It’s Worth it to Weather a Winter Home Purchase

Did you know there’s a “buying season” in Portland? And did you know it can be better to avoid buying in that season?

Every year the greater Portland area sees a wave of activity in the spring. According to data gathered from the RMLS listing service, we see the highest price peaks and the lowest amount of inventory around March and April. Sure, we know that time of year feels like the best time to buy. It’s when we come out of winter hibernation and the sun begins to shine. Buyers find their motivation and sellers’ homes look best as spring blooms sprout. But there are drawbacks, primarily in competition among buyers, that can be avoided by buying when everyone else slows down for a long winter’s nap.

The most recent Market Action Report from RMLS shows inventory in September 2018 at its highest since January 2015. This is a big change from the several years in which we’ve had low inventory driving already high demand, and it means good things for buyers. Those who take advantage of this opportunity will find that sellers are still putting their homes on the market, interest rates are still reasonable, and buyers have more leverage than in the recent past.

Buyers who write offers in winter will have another advantage that spring and summer buyers don’t: rain. Seriously, rain. A variety of home maintenance issues in the Pacific Northwest arise because of our wet weather. Leaking roofs, puddling water in basements, moldy attics and more are caused or exacerbated by precipitation. But without actively wet conditions, particularly in an older home, it’s difficult to tell if that stain in the basement is a current issue or something from years ago. As a result, savvy purchasers will hope for the worst weather during their home inspections.

One thing to keep in mind when deciding how to time your move is that the market will change. It always does. The trend since the downturn from several years ago, is that activity, competition and pricing dip during winter and rise in the spring. So if you’re going to try and “time” the market any time soon, the time may be now.

If you want to learn more, give Amy Seaholt a call. She’s happy to put on rain boots and go find you a house.

 – Amy Seaholt

Understanding Radon

AND A COOL INTERACTIVE MAP, TOO!

 The map areas correspond to zip codes. Click on each for a summary of information about radon in the area. The map areas correspond to zip codes. Click on each for a summary of information about radon in the area.

Radon is dangerous. I think just about everyone knows that. But how dangerous is it? That’s where things start to get a little fuzzy. A friend and colleague recently endured a few months of radon poisoning with almost deadly results. This can happen to anyone that lives in a home with exposure risk. It’s important to understand this deadly gas, why you should be aware of it, and how to mitigate the risk to you and your family.

The State of Oregon publishes an interactive map of indoor radon risk levels that was recently updated. This is a useful tool, but be aware that no matter the risk level in your area, you can still encounter a radon problem.

SO WHAT IS RADON?

You can’t smell it, see it, or taste it. It’s literally radioactive. It is the second-leading cause of lung cancer in the United States. But what in the world is this stuff and why does it want to kill us? Let’s go into geek-speak for just a second.

 Not the best illustration, but it Not the best illustration, but it’s colorful!

Radon is a colorless, chemically-unreactive, inert gas discovered in 1899 partly by Ernest Rutherford and in 1900 partly by Friedrich Ernst Dorn. It is 9 times denser than air, which is an important factoid to remember. It easily penetrates almost any material in a building, including sheetrock, concrete block, wood paneling, and most insulations.

Radon is naturally occurring in the ground and is the result of the breakdown of uranium present in soil, rock, and water. It occurs in several isotopic forms, of which radon-222 occurs most frequently. When this gas is released into the environment, it results in the formation of decay products that are radioisotopes (a chemical element that has an unstable nucleus and emits radiation during its decay to a stable form) of heavy metals (polonium, lead, and bismuth). These decay products can easily be inhaled because they rapidly attach to other airborne materials (like dust). It also may be ingested if it is highly concentrated in groundwater (well water), but the inhalation of radon is of higher concern.

WHAT ARE THE SYMPTOMS OF RADON EXPOSURE?

Respiratory problems are the most common signs of radon-related distress. These problems can include: a persistent cough that doesn’t get better, difficulty breathing, chest pains, the coughing up of blood, wheezing, hoarseness and recurring respiratory infections such as pneumonia or bronchitis. Radon exposure can lead to lung cancer.

A lesser known symptom of radon exposure is neurologic issues. Anxiety, memory loss, and depression could be a sign of radon exposure. However, brain health and function issues have many, many other possible causes, so this is not a symptom often mentioned.

Serious effects from high radon levels are cumulative over a long period of time. It’s important to periodically test for radon, but the presence of high radon levels in your home or a home you are thinking about buying is not a reason to panic.

WHERE DOES RADON OCCUR?

