On January 1, 2018 the City of Portland Home Energy Score ordinance took effect. It requires sellers of single-family homes to conduct and disclose a Home Energy Report and provide a Home Energy Score when listing their home.
If you're thinking about listing and the property is in Portland, this directly affects you.
As an Earth Advantage® Broker, I have access to information and materials that will help you navigate this process and I'm just a phone call away - so if you have questions, don't hesitate to text or call.
In the meantime, here's a great video our friends at Earth Advantage® put together to explain the process in a little more detail.
Now that selling season is in full swing and you’re likely applying those last finishing touches before hitting the market, here are a few ideas to consider that are sure to have a great impact on that first impression…
Mature Tree(s)
Choose a location that adds but doesn't detract - too close to the home and you may have sewer and foundation woes down the road, amongst other things, but when placed in just in the right spot, one or more mature trees can provide not only a charming look and feel but also help to cut down on cooling costs in the summer. (If you are in Portland and planting in the "parking strip" look to the city for approved trees for your space)
Simplify
The future owner may love gardening or despise it! Keep the plantings to a manageable minimum. This will allow the green thumb gardeners to imagine all that they could do with a workable canvas while offering the folks that don't care for gardening an approachable landscape. Go for a few perennial shrubs, plants and trees that are easy to maintain.
Go Local!
This mantra doesn't just apply to foods and goods - I encourage you to keep native plants for your yard top of mind, too! Native plants grow here naturally! What does that mean to you? 1) Less watering! (lower water bill!?!) 2) Happy birds, bees, and bugs! & 3) An all-around easier-to-maintain landscape that will appeal to both buyers and neighbors!
Grass
If you must have a lawn, then keep it green for home sales and photos. Take care of dead patches and keep it classy. Do your neighbors all have lawns? Then when you prep for a home sale this might be a trend to stick with.
A Happy Entry
Stand at the edge of the street facing your property and approach as you would if you were a visitor. Would a seasonal pot of flowers be a nice touch to greet you on your way to the door? Are you walking through overgrown plants and bushes? Tripping over uneven stones and broken concrete? If you notice it, so will a buyer. These will all be a very important part of your visitors or future buyer's first impression of your home. Clean it up and make the entry simple, easy, and delightful.
Today we’re going to take a moment to look at the 3 P’s a buyer will consider when choosing which property to come visit and subsequently make an offer on:
Property
Placement
Price
The first is “Property”
Whether purchasing a primary residence, a rental property to buy and hold or a fixer to flip - a buyer always has a specific property type in mind. A list that looks something like this: a single-level, 3 bed, 2 bath, over 1,500 SF, and it must have an attached garage. Often times, there are many additional amenities on the list - but this is just an example of what I mean by “property”.
This website, housesofportland.com, has a search tool where a prospective buyer can input all of their criteria into a search, save those parameters, and then as soon as a property hits the market with that criteria, they receive an email notifying them of a new listing.
Sellers, unfortunately, outside of a major renovation or addition, your “property” pretty much is what it is. My job as your real estate marketing specialist is to make sure that we are effectively marketing all of your property’s best features so that your property doesn’t get filtered out of those extremely important buyer-saved searches.
The second is “Placement” - or "location"
Sellers, this is going to be the most challenging of the 3 to have an impact on. Typically, if a buyer wants into the area, you’ll make their search - and if not - you won’t. That said, making sure that we’re pointing out and marketing the nearby amenities and neighborhood features is going to be impactful when your property listing hits their inbox.
They say that the 3 things that matter in a real estate investment is location, location, location - so buyers, let’s make sure we have your search set up so that we’re sending you only the best properties that will meet your real estate goals. There’s no reason to settle for something less when we have such powerful tools.
