented by someone who has been over the road before. So whether you’re in negotiations with a ‘bargain hunting’ buyer, experience an unpleasant ‘surprise’ in a home inspection, or a seriously low appraisal, each unique situation presents an opportunity for difficulty and reaching common ground. Your Realtor can assist in ‘end gaming’ your best strategies and in dealing with a wide variety of buyer personalities.

Having a Realtor ‘Buffer’ Between Buyer & Seller Can Avoid Headaches

9. The ‘Buffer Effect.’
Having an agent represent you makes it easier to maintain civility between ‘warring’ parties.  If you don’t consider homeselling as a battle, then see our prior article and podcast titled ‘The Art of War for Homesellers.’ Ever say something you regret? An experienced Realtor can often use more constructive language to accomplish what can sometimes be an emotional and/or provocative comment.

Hiring A Realtor Makes Sellers More Money: Click above image to enlarge

10. More Money.
National Association of Realtor statistics reveal that homesellers who use a Realtor actually net considerably more at closing than those who don’t, even after taking into account paying a commission. Consider that when banks (which are renowned for watching the ‘bottom line’) sell their foreclosed homes, they hire an expert, a Realtor. From a financial standpoint, it really does ‘pencil out’ to hire a Realtor. 

Oregon Realtor Roy Widing

Thinking about selling your Willamette Valley property? Contact Roy with Certified Realty, Oregon’s choice since 1950 using the form below for a free consultation.

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Why Does My Realtor Do That?

Realtors must follow many rules and according to consumer satisfaction surveys, real estate agents generally do a good job. Realtors are trained to abide by applicable state and national real estate laws, follow accepted business practices and the Realtor Code of Ethics, which is considered a higher standard of duty. Yet as in other professions, sometimes agents fall short. Wrong is wrong, yet it’s also important to separate willful wrongdoing from expectations which may be misinterpreted, or where motives are misunderstood.   

Hear the audio podcast version of this article here or click the ‘play’ button below:

Failure or Flying Colors? 
When real estate agents are perceived to have ‘dropped the ball,’ a good first step is to see if there’s an explanation behind it. Let’s take one common example, the case of the ‘disappearing Realtor.’ Unless you’re in the midst of a transaction, if your real estate agent has fallen out of touch,  it’s entirely possible that he or she is no longer in the business, moved, is ill, or perhaps decided to focus on another field within real estate, (such as commercial, or property management). Another likelihood is a transition to working with other client types or geographical areas.

One reason for a ‘disappearing agent’ may also be because your lender informed the agent that you are not qualified to purchase a home. While ceasing to contact you because you’re not in the market to buy right now isn’t illegal, it could be considered rude. Being human, sometimes agents are unartful. But as when dealing with any professional, it’s instructive to distinguish between the unartful and activity which is unethical, or illegal.

While most Realtors are diligent, honest and hardworking, there can be a broad range of Realtor behavior, ranging from ‘normal’ and reasonable, to impolite, to unethical, or even criminal. So let’s analyze some comments about Realtors. Sometimes the agent is ‘out of line,’ yet sometimes it helps to better understand differing perspectives to get the whole picture.  Here are some examples of Realtor behaviors you may have heard about.

1. ‘Why Don’t Realtors Return Calls (or e-Mails, or Texts)?’
Unless it’s an isolated incident or emergency, this kind of Realtor behavior can be inexcusable, especially in an industry where communication is key. It’s true that some agents have a difficult time responding in a timely manner. A common reason is that some agents are simply disorganized. Simply put, if it’s chronic, this is bad form, bad business and outright rude. Such non-responsiveness even drives other Realtors nuts, particularly if they wish to show a home that is listed, present an offer, or simply find out if a home is still for sale.

Other explanations for not returning phone calls may be a personal habit among such agents, a sign that he or she is seriously overly busy (still no excuse), or perhaps is trying to tell you in a passive-aggressive manner that your business relationship is on the wane. Realtors sometimes have been known to ‘fire’ a client. What to do? Be clear with your agent about what you expect. Given a myriad of possible communication forms these days, if you have a preference for being reached by text, phone, e-mails, Facetime or Skype, explain that to your Realtor early on. Not everyone has the same communication style or tools.

2. ‘A Realtor Insisted I Get ‘Pre-Qualified’ Before Showing Me Homes.’
This is an easy one. First, let’s imagine you’re a seller. Early on as your home is placed for sale, you notice many ‘tire-kickers’ and ‘looky-Lou’s’ traipsing through your house, including a large number of neighbors, with little apparent intention to buy, along with unqualified buyers, who are likely unable to buy. Yet, each time you receive a request to tour your home, you spend half an hour or more getting it cleaned up and leaving for showings. The result? Sellers want buyers to be pre-qualified.

Now, let’s imagine you’re a Realtor. You’ve just spent the past two weeks showing homes to buyers. Then you learn the ‘buyers’ can’t buy because the lender said their credit, income or other disqualifying factor disallowed it. The result? Realtors want buyers to be pre-qualified.

3. ‘My Realtor Says My Home is Overpriced.’
It’s entirely possible that your home could be overpriced, yet there are several issues you may first want to sort out.  For example, when you placed your home for sale, what was the process you and your Realtor used to arrive at a list price? How long has your home been on the market? Has your property been receiving showings? Did you discuss what kind of market response might suggest the need for a price adjustment? What is the average market time for similar homes in your neighborhood?

Also, were you provided with comparable property information? Have you seen any documentation that confirms buyer activity, like online ‘hit counts?’ In other words, there may be valid reasons for your agent to suggest a price adjustment. Also usually helpful is going back to the ‘comps’ or comparable properties used to price your home, while researching to see if any other similar properties may have sold in the meanwhile since your property was placed on the market. For some helpful insights, answers and information about these questions, check out our article and related podcast ‘3 Steps To An Oregon Home Sale” here.

4. ‘A Realtor Bought My Property And I Feel Cheated.’
State real estate regulators cite the majority of claims against agents is due to ‘self-dealing,’ where an agent acts on his or her behalf. For example, a Realtor may be asked to list a property, but instead after speaking with the owner, buys it for him or herself. There are strict rules for Realtors to follow when buying or selling real estate in Oregon. Given disclosure laws, real estate agents are on notice that they are being watched closely by various regulatory bodies, particularly if an agent is ‘self dealing.’ If you ever feel cheated by a real estate agent, you can contact the Oregon Real Estate Agency, or your local association of Realtors.

Crime Victim Realtor Ashley Okland

5. ‘A Realtor Refused to Meet Me At A Home!’
Personal safety has become an important Realtor issue, especially since Realtors often work with the public alone, at night and in unfamiliar surroundings.  As a consequence, agents are advised not to meet prospective first time clients alone in a remote location or vacant home. Realtors Ashley Okland and Beverly Carter were real estate agents who did and their tragic stories are mentioned in educating real estate agents about personal safety.  

Given incidents like this devastating story of a Realtor’s murder that generated significant media attention, expect Realtors who’ve never met you to be cautious.With concern for personal safety up, self defense classes are more popular and concealed handgun carry is growing across the nation…and that includes Realtors, too.

6. ‘Why Won’t My Realtor Hold An Open House?’
Simply put, selling homes can be a numbers game and here they are:

How Homes Are Sold

Fact is, open houses most often benefit Realtors, not homesellers. That’s because most buyers don’t purchase through an open house. However, open houses are one way real estate agents can find new buyers. This isn’t to say that open houses will never sell a home. But given a variety of factors, it’s considered among the least effective ways to sell a home. 

Thinking about buying or selling an Oregon home? Contact veteran Oregon Realtor Roy Widing with Certified Realty using the convenient contact form below for a free consultation.

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The Willamette Valley ‘Two Transaction Tango’

Simultaneous/Consecutive Home Transactions
Selling your Willamette Valley home and buying a replacement property are frequently linked activities. In this article and podcast, we reveal how to maximize the efficiency and minimize the bother when simultaneously home buying and home selling.

Click here or on the ‘play’ button below for the audio version of this presentation about homebuying while homeselling.

We’ll also examine options to help decide if either simultaneous or consecutive real estate transactions may be best for you.

Timing
The singular act of buying or selling a home is often the foremost concern of many. Whichever immediate task you may be considering, it’s common to have twice the activity anticipated, but in two steps. That’s because Willamette Valley home buyers often have a home to sell…and Willamette Valley home sellers are frequently seeking a home to buy. So what’s the best way to navigate this potential real estate quagmire without getting entangled in a morass of stress and needless extra costs?

First Steps
To begin, it helps to examine three common dual home sale/home purchase options:

1. Selling your existing house first, then buying your next house.
2. Buying the next house first, then selling your existing house.
3. Simultaneously moving from your existing house to your next house.

Your challenges, benefits and results will largely depend upon which of these three decisions you settle upon. Here are three quick takeaways for these three usual options:

Option #1.  Selling your existing house first, then buying the next house
This option usually requires a ‘double move.’ Yet one advantage of this approach is that you won’t have double house payments. One disadvantage is that you may have to move twice.  An added benefit of this ‘selling first’ approach can include negotiating with strength in the purchase of your next home. That’s because your purchase needn’t be contingent upon the sale or closing of your sold home. As a result, you are seen as a ‘cash in fist’ buyer, or at the very least, a buyer who is considerably more likely to qualify for a home purchase, given that you ostensibly now have access to the equity in your now-sold home. This helps you negotiate with more power in the purchase of your next home.

Option #2.   Buying the next house first, then selling your existing house
When first buying a house, then selling yours, one advantage is that you know where you’ll be moving. The reduced stress of ‘knowing where you’ll land’ is empowering.

Unless you’re a cash buyer, you’ll likely need to qualify with a lender. And if you have an existing loan in place on the house you’ll be selling, this may mean you need to qualify for two loans, your current home loan and the loan on the house you’re buying.

As long as your current Willamette Valley home sells in a timely manner, added financial obligations can be minimized.  For more information about bridge loans, see the below ‘A Bridge Too Far?’ discussion.