Radon is found in every state in the country. If you take a look at the map and find that you are in an area that is considered low-risk, you still may encounter a radon problem. It often enters the home through cracks in floors, cracks in walls, gaps around service pipes, joints between floor and walls, gaps around drains/pipes, etc. You may have no problem at all with radon while your immediate neighbor is dealing with extremely high radon levels.

HOW DO I TEST FOR RADON?

 Okay, so this vat is 100% more like the stuff the Joker falls into than it is like radon, but I Okay, so this vat is 100% more like the stuff the Joker falls into than it is like radon, but I’m running out of visuals, here.

Short term, long term, and continuous tests are available for radon. Tests should be conducted in the lowest livable area of your home (remember how radon is denser than air?). If you are considering selling your home, I highly recommend conducting a short term radon test before listing the home on the market. It doesn’t cost much and is very much worth knowing the results before you’re in the middle of a transaction!

Most people start with a short term test to determine whether or not further testing is necessary. The test takes between 2-7 days and are then mailed to a lab to determine the results. These are available at most home improvement stores and online.

Long term tests measure radon levels between 90 days and a year. They are more accurate than short term tests because radon levels can vary significantly from day to day and month to month. These tests are usually available through state agencies and online retailers.

Continuous radon testing devices plug into an outlet and can be used for both short and long term testing. They will give you a running average radon level. These are available from online retailers such as Amazon.

Home buyers: It’s important to note that if you purchase a home in summer and conduct a radon test, you should conduct another test in winter when radon levels are more likely to be an issue.

SHOULD I TAKE ACTION?

One out of every 15 homes in the U.S. have radon levels that should be lowered. Fortunately, reliable techniques exist to reduce radon levels in homes so that almost any home with high radon levels can be fixed. If you have a radon problem, you can hire an experienced radon contractor or accomplish the repairs yourself.

The EPA recommends doing a second test if an initial short-term test registers 4 picoCuries per liter (pCi/L) or higher. A long term test is ideal, but you can perform a second short term test if you need results quickly. If the second test results in levels higher than 4 pCi/L, consider taking action to mitigate radon levels in the home.

WHAT CAN I DO TO MITIGATE RADON IN MY HOME OR REDUCE RISK?

 Ventilation = good Ventilation = good

It does take more than just sealing cracks in the foundation to mitigate radon risk and/or exposure. Active soil depressurization or fan and exhaust systems have proven to be cost-effective and reliable.

Radon that escapes out into the air is not a problem as it quickly becomes diluted. Therefore, ventilation is key. Ventilation can be increased through opening doors, windows, and vents. Many people like to block their crawlspace vents in winter and/or install additional insulation in their crawlspace. Blocking crawlspace vents provides very minimal energy savings so unplugging these vents and possibly moving some insulation around may be all it takes to mitigate a mild to moderate radon problem. A heat recovery ventilator (air-to-air heat exchanger) can also be installed to increase ventilation.

All information above is provided for educational purposes. It is always recommended to consult a radon professional if you have any concerns about radon in your home.

Brandi Whitaker

Oregon Tenant Protection Bill

This seems to be a subject much talked about amongst real estate agents, property managers, landlords, tenants, and homeowners (i.e. everyone). Yet, if you Google “Oregon tenant protection bill” or “Portland tenant rights bill”, all you’ll get is a few cut and dry articles from the Oregonian and other local news blogs and not much else. Most of what you’ll see will be about other legislation that has already passed.

What are we afraid to talk about? I’m a Portland area real estate agent and I eat complicated, controversial topics for breakfast. Okay, no, I usually eat eggs for breakfast. Sometimes cereal. Occasionally a snack bar…

But that’s beside the point. Let’s boldly go where few have gone before.

The original version of this article can be found here.

 Boldly blogging where no one has blogged before. Boldly blogging where no one has blogged before.

The housing shortage is driving legislation.

People are passionate about this subject because Portland is in a housing shortage. We need approximately 24,000 units to meet demand (read my blog about all the people moving here). Barring economic catastrophe, a housing shortage will always cause home values to rise and rents to increase. This places undo pressure on tenants and home buyers, while current homeowners get to watch their net worth rise and landlords have the opportunity to raise rents.

The only real solution to a housing shortage is to build more housing but of course we only have so much space available. But, hey, we’re Portlanders, and if we can find a weird way to help solve this problem, by golly, we’re gonna leap down that rabbit hole.

Multnomah County and Enhabit (no relation to Inhabit) are launching a pilot project called “A Place For You”. It aims to build ADUs (accessory dwelling units or “tiny homes”) in Portland resident’s backyards. These will be used to house homeless families rent-free for 5 years in exchange for a tax abatement to the property owner. After 5 years, the homeowner gets to keep the ADU to be used as they see fit. The pilot project is starting with just 4 units but over a 1,000 homeowners have expressed interest.

