Category: Selling Advice

Advice for home sellers in Lake Oswego, Oregon

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The Repair Addendum

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

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

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

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

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

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

Cheers!
Dianne

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Worth the Price Fix-Ups

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

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

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

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

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

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

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

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

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

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Values on the Lake

As a Realtor in Lake Oswego, one of the most common questions I hear is “How much does it cost to buy a house on the Lake?” Now that the lake is full, and the sun is coming out, it seems like a good time to do a little analysis and answer this question.

There are 3 distinct types of water front property: canals, bays, and the main lake. The values are specific for these 3 areas. The canals have more shallow water and houses that face one another from one side of the canal to the other. These properties typically have the lowest values. There are 2 bays, one at each end of the lake, and these bays are shallow, but wide enough for water skiing. The main lake is by far the most valuable. Spectacular is the word that comes to mind. If you can afford it, this is the most beautiful setting.

Canals
There are currently 3 houses for sale on canals. The least expensive is $649,000 and the most expensive is $949,000.

There are 4 canal properties that are pending sales. The least expensive is listed for $749,000 and the most expensive is listed for $1,499,000.

In the last 12 months, 4 canal properties have sold and closed. The least expensive was sold for $510,000 and the most expensive was sold for $845,000.

Bays

There are 5 houses for sale on either of the two bays. The least expensive is listed for $599,000 and the most expensive is listed for $2,300,000.

One house on a bay is a pending sale that was listed for $950,000.

2 houses located on either bay are closed sales from the last 12 months. The least expensive was sold for $625,000 and the most expensive sold for $800,000.

Main Lake

23 houses on the main lake are currently for sale. The least expensive is offered at $924,900 and the most expensive is offered at $15,000,000.

1 house on the main lake is in “bumpable buyer” position. This means that a buyer has made and had an offer accepted that is subject to the sale of their current home. The list price on this house is $1,595,000.

4 houses on the main lake are sale pending. The least expensive was offered at $879,000 and the most expensive was offered at $1,985,000.

11 main lake houses became closed sales in the last twelve months. The least expensvie was sold for $300,000. (Really, an incredible value, probably reflecting land value. It was a short sale that was on the market for nearly a year. I do not know the details of this sale, but logic tells me that there were likely extreme structural or condition issues.) The most expensive was sold for $1,900,000.

Analysis

So to answer the question “What does it cost to buy a home on the Lake?”, with this information I’d suggest it costs about $500,000 to $845,000 to buy a house on a canal; it costs about $625,000 to $800,000 to buy on a bay; and to get on the main lake, you might find a screaming deal for $300,000, but you can go as high as $1,900,000.

Notes

There has not been a closed sale over $2,000,000 in the last 12 months, yet of the 23 houses on the main lake currently for sale, 12 are listed for more than $2,000,000. This tells me that there are 12 home owners who are up against this economy in a very hard way.

The most expensive house for sale on the main lake is Jantzen Island, a 5 acre private estate. It has been in the news of late because the current owner, Jerry Stubblefield who founded Avia Shoes, and Chris Dudley, last year’s Republican candidate for Governor, are involved in a lawsuit over a 3.75 million dollar loan and ownership of Oregon’s most prestigious piece of real estate. The house was built in 1930, it has 13,500 square feet with 4 bedrooms, 6 full baths, and 2 half baths.

There is only one house for sale right now on the main lake that is priced at less than a million dollars. It’s a 1938 Tudor with 2889 square feet, 4 bedrooms, 3 full and 1 half baths, and it is neither a foreclosure or a short sale. If I were in the betting state of mind, I’d predict that this house will go pending long before the $2,300,000 house offered for sale on one of the bays.

I hope you find this information helpful. Give Linda or myself a call if you have any questions,
Dianne

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Tips and Tidbits

Your Personal Information – When you are ready to sell and embarking on setting up your listing, you and your Realtor will discuss what (if any) things other than those materially significant to the property may be relayed to an approaching Buyer’s agent. You will likely discuss that you, as the Seller, have confidentiality with your agent unless you specifically direct them to release certain information not material to the property. So, if you are relocating and that is the reason for your move, you may want to ask your agent to go ahead and let agents know (or not). If you are getting married and combining households you may or may not want this shared. If you are really wanting to generate offers and want to let people know that, you -may- want your Realtor to put something like “Motivated Seller” in the remarks… but remember that if you do this, you are letting people know that you will likely accept less than the offer price. The gist is that your personal information is between you and your agent. Sometimes it can be helpful to ask them to share some things if it gives a clear signal that is one that you want to give such as:
* That you are either really motivated, or really relaxed about the sale (depending on your situation),
* That you are in one circumstance or another that may be generally favorable to any Buyer (& therefore that you want communicated),
* That you are putting the home on the market or BOM (back on the market) due to some circumstance not related to the condition of the property, etc.