Option #3.  Simultaneously moving from your existing house to your next house
This situation is very common. Provided your activities are clearly thought out, well-executed and contingencies are in place for protection, it’s also one of the more affordable options.

Think far ahead and shoot for impeccable timing, in order to make your move the smoothest possible. In order to have sufficient time to move out soon after closing on your current home’s transaction, you will need to locate your next home, write an accepted offer, have the home inspection and if you’re getting a home loan, likely an appraisal…all before you close on the purchase and can actually move in.

One advantage of this approach is that you won’t have double house payments. You also know where you will be landing, and you won’t likely have to move twice. One disadvantage is that your timing needs to be good and possibly have a little extra ‘cushion’ to allow for emergencies, like delays with appraisals, inspections and repairs. Otherwise it’s easy to feel ‘squeezed’ by your being in the middle of two time-sensitive transactions.

That’s one challenge of going this route; It’s complicated by not knowing with precision the timeline of certain key activities. That’s because while home inspections can usually be completed within a set time frame, like 10-14 business days, other requirements like appraisals, can take much longer, with less certainty of the completion date. On top of that, most transactions involve two appraisals, one on the house you’re selling and another on the house you’re buying. So if you plan on a simultaneous sale/purchase, huddle up with your Realtor to create a well planned timeline, then build in some extra breathing room, as necessary.

A Bridge Too Far?
One way to do purchase a house without first selling your Willamette Valley home is with what’s called a ‘bridge loan.’ This is effectively a loan against the equity on your existing home. There are plenty of added details, but for the sake of simplicity, just understand that if you use a bridge loan to buy your next home, until your current home is sold, you will likely have double house payments. So if your current home doesn’t sell in a timely manner, hopefully the squeeze on your wallet won’t be more stressful than if you were to have simply sold your existing home first. 

Tools of the Trade
To accomplish the job of simultaneously buying and selling homes, among the most common protective tools is called a contingency. Consider contingencies as akin to safety goggles. They’re designed to prevent a mishap, only in this case, the mishap could be losing your earnest money.

Earnest Money
Earnest money is usually a certain dollar figure placed on deposit as a sign a buyer is earnest, and later applied to the home purchase. This helps convince sellers that a buyer is serious and take their property off the market. Earnest money essentially helps to ‘hold’ a property for a buyer. Earnest money is not often the total down payment, although it can be applied as part of the down payment.  Earnest money is important to homesellers, because without it, a buyer could otherwise tie up the seller’s property with virtually no obligation.

A large part of contingencies relate to a buyer keeping their earnest money, or the initial deposit showing the buyer is ‘earnest’ in proceeding to closing on a home sale. If a homebuyer does not have a sufficient contingency in place during a home sale, forfeiture of a buyer’s earnest money becomes possible. It’s not terribly common, but it can and does sometimes happen.

Types of Contingencies
Home inspection contingencies provide buyers with the right to have a house inspected for a variety of conditions, all within a specified time frame. Another common contingency is the loan contingency, so if for some reason a lender does not approve a buyer or the property for a home loan, the earnest money deposit is returned to the buyer. Buyers have lost out on qualifying for a home loan because they went out and bought a car during the home purchasing process, thereby disrupting their loan ratios.

The Reality of Earnest Money Deposit Risk
As long as appropriate contingencies are in place and they’re followed in a time-conscious manner, it’s relatively uncommon for buyers to lose their earnest money. It’s always a good idea to keep an eye on your timeline.

Buying And/Or Selling?
Use the form below to contact Willamette Valley real estate expert Realtor Roy Widing with Certified Realty for a FREE consultation. Whether your real estate situation involves homebuying, homeselling, or if you simply have questions about our current Willamette Valley real estate market, Roy can help!

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10 Reasons Willamette Valley Winter Homeselling Is Hot

While there is a case to be made for homeselling in each of the four seasons, Winter is one of the most powerful times Willamette Valley sellers can place their home on the market and for ten very good reasons.

Click here or the play button below for the audio podcast presentation of this article.

1. Price & Market Time. Statistics show homes sell faster and for more money in Winter. One way to understand this phenomenon is by considering a motorist with a flat tire in bad weather. That motorist has an urgent need and is less likely to haggle, or even seriously consider less expensive options, in order to meet an immediate need. Winter homebuyers can experience the same kind of urgency and this helps to explain the premium that homes can command during the real estate ‘off season.’ Another way to look at the Winter market dynamic is if you want to buy snowshoes in July (at least in Oregon), expect to pay more, since availability is typically lower. 
2. High Quality Buyers. Because home touring is generally less convenient, there tend to be fewer ‘Looky-Loos’ during the Winter. This means Oregon Winter homesellers have fewer buyers tracking dirt into their house, with less energy spent preparing for real estate ‘Tire-Kickers.’
3. Less Seller Competition. Let’s face facts: It’s convenient to sell in the Spring and Summer, especially in Oregon. The weather is usually better, flowers are blooming and with plenty of homebuyers looking, it’s a ‘target-rich environment.’  Yet while it’s easier and more convenient to sell in sunny weather, this convenience often comes at the cost of increased competition from other sellers. Conversely, Winter homesellers can expect fewer like-minded sellers competing for buyers. Just like the successful contrarian investor who sells when everyone else is not, avoiding a ‘herd mentality’ can pay off with a higher price and faster sale. 
4. Higher Buyer Motivation. Is your idea of a fun time getting into a car on cold drizzly nights to look at houses? Probably not…unless you just got a job transfer. Or a nice raise. Or you received an inheritance and want to get out of your tiny apartment. It’s helpful for prospective Winter homesellers to know that corporate relocations are common in the first quarter.  Plus family changes can occur anytime and estates are settled year around.
   
5. The Hunt for Red December: Get a ‘Jump’ on the New Year’ s Competition. The best time to get your property on the market could be when everyone else isn’t. Placing your home for sale in Winter gives you access to hyper-motivated buyers who have made homebuying a New Year’s resolution. That way, when these eager homebuyers begin their ‘hunt,’ your house will be a prime ‘target’ as visible as Rudolph’s nose. So if your home is market-ready and available to tour leading up to the New Year, expect to tap into this highly focused ‘pent up demand.’
   
6. Your Home Looks Inviting During the Holidays. Who doesn’t enjoy the happy glow of a Christmas tree or other holiday decorations, along with the pleasant smell of fresh-baked pumpkin pie, cinnamon buns, or a vanilla candle? Homes often look their most inviting during the holidays.
   And given the pleasant, even emotional attachment so many have during that time of year, expect some homebuyers to fully embrace the holiday theme of ‘Peace on earth, good will toward men.’ As a result, such positive feelings can spill over into the home selling process and make it easier.
   
7. Your Lawn & Landscaping is Virtually a Non-Issue. Forget to mow your lawn? No worries. Some buyers won’t care if they tour your property and it’s covered in snow, raining hard, or after sundown. Buyer landscaping expectations can be quite reasonable during Winter months in Oregon.
8. When Your Home Sells, You May Buy With Less Competition. Few homesellers stop to consider that given good timing with their sale, their own future home purchase may also benefit from similar, unique seasonality. So depending on a variety of factors in the market where and when you buy, homesellers can sometimes take advantage of lower Winter activity levels to successfully negotiate with a motivated seller. This is because some sellers place their home on the market during Winter not for convenience, or desire to maximize their selling price, but from genuine need. In other words, they are highly motivated. Such homesellers could therefore provide a good buying opportunity.
   
9.  Fewer people relocate in Winter, so this means you’re likely to have an easier time booking a mover.
   Competition for moving companies can be challenging during the real estate ‘high season.’ As a result, expect less difficulty scheduling your moving company when you sell in Winter.
   
   
10.  You Can Dictate Which Days & Times Are Available for Showings. As a homeseller, you typically have control over tour times and dates for your home. This includes during Winter months. Given holiday-related gatherings and events, buyers are likely to understand their need to schedule their tour of your home. Your Realtor can help by specifying days and times your home is available for showings. For example, you could have your house available for tours on Saturdays from 2 to 5pm, weekday mornings after 9:00am, or between 5 and 8pm weekday evenings.

Thinking about selling your Oregon house this Winter? Use the convenient form below to contact our sponsor, Certified Realty for a FREE consultation!

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5 Winning Homebuyer Strategies for Any Market

Regardless of the kind of market you find yourself in when buying your next home, there are key tactics buyers can use to make the process both more successful and considerably less stressful. What are these key homebuying tactics and how can you use them to navigate your next home purchase to a successful close? Find out in this Podcast to help Willamette Valley Homebuyers.

Listen to the audio podcast version of this article by clicking here or the ‘play’ button:

‘The Thinker’ by Rodin

How Homesellers Think
There are plenty of factors that can influence how sellers think.  Among the most important of these is motivation, or a seller’s reason and/or need to sell. For example, expect different seller responses depending on if a homeseller is in no hurry, compared to other sellers needing a fast sale in order to purchase their ‘dream home’ or move for a job transfer. That’s frequently among the most frustrating elements for homebuyers, the variability not just in homes and seller pricing strategies, but navigating homeseller personalities and motivations.  

Given the significant tasks involved with selling a property, some homebuyers may understandably wonder: Aren’t all sellers motivated?  Sometimes the answer is both ‘yes’ AND  ‘no.’  Consider a divorce situation, where one spouse desperately needs money and the other does not wish to move at all. Or consider an estate, where there are multiple family members, each with varying degrees of interest in selling; One family member may greatly need proceeds from a home sale, while the others are independently wealthy and perfectly willing to wait to sell, perhaps for tax purposes.

This means it’s helpful to first realize that as when fishing, you’ll never really know what you’ll be dealing with until you have them ‘on the line.’ Looks can be deceiving and no matter how a homeseller may outwardly behave, their motivation for selling is sometimes hidden and an important factor to determine as early as possible.  The situation can be further complicated if sellers have a large mortgage on their property being sold. In such a case, they’re not really negotiating with ‘extra’ money. They simply have little price flexibility in order to pay off their home loan and pay closing costs.  