It almost sounds like an episode of Portlandia.

 It It’s okay if you don’t know what this is. What am I saying? No, it’s not okay. It will never be okay. Things will never be the same again!

This is an interesting idea but creativity isn’t going to get us very far in the short term (and that doesn’t get politicians re-elected). The housing shortage is enough of a hot topic that politicians such as Ted Wheeler and Tina Kotek have thrown their weight toward repealing the statewide ban on rent control (although last year Ted Wheeler said he supported this for the state but not in Portland, where he would adopt other measures first, he seems to have now changed his position). In the election last year, Chloe Eudaly upset incumbent Commissioner Steve Novick despite having no political experience. Her grassroots campaign for the Portland City Council was focused entirely on tenants rights.

Now that we’re firmly into 2017 it means that politicians are putting their legislation where their mouth is.

In Portland, new rental ordinance is already in place.

Before we talk about the infamous House Bill 2004, let’s quickly take a look at the tenant protection ordinance that took effect back in February this year. This was an emergency ordinance brought forward by Chloe Eudaly and Ted Wheeler that was passed unanimously by the Portland City Council. It requires landlords to pay moving costs for tenants that are evicted without cause or for tenants that must move because rents have been increased by more than 10 percent in a 12 month period. The one exemption is for landlords that have only one rental unit. Moving costs paid by the landlord range from $2900 to $4500 depending on number of bedrooms.

Attorneys are already dueling in court over the legality of this ordinance but for now it stands.

 Not that kind of duel. Although court cases might be more interesting this way.  Not that kind of duel. Although court cases might be more interesting this way.

This brings us to the Tenant Protection Bill (HB 2004) that was recently passed (31 in favor – 27 opposed) by the Oregon House of Representatives and has now moved along to the state Senate for review. There are a lot of nuances to this bill and several compromises were made to get it this far. Remember, this is NOT law yet.

Here’s a few salient points of the pending bill.

  1. After 6 months, no-cause eviction of tenants renting month-to-month are banned (before 6 months no-cause eviction of tenants renting month-to-month are allowed with 30 days written notice).
  2. After 6 months, evictions are allowed for month-to-month (30 days after the effective date of this legislation) and fixed term tenants (immediately after the effective date) with 90 days written notice for specified reasons, such as renovations, repairs, when the property is scheduled to be demolished, or for the sale of the property. Landlords must pay one months rent to cover relocation expenses in this case. (However, if the reason is repairs/renovations, the landlord must offer a new rental agreement back to the evicted tenant before other potential tenants.)
  3. After 6 months, evictions are allowed for month-to-month and fixed term tenants with 30 days written notice for cause. (Examples of cause: non-payment of rent, violation of drug or alcohol program, pet violation, substantial damage, etc. There are additional provisions that govern “cause” and timelines that a landlord should be fully aware of.)
  4. If the landlord terminates the tenancy in violation of the provisions, the landlord would be required to pay 3 months of rent to the tenant in addition to potential damages. This applies to both month-to-month (30 days after the effective date) and fixed tenancies (immediately after the effective date).
  5. Exceptions to the above exist for landlords that own four or fewer rental units or for landlords that live on the property and own two or fewer rental units.
  6. The bill also allows cities and counties to adopt their own rent control program which effectively abolishes the statewide ban on rent control.
  7. An exemption to rent control is provided for any new residential development for a period of 5 years from the date of issuance of the first certificate of occupancy.
  8. If a city or county passes a rent “stabilization” program, it must provide landlords with a fair rate of return and a process for the the landlord to petition for permission to increase rent in excess of the amount allowed in the program when needed to achieve a fair rate of return.

 The rubics cube of government. Nuff said. The rubics cube of government. Nuff said.

A few of the compromises that allowed this bill to pass include the exemption for landlords that own 4 or fewer units, reducing mandatory relocation assistance down to one month (originally the bill called for three months even when the eviction is for an allowed reason), and the 5 year exemption for new residential developments.

What does this mean?

So, does this bill seem sensible? Why would anyone object to it? Why was it passed on such a slim margin and why is the battle for it in the senate expected to be difficult?

I think the biggest concern is with point 6 – 8. Rent control is only fiercely debated when you don’t talk to economists. Meaning, economists largely have a consensus of opinion that rent control results in a reduced supply of property to the market (which of course drives rents and home prices even higher).

Wait a second, reduces the supply? Didn’t I just say earlier that this problem is a result of a housing shortage?