The third and final “P” is “Price”
In the end, a home is only worth what a buyer will pay for it. The property has a say, the location has a say, the comparable market value of your home has a say, the level of competition and bidding over your home has a say, but in the end - it’s the buyer who is going to make the offer. Our goal is to make sure that whatever we price your home at accomplishes 2 goals:
We market your home in order to make it look as desirable as possible
We get your home in front of as many people as possible
Quality marketing in the right places drives interest. The more interested buyers we can generate, the more visitors to your home we’re going to have, and the more visitors your home has, the better the offer quality and quantity will be.
The price of your home has a direct impact on the number of people that see your property. For example, if the comparable market value of your home is $390,000 and there are 100 buyers with a saved property search capped out at $410,000 and there are 500 prospective buyers with searches capped out at $400,000, would you have more competition and potentially better offers if you were to price your home at $389,900 or $409,900. You’re talking about 600 buyers seeing your property vs 100. 6x the visibility. Even if you simply have 2 offers - one from a buyer who can go up to $410,000 and 1 from a buyer who can only offer $400,000 - that extra competition that was generated is what will likely encourage that buyer who can offer $410,000 to make that higher offer.
Pricing your home is as much art as it is science and I’d love to talk with you about what we can do to make sure that you’re property gets in front of the highest possible number of prospective buyers. That's how we’re going to ensure that you get the highest possible amount when selling your home.
Today we're going to talk about the temperature of our local real estate market. I've heard a lot of opinions and bold claims recently and think it's important to stop and look at the facts to decide if any of these claims contain truth.
The strength or “temperature”, if you will, of the real estate market is measured by something we call “inventory”. Inventory is the number of months that it would take to sell all out of all of the homes on the market if we stopped putting homes on the market at the moment this inventory was measured. A “cold” real estate market - or a “buyers market” - is when inventory is above 9 months, a balanced market is 6-9 months, and a “sellers market” is less than 6 months.
The RMLS report for July (2017) came out recently and it contained some interesting information for this particular statistic. Every July for the last few years, the market inventory has increased over the June market - but this July, it increased a bit more.
At 2.1 months, this July was our highest monthly inventory number since February of 2015.
Before we sound the alarm and start crying "the sky is falling" in true chicken little fashion, I want to give you a few reasons why this number is not necessarily a cause for concern, but rather it is likely just a sign that the market is as hot and healthy as ever...
First, it’s not a lot higher than it’s been in recent similar times of the year - for example, last year we saw 1.9 months of inventory in July (only a 0.2 month difference). In both September and October of last year we saw 2.0 months of inventory. So, 2.1 isn’t an astronomical leap.
In the first 7 months of this year, we have averaged 0.1 more months higher in inventory each month than the same month last year - April was 0.3 months higher than April in 2016 - and this 2.1 number is only 0.2 months higher than July of last year. In other words, this isn’t a new trend - it was to be expected.
2.1 months of inventory is still an extremely hot market when considering that a balanced market is 6-9 months of inventory.
To summarize, while we have seen our highest inventory in 2.5 years, it’s not drastic enough of a change to start panicking or making fearful assumptions.
That said, a market cooling would have to start somewhere - and perhaps this last April was the beginning of some slowing to come. If you’re thinking about buying or selling real estate in the Portland Metro area and would like to discuss what your options might be as we head into a possibly cooler fall and winter market, please reach out to me so we can connect.
Let's take look at 4 very common lending myths that are floating around out there and shed a little light on why they’re not always so accurate. Before we do, I just want to mention that while I am a licensed real estate broker, I am not a licensed mortgage broker - and I don’t pretend to be one.
Without further adieu...
Myth #1 - "I have to have perfect credit to get a loan.”
Truth - While there are some advantages to having good credit score - and a good lender will talk to you about what those things are, the 2017 FHA loan application guidelines now require just a 580 credit score to qualify for their 3.5% low down payment program. There are other factors involved in getting pre-approved, but a perfect credit score is not one of them.
Myth #2 - “I have to have a large down payment saved up before I can buy.”