For Example
For an example of how disparately homesellers can behave, let’s say you drive up to a house your Realtor found for you. Walking up the steps to the porch, you begin your home tour. Upon entering, you immediately see the home is immaculate, the view grand, the layout ideal. It’s a great house. Yet compared to other homes you’ve seen, the price still seems a little high. In fact, you’re pre-approved, but purchasing the home at the seller’s asking price would be a tight squeeze.

Because it’s a great house and you’re ready to buy, you meet with your Realtor that night and write a ‘clean,’ yet not quite full price offer. Your Realtor forwards the offer to the seller’s Realtor and makes sure to include your lender’s pre-approval letter. The next day, your Realtor calls you with an update.

“Your offer was not accepted. But the sellers sent you a counteroffer at full price.” 

“Full price! Why?” you ask.

“Well, they just placed the property on the market, are not in hurry and figured they could do better than your initial offer.”

Welcome inside the world of seller motivation.

Knowledge is Power
Given situations like this, it helps to know as much as you can about the local real estate market, the property, the sellers and details about their situation. For example, sellers frequently exhibit less price flexibility early on in the listing period. That’s because if the property is new to the market, their opinion is often strongly in favor of their home’s benefits and sometimes they don’t even know where they will move yet. It’s also common for sellers to think ‘I can always come down in price if it doesn’t sell.’

Fast forwarding a month or two into a property’s market time, the situation and seller’s attitude can look considerably different.  By then, buyers have ostensibly toured and rejected the property as being ‘too high’ by a handful (or more) of qualified buyers. ‘Why doesn’t someone just bring us an offer,’ some sellers might then ask. The saying ‘Price cures all ills’ is sometimes hard for sellers to hear, but generally true.  Buyers are constantly comparing the home they’re looking at to others they’ve toured. One home may have a more desirable floorplan, another home may have a better view, another may have an extra bedroom, bathroom, or larger garage.

So why don’t some buyers write an offer for less than asking price? Here are just a few reasons: 

1. Buyers not wanting to offend the seller
2. Buyers not thinking the seller would respond favorably
3. Buyers not even aware the property is for sale,  given the high price
4. Buyers concerned that the property would not appraise high enough
5. Buyers plan to make changes to the house, which requires additional cost

Inventory
Another independent, yet primary factor to consider when homebuying is inventory, or the amount of competing homes on the market. If the real estate market is flooded with properties, expect different behavior from most homesellers compared to a market where homes are scarce. Let’s briefly consider the concept of equilbrium,  buyer’s market and seller’s market.

Equlibrium
When neither buyers or sellers dominate, a real estate market is considered to be balanced or in equilibrium. In our region, the range of 3 to 6 months of home supply is generally considered to be favoring neither buyers or sellers and otherwise ‘normal.’ Inventory figures are released monthly by multiple listing services.

Buyer’s Market
A buyer’s market exists when there are more sellers than buyers. Usually this means there is an abundance of homes to choose from, so it’s considered a market favorable to buyers. In our region, more than 6 months of home supply is generally considered to be favoring buyers. Home prices are typically falling, market times are longer and sellers are competing for buyers.

Seller’s Market
A seller’s market exists when there are more buyers than sellers. This is indicative when there is low home inventory to choose from, so it’s considered a market favorable to sellers. In our region, fewer than 3 months of home supply is generally considered to be favoring sellers. Home prices are typically rising, market times are shorter and buyers are competing for properties.

Interest Rates
A relatively minor shift in interest rates can price some of the properties a buyer might consider buying ‘out of reach.’ And while interest rates are a factor outside the control of both buyers and sellers, they remain part of the market landscape through which everyone needs to navigate. 

Market environments are important, but unless the element of seller motivation is well understood, you could even be dealing with an unmotivated seller in a buyer’s market and see poor results. That’s because the factors of seller motivation and home inventory, for example are not linked, but variables for homebuyers to consider.

If homes are scarce and prices are rising, understand that buyers are likely to feel pretty good about their property. As a result, presenting a clean and very strong offer is likely to work best in any market, but especially in a competitive situation with other homebuyers. Also include your lender’s pre-approval letter to confirm that you are able to afford the home you’re bidding on.

In Real Estate, It Helps to Level the Playing Field

If the market is balanced, with neither buyers or sellers holding the ‘upper hand,’ the playing field is more level. But you still must deal with seller motivation. As a homebuyer, it’s to your advantage if the seller has a real, time-sensitive reason for selling.  If you’re buying in a buyer’s market with lots of homes to choose from, realize that while most sellers will adjust to the market with reasonable prices in order to compete, there are still ‘hold-outs’ who remain less motivated.

Dealing with marginally motivated homesellers can be frustrating, but sometimes helped by determining if there are any areas that matter to them.  For example, if your offer gives the seemingly unmotivated seller an extra two weeks to move out at no added cost for ‘rent back,’ he or she may then reconsider a less-than-full-price offer. Figure the ‘pain point’ of a seller and you may be able to craft a ‘win-win’ offer.

Keeping the important consideration of seller motivation in mind, here are five tactics to make your homebuying more effective and less stressful:

Homebuyer Tactic #1: Do Your Homework
Have your Realtor research the property before you consider making an offer. The answers to certain questions can help reveal insights. How long has it been on the market? Have there been any price changes? How many different listing Realtors has this seller gone through? Observing that more than a couple Realtors worked with the same seller within a relatively short time period can suggest an unreasonable seller who is either unmotivated, not willing to seriously look at the market, or one that is simply ‘difficult.’

Understand that even if a property is significantly overpriced, early in the process many homesellers remain enthusiastic about any interest in their property. In this situation, each showing early on confirms the seller’s belief that theirs is the best home in town. Experienced Realtors know the process well and by simple observation can become astute in understanding seller behavior. And sometimes the occasional ‘lightning strike’ will occur, where a seemingly above-market price offer is made for more than a property appears to be worth. But generally speaking, this is the exception and not the rule. And by staying with an above-market price over an extended period of time, sellers then run the risk of their property becoming ‘shop worn,’ with buyers wondering ‘What’s wrong with it? Why hasn’t it sold already?’

As a result, most experienced agents understand a seller’s price that turns out to be ‘above the market’ can change with time, or until at least a few qualified buyers walk away without making an offer. Further complicating the situation is if a seller is not particularly motivated, which is sometimes difficult to address. This underscores the importance of homebuyers understanding the homeseller’s motivation. Does the homeseller have a deadline, such as a purchase agreement already in place, a time sensitive job transfer, or an expiring interest rate lock, in order to purchase another property?

Homebuyer Tactic #2:  Write a Strong Clean Offer, with Minimal Contingencies
Offer close enough to avoid triggering a counteroffer. Sometimes a homeseller will not want to ‘rock the boat’ if an offer is fairly close to their asking, despite not being full price. Once a counteroffer is ‘triggered,’ additional items in the original offer may be changed, since a counteroffer essentially restarts the negotiation process anyway.

This is also where comparable research can be helpful. If you’re convinced that the property is overpriced and you’re unable or unwilling to offer what the seller is asking, consider including a market analysis with your offer and include truly comparable property information that shows why your offer is not for full price. 

Back it Up
A pre-approval letter made for the exact purchase price can help make your ‘strong, clean offer’ stronger . You may not want to telegraph that you’re qualified for a home loan in excess of your offered amount, which is why lenders frequently will send your Realtor a pre-approval letter that precisely matches your offered price. Otherwise, if you show a seller you’re approved significantly above the offered price, the seller may simply respond with a full price offer, figuring you’ll pay more because you can afford it.

Homebuyer Tactic #3:  Escalator Clause
If you expect the property you want to buy will have multiple offers, one way to both stand out and enhance your odds of success is by using what’s sometime known as an ‘escalator clause.’  Under this scenario, your offer is made and in it, you agree to beat any other offer up to a certain maximum dollar figure and usually in an increment of say, $1,000 or other specified amount. There can be various elements to an ‘escalator’ clause. If your ‘escalator’ offer is accepted, proof of the second best offer is typically provided to confirm the appropriate purchase price above which the winning buyer then must pay.

Homebuyer Tactic #4: Activate ‘Stealth Mode’
If you’re a ‘choosey’ homebuyer, or seeking to buy in a certain area or neighborhood with few homes for sale you’re interested in, consider having your Realtor go into ‘stealth mode.’ This could mean having your agent knock on doors, collaborate with other Realtors having a ‘pocket’ or unofficial listing, or simply become hyper observant.  Many buyers don’t even consider this approach, which while unconventional, can sometimes pay off with work, persistence and a little luck.

The Pre-Listing Stage
In the early phases before a property is formally placed on the market, there are various pre-listing indications you might notice. For example, a location company is often contacted to spray paint where utility lines are located. This prevents a real estate sign placement company from digging a hole and hitting a gas or electric line. How does this matter? If you or your Realtor observe such ‘utility locator’ paint, or a dumpster, a storage ‘pod,’ a moving truck, a U-Haul van, or a ‘hanging signpost’ without a real estate sign yet placed, these hints can sometimes indicate a property is being put up for sale…giving you a headstart before other buyers find out about the home. If the average market time for a given area is weeks or months and you have a ‘heads up’ even before day one of the property hitting the market, you have a tactical advantage.

Stealth Research Can Provide a ‘Direct Hit’ of Otherwise Little-Seen Information

For currently listed properties, other examples of ‘Stealth Mode’ could include your agent researching information on a property or homeseller for potentially helpful tidbits. This might be helpful legal information such as an estate, lawsuit, divorce or inheritance. Other possibly helpful records to consider may involve tax records, old listings from the local multiple listing system (or a separate more distant MLS altogether), since sometimes property history will not always be found in the usual multiple listing system.  

Homebuyer Tactic #5: Prepare for a 2nd Bite of the Apple
Once your offer is accepted, that’s it, right? Not necessarily. A well-prepared homebuyer always keeps an extra tactic or two ‘tucked away.’

So as ‘back up’ tactics go, one might consider such ‘deep concealment’ techniques much like an ankle holster: Maybe not your first line of defense, but nice to have, ‘just in case.’  What is an example of such a ‘back up’ homebuyer technique and why might it be considered so stealthy? 

