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Wednesday, April 23, 2014

Love Letters and Commitment in Real Estate

Right now, cash buyers
are keen to acquire
rental properties.
Right here and right now in Portland, Oregon, it can be a challenge to buy a "close-in," relatively inexpensive property (under $250K, in terrific shape, or a good deal, in contrast to the competition), if you are not an investor who is paying cash. There are just too many people chasing the same house, and the buyer with the deepest pockets and tiniest demands usually wins.

But, it still can be done...and you have to work with ONE committed realtor, like me, in order to find a home, get an accepted offer, and finish with a successful closing. 

A personal plea has won out over excess
cash more often than you think.
Remember, when competing with Portland investors for properties, the main reason a seller has for accepting a cash offer is that the closing is quick (time for an appraisal is unnecessary, for example), and less likely to fail due to the buyer not getting the funds together. But these reasons don't always match the most compelling motivations of sellers.

Your agent should always be willing to write an eloquent letter as part of an offer, which, if it describes your appreciation of the home and desire to raise kids/dogs/orchids, or play sudoku in the lovely garden room, or restore bikes in the awesome work space, might tug the heartstrings of a seller enough to forego a purely commercial transaction.  Does the seller want to see the home become a rental unit, or do they wish someone would buy it who will love and care for it as they have? The heart may yet win out over convenience.

Besides this, a real professional agent (like me) is going to present your offer in person, whenever possible, and have everything in order, all details fulfilled and included. The more comprehensive yet personal the offer is, the more likely it is to be noticed, taken seriously, and given the honor of an answer, in a multiple-offer situation.

The best agents waste no time to
find you the best opportunities. They only get paid
when you get the keys to your dream home.
So, it can be wise to choose a detail-oriented but also an emotionally gutsy realtor; yet it's just as important to be emotionally gutsy yourself, and commit to the process of finding a home.

As a buyer, if you spread your attentions out and "work with several people" you are really not getting the attention of one professional spending the effort to fit your needs with what is immediately coming onto the market. Buyers who are "working with a few people" aren't really working with anyone, at all.

People committed to working with a strong realtor get a professional's time and energy, up front, without paying for a thing. Their agent is a hawk for them: looking for pocket listings, and talking to other agents all the time to keep their eyes on every possible home that comes onto the market--sometimes, before it even gets to the regional listing service.

A buyer broker agreement is essential
to keep both heads in the game.
This is why some recent Portland buyers have been deeply frustrated to find that their perfect house has sold before they could even look at it. It may be sold to an investor, sight unseen, or it may be going to a buyer who is lucky enough to have their agent pro-actively hunting for their home and not just waiting for something to bob up on the listing service.

Don't miss opportunities for properties! Commit to a single realtor and work with her/him closely. It doesn't cost you, the buyer, a thing, so go ahead and choose one agent and sign an agreement to work with them...but do this only if you really want to find a home!

Tuesday, April 22, 2014

The Next Up-and-Coming Neighborhoods

Here's what Portland Magazine recently said about the best Portland neighborhood areas to buy into right now. Portland is a Pacific Coast market, so it's high prices are vaguely California-like...a shock if you're from somewhere, where a first-time homebuyer can still purchase a decent home close to an urban center.

 Portland's Hottest Neighborhoods, Real Estate Spring 2014

Tuesday, March 25, 2014

Tabor/Montavilla Home Price Watch: March 2014

This 1949 ranch home sold in one month and ten days in Montavilla this March 2014 for $200K. 

Here's what they got: two bedrooms/one remodelled bath; refinished, original hardwood floors, 1026 square feet, stainless steel appliances and updated interior paint colors, newer vinyl windows, a large fenced backyard with a hot tub, and nearby to a park and the Max station.

Kitchen features original but freshened
cabinets and new appliances.

Here's what they got: one bed/one bath, refinished original hardwood floors, newer appliances including washer and drier, professionally landscaped rock garden on corner lot, recent sewer line work, and fresh interior/exterior paint.

Light and bright paned windows
and a charming stone fireplace

This 1925 bungalow off Stark Street, with 1896 square feet sold after 3 months in March 2014 for $300K.

Here's what they got: 3 bed/1bath, a fully finished basement (but not built "to code"), a separate work quarters converted from the original one-car garage, many upgrades to the home systems, plus new heating and water, new vinyl windows, and updated kitchen and bath.