Then again, you can choose to relay absolutely no personal information at all. Ask your Realtor what he/she thinks. You’re in the driver’s seat.

Inspections – Talk w/your Realtor about inspections and what is allowed during a transaction. The standard contract pretty much allows for the potential Buyer to inspect the property and systems on the property during their allotted time period (often 10 business days). There is also an inspection addendum that sometimes accompanies an offer detailing more specifically what inspections the Buyer may want to employ, and that has a teensy little addition to be aware of that, if filled in, could allow/tack on a few extra days beyond what is specified in the contract for a Buyer to review of all inspection documents & reports & finish negotiating. Just be aware of this and talk with your Realtor about any affect it might or might not have on your transaction time-line should it come up.

Pricing and Negotiating – These days, in my experience, most people offer less than the asked-for price unless it is a multiple offer situation or there are other extenuating circumstances, so don’t be offended by this if you are selling. It is just a sign of the times. How much you offer as a Buyer, or how you respond to an offer as a Seller are things to discuss in depth with your Realtor. The offer ought to be based on real market value, and of course that is a mixture of recent local market data and what an arms-length Buyer is willing to pay for any particular property. Many Buyers note changing market conditions and their anticipation of market decline when offering significantly less than you are asking as a Seller. Your Realtor will be able to counsel you as a Seller on whether or not these rationale are based on any reasonable conjecture or not with regard to your specific property, it’s location, parameters, and recent local market activity. In the end, you as the Seller hold the cards, as you get to decide to either sell or not to sell given what is presented to you and what the limits of negotiation yield.

Hope this info is helpful!
Very Best,
Linda

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Selling Tips & Tidbits

“When selling your home pay attention to pets.” Aristocratopholous

Yes… I just made that up. The puffy clouds & Oregon sunshine are making me a bit silly!  The idea was that it might sound more believable coming from an ancient philosopher than a Realtor, though (?)

It’s interesting to note that the truth is:  Realtors can sometimes be experienced as school-marm figures by Sellers already so overwhelmed with preparatory “chores”.  We get it.  You’re being asked to consider doing things you perhaps don’t really want to do, & therefore… hmmm… “Maybe we don’t really need to:  _______.”  Fill in the blank. You know what I mean.  When overwhelmed we all try to cut down the “list”.   Some items on that list are critical, however. And some are so normal to us as individuals that we may be tempted to cross them off.  Remember, though, that what is normal to you in everyday living is not necessarily normal to others. You know this from walking into a friend’s home for the first time and recognizing the difference in how people live:  Smells from ethnic or unfamiliar cooking.  Crumbs on the counter or stove that are invisible to them but not to you. Weeds along the front walk that they pass everyday & therefore do not notice.  That big, brown crack in the white tile right as you enter the home.

Today I wanted to talk a bit about pets and how they can affect the process of selling your home.  Here we go-