Being ‘En Garde’ Helps to Prevent Needless Surprises

‘En Garde’
First, it’s important to understand that like homebuyers, homesellers are typically most ‘on guard’ during formal negotiations. This period usually begins once an offer is written, plus during any ‘back and forth’ by buyers and sellers. Once an agreement is reached, even though there remains significant time, work, patience and even negotiation until the sale is officially closed, most buyers and sellers relax a bit psychologically.  But therein lies the problem, since realistically, two key factors usually remain that could interrupt, or even destroy the existing sale now in place. 

These two key factors include the inspection and appraisal, both which the seller has little control over. So if the home inspection reveals there are now plenty of heretofore unknown repairs, there are several possible scenarios on the inspection alone:

1. Seller pays for everything
2. Buyer pays for everything
3. Buyer and seller negotiate

Assuming any home inspection items are successfully ironed out, this still leaves the appraisal. What could go wrong there? Two of the more common appraisal ‘minefields’ are (a) value and (b) additional repair and/or code factors. If a barn does not have a permit, the home inspector missed an issue important to the appraisal, or the appraisal comes in low, expect more potential negotiation between buyer and seller to close the transaction.

Most buyers don’t necessarily focus on getting a ‘second bite at the apple.’ But if you feel your initial negotiation in purchasing a property didn’t go perfectly, sometimes the inspection and/or appraisal provides a renewed source of redress. And if the property has material defects, the seller is required to either disclose or fix them, in the event your transaction doesn’t go through. And regarding the appraisal, there is no guarantee a different appraisal will come in much different. So if the appraisal is low, renewed negotiation can occur here, as well.

Do you have questions about buying or selling Oregon real estate? Contact our sponsor, Certified Realty using the convenient form below, or call 800-637-1950 for a free consultation.

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7 Strategies to Sell Your House Sooner!

Homeselling Strategies
There are key strategies for homeseller success. What are these strategies and as an Oregon homeseller, what is it that you might need to know? As an Oregon homebuyer, you may find it helpful to understand the following insights on homeselling for an ‘inside’ view.

Strategies that Benefit Homesellers
There are some proven strategies that benefit homesellers. Chief among these is the appropriate mindset, even before implementing a well thought out ‘plan of attack.‘  Experienced Realtors routinely guide homesellers through a ‘minefield’ of common and avoidable missteps in their many forms.

Click here or on the ‘play’ button below to hear the audio podcast version of this presentation.

Proactive awareness is one mindset that can significantly benefit homesellers. Examples of proactive awareness include addressing potential problems before they disrupt a home sale. Some specific examples might include:

1. Making sure required permits for any prior remodeling are ‘finaled,’
2. Replacing leaky gutters,
3. Trimming shrubs that touch the house,
4. Confirming there is no obvious peeling paint, or
5. Replacing windows that have broken seals.

Besides removing such items as a possible source of contention, proactively addressing relatively simple maintenance items helps to alleviate buyer concern. That’s because if a house has numerous obvious signs of deferred maintenance, buyers may wonder about other, less obvious repairs.

Proactive awareness can also mean that you understand homebuyers have options and that as lovely as your home is, some homebuyers may prefer to live elsewhere. This mindset provides a homeseller with fortitude and the advantage of not being crestfallen when their home doesn’t sell the first week on the market.

Homesellers also benefit from strategic thinking. Based on your needs and pricing strategy, for example, this might mean setting up alternative schedule scenarios for homebuying, moving and budgeting,  depending upon whether your home sells in 10 days or 100 days.

Thinking Ahead is Beneficial for Homesellers

Combining proactive awareness with strategic thinking provides the kind of forethought that allows fewer surprises throughout the already stressful process of selling a home. Then, given the reduced stress that comes with having to react to negative news, you’re (1). able to focus on those issues that matter most, (2). spend less time worrying and (3). possibly even enjoy the homeselling process.

Strategy
The word ‘strategy’  is derived from the Greek word strategia, meaning the ‘office of general, command, or generalship’ and as such is considered to be a high level plan to achieve one or more goals under conditions of uncertainty. 

Degrees of Uncertainty Exist in Gambling, Battle and Homeselling

The Certainty of Uncertainty
As we saw in the Oregon Real Estate Podcast program titled ‘The Art of War for Homesellers,’ selling a home is frequently conducted under conditions of uncertainty. Awareness and anticipation helps homesellers to better predict and influence their real estate outcome, as situations dictate, often in ‘real time.’ 

Kicker Tom Dempsey Accomplished his World Record Field Goal with Half a Foot!

Goals
Goals can come in many forms. A primary goal for homesellers is often a prompt, uncomplicated transaction. Reasons cited by sellers for wanting a fast and easy sale include feeling like ‘living in a fishbowl,’ or the need to constantly be ‘picking up’ to keep the home ‘show-ready.’  Other reasons might be a time-sensitive job transfer, or a firm deadline to purchase the next home before a favorable interest rate lock expires. Whatever your goals, some homesellers benefit by prioritizing them early in the process on a sheet of paper or computer printout. This roadmap can help to track progress and maintain focus on the desired outcome.

Missions, Strategies & Tactics
First, it’s helpful to know how missions vary from strategies and tactics.  If the overarching mission is to move in a timely manner while selling your home for the most money possible, then a variety of planned strategies to sell your property faster and for top dollar could employ numerous, effective and specific tactics.

One If By Land, Two If By Sea
Think of it this way: Tactics are specific, detailed actions that often use diverse, pre-planned strategies to accomplish your mission.  For purposes of this article, we already know the mission: Selling your home without needless delay at the highest price. This means that in order to enumerate tactics to sell your house sooner and for the most money, it’s helpful to first arrive at appropriate and achievable strategies to accomplish such a mission. Let’s begin with the immutable real estate characteristic of location.

Strategy #1: Address Your Home’s Location
Your property’s location is a key factor to consider when you sell your home. It is also the one element which cannot be changed. To properly determine real estate value, location must be considered and accounted for with respect to what buyers are willing to pay for like homes in similar locations.

Mission: Sell your property faster, for the highest price.
Strategy: Maximize your property’s locational advantages.
Tactic:  It’s helpful to know that many buyers for your property may not be far away. Ensure awareness among local or even hyper-local buyers, who may either have relatives already living in the area, or existing residents who may sell and wish to remain in the neighborhood. While it’s true that buyers frequently appear from outside the area, some neighborhoods have an inordinately high ‘retention factor.’ Such homebuyers know the area and are already living there ostensibly because they like it. They may want a larger or smaller home, but don’t wish to move away from their family, friends or desirable commute. Generating a ‘bidding war’ among buyers likely to strongly desire your property can be very successful.

The good news is that even homes in areas generally considered to be sub-optimal (near loud factories or industrial parks) sell. The market for these buyers may be skewed toward a particular price bracket or the hard-of-hearing, but when the locational aspects are acknowledged and adjusted for, buyer resistance to a poor location can be overcome.

If location is a major objection, it becomes especially critical to match the home to what the market will accept. Otherwise, sluggish showing activity, low offers, low appraisals and potential sale-fails are common outcomes.

Similarly, a property on a busy street may have less demand from parents with young children. However, to a disabled person whose requirements include close access to public transportation, this same property could be ideal. Some locations are more challenging than others. When dealing with high power lines, nuclear waste contamination or crime infested areas, location is more of a major limiting factor.

Secret #1: To determine an accurate list price, review comparable properties with locations that closely match the subject property. Make certain that the location of each comparable is truly similar. When performing a market analysis on your property, your real estate professional should compile a list of comparable sales that take location into account.

Specific criteria among similar homes assist in evaluating exactly what constitutes a comparable location to the subject property. This is accomplished by determining whether these residences share the same neighborhood, school district, zoning/land use restrictions, view, commute time, park proximity, street condition and volume. Only by utilizing accurate comparable sales information can maximum accuracy be achieved to understand how locational issues affect your property.

Recent, accurate and supportable market evidence is therefore essential. Real estate is unique in that it is considered “non-fungible.”  Unlike a textbook, no two homes or properties are considered identical. This being the case, a degree of professional judgment must be exercised when establishing real estate values. Once determined, you can then proceed to maximize your advantages through the remaining “7 Strategies to Sell Your House Sooner.”

Strategy #2: Address Your Home’s Condition
The condition of your home greatly affects how fast it will sell. One reason for this is that many buyers lack the “vision” required to imagine what a minimally maintained home could look like in its improved state. Another reason is that bargain hunters are always eager to point out deficiencies to justify their “low-ball” offers. Don’t give the bargain hunters ammunition!

Mission: Sell your property faster, for the highest price
Strategy:  Minimize negatives of your home’s condition and enhance the positive features.
Tactic: Address all significant and obvious needed repairs. Consider paint, if needed.

You can sell sooner and avoid headaches if you take the following steps:

1. Focus on “curb appeal” – Step out to the street and take a long look at your home. Try to view the home through a buyer’s eyes. Are bushes overgrown? Does the lawn need mowing? How’s the roof? Are the gutters drooping? Is there an old car up on blocks in the driveway? Your initial task is to enhance the appearance of the home’s exterior, including the yard.  Secret #2: Realtor studies confirm you won’t get the buyers inside your home if they don’t like it from outside.
2. Clean & uncluttered inside – Everyone prefers a clean home. Buyers will forgive clutter before they’ll forgive dirt. A thorough housecleaning is advisable prior to putting your home on the market. Be sensitive to odors in the home and neutralize them. Get rid of the clutter by storing any non-essential items which do not enhance the appearance of your home’s interior. One helpful ‘trick’ is to remove half of the items in your closets to make them look bigger. If you lack storage space, consider renting a mini-storage unit on a short-term basis. It could be a great investment!
3. Light and bright – Dim lighting and dark colors can dissuade buyers from considering your home. If you decide to re-paint and re-carpet the interior prior to selling, choose light colors. Off white paint and light, neutral-colored carpeting have the broadest appeal. Avoid white carpet, as dirt shows more readily.
   
