Pocket Listings

Pocket Listings

A pocket listing is where a seller signs a listing agreement with a broker but they don’t want the house marketed on the Multiple Listing Service (MLS). Due to the current housing market, this practice is becoming less common.

What’s the benefits and drawbacks of pocket listings?

The main benefit is convenience. Many property owners want to sell their house but do not want the aggravation associated with showing the property.

However, if you aren’t marketing your home on the MLS, you’re not exposing the house in the entire market so it’s harder to determine market value.

For example, if I’m going to sell candy and I’m going to sell it to one person, it’s worth $1. However, if 30 buyers want the same candy, it increases the value of the candy to perhaps $15.

What’s your experience with pocket listings?

As a general rule, we don’t encourage our sellers to keep their property as a pocket listing because it doesn’t fully represent the seller. We’ve had occasions where sellers signs the listing agreement but they aren’t ready to have the house exposed to the market. In the meanwhile, if someone wants to buy the house, they want to sell.

Recently, one of our buyers heard about a house for sale directly through the seller and we submitted what we felt was a fair market value offer based upon the comps. The seller decided at the last moment to expose the property to the entire market and they ended up getting $15,000 or $20,000 more than what we had offered.

Tune in to KXL’s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Are We Headed For Another Housing Bubble?

Housing Bubble

Real estate prices are rising, but are they going up too fast? Are we headed for another housing bubble?

This is unlikely. The low supply of houses for sale is one reason that has been driving the recent upsurge in prices. We’re seeing a lot of people who are able to sell or who are finding it more attractive to sell. We should see inventory levels used up a bit.

One strong factor that we’re not heading for another housing bubble is the mortgage rates. Economists believe that they are going to continue to go up, slowly but surely. Along with this is the fact we’ve seen very little foreclosure activity of late. With some of the recent changes on how foreclosures are processed, we’re going to start to see more foreclosures and that’s going to add to our inventory help.

I just read a report from CoreLogic, one of the biggest real estate data firms, and they also admit that housing bubbles are usually spotted in hindsight. But to reach affordability levels that we saw back in our bubble here, prices would have to go up by as much as 47% or interest rates would have to rise to 6.75%.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Why You Should Buy A Home Now

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Anyone who’s been thinking of buying a home may want to hurry up and follow through. But what’s the rush?

It’s all about appreciation. We’re hearing predictions that prices might still go up by as much as 12% in the next 12 months. Based on this percentage, if you wait for a month, you’ll be paying $3,000 more; if you wait for 3  more months, you might be paying an additional $9,000, and in 6 months, it could be $18-20,000 more for an  average-priced home.

Mortgage rates have been rising in the last few months, and it is expected to continue that way. This adds to the price of a house too. The Mortgage Bankers Association predicts that they’ll go up by as much as a full point this year.

If you’ve been thinking of selling your home, you should act soon as well, for the same reason. The price appreciation is based around the lack of supply while there’s a huge demand. A good percentage of our sellers who would be selling right now are those who bought in 2005-2007. They’re locked out of the market due to a lack of equity. But as prices go up, more of these people will be able to sell, so supplies will be enough for a short time. This, combined with the interest rates going up, could cool the market.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Foreclosures in Oregon

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Foreclosures in Oregon for May were down sharply, a drop of 38%. But could this be the quiet before the storm?

Here’s a little bit of history. Back when the foreclosure prices started, they were using a system primarily in Oregon called trustee sales or out-of-court foreclosures. When the mortgage electronic registration system scandal started, there were questions that since the transfers and ownership of loans were not necessarily recorded in the county records, the banks did not have the authority to foreclose. The banks then started using the more expensive and lengthy court process of judicial foreclosures. The judge ruled that they can foreclose, so they could. But recently, the Oregon Supreme Court decided that not all transfers and ownership of loans had to recorded in the county records for a trustee sales or out-of-court type of foreclosure to proceed. The banks then should be able to go back to using the less expensive, quicker and easier route to foreclosure.

The good news is that with the prices going up right now, the risks of foreclosure are lessened, because if the owner can make their payments and they have equity, they could sell their home. But this new ruling could somehow affect our prices.

Nearly 30% of foreclosed homes are vacant, due to all the changes in the process and the banks taking so long to foreclose.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to Real Estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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The Latest Buzz on Portland Housing Market

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Are home prices still rising?

It’s a crazy market right now and home prices are still increasing.  Also, we need to consider the growth of the higher end market as it affects the average. For the true measure of value, buyers and sellers should speak with their Realtors.

We’re down to 2.5 months of inventory. If real estate agents stopped taking listings, everything that’s currently on the market would sell in 2.5 months. This is the lowest inventory since May 2006. For reference, a balanced market is 6 months of inventory. We’re seeing an influx of new listings, but due to the high demand, they’re being absorbed by the market right away. There are buyers who want to purchase a home but are unable to because of the low inventory.

Mortgage rates are increasing; they’re right around 4%. This is partly driving the frenzy; some buyers are starting to realize that if interest rates goes up, the amount of house they can afford goes down. For every 1% the interest rate increases, the affordability decreases by approximately $10,000.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to Real Estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Should you sell your home yourself?

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Should you sell your home yourself and save a real estate broker’s commission? What are the risks?

Typically, it’s a real estate agent’s full-time job to sell properties so the Realtor’s skills are going to be more refined than the average homeowner.  According to a National Association of Realtors survey, homeowners who sell their home themselves receive 16% less than if they had been represented by a Realtor.