  • Odors- Some people are very sensitive to any pet odor, others are just sensitive to BAD pet odors.  Either way, when it comes to selling your home, there actually is no good pet odor.  Now, I have a dog and a cat, and have had more numerous and elaborate combinations of animals in the past as I love them… This is one area where you really need to check yourself as a Homeowner/Seller.   You can’t let your emotions get the best of you.  We all know that saying: “Love me, love my pet.”  …Throw it out the window if you’re selling (I mean the saying of course : ).  If there are odors, the best solution is to find the source and eliminate it.  Quickly.  I.e., if your cat thinks that the shag carpeting in your bathroom is just like cat litter (first of all… don’t have shag carpet in your bathroom… : )  PLEASE cut it out and put in tile or some other hard surface.  If the cat comes back out of habit, at least you can quickly eliminate the problem with paper towels and Nature’s Miracle.
  • “Accoutrement”– Don’t leave pet toys strewn about… at least if you know you are having a showing.  I know that my dog is much happier if I leave him some toys, or a rawhide bone to have on hand while I’m gone.  Some people absolutely love those corrugated cardboard scratching thingies for cats, and granted, you’d rather have your kitty scratching on that than on your living room furniture.  HOWEVER, if you are selling your home, the last thing you want is bits of cardboard lying all around the dining room table, or for people to trip unexpectedly over a rawhide bone, or to have the showing Realtor moving slimy toys to facilitate easy passage through hallways etc.  Besides… it is  drawing the eye and attention to plastic rib-eyes instead of your home!   Buy a basket (with a lid) where you keep dog & kitty toys, and if you must leave something out, limit it to one, please.
  • Pets at Home- Leave instructions if your pet will be there during showings.  This is assuming that you would not have a vicious dog or cat at your home if you were expecting potential Buyers to view it… I don’t think I need to go into the negative legal impact it could have on you as a Homeowner.  That said, let’s assume you have a gentle dog at home, or cat, and you need them to stay indoors.  Please say so on your listing.  First of all, I have had clients who had serious dog phobias from former attacks etc., and we have been surprised in the past when opening a door and having a dog there to greet us that we were not expecting… That potential Buyer will never see your home- They’re headed to the car before ever going inside.  Your Realtor will tell you these things of course, but I just wanted to make the point that, first of all, people need to know if they will be encountering a pet, and secondly, when people (Realtors and potential Buyers) enter your home and an animal is at the door wanting out, they can sometimes be persuasive! (They’re so cute and sneaky that way  : )  So… please leave instructions as to whether the pet must stay indoors or can be let out.
  • Pets Not At Home- If at all possible, remove your pet (especially dogs) for showings.   Sometimes you can leave them in the backyard, but know that your main aim is for people to really concentrate on your home & how their furniture will look there etc. If a pet is in the backyard, not only will they command precious attention, the potential Buyers will very possibly never enter your gorgeous backyard… never walk under that pergola or see the detail work on the back of the home.  Also, bottom line, you want to make it as easy as possible, and remove as many inhibitors as possible for a potential Buyer who might want to see your home *today*.  I have said in this forum before that my advice is most always to opt for showing instructions that say “Call 1st” if the home is not vacant.  This allows for a call & a voice mail message with an expected showing time or time “range”  if no one answers the phone (i.e. if you’re at work or not home etc.)  Maybe your sweet dog has a doggie friend who he or she would love to play with during the daytime, or maybe a human friend who works from home and would love the company while you’re at work.  Think out of the box! My clients who have pets to remove and therefore require “appointment only” showing instructions inevitably experience less frequent showings and this just translates to taking longer to sell.

Hope this has been helpful information for you.

As always, thank you for reading the Property Blotter!

Very Best,

Linda

 

 

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The Power of Color

It used to be that the rule of thumb when selling your home was paint the walls white. You didn’t want to turn off your potential buyer by having a color on a wall that they would not like. The times have changed, and that just simply is no longer the case. In fact, color is a big feature when selling your home.

So what color is best? Good question.

For the past 5 or so years earth tones have been very popular. Earth tones are just that, colors that are found in nature. Soft shades of green, warm shades of brown and rust, and even deep shades of auburn or red. These have really been en vogue. Curiously, I have noticed in some national advertising by a large home decorating store, crisp blue tones. This has me wondering if the earth tones are headed out and the colder shades of blue and gray might be coming back in.

To know what color to paint your house if you are doing it for the purpose of selling, my suggestion is to visit some new neighborhoods that are currently under construction and tour the model homes. The builders hire designers to select the paint colors and these designers stay on top of the latest trends.

Is white completely wrong? No, not always. White-on-white such as you find in extremely contemporary homes has never gone out of style. What about black? Black can be extremely effective as an accent, but don’t over do it. Both black and white can add elegance and sophistication.

To learn a little bit more about color, I found information from Debbie Zimmer, a contributor to Realtor Magazine and a color expert at the Paint Quality Institute. She has some ideas not just about color but about how color can influence the mood of a room:

Purple can be used effectively in a child’s room and it is known to stimulate brain activity.

Blue has been shown to lower pulse rate and body temperature, making it great for bedrooms. It was used by ancient Egytians and Native Americans to heal.