4. Remedy deferred maintenance – Almost every home that’s more than a few years old needs a repair or two. Fortunately, many home repairs are minor and require little time and effort. Those little jobs around the house that you’ve been meaning to get to – the leaky faucet, the loose handrail, the cracked light switch cover – all could be seen as “trivial” items by a seller. Yet to buyers, these may be viewed as signs of neglect and symptomatic of larger, unseen problems.
5. Disclose all known property defects – Don’t try to hide your home’s defects from the buyers — It could come back to haunt you.

Strategy #3: Address Your Home’s Price
You don’t determine the sale price.
Your Realtor doesn’t determine the sale price.
Your well-intentioned relatives don’t determine the sale price.
Sentimental value doesn’t determine the sale price.
Your financial needs don’t determine the sale price.
Your investment in the property doesn’t determine the sale price.
You get the point.

Mission: Sell your property faster, for the highest price.
Strategy: Maximize your seller’s net proceeds at closing by provoking a bidding war.
Tactic: Aggressive pricing at, or barely under, the current market value.

Secret #3: The market determines the sale price. Your home is worth what buyers are willing to pay.  Listen to the market. The strategy of aggressive pricing is one method to provoke a ‘bidding war’ and make buyers compete for your property. Banks sometimes use this tactic and it sometimes means not taking the first offer that comes in. What you want are clean offers, preferably cash if possible, with minimal offer conditions and a short closing timeframe.  

Strategy #4: Address the Marketing of Your Property
The maximally effective marketing of your home requires a multi-pronged approach. This includes not only featuring your home in the local multiple listing system, but how it is featured, including quality photos and compelling remarks in both the ‘public’ and ‘Realtor only’ versions. In addition, even if the property is correctly entered in the MLS, if showing access is limited, expect a damper on showing activity. For example, if you require 24 hour notice to show the property, then some agents working on short notice simply won’t be able to comply and there will be a missed opportunity.

Secret #4: Put the ‘Multiplier Effect’ to work for you. This means ensuring your property is promoted in the most effective venues and to the most logical buyer groups for your property type. For residential homes, this includes professional signage, flyers, plus at least one multiple listing system along with an advanced web presence. Each marketing ‘mix’ can vary, depending on factors like property type, price range and location.

Mission: Sell your property faster, for the highest price.
Strategy: Maximize your home’s marketing advantage to make it more attractive to buyers.
Tactic: The larger your ‘buyer pool,’ the faster your home will sell and for the most money. To accomplish this, have your Realtor include the use of key ‘searchable’ phrases referencing your neighborhood, district or other recognizable words denoting where you live in the remarks section of your property’s listing. If seller financing is an option for you, consider offering ‘seller terms’ to further broaden your buyer base. Also helpful are yard signs and directional signs.

Selecting the Right Buyer Pool Could Mean Rewarding Yourself at a Pool Like This One

Strategy #5: Address the Buyer Pool of Your Property
Mission: Sell your property faster, for the highest price.
Strategy: Increase the buyer pool of qualified buyers for your property in order to potentially increase your net proceeds at closing and sell your property faster.
Tactic: Offer as many terms as possible;  The more terms a seller offers, typically the faster the sale and higher the price

“Terms” in real estate parlance refers to the form in which consideration or payment is made. Common terms include cash, conventional loan, seller financing, 1031 exchange and other trade methods, a government insured loan, non-conforming loan or private investor and assumptions. Below are explanations for a few of the most commonly used terms in real estate transactions. Secret #5: Higher sales prices and shorter marketing times are benefits of offering the greatest variety of terms.

TRUE CASH BUYERS are able to close transactions rapidly without the usual lender requirements such as loan underwriting or an appraisal. Buyers also have no loan fees. Cash buyers may expect price flexibility in their negotiations with home sellers. Cash purchasers are a minority of buyer types.

CONVENTIONAL LENDERS are the most common source of residential real estate loans. Lenders assess purchaser qualifications through income, credit history and tangible assets. They also routinely require appraisals, a pest & dry rot report and other inspections, depending on the property. Most conventional loans are 80-95% loan to value, which means the buyer has a 5-20% down payment. The majority of home sales involve conventional loans.

SELLER FINANCING involves sellers willing to act as the “bank” when selling their property. Payments can be made directly to the seller, or through an intermediary, such as a collection escrow account. Often a substantial down payment is expected with a balloon payment due on the remaining balance at a pre-determined date. Because of the seller’s willingness to assume a degree of risk while also offering serious savings (buyers have no loan fee or appraisal to pay), seller financing tends to deliver higher sales prices. Interest rates vary depending upon the motivation of the parties involved and other negotiated factors. Typically, seller financing is secured with a trust deed or land sales contract. Unless the property being purchased has either no loan remaining or little owed on it, a current lender’s “due on sale” clause may prevent seller financing as an option.

NON-CONFORMING LENDERS are a financing option for those unable to secure financing under conventional guidelines. Many are willing to waive a purchaser’s debt rations if net assets are considerable. Home equity loans are a popular market for these lenders. Interest rates tend to be higher than conventional loans, plus various up-front fees and points are often required.

PRIVATE INVESTORS assist in financing real estate transactions to receive greater returns on their investment. For instance, most lenders will not loan on homes lacking a foundation. Private investors are often eager to fill this gap and loan the money to the purchaser, thereby “cashing out” the seller. Payments from the purchaser are then made to the investor. To ensure an attractive return, significant penalties for prepayment are common.

GOVERNMENT INSURED LOANS (FHA/VA) are government-backed loans requiring additional paperwork and documentation. These programs frequently offer significantly lower loan limits, longer processing times and more stringent home condition requirements than conventional loans but by agreeing to sell your home under these conditions can be helpful in enlarging your pool of potential buyers.

ASSUMPTIONS involve a buyer taking over the seller’s prior obligation by making a payment or securing financing for the difference between the selling price and the assumed amount. “Qualified” assumptions typically require that a buyer who assumes an existing loan first be qualified by the existing lender. “Blind” assumptions require few qualifications, sometimes necessitating only that the purchaser pay a set fee.

You’ve Heard the First Five Strategies. For the entire power packed list, just complete the convenient form below to receive the full report, “7 Strategies to Sell Your House Sooner!”

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The ‘Art of War’ for Homesellers

‘Peace through Strength’ Can Apply to Real Estate Transactions, Too

“The supreme art of war is to subdue the enemy without fighting.”
― Sun Tzu, The Art of War

Click here or on the ‘play’ button below to hear the audio podcast of this presentation.

The ‘Home Front’
Without being overly dramatic, it’s helpful to realize that as a homeseller, you are in a ‘war’ of sorts. Outright battle? Definitely not. And for anyone selling a home, it clearly helps to maintain a sense of politeness and grace when dealing with potential homebuyers. But we’re about to look at the process of homeselling using the metaphor of homeselling as ‘war.’

Why would the concept of ‘war’ be appropriate for homeselling? To start, homesellers and homebuyers do not have identical goals. In fact, similar to armed conflict, they frequently have goals at direct odds with one another. You can call such business interaction ‘give and take,’ or ‘financial combat,’ or real estate ‘tug-o-war.’ Rather than use swords or heavy artillery, the tools used can be more subtle. Here, metaphorical weapons might include home inspectors, attorneys and a ‘take no prisoners’ attitude. The point is that there is sometimes conflict in a home sale. But as with any good book or movie, sometimes it’s conflict that keeps things interesting and moves the plot forward, while underscoring the value of what is being contested.

So on many levels, the process of homeselling includes engagement with buyers who are naturally at odds with some of your desires as a homeseller. Acknowledging this fact will help you to maintain reasonable expectations throughout the transaction. If that becomes difficult, then simply remember that you were once a homebuyer, too.

Agility, Leverage and Balance Matter

A Martial Arts Comparison
One such metaphoric view of homeselling is akin to defensive forms of Judo, a time-tested martial art where an opponent’s weight can be used to advantage. A comparison of Judo with homeselling suggests deftness on the part of a homeseller doesn’t have to mean abrasive confrontation, or offensive aggressiveness. Instead, it’s primarily defensive. So we’re therefore talking agility, leverage and balance in order to yield a winning result. Namely, if not to vanquish an attacker, then to simply remain financially safe. 

Research, Like the Tedious Work of Minesweeping, is Worthwhile

“When you surround an army, leave an outlet free. Do not press a desperate foe too hard.”
― Sun Tzu, The Art of War

Make War No More
In the ‘heat of battle,’ there are some practical real estate applications for homesellers to ‘sue for peace,’ de-escalate tensions and maximize results of ‘peace talks.’ Let’s look at a specific real estate situation. For example, in the heat of an ‘offer-counteroffer’ scenario where a buyer and/or seller becomes testy or emotional over a key issue, a constructive approach might involve tactics of (1). taking a ‘time-out’ of sorts by mutually agreeing to longer response timeframes for time-sensitive documents, (2). deflecting an argumentative conversation to other, more fruitful forms, (3). working on other more readily resolvable issues first, and/or (4). ultimately and simply agreeing to disagree.

Spies Like James Bond Use Many Effective Resources

Spy vs. Spy
The metaphor of ‘armed conflict’ in the real estate environment is also relevant in a ‘Cold War’ sense, where parties warily share information as necessary, especially when it suits their own best interests. This might be illustrated as ‘spy’ tactics between two less-than-trusting powers, similar to ‘Cold War’ political terms of entente’ (a French term meaning a diplomatic “understanding”)  or detente’ (“the easing of hostility or strained relations”).

For example, homesellers may not enjoy completing a multi-page property disclosure statement to highlight their home’s flaws, yet they realize the significant downsides if they don’t accurately complete the document, so they comply. Such less-than-enthusiastic engagements definitely don’t resemble a ‘hot’ or ‘shooting war’ which could otherwise usher in the military acronym of MAD (mutual assured destruction), where ‘the plug is pulled’ on a home transaction and ostensibly everyone loses. “Scorched earth” is rarely good policy.  Such alternative approaches incorporate thoughtful caution imbued with hope, which seems to describe most real estate transactions.