Truth - While a down payment does help keep the monthly payments down, you don’t have to have a large down payment saved up in order to buy a home. There are grant and loan programs that offer anywhere from 0% to 5% down. A good lender will go over your specific situation and find a loan type that works for you.
Myth #3 - “I’m approved for X, therefore I should buy a home worth X."
Truth - Just because you can get a loan for a certain dollar amount doesn’t mean that the monthly payments that come with it are going to be comfortable for your budget. There is nothing worse than being house-poor. I believe that tomorrow is built by today’s decisions so I recommend that all of my clients look not only at the total amount they can get approved for but more importantly, those monthly payments. Let's make sure that we’re setting your household up for success.
Myth #4 - “I should wait until I’m ready to buy a house to talk to a lender"
Truth - Almost every day I chat with folks who are thinking about buying a home but are hesitant to talk to a lender because they just “aren’t ready yet”. The lender is the person that helps you get ready! Talk to a trusted lender 6mo to a year out from when you anticipate starting to look for your home. A good lender will coach you through what you can do to make your credit and finances home-buying ready.
At the end of the day, every person’s journey to getting a home loan is going to look a little different. A good lender is going to help walk you through all of your options and help you find the best package that’s right for you. If you’re thinking about buying and you’d like to know what your options are, let’s connect and I’ll provide you the names of a few lenders I know and trust.
This likely doesn't come as a shock to you - but there are more people involved in your average real estate transaction than just a buyer, a seller, and their respective Realtors. The question for today is - who is involved in your typical real estate transaction?
First, let's take a look at the listing side of the transaction
I’ve already given this one away - but, first, you have the Seller and their Realtor. If you have a good, quality, experienced Realtor, they’re going to have a network of specialists who will help you prepare your home for the market.
Often this will include the services of a General Contractor (and any subs he may bring on), a stager, a photographer, a videographer, a 3D-ographer, a sign installation company, and a title company - who will serve as the neutral 3rd party to the transaction.
Sellers - while it’s possible that you may end up needing to use the services of all of these professionals - I’m here to help you decide which, if any, of these services will make sense for your goals and your bottom line. The end goal is the most money in your pocket, right? That’s why I’m here to help.
Now, to the buying side…
30 percent of homes purchased in Portland in 2016 were purchased with all cash. This means that the majority of homes, around 70% of them, were purchased with some form of financing.
So, in addition to the buyer and their Realtor, there’s likely going to be a mortgage broker or lender involved.
Once the buyer and seller have agreed upon the conditions of purchase and the home is under contract, the buyer will enter their inspection period.
Typical inspections include the services of a home inspector (who will typically perform general inspections, pest and dry rot inspections, and, occasionally, the radon inspection) and a sewer scope company. Depending on the home and your individual needs and concerns there may be more inspectors at play like septic inspectors, well testers, tank sweepers and more but let’s keep this list to the basics.
Once the inspection is completed and the buyer has an idea of what might need to be done to the home - the wise thing to do is to get professionals who focus on those specialties such as electrical, roofing, windows, mold remediation, flooring installers, etc. out to do a bid so that you know what you’re working with - getting preferably 2 or 3 bids for each.
Based on my experience, the average in a typical transaction ends up totaling about 3-4 contractors
Now, most banks will only loan out on a home if they think it’s worth loaning money on. Because of this, the banks use a 3rd party home appraiser to come in, once the inspection period has passed, to assess the value of the home and give the bank the green light on the loan amount and condition of the home. Their main focus will be on the safety and structural soundness of the dwelling, as well as, to assess the home's value.
Lastly, while the mortgage broker is on the offensive side of the ball, so-to-speak, getting the buyer into a bank's loan package that’s right for them, the bank also has someone playing defense called the underwriter. They’re the person with the final say on whether or not the buyer will be able to actually close on the loan with that financial institution.
Whew… that seems like a lot of players, right? So far, in just a typical transaction, we’re looking at around 20 people that are involved. In some of the more complicated transactions it’s realistic to see as many as 25-30 people involved - in one way or another.