The converted 1-car garage made
a handy workspace--but, no garage

Sunday, March 23, 2014

How to Tell if Your Real Estate Agent is Lying to You

A good real estate agent is like Sherlock Holmes. They are going to take into account a great many subtle details in order to reach the prime conclusion upon which selling your home depends: that is, an accurate selling price that reflects market activity. A selling price for your house is: the price at which an offer to purchase your home is actually going to resolve to a completed purchase. It is the amount a qualified buyer will agree to pay.

So, how do you know your agent has come up with a reasonable price for your house? Well, they show you evidence. This evidence is comprised of what other homes near you, other homes similar to yours, have been purchased for, during the last six to nine months. Evidence includes pictures, details, numbers, and statistics.

A good agent knows that other sold homes in worse condition than yours will have brought lower prices than what yours can reach. And she knows that other sold homes in better upkeep, with more amenities than yours, will have brought higher prices than what yours can sell for. Like Sherlock, an agent looks at and assesses all the myriad realities, weighing and considering them with lightning speed, to draw an intelligent conclusion.

Evidence and proof don't come from these things: what a person tells you at a party they think your house is worth, what the neighbors tell you they got for their place, what your realtor cousin across the country says you should walk away with, or what a real estate agent tells you, off the cuff, that they think your place must surely be able to bring. So, it's not about flattery or conversation, or rumor, or trying to forge a friendly bond. Proof-in-pricing involves actual, tangible evidence of other, nearby homes' sold prices.

Don't look to rumor, flattery, or your own conviction when deciding upon a sale price for your house. Let a professional present you with solid evidence of what's happening in your market.

Evidence and proof don't come from your desire to get a certain price. From the feeling that you should get, or are entitled to a certain amount. It doesn't come from a feeling, a belief, from faith, or from a strong conviction that, by goodness, the price you have in mind is fair because it's what you want. It doesn't relate to the fact that you spent a great deal of money on the house, and you need to get a buyer to pay you back for those improvements. Evidence of reality involves actual, tangible evidence of the prices at which other, similar, nearby homes have sold.

Setting a realistic and market-wise price for a home is the greatest factor in selling it. It is the most delicate and important decision an agent must take, because getting offers-to-buy completely and utterly depend on the accurate attractiveness of the asking price. If it's too high, the house will sit there. Nobody will even come to see it. Nobody will even consider making a low offer for an overpriced house. It just gets passed by.

"A house for sale that gets fewer than ten showings in a month, is overpriced. A house that gets no offers to buy after seven showings is overpriced."

So how do you know that a real estate agent is lying to you? Here's how. They offer no evidence as to the market-wise value of your home. They tell you they will list your house for sale at the price you want, rather than the market price. They offer to sell your home at your favorite price without offering any tangible evidence that buyers can be induced to paying that amount. A weak realtor will provide evidence, but then allow a client to persuade them to list the home overpriced, anyway, just to have the business.

Realtors do this because they want the listing, and they believe that as time goes by, you will become frustrated and begin to lower your price to catch a buyer. Rather than being honest and upfront with you in the beginning, and using their professional expertise to make the case for an accurate, market-wise price, they let your exhaustion with the process do the work for them.

Unfortunately, when you overprice a property to start, it usually ends up selling for even less than what it could have sold for, if originally priced fairly to begin with. That's right: when you choose a fair market value in the beginning, you get more in the bank and have a quicker closing than if you price it high and keep dropping the price until someone finally pays it. For example, a fairly priced home at $235,000 will sell within two months. Boom: money in the bank, and you've moved on to your new life.

The same home priced at $265,000 will sit on the market for eight months, dropping the price by increments, finally selling for between $220 and $228. Meanwhile you've had to keep the place clean every weekend, and gotten angry and disappointed while you waited for something to happen.

You wouldn't let a surgeon do surgery on you without evidence they needed to, no more than you'd let someone fix your car without evidence of what's wrong with it. So, likewise, when selling your most valuable asset, your home, always ask for evidence as to what your home's value-to-qualified-buyers is. You'll save yourself priceless time and aggravation by choosing a strong realtor who understands the market to represent you: a strong realtor has no problem offering proof of their ability to price your home accurately, and they'll stick to it, too.