Moreover, there are certain federally required documents (e.g. disclosures), timelines and other documentation that’s necessary to complete a sale, which, if not done correctly, can be a liability for the seller.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to Real Estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Home Buyers: Beware of Solicitations

The rise in home sales has a downside. There are companies that appear to be affiliated with the government that send solicitations to homeowners that require payment.

A client received a mailing that appeared to be a bill from a local government office.  The “bill” stated they were required to pay $87 to get a copy of the deed on a home they had recently purchased.

Home buyers are given everything they need to prove completion of the sale upon closing. Also, the county will mail a certified copy of the deed to the purchaser after closing without an additional cost. If a homeowner needs a copy of the deed,  they can go to the county office and purchase one for under $10.

Whenever someone buys or refinances a home, they may receive a flood of solicitations.  Home purchases and refinances are recorded at the county and become public information. Unfortunately, there are companies which take advantage of this information and start mass mailing homeowners.

These mailings must have disclaimers on them because companies are not allowed to claim they are affiliated with the government. Homeowners should read these letters carefully and check with their attorney or real estate agent to confirm the mailings are legitimate before sending payment.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to Real Estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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The Housing Market’s Great News

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Foreclosures were down in April as the housing market is getting hotter. Also, reports show that the numbers are way down from the prior month and even from the previous year.

Realtytrac says that foreclosures are down by 20% from April and 32% from 2012; these percentages are from the actual repossession of the house. The other good news is that foreclosure starts (the initial step in the foreclosure process) are down 28% from last year. It’s a great sign of job growth and the rising home prices are making it more likely for people to sell or refinance if they become unable to make some payments.

The percentage of people who are behind on their payments fell by 21% in the first quarter of this year versus the first quarter of last year. This can serve as a good indicator that the economy and the housing market are continuously improving.

The State of Oregon is re-launching a program called Mortgage Assistance Payment Program which can help homeowners to stay current on their mortgage payments. This plan is devised for people who are current but are in danger of falling behind.

The market is so hot right now that The Oregonian reports some real estate agents are calling people to ask if they want to sell their house. The interesting part is that most people who receive these calls or letters respond positively to the offer, meaning they are willing to sell their house as long the “money” is good enough! The market is so tight that there’s just no inventory, so some real estate agents are doing all that they can to meet the demands.
Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to Real Estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Legal Facts About Oregon Short Sales

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As the real estate market grows bigger, we’re hearing less and less about short sales. Problem is, it’s still a
significant part of our market, and some of these transactions may not actually be legal.

What does Oregon state law say about short sales?

There’s a lot of confusion about who is and who isn’t legally allowed to negotiate a short sale, and that’s because most real estate agents and consumers believe that the former are allowed to do it. It was, up until House Bill 2191 was put into effect; it’s a consumer protection law which states that anyone who negotiates a short sale has to be registed with the state of Oregon as a debt management service provider and there is a $20,000 bond for that. Unfortunately, there were over 30 people who were given cease and desist orders for breaking this law in 2012.

So how can a person be sure that the person who’s helping them with a short sale is legally qualified? The good news is there isn’t a lot to sort through. There are only 12 registered entities in the tri-country area who are registered as Debt Management Service Providers. Someone can simply go to the Division of Finance and Corporate Securities website or just search online for debt management service providers in Oregon to find out.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to Real Estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Renovate or Buy

To Buy or To Renovate

Portland’s housing market is heating up and sellers are curious if it makes more sense to renovate their current home or sell and buy a new home.

Before you make any decisions, please consider the following questions: Are you going to be living in the home long-term? If yes, then it does make sense to renovate the house. If it’s just a short-term fix, then it’s probably not a good idea.

Is your house already the best home in the neighborhood? If it is, the ability to recoup your investment is limited by the house values in the area. As a rule of thumb, expect to recoup 50-85%, depending on the project that you do.  As long as you’re willing to accept somebody else’s design, it may be better to buy a house with the remodel already completed.

On the surface, it can sound a little confusing but it actually comes out to a case-by-case scenario. Have an expert sit down with you before the decision to renovate and let them do a market analysis (duration of stay etc.). Another market analysis should be done regarding the value after the house renovation has been completed. From there, you can make a final decision if it makes sense to renovate.

Top 10 Midrange Projects
1. Entry Door Replacement (steel)
Job Cost: $1,137
Resale Value: $974
Cost Recouped: 85.6 percent

2. Deck Addition (wood)
Job Cost: $9,327
Resale Value: $7,213
Cost Recouped: 77.3 percent

3. Garage Door Replacement
Job Cost: $1,496
Resale Value: $1,132
Cost Recouped: 75.7 percent

4. Minor Kitchen Remodel
Job Cost: $18,527
Resale Value: $13,977
Cost Recouped: 75.4 percent

5. Window Replacement (wood)
Job Cost: $10,708
Resale Value: $7,852
Cost Recouped: 73.3 percent

6. Attic Bedroom Addition
Job Cost: $47,919
Resale Value: $34,916
Cost Recouped: 72.9 percent

7. Window Replacement (vinyl)
Job Cost: $9,770
Resale Value: $6,961
Cost Recouped: 71.2 percent

8. Basement Remodel
Job Cost: $61,303
Resale Value: $43,095
Cost Recouped: 70.3 percent

9. Major Kitchen Remodel
Job Cost: $53,931
Resale Value: $37,139
Cost Recouped: 68.9 percent

10. Deck Addition (composite)
Job Cost: $15,084
Resale Value: $10,184
Cost Recouped: 67.5 percent

http://realtormag.realtor.org/home-and-design/cost-vs-value/article/2013/01/2012-13-cost-vs-value-make-first-impression-count

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to Real Estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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