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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Builders, Land Development and the First-Time Home Buyer

Builders, Land Development and the First-Time Home Buyer

Builders, Land Development and the First-Time Home Buyer

The limited home inventory in Portland is tight and it’s getting tighter.

The real estate market downturn of 2007 caused most land development to come to a grinding halt. Now that the market has picked back up, builders are looking for new projects by purchasing existing homes (such as fixers, entry level etc.) to develop the land. Builders are now directly in competition with the first-time homebuyers for these homes.

How is this affecting home sales?

It’s increasing demand which increases market value if there’s competition for the house. Typically, builders can pay cash, close quickly and waive inspections as they are removing the existing house to build a more expensive home.

Is the City of Portland concerned?

Land use laws and urban growth boundaries direct development in Portland. If there’s a shortage of available land, builders are required to look at existing properties for development. I know several builders that weren’t interested in building in Multnomah county three years ago but they are now.

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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Changing Interest Rates of Jumbo & Conventional Home Loans

Changing Interest Rates of Jumbo & Conventional Home Loans

Changing Interest Rates of Jumbo & Conventional Home Loans

Interest rates for home loans which exceed $417,000 (jumbo loans) have been averaging a lower interest rate than a traditional 20% down conventional loan. Currently, a $250,000 loan is paying a higher interest rate than in jumbo loan.

Shouldn’t jumbo loans have a higher interest rate for putting the bank at a higher risk?

There are some changes changes that are happening in the current lending industry. Conventional loan fees have increased due to lenders sustaining losses. Also, lenders are using jumbo loans to entice wealthy individuals to serve their other financial needs such as brokerage services and financial management.

Is it going to stay this way?

No, it’s temporary. Now the high-end homes are selling, bankers are using the conventional loans to make up for some of the losses. Once the lenders start taking losses on the jumbo loans, it’ll change again.

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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Decreased Foreclosure Filings In Oregon

The Ripple Effect of the Government Shutdown Started to Affect Home Loans

Foreclosure filings in Oregon’s seven biggest counties decrease a whopping 42% from a year ago and 80% from the prior month. Why? Well, the foreclosure filings are likely decreasing due to the requirement of expanded mediation with homeowners prior to filing for foreclosure.

The new law requires lenders to give homeowners 60 days notice before they can file for foreclosure. While there’s not any assurance that this will decrease foreclosure filings in the long run, it has temporarily. The sixty day requirement could take a few months to catch up.

This will maintain our tighter inventory for now which will help keep up prices stable.

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

The Ripple Effect of the Government Shutdown Started to Affect Home Loans

Four Downtown Condo Buildings Are Tied Up In A Court Fight Over Construction Defects

The Government Shutdown could affect buyers who need loans to purchase their home. The IRS is currently closed so lenders are unable to obtain tax transcripts which are required to process most loans. The Social Security administration is closed as well and lenders are unable to verify social security numbers. FHA is not endorsing new loans in the multi-family mortgage program. Not to mention, the federal workers may not qualify for home loans as their income has been impacted due to the shut down.

Most buyers are being affected in some way, whether it’s a short or long delay. While it is unlikely, this could create a possible backlog of loans being sold to an investor like Fannie Mae and Freddie Mac so the lenders can fund additional loans. If Fannie and Freddie stop purchasing loans on the secondary mortgage market, until they can get the tax transcripts for example, the lenders could potentially run out of money to fund more home loans. It just depends on how long the shutdown lasts.

A small percentage of home sales are cash sales. If you are selling your home, you might want to prepare for a possible delay.

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 the expert himself, Rick Sadle.

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