While this can seem a little overwhelming on your own, I am here to help you make sure that all of the deadlines are met, all of the legal contracts and documentation are properly executed and filed, and that everyone is doing what they’re supposed to be doing when they’re supposed to be doing it.
I’m your consultant, your guide, your advocate, and at times even your lightening rod. In other words - I’m here for you and here to help!
When selling your home, establishing that all important “list price” has a huge impact on who sees your home and what they might offer.
Price it too high…
…and everyone who can afford your home at or slightly above its fair market value won’t even see it! The 92% of home buyers that are shopping online typically have saved searches on websites that will email them when new properties with what they’re looking for hit the market. Those searches have a “max price” parameter that will filter your property out if it’s listed above the top end of their budget.
Before you think “well we can always lower the price later” - don't forget that you'll want as many eyes on your property as possible at one time so that you take advantage of supply and demand.
Price it too low…
…and, you run the risk of receiving an offer slightly below what you may have otherwise received had you priced it correctly. The market will typically correct for this mistake automatically in the first-time home buyer price range because there are more buyers (supply and demand). In the higher home price ranges, however, pricing the home correctly the first time becomes imperative.
Price it just right…
…and you can maximize the number of buyers that see your property who can actually afford it at or above its market value. Pricing a home is actually pretty straightforward.
A good buyer’s broker is going to look at comparable homes that sold within a 1-mile radius of your home in the last 3-6 months. They will use this as a guide to help the buyer determine how much to offer.
The bank’s appraiser will use a similar approach.
Therefore, we will sit down with you and look over that same information. No guesswork necessary. With that price range in hand, we will then determine, together, where in that range to list your home based on your goals.
Please enjoy this tongue in cheek look at some pretty serious recommendations regarding a borrower's behavior during the home loan acquisition process...
Thou shalt not change jobs, become self-employed or quit your job.
Thou shalt not buy a car, truck or van (or you may be living in it)!
Thou shalt notuse charge cards excessively or let your accounts fall behind.
Thou shalt notspend money you have set aside for closing.
Thou shalt notomit debts or liabilities from your loan application.
Thou shalt not buy furniture.
Thou shalt not originate any inquiries into your credit.
Thou shalt notmake large deposits without first checking with your loan officer.
Please note - any one of these lenders will have much more comprehensive information regarding getting pre-approved. If you are ready to get the home buying process started and have not yet been pre-approved, I recommend starting there.
There are a number of documents you will need to gather for your lender and loan officer. A loan officer or lender will need to review these documents in order to understand what your qualifications are for getting a loan as well as helping you understand which loan programs best suit you and your financial plans.
Income Verification:
Names and address of all your employers for the last two consecutive years, and supporting documents verifying income figures
Debt Verification:
Any car, student, mortgage, home equity, loans, bankruptcy proceedings, credit card accounts, divorce decrees and separations agreements
Asset Verification:
All savings, checking, mutual fund, IRA, 401k, security accounts. Also Bank statements and and gift letters if you are receiving funds from family or friends.
Other Documentation:
A list of the past 2 years of addresses, social security number, last two years of tax returns and a loan application. Once you have supplied your loan officer all this documentation they will determine how much you can afford as well as go over the costs of that loan. During the home buying process ask any questions that arise, be sure to make all your payments on time, and if you do not have an insurance representative, let me know and I can help you find one.
Going from getting your offer accepted to getting your keys in hand on your new home usually takes about 45-60 days if you aren’t paying in cash. There are several things that need to occur during that time period:
Home Inspection Period: 10 business days
Home Appraisal: 7-14 days
Loan Underwriting: 2-5 days
Loan Approval & Condition Collection: 1-5 days
Cleared to close by Underwriter: 1-2 days
Final Review by the lender after signing loan documents: 3-5 days
Every home buying situation is a little different and timeframes can be pretty significantly altered by new laws and regulations from time to time - but these are pretty accurate estimated timelines as of the Spring of 2019.