Green is soothing. Like blue, it is calming and works well in bedrooms.

Yellow makes people happy and represents optimism. Studies have shown it causes the brain to release more serotonin. I want to suggest that you have to be careful with yellow. Keep it soft and buttery. When done right, it is fantastic. When too bright or loud, it is a big mistake. Years ago I heard a statistic that a yellow house (exterior paint) will sell faster than any other color. I am no longer convinced that this is true, but I do know that buyers do respond positively to it, again, when it is done right.

Orange says “look at me”. Muddy shades are very rich and soothing. If it is too bright it will appear raw and flamboyant.

Red has energy and makes people feel excited. It is associated with passion and can be used effectively in a master suite, but also in a dining room.

So don’t be afraid of color, but use it correctly. And I highly encourage you, if you have lived in your home for many years, to consider updating the paint scheme if you are considering selling. Do your research to figure out what is in style. Paint is one of the least expensive things you can do to remodel a home, particularly if you are able to do the painting yourself. Painting is step #1 in preparing your home for selling.

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Price Per Square Foot

Price per square foot is a handy tool when trying to calculate value for a house. It is commonly used by Realtors, home buyers and sellers, and Appraisers. It can also be a bit misleading. So I thought it was time to take a good hard look at it.

Two weeks ago I got an e-mail from a reader wanting to know if Lake Oswego had an average price per square foot that houses were selling for. Trying to be helpful, I went back into the previous week’s sold properties (3/7-3/13) and found that they had sold for an average of $133 per square foot. However, this lumped all of the solds together (condos and detached houses), and was only a 1 week snap shot. Wanting to delve deeper, I re-did this exercise and broke it up into condos, detached houses, and waterfront. Again, these are averages.

This snap shot reflects sales in the last 30 days:
Condos
18 condos have sold in the last 30 days. The least expensive per square foot was $68. The most expensive was $389. The average sold price per square foot was $158.

Single Family Homes
33 single family homes have sold in the last 30 days. The least expensive per square foot was $92. The most expensive was $279. The average was $174 per square foot.

The average/average (in other words both condos and detached houses) was $167 per square foot.

Now, some clarification. These are some widely swinging values. What separates the low values from the high values are variables such as age, condition, and location. A house that is brand new is generally worth more than a house that is 50 years old. A house in a high-demand location like First Addition is going to be worth more than a house on a busy street in Lake Grove. These averages do not take into consideration these variables.

When you value a house using price per square foot, you really need to be comparing that property to others that are as similar to it as possible. But averages are interesting. It kind of creates a lens through which to look. If the average for houses in LO is $174 per square foot, and you are looking at a house that is priced either greater or less, why is there the difference? Is it worth more because it’s a fantastic house? Are you getting a chance to get a screaming great deal?

Waterfront
I purposely left out waterfront properties from these averages because I think that they have their own unique valuation. We happen to have both a lake and a river in Lake Oswego, so waterfront is an important part of our market. To look at waterfront averages, I went back 6 months in order to have enough properties in the study to make it useful. I found a low per square foot of $73 (OK, that is just amazing!) and a high of $571. The average sold price per square foot was $287.

Then there is the issue of measuring
With all of this emphasis on value per square foot, one of the realities is that measuring a house is not an exact science. Two highly qualified professionals can measure the same house and arrive at different numbers. Do you count a staircase twice? After all it exists on more than one level. Yet, it really is only floor space that is used as a single level. Then there are tricky floorplans with cut outs and overhangs that can not be measured from the ground. To measure, you end up doing estimates based upon other measurements of either the interior or surrounding walls that can be measured. I am currently involved in a sale that is new construction. The builder, based upon architectural plans, has a measurement of 3650 square feet. The appraiser who was at the house last week found a measurement of 3823 square feet. Just using the average in LO as I calculated above, that’s an additional value of $30,000.

Ultimately my perspective is that looking at price per square foot can be helpful, but it needs to be taken with some understanding that it is not an exact science. As a buyer or a seller, you also need to factor in the obvious things like age, condition, and location, but also how much do you love the house. Is it worth to you what is being offered? Because ultimately a house is worth what a seller is willing to sell it for and what a buyer is willing to pay for it. These are human decisions and not scientific ones.