“The greatest victory is that which requires no battle.”
― Sun Tzu, The Art of War

Trust, but Verify
What the term ‘trust, but verify’ can mean is that given often high financial stakes, buyers and sellers are sometimes wary as they ‘size each other up.’ From there, it’s largely up to each party involved to determine whether they attempt to maneuver and take tactical advantage, or ‘play nice’ and get along well throughout a home sale. Practical application of this in a real estate context may include finding common ground wherever possible, but for example, hiring your own home inspector or licensed contractor if a buyer’s inspector seems ‘heavy handed.’

Land Battles of Different Sorts Can Cause the ‘Fog of War’

The ‘Fog of War’

“In the midst of chaos, there is also opportunity”
― Sun Tzu

Military veterans have long talked about the ‘fog of war,’ which is defined as  the uncertainty in ‘situational awareness’ (what is going on around you) experienced by soldiers in the heat of battle. The word “fog” in reference to uncertainty in war was introduced by the Prussian military analyst Carl von Clausewitz (1780-1831).  If the ‘fog’ of war is defined as uncertainty in what’s going on around you, this certainly applies to real estate transactions. For example, people you don’t know are walking through your home, viewing your possessions, all the while assessing an opinion of value. 

Don’t Let This Happen to Your Next Real Estate Transaction

‘Fog’ is an apt description of some home selling processes, which can be both confusing and uncertain. Think about it. Interest rates fluctuate. Loan underwriters, home inspectors and appraisers all need to come together in agreement that the buyer and property both ‘pass muster.’ Unless and until they do, uncertainty. Some home sales fail because the buyer made a major purchase before the home sale closes. Or their credit score dropped.  Or the appraisal came in low. You get the idea. In the end, more than a few home sales are just one ‘thumbs down’ from someone in the property transaction ‘chain’ blowing it sky high.

Opposing  Civil War Generals, U.S. Grant & Robert E. Lee

Wars of the Roses
Interestingly, the historic ‘War of Roses’ was a different kind of ‘real estate battle’ between two royal ‘houses,’ the White Rose of York and the Red Rose of Lancaster. But thankfully as a homeseller, you aren’t marshaling troops to wound and destroy. Instead, we’re talking in essence about a ‘civil’ war between parties who can do business. As a homeseller, your ‘battle’ includes navigating a minefield of easily avoided homeselling missteps, while engaging  homebuyers who might be alternatively friendly, hostile or ‘hard-to-read,’ yet always potentially adversarial.

An Impossible Mission?
A major goal of homebuyers may at first seem like “Mission Impossible.” Namely, getting you, the homeseller, to accept the lowest possible price for a prized possession, your home. This doesn’t mean you have to be fearful, intimidated or worried. With an experienced Realtor at your side, you’re a ‘well-armed’ team ready to ‘do battle.’ It also helps to know that the more buyers want your house, often the nicer they will be.

War Games
Given these dynamics and with tongue planted firmly in cheek, it makes sense to modify a few homeselling cues from successful battle strategists. You might consider this approach as a ‘tip sheet’ to lay your ‘battle plan’ for what lies ahead.

1. Declare War. Franklin Delano Roosevelt
2. Never Surrender. Winston Churchill
3. Declare Victory. Harry S. Truman
4. Win the Peace. George C. Marshall
5. Go home. To your new home, that is

1. Declare War
This step mainly involves understanding that buyers generally have opposing interests than sellers, but you can usually do business with most of them. Such realistic expectations will help you to understand, for example, why it’s usually a good idea to let your Realtor do much of the talking and not share many specifics about your motivations for selling. Otherwise, opportunistic buyers may sense desperation and take advantage by offering you significantly less than your asking price.

2. Never Surrender
When the going gets tough, stick with your plan. This includes following through on your thoughtful, well-defined strategies. ‘Keep your powder dry’ by not obsessing over factors you can’t change and ‘choose your shots wisely’ by considering those factors you can change. Conserving firepower is fundamental to strategic homeselling.

For example, adjustments in the home-selling process are sometimes necessary. It’s entirely possible that if your home hasn’t sold for some time, a case can be made for a price adjustment. That’s not a defeat, unless you stop moving thoughtfully forward. But before making substantial ‘course corrections,’ first make sure to review the situation and your options.

3. Declare Victory
Realize when you’ve won. This doesn’t mean chest beating. Just make sure to remind yourself of your goals once you’ve reached them. For example, your home selling goals may have included receiving a timely offer at full selling price and/or retaining a few extra days of delayed possession after the closing date to more comfortably move out along with other factors important to you. Cherish the win.

4. Win the Peace
Remain as gracious as possible throughout the transaction. Be charitable to your buyers. For example, this could include your being flexible if they ask about allowing contractors to visit your home before closing in order to provide bids for later remodeling. Leaving a vase of flowers in the house with a note for when the buyers move in is a nice touch, too.

5. Go Home: To Your New Home, That Is
Mission Accomplished!

Thinking about selling your Oregon home? Contact the experts at Certified Realty using the convenient form below for a free consultation. And please thank a veteran today for their service.

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What’s An Oregon Acre Worth?

 

One frequent Oregon real estate question that both buyers and sellers ask is ‘What’s an acre worth?’ When you think about it, this question is not so different than ‘What’s a car worth?’ That’s because each situation has significant variables.

Click here or the ‘play’ button below for the audio podcast presentation of this article.

With a car, the mileage and condition are both very important to arrive at an accurate value. Land, too has unique variables. What are these variables that affect the value of an acre and as an Oregon property buyer or seller, what is it that you may need to know?
What follows in not an exhaustive study of determining the value of an acre, but a summary of 6 key factors that affect the market value of Oregon acreage property. Spoiler alert: The actual answer to the value of an Oregon acre is ‘it depends.’

Research is Fundamental
There are plenty of places to find estimates on land values, including for Oregon acreages. But unless some specific and fundamental research is performed, such estimates can be meaningless, beyond providing a broad yardstick for comparison between states. Yet, even that can be a misleading endeavor.

California Dreaming
For example, many think California land is more expensive than Oregon land. Yet an acre of land in Oregon could be worth considerably more than a California acre. How? Select one acre in Canby, Oregon (with a current population of more than 16,000) and the other acre in tiny Canby, California, (with a current population of less than 500). The simple laws of supply and demand apply, even across state lines. So to begin, demand is a function of value. The larger a population surrounding a given acre, usually the greater the demand and hence the higher the price per acre.

Click for Image

How Big Is An Acre?
Sources suggest an acre was first defined back in the Middle Ages as the amount of land that could be ploughed in one day with a yoke of oxen. An acre can now be specifically defined as an area comprising 43,560 square feet. For example, this would equal a parcel of 66 feet (1 chain, also known as 22 yards) by 660 feet (1 furlong, also known as 1/8 mile, or 220 yards).

6 Factors of Separation
The following six factors provide insights into some key components that help determine the value of an Oregon acre of land.

Factor 1: Location, Location, Location
To help determine the value of an Oregon acre, chief among the variables is the immutable characteristic of location. Why? For example, prime farmland located in distant locales can be worth less than somewhat lower grade farmland if the distant location requires significant fuel and related expense in order to transport crops to market. Location explains why waterfront property usually sells for more than property located some distance from a river or lake. Location also explains why view properties can command a premium.

Factor 2: Zoning & Allowed Uses
In Oregon, also top among the factors that impact the value per acre is zoning. Zoning can be influenced by federal, state, county, regional (like Oregon’s Metro government) and city regulations. For example, don’t expect to generate much income from a parcel of land designated as a wetland. There are fewer activities that can be performed on such a property and as a result, fewer buyers and therefore lower demand. This typically means a lower market value. Generally speaking, in many parts of Oregon, property zoned to allow residential, commercial or industrial use frequently commands a higher price than agricultural land.

Factor 3: Volume Discount
With some limitations, the larger the parcel, generally speaking the lower the market value per acre. This is true for several reasons. As a property’s price gets up into the higher ranges, particularly if we’re talking multiples of a region’s average selling price, there are simply fewer qualified buyers. As an example, consider how many buyers in a given area who may be able to afford a $100,000 property. This is a sizable percentage of the ‘buyer pool.’ Now consider how many buyers who may be able to afford a 3 or 4 million dollar property. Far fewer as the price increases. So while there are buyers for each price category, the price per acre is typically reduced with the increase in land size and purchase price.
Factor 4: Soil Types
There is a plethora of soil types, with various metrics to determine their characteristics and use. According to Oregon State University, we have nearly 1,000 different soils in Oregon. One broad method of grouping and evaluating soil types is known as the ‘class system.’ Broad groups of soils can therefore be denoted as Class I, Class II, Class III, and the like. As you might expect, Class I soils are considered the best and typically have very good fertility, superior drainage and are typically located in mostly level areas, often with slopes of no more than 3%. Examples of Oregon Class I and Class II soil types are Willamette Silt Loam and Woodburn Silt Loam.

Also as you might expect, Oregon’s Class VI and Class VII soils are considered less useful for agricultural purposes. One example of these is called Whetstone soil. While having low fertility, Whetstone is suited to to growing timber, but not cultivated crops. Erosion of poorer soils can also be severe. One of Oregon’s least productive soils is not even technically considered soil. Called Terrace Escarpments, this alluvium is typically located in steep areas which makes cultivating it so difficult.

Some crops grow significantly better with certain soils. Other crops, such as grapes, can be more forgiving and can actually thrive under a diversity of soil types, even if they ‘struggle,’ which is said to provide certain favorable wine characteristics.

Examples of Different Soil Surveys Published for Each Oregon County

While soils information on a given property can now be located online for a specific property according to each Oregon county, for many years the primary method of researching soil types was to either speak with an extension agent or view the ‘soil survey’ book issued for each Oregon county. These books were published by the US Department of Agriculture. As a result, they became the ‘bible’ for determining soil type and related information.