Thanks for reading. Send us your questions and allow Linda and I to address them here. We would so much rather be writing about things that are of interest to you. Again, thanks for reading.
Dianne

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Showing Tips

So you’ve put your house on the market and are planning to jump on the spring bandwagon and take advantage of the thawing market. Let’s talk about how best to show your home & what your options are.

You’ll be talking with your agent about the listing’s “Showing Instructions”. You have several options including “Call 1st”, “Call Agent”, “Call Owner” and “Appointment Only” among others. My recommendation to my clients is to veer toward the “Call 1st” option if at all possible. My reason for this is that you want to remove as many barriers as possible to getting a potential Buyer into your home. While there is often very reasonable rationale for choosing others of those options, the one that makes it easiest for your potential Buyer is “Call 1st”. This Showing Instruction lets the Buyer’s agent know that he or she may call your number, and if no one answers, leave a message with the approximate time of the desired showing and the request for a call back that if that time will NOT work for you. This makes it very easy for the Buyer’s agent and the Buyer…. and that’s what you want! It also gives you the opportunity to say “No… 2PM this afternoon would work better for me.”

Now let’s talk about how you leave your home when you have a showing. Obviously you want your home to he “the one” for the Buyers looking it over. I know you’ve heard all the admonitions before about making things neutral so that Buyers can picture themselves and their “stuff” there; taking down family photos/neutral wall colors/cleared counter-tops etc. I also want you to consider those things that are probably invisible to you as a homeowner… Pretend you have never been in your home before, and walk in the front door. Is the entry open with a clear view to the rest of the home? Is the porch littered with shoes or other “normal” things like miscellaneous gardening objects (trowels, gloves…), dead potted plants, etc? Are your toothbrushes in cups on the counter for visitors to admire? Dentures in a glass? Are your medications out on the counter in the bathroom or your vitamins out on the kitchen counter?? Is there a stinky kitchen sponge decorating your sink? Are those pesky box beetles trying valiantly to get in under your back door & warm up a little? (PLEASE call Orkin…) How about your mud room… is it muddy? If so… transform it into a showplace for cleanliness w/ hooks for clothing & bench-seats for cleaning up…. but leave the mud for peoples’ imaginations. The whole thing is about creating ambiance. I’ll say it: “The way you live in a house is not the way you ‘sell” a house.” Just do a little “I’ve never been here before” exploring around your home… it will probably amaze you!

How to make it all easier?
There are professional organizers who can come in and help you with streamlining your home. I’ve used this method with clients, especially busy ones. It lifts a huge weight off a Seller’s shoulders during the process of sorting and deciding what is staying and what is going into storage during the sale period or to Goodwill.

Once that phase of preparation is complete, I suggest hiring a professional cleaning company to come in and do a once-over on your home. It is more of what we discussed above; things you don’t tend to notice as you live in the house. After this, attempt to keep things the way they are… hopefully streamlined and clean. Then just keep a bottle of window cleaner handy and go through the house lightly touching all the sinks’ hardware so it shines before you leave. Once the initial work is done in preparing your home for sale, maintenance is key, and not as hard as you think.

My main message here? You’ve heard all of the obvious advice on staging, colors etc. Remember to look at the little things. They make a big difference!

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Mortgage and Market Tidbits

  • Local Area Trends- According to the latest RMLS Market Action Report, comparing November 2010 with December 2010, a few interesting facts emerge-  Average Sales Price increased in the Portland Metro area by 2.2%, and Closed Sales increased by 14.3% which is the highest monthly level since June.
  • Rates- There is some indication that this increase was due to interest rate swings which may have persuaded uncertain buyers to take action. After remaining for weeks at historic lows, rates jumped for a short time to over 5%. They have since gone back down again to about 4.75% but the temporary increase may  have  convinced  buyers that low rates won’t be around forever.  According to MBS  Quoteline, the volatility of rates which has surfaced in the first weeks of the new year is of course due to shifting economic factors. Prior to Friday’s Employment report, nearly all the economic data was stronger than expected which impacted mortgage rates negatively.  Rates improved after the employment data though, and ended the week nearly unchanged.
  • Pat Goodell of Academy Mortgage says:

    • The Monthly Inflation reports and Retail Sales reports  were not as strong as hoped so rates have stabilized below 5%.  But all indications are that there will be stronger economic data coming out in the next few months which will impact rates negatively again.  There is no reason to expect that rates will continue to be as low as they currently are and most expectations are that by the 2nd half of the year, they will have increased to over 5% again.

  • Portland Metro’s “Grade” To Improve?- The mortgage insurance companies identify cities according to their “risk” of declining values. One mortgage insurance company just upgraded 18  cities nationwide (and downgraded 3). They made no change to Portland yet but it’s a positive sign that they are seeing stronger values in 18 cities nationwide and one mortgage insurance rep did say he expects to see Portland upgraded in the near future.
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Price it Right!

Price it Right!

Real Estate 101 says that you have four factors to consider when selling your home:  price, condition, terms, and location. You have no control whatsoever over the location.  You do have control over the price, the condition, and the terms.  When getting a house ready to put it onto the market you do want to get it into top-notch condition, particularly in this economy.  A shabby or dirty house is hard to sell because the investors have taken a beating and aren’t flipping homes in great numbers, and owner-occupied buyers rarely want to take on projects.  Terms can attract a buyer and involve you paying closing costs or perhaps even offering a private contract.  This can save a buyer thousands of dollars and will certainly make your home more marketable and perhaps even get you a higher price.  Having said that, in my opinion the queen who wears the crown in this group is price.  Price appeals at every level.  It corrects flaws that you can not change if you are in an undesirable location, it makes a fixer house attractive because it is a bargain, it appeals to buyers who would otherwise want terms because it is an obvious value, and it gets your home attention across the entire market.  It will make your home sell.

I am not advocating that you need to give your home away.  I also realize that you can only sell within a range that you can afford.  If your mortgage is greater than the current value, you need to do a shortsale to get it to be priced right to sell it.  So, yes, price has its limitations.  Do not get mixed up into this equation your need to pay off credit cards or take that luxury cruise you dream about.  The value of your home has nothing to do with your credit card balances.

So how to price it?

First, don’t take it personally.  The market sets the price and you don’t.  Buyers are really, really smart. They shop and compare and figure out value.  When you are priced right, they will see the value and they will make an offer.  This is something you do have control over.  You can work with your Realtor to do the same calculations in the current market to figure out your home’s value.  Once you know that, please do not be offended.

Second, your home’s value is based upon closed sales and not active listings.  When a home in your neighborhood is listed for sale you likely look it up on-line or pick up a flier from out front.  You see the asking price and that tends to stick in your head.  After the home sells there is not much advertising about what it actually closed for.  You are not likely to know if the final price was less than the asking price or if the seller paid concessions such as closing costs.  This means that when the Realtors you interview come to meet with you to discuss your home, you may have an inflated idea of what it is actually worth.  Be prepared to learn what actual sales prices have been.  It is these prices that you need to use to calculate the value of your home.

Third, avoid the temptation to tack on a few thousand dollars to “leave room for negotiating”.  This is like tacking on 6 months to realize a lower final sales price.  Seriously, in this market even a few thousand dollars extra will put buyers off.  When your house seems like it is a higher price to other homes, why should buyers bother with it?  And think about it:  the houses that sold in your neighborhood also had to pay closing costs and do repairs to satisfy their buyers.  No matter where you price it you will be negotiating.  I do want to point out that a well priced home is more likely to sell quickly and at or near the asking price.  When a buyer asks how long has it been on the market, and they hear just a week or so, they know that they can’t haggle you down because you aren’t ready for it.  But when a house has been on the market in excess of 60-90 days, they know that they are going to go in low.  So pricing it right will get you better offers, more quickly.

Last, pay attention to what the market tells you when you do list it.  Are you getting showings?  If you aren’t, you need to do something.  I tell my sellers that it takes about 20 showings to get an offer.  If you get only 1 showing in the first 30 days then you have got a long and slow road ahead.  If you get 10 showings in the first month then you are going to get an offer in the next few weeks.  That is how it works.  It’s not rocket science.  Don’t wait to make changes.  Pay attention and be responsive.  I also recommend that you be in communication with your Realtor to find out what they are hearing.  They can get feed back after showings and also during the Realtor Broker’s Open House.  They can then share with you what they are hearing. This can be helpful with correct pricing and also with finding flaws that you and your Realtor did not foresee, such as leaving a light on in a dark corner or re-arranging furniture.

There is a buyer for every house.  Be smart.  Be pro-active.  Make the market work for you.