Factor 5: Water Rights
In addition to the above factors, access and legal ability to use water is a very significant element in determining the value of an Oregon acre. The Oregon Water Resources Department has a regional watermaster system, where each watermaster has a range of state-mandated duties. As a general rule, land with water rights is worth significantly more than ‘dry land.’ One reason is because irrigable land allows for more-and potentially more profitable-crops.

Factor 6: Improvements
Another important factor in determining the value of an acre are improvements. Key among these can be a home. However, even if a home is not present but a well and/or septic system is, and the property is zoned to allow a home, this can be the ‘dream scenario’ that some buyers who wish to have a new home built actually want. That’s because the zoning is already in place, as are some of the most expensive utilities like water and septic. As a result, the presence of absence of improvements is another element in helping to determine the value of an acre.

In Summary
There are many components to evaluating the worth of an acre in addition to those touched on here. For example, certified organic land can command a premium. The bottom line is that in order to most accurately determine the value of your property, it’s important that a review of comparable properties be performed in your area. This means utilizing information among truly similar properties sharing related characteristics, especially those which may have recently sold. An experienced Oregon acreage real estate specialist is conversant with the multiple factors necessary to most accurately gather, analyse and interpret such data.

Questions? Call a Professional!
Do you have questions about buying or selling Oregon property? Contact veteran Oregon Realtor Roy Widing for a free consultation using the convenient form below.

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3 Questions Your Oregon Realtor Can’t Answer

Click here or on the ‘play’ button above for the audio podcast version of this article.

When making the biggest financial decision of their lives, many homebuyers and homesellers understandably ask their Realtor to provide a professional opinion on a range of topics. Some common questions include if adding a bathroom will boost resale value, should wallpaper be removed, if re-painting will help, how long a home has been for sale, if sellers should leave when their home is being shown, or if a home shows better when ‘staged.’ These and many other questions are typically addressed with aplomb by an experienced Realtor.

However, with other, less benign questions, agents are trained not only to be cautious, but simply refuse to answer them. Is it because the Realtor doesn’t have an opinion? Maybe, but maybe not. Often the reason is because rules don’t allow it.

Federal, State & Ethics…Oh My!
What are these rules that might cause an otherwise conversational, if not super-chatty (or at least engaging) real estate agent to go mum? They include federal laws, state regulations and the Realtor Code of Ethics.  And while there are more than three topics agents are trained to be wary of, here we’ll address three examples of areas Realtors are supposed to be particularly cautious about. It helps to first understand that some of the following essentially forbidden conversations most often occur between a Realtor and clients. However, the specific topic of Question #3 below can also be especially problematic if discussed between Realtors.

1960’s Civil Rights History-A little girl, Ruby Bridges, had to be escorted by federal Marshals to school

Question #1 That Your Oregon Realtor Can’t Answer: “Do Many Minorities (or Other Protected Classes) Live Here?”
If there is even a hint of a question having a racial, religious, or other prohibited basis, law-abiding Oregon Realtors will not go there.

Federal Law Prohibits Real Estate Discrimination
Chief among the federal laws that limit a Realtor’s behavior in these areas is the Civil Rights Act of 1968. It prohibits:

• A refusal to sell or rent a dwelling to any person because of race, color, religion, sex, or national origin.
• Discrimination based on race, color, religion or national origin in the terms, conditions or privilege of the sale or rental of a dwelling.
• Advertising the sale or rental of a dwelling indicating preference of discrimination based on race, color, religion or national origin.
• Coercing, threatening, intimidating, or interfering with a person’s enjoyment or exercise of housing rights based on discriminatory reasons or retaliating against a person or organization that aids or encourages the exercise or enjoyment of fair housing rights.

Oregon Law Prohibits Real Estate Discrimination
Discrimination in Real Property Transactions-State discrimination law also prohibits a person from refusing to sell, lease, or rent any real property because of an individual´s race, color, sex (including pregnancy), sexual orientation, national origin, religion, marital status, familial status, physical or mental disability, or source of income.

The Realtor Code of Ethics Prohibits Real Estate Discrimination
Additional guidelines to assist Realtors in following laws against discrimination are incorporated in the Realtor Code of Ethics, which you can read in its entirety here. For the purposes of this discussion, here is a pertinent portion:

Article 10
REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. (Amended 1/14)

REALTORS®, in their real estate employment practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. (Amended 1/14) [listen]

• Standard of Practice 10-1

When involved in the sale or lease of a residence, REALTORS® shall not volunteer information regarding the racial, religious or ethnic composition of any neighborhood nor shall they engage in any activity which may result in panic selling, however, REALTORS® may provide other demographic information.

Steering
Related to this phenomena is the concept of ‘steering,’ where a real estate agent might guide prospective homebuyers toward or away from certain homes or neighborhoods based upon forbidden criteria. This article provides six ways a Realtor can help to avoid ‘steering.‘ Just one example of a forbidden topic might be: ‘Can you find me a Catholic neighborhood? (or Jewish, or Mormon, or Hispanic, or Lebanese…)’ As seen in the above example, just as religion and race are protected classes, so are nationalities.

So What’s a Buyer to Do?
If there are particular places where you want to reside, like specific neighborhoods where your friends currently live, or an area where your church is located, then an agent can show you homes in areas you request.  Real trouble comes when asking a Realtor to specify neighborhoods for you that involve protected classes. So questions about the racial, religious, or nationality composition of a neighborhood are not something to bring up with a real estate agent.

It really helps to leave protected classes out the discussion. Instead, after doing your own research of factors that are most important to you (which may include crime as we’ll address below, or proximity to good restaurants, or parks, or a reasonable commute to work), then provide your agent with boundaries of areas where you want to focus your homesearch. There are several other terms used to define related discriminatory illegal real estate activity.

Blockbusting
The practice of persuading owners to sell property cheaply because of the fear of people of another race or class moving into the neighborhood, and thus profiting by reselling at a higher price.

Redlining
Refusing a loan or insurance to someone because they live in an area deemed to be a poor financial risk.

Question #2 That Your Oregon Realtor Can’t Answer: “Is This a Safe Neighborhood?” Real estate agents are instructed not to disclose information regarding crime and the safety of a neighborhood in part due to concerns of violating the Fair Housing Act. The following paragraph is from a Realtor article about how agents are advised to advise homebuyers on crime figures, along with a host of other topics:

‘Direct them to the police. If buyers want to get a picture of the area’s crime rate, direct them to the police department or other sources of information. Don’t disclose crime statistics or say a neighborhood is a safe place to live even if you believe it to be true.’

Why Crime Statistics Can Be Difficult to Get-Part A
There’s another reason why getting reliable crime information, at least from a Realtor, is not preferred. That’s because in Portland, for example, Oregon Revised Statute 696.880 states that an Oregon real estate agent is not required to disclose the proximity of a sex offender. For some, this may be difficult to believe. As a result, it’s helpful to take the attitude of ‘buyer beware’ if you have small children, or simply want to avoid living near a convicted sexual predator.

Why Crime Statistics Can Be Difficult to Get-Part B
There is currently a strange situation being experienced in parts of Oregon, because while FBI crime statistics have long been seen as a helpful source of public safety information, for Portland and 40 surrounding communities, these important recent figures will not be available.

Are Sex Offenders Living in the Neighborhood?
Megan’s Law requires convicted sex offenders to register their address with local officials. This information is available to the public. You may check the public records, or get information from local police near where you’re considering a move. But it’s important to know that online information is hardly foolproof. Here’s why, as stated in the Oregon Sex Offender website which reads in part, with my highlights:

This website only lists sex offenders designated: a Level 3 offender under ORS 181.800; a predatory sex offender under ORS 181.585; or a sexually violent dangerous offender under ORS 144.635.  Not all sex offenders are listed on the website. In addition, the information on this website refers only to sex offenses defined under ORS 181.805(5) and does not reflect the entire criminal history of a particular individual.

Since all information is subject to change (and not everyone registers how they’re supposed to), if accurately determining if a sex offender might live in your next neighborhood is important, make sure you’re comfortable with the information you gather. Here’s a link to the State of Oregon’s sex offender website.

There are good reasons to avoid living near a convicted sex offender. In addition to the reasonable desire for safety, it’s proven that homebuyers can take a financial ‘hit’ after purchasing in unsafe neighborhoods. For example, one study showed that a home’s value declines by 4% on average if it’s located within one-tenth of a mile of a sex offender’s residence, according to the National Bureau of Economic Research.

What’s A Buyer to Do?
Many homebuyers would like to see local crime statistics before buying a home. However, getting reliable information isn’t always as simple as asking a real estate agent. Why? First, realize that Realtors are not police and therefore typically not always well-versed on crime statistics. To get those, it really does make sense for buyers to contact local law enforcement, or research online themselves, using a variety of available resources.

Also understand that if you’re concerned about a factor like crime, certain kinds of research will best come from someone other than your agent. This may not seem fair, but in Oregon, an agent is not required to provide such information. The good news is that there are established sources of information for homebuyers interested in a safer neighborhood. Yet you may have to dig.

Some Helpful Oregon Homebuyer Websites
CrimeReports.com
FamilyWatchdog.us
FBI Crime Report
MyLocalCrime.com
Oregon Drug Lab Properties Website

Question #3 That Your Oregon Realtor Can’t Answer: “What’s the Standard Real Estate Commission?”
The reality? There is no ‘standard’ real estate commission. A Realtor can tell you what they charge, but commissions are negotiable and one real estate agent can’t speak to what another company or agent charges. There is also good reason why a real estate agent would not want to discuss real estate commissions with other agents.

Some Questions Get Realtors Running!

A Different Kind of ‘Running Suit’
A major antitrust lawsuit that has reverberations to this very day involved real estate brokers who attempted to ‘coordinate’ an increase in their commissions. Federal investigators were not amused. As a result, now Realtors are advised very early in their training to avoid discussion of commissions with other real estate brokers, lest they be accused of ‘price fixing.’  Real estate agents are commonly instructed to simply leave a room if someone attempts to discuss such illegal tactics. Some have observed agents scrambling out of a meeting to avoid talking about commission collusion, or price fixing.Do you have questions or are you considering the sale of your Oregon property? Contact veteran Oregon Realtor Roy Widing using the convenient form below for a free consultation.

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The Power of Oregon Seller Financing

While most Oregon homebuyers use traditional loan sources like banks, mortgage brokers or credit unions, there are solid reasons (and a very helpful alternative) for purchasing a home without them. Buyers avoid traditional lenders for a variety of factors and when they do, one mechanism they frequently turn to is known in our area as seller financing.

Click here or on the above ‘play button’ to hear the audio presentation of this article, The Power of Oregon Seller Financing.

What Is Seller Financing?
Also called owner financing, seller terms, owner carry, seller carryback, or seller carry, seller financing allows a homebuyer to purchase a property by making an initial down payment, then making direct payments to the seller. While Oregon law has rules in place especially to regulate large-scale property sellers who might handle a significant amount of seller-financed transactions (notably commercial firms, such as private finance companies), the process still remains relatively simple for typical Oregon home buyers and sellers who enter into a home sale without using a traditional lender.

Fundamentals  
A key factor that helps to make seller financing an option is if a homeseller has either no loan, or a very small loan remaining on the property to be sold. Having little or no loan on the home being sold means more of the buyer’s down payment will go to the seller, and not diverted to the lender of a seller’s existing home loan. Most home loans now have what’s called a ‘due on sale’ clause, which means a seller’s existing home loan must be paid off upon the sale of a property. The single factor of having no or little loan balance on a property is often the single most limiting condition in determining if seller financing is an option. If the property has either no loan, or only a small loan remaining, this can really open the door to seller financing. 

Playing the Bank
One other factor for prospective sellers to consider when thinking about seller financing is if they’re okay with ‘taking payments’ instead of receiving a ‘lump sum.’ By ‘playing the bank,’ sellers receive payments from the buyer as they are made over time, not all at once. Some sellers greatly prefer the regular income of proceeds from their home sale over time. That said, unless the payments are made according to a ‘straight line’ amortization, there usually will be a lump sum paid to the seller at the end of the agreed upon term, often after several years, or much longer.

Seller Financing is the ‘Swiss Army Knife’ of Loan Options

Basic Tools
Several tools can be used to establish seller financing. In Oregon, these include either a trust deed and note, or a land sales contract. Here is a recent legal article outlining some differences between these two instruments for Oregon seller financing. Most common is the trust deed and note, which can be prepared by Oregon title companies and escrow firms.

Less common in Oregon but also suitable is the land sales contract, which is frequently more expensive, since Oregon land sales contracts can only be drawn up by an attorney. Another difference is how a buyer takes title. ‘Equitable title’ is an ownership interest that describes a land sales contract and ‘legal title’ describes interest via a trust deed and note. 

What Makes Seller Financing so Powerful
Seller financing may sound ‘blah’ to some, but it can be very powerful. How else to describe a something that can:

1. Make an otherwise ‘unsellable’ property sellable, and/or
2. Render an otherwise ‘unqualified’ buyer qualified, whilst escaping considerable loan fees, underwriting and requirements, like an appraisal, and/or
3. Provide income to a home seller, with interest, all secured with the protection of a legal instrument in case of default, and/or
4. Allow a homebuyer the ability to purchase a home while selling a less liquid (hard to sell) asset, or re-building credit, and/or
5. Give both buyer and seller the flexibility to negotiate what works for them, rather than a bank’s pre-determined, ‘cookie-cutter’ loan term, interest rate, or myriad other conditions.

Here are a few scenarios illustrating some of ‘real life’ advantages of seller financing.

Scenario #1 involves a house located in a large Oregon city with no foundation and a faulty roof.
This property is otherwise attractive, yet routine lender guidelines require a foundation for residential properties. The seller begins to think his house is a ‘lemon.’ That is, until he learns that since he owns the property ‘free and clear’ with no loan, that he can sell the property directly to a buyer. A buyer who happens to be a contractor discovers the house and realizes he can put a roof on the house for the cost of materials, then hire foundation work far more cheaply than someone unlike him who is not in the building trades. An agreement is made and the transaction closes. Buyer and seller see the transaction as a ‘win-win.’ 

Scenario #2 involves a nice home located in a tiny Oregon town between the Willamette Valley and Oregon Coast.
Given the somewhat remote location, there isn’t a lot of demand for the property in Scenario #2. In an effort to ‘open up the buyer pool’ and ‘jumpstart’ buyer activity, the seller’s Realtor advises his seller client to consider seller financing.

The seller agrees and before long, a California buyer who just retired discovers the property, located near the buyer’s elderly relative. The buyer wants to first sell his large ranch in California, but because he will be listing his out-of-state property for 4 million dollars, the buyer knows it may take more than a few months to sell it. The California seller doesn’t want to sell his out-of-state property at a discount and wants to purchase a home meanwhile near his relative.  

So the Californian strikes a deal with the tiny Oregon town homeseller. Because the seller is open to seller financing and therefore providing the buyer with a helpful benefit, including no need for a lender required appraisal or loan fees, the buyer agrees to pay full price for the seller’s property and places $75,000, or 25% down of the $300,000 purchase price using seller financing. Confident his California property will sell within 3 years, buyer and seller agree to mutually agreeable monthly payments, with a balloon payment of the remaining loan balance within 36 months.

The buyer gets full price, a quicker home sale, loan interest (on top of his full selling price) and the security of a legal instrument as protection in the unlikely event of buyer default. The buyer has sufficient time to sell his out-of-state asset, plus can move quickly to live near his Oregon relative. Buyer and seller see the transaction as a ‘win-win.’

Scenario #3 involves a homebuyer who recently experienced a ‘short sale’ on an investment rental he owned.
Because traditional lenders are unlikely to loan to borrowers with a recent ‘short sale,’ this homebuyer can either wait possibly years until lenders are satisfied that this experience is well behind him, or look at other options.  Knowing his buyer’s situation, the Realtor for this ‘short sale’ purchaser searches specifically for, then locates a property suitable for his buyer client which is being offered with seller financing. The buyer’s Realtor writes up a clean, solid offer with 20% down at a competitive interest rate and 5 year balloon payment. The seller accepts the ‘short sale’ buyer’s offer. There is a successful closing of the transaction, long before a traditional lender would have said ‘yes’ to providing the ‘short sale’ buyer with a home loan. Buyer and seller see the transaction as a ‘win-win.’

Covering the Bases
As with any business agreement, business agreements can and sometimes do go wrong. One important factor for sellers to consider prior to entering into any seller financing agreement is the possible default by a buyer, who may not continue making payments as agreed. In this case, placing the situation before an Oregon real estate attorney is frequently a good move. If the buyer is dealing in good faith, sometimes a temporary restructuring of payments can be agreed upon, or mutually agreeable exit strategy to provide the buyer a pathway to meet the agreement, or sell the property. If the buyer becomes difficult, an attorney’s letter can be persuasive. 

Happy Bankers
Studies show that traditional lenders start relaxing requirements when a buyer can make a 20% downpayment, known as 80% ‘loan to value.’ This is a good general rule for seller financing, too. A minimum 20% downpayment typically means a buyer will be a better risk. The graph below shows how such an 80% ‘loan to value’ situation has historically reduced the delinquency rate for loan transactions.

The larger the down, the fewer the frowns

Insurance
One other condition for sellers to be aware of relates to insurance. This can include fire and liability insurance. Especially helpful is if the seller is named as a ‘loss payee.’ This means that if there is a loss, such as a fire, the seller has a priority to insurance compensation.

New Rules
Federal and state mortgage laws often change and this is certainly true of Oregon seller financing. The good news is that for many routine transactions, Oregon homebuyers and homesellers can participate in the benefits of seller financing.

The latest batch of regulations are largely designed to hold commercial lenders more accountable. If a home seller is not a major creditor or commercial lender, the process of buying and selling with seller financing in Oregon can still be relatively simple. The latest rules create a situation where it’s best to be clear if you’ll be dealing with a ‘vanilla’ type ‘mom and pop’ seller financing transaction, or a more complicated ‘corporate’ one that requires additional time, money and outside assistance.

The following information is not legal advice, but a ‘thumbnail’ overview of two simpler scenarios for Oregon seller financing. For real estate advice, consult a Realtor. For legal advice, consult an attorney.

The ‘Vanilla’ Scenario
Let’s have dessert first. One of the easier scenarios for seller financing is if you’re buying a home from a seller who has lived in the house as a primary residence. This simple factor is a decent sized ‘green light’ and avoids much additional paperwork, like the need to hire a mortgage loan originator, or MLO, to handle the seller financed transaction. Under the new rules, another ‘vanilla’ scenario that simplifies the process are transactions between family members.

The ‘Small Potatoes’ Scenario
Even if the seller has never lived in the home you’re buying, if the seller is deemed ‘small potatoes’ and not a major creditor or commercial lender, the seller can still provide seller financing. In this case, a ‘green light’ to simplicity is found among sellers who have provided seller financing in a home sale for three or fewer transactions within a 1 year period.  This exemption is helpful, since few residential homeowners sell even one home each year.

The Meat of the Matter
Regardless of the kind of seller financing you consider, consider working with a professional experienced in this unique area of real estate practice. Seller financing offers many potential advantages, but it’s important to understand the process and your limitations.

Collection escrow accounts keep order in seller financed real estate transactions

Collection Escrow Account
One very convenient service often used by buyers and sellers who use seller financing is called a collection escrow account. Collection escrow accounts are usually set up during the escrow process, once an offer has been accepted. In our region, collection escrow companies receive payments from the buyer on behalf of the seller, handle accounting procedures, then forward payments to the seller, often by direct deposit or via a mailed check. Why is this convenient? Because both parties then have a state-licensed firm keeping track of payments.  This also makes it easier around tax time for buyer and seller, as they can receive a printout of payments made or received for accounting purposes. Sellers can more easily show income and buyers can better account for their mortgage interest deduction. 

Thinking about using seller financing? Contact Certified Realty for more information about this frequently helpful real estate tool using the convenient form below.

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