Based on historical data, most economists viewpoints, and studies that have been conducted on rent control, enacting rent control (or “stabilization”) causes housing shortages to become worse than if no controlling measures were put into place. I don’t like it when legislatures pass bills with provisions that aren’t supported by the data. (Read this article and this one and this one to gain some perspective on what economists think about rent control)

I don’t think the 5 year exemption for new construction or vague “fair rate of return” language is enough to curb the negative side effects of rent control but politicians only have so many tools in their belt when in comes to housing. Those tools tend to be very blunt instruments. Even though a screwdriver might be needed, we’re instead getting a hammer. Or maybe a mallet. Or maybe even a sledgehammer. Except I don’t think Peter Gabriel is the solution here.

 This analogy is too good for a caption. This analogy is too good for a caption.

The merits of points 1 through 5 above really come down to your point of view. I won’t delve into those here other than to say that I see both the positive and negative ramifications to being this restrictive about evictions but I’m open minded about the ideas.

HB 2004 hasn’t passed the senate yet (it was just referred to the Human Services committee). I’ll be following along to see if it passes and is signed by the governor, or if it dies, or if it becomes reborn as something more palatable. This is an interesting time for anyone that is a landlord or tenant!

Do you own a rental property? If so, what are your plans? If this bill passes, much of the legislation will go into effect either immediately or within 30 days. I’m a Portland area realtor and can assist you in deciding what course of action makes sense for your investment. Contact me if you have questions.

Brandi Whitaker

Online Real Estate Scams

Hold onto your money, folks, and verify, verify, verify.

 Online scams nowadays often have more to do with social engineering than serious hacking. But protecting your data is very important, too. Online scams nowadays often have more to do with social engineering than serious hacking. But protecting your data is very important, too.

So this is a super exciting topic, right? I’ve attended enough classes on information security to know how quickly people tune out (about 47.8 seconds). We’re all vulnerable, though, so let’s keep on top of this crazy world.

THE WIRE FRAUD SCAM

How it works
This one has been around for a couple of years and there are several different variations. However, the end result to a client during a real estate transaction is virtually the same. You receive an email from what looks to be your title company or realtor (it may have come from a hacked email address or be a “spoofed” email address). It includes wire instructions related to the house that you are purchasing. You go ahead and wire the amount to the account details shown because why wouldn’t you? Unfortunately, that account you just sent your money to was actually an account that the scammer had access to.

 Don Don’t let go of your control! (haha, see what I did there)

Scammer = $, You = 🙁

How to avoid the scam
Always, and I mean always, verify wire instructions via a phone call to someone you trust (the title company if you are familiar with the agent, your realtor, or your loan officer). Don’t use any contact information contained in the email with the wire instructions.

Fictitious Property Scam

This one mostly impacts people that live out of state looking to purchase or rent a property but there are local variations, too. It is especially prevalent in hot markets. I could see this really starting to impact Portland. Take a look at my blog about all the people moving here.

How it works
Scam artists copy photos of previously listed homes and create a fake property profile. They post to websites that allow for basic, unverified user accounts such as FSBO (for sale by owner) websites. Prospective buyers/renters call the information listed and, depending on the variation of the scam, may go so far as to make an offer to purchase/rent the home.

In the case of properties for sale, the interested buyer moves forward in wiring funds or mailing a cashier’s check for earnest money (an amount often sent with an offer to purchase to prove how “earnest” the buyer is in their desire to buy the home). After funds are sent, the online property profile vanishes. In the case of rentals, the scam artist asks for an upfront “application fee” which promptly disappears along with the online listing. This scam can also happen on popular websites like Zillow, Trulia, or Craigslist. These sites aggressively crack down on scam accounts but there will always be some that slip through.

 For sale online in southeast Portland for 0,000. Just take my money, already. For sale online in southeast Portland for $450,000. Just take my money, already.

How to avoid the scam
For home buyers, always work with a buyers agent. Attempting to buy a home without representation, especially when you live out of state, can lead to a whole host of problems (we’ll save that for a future blog). Of course, I’m completely biased in this opinion because I’m a realtor but when it comes to the buyer side of things, there’s very little to lose by having someone represent you.

Other things you can do if you’re a renter or you just don’t want to hang out with your friendly neighborhood realtor:

  1. Check the tax records. Most places have some type of online public access to check this (locally that would be PortlandMaps) but if not, lookup the local Tax Assessor’s office and give them a call. If the name on the tax record doesn’t match the property profile, slowly back away before turning around and running. Figuratively speaking, of course. Don’t, like, leave your computer behind in a public place.
  2. Ask for the property address then look it up on your favorite maps program then check the street view. Does it match the picture? No? Methinks I smell a rat.
  3. Contact a local realtor and ask them about it. I am sure that any who respond will be happy to help you find information about the house even though they don’t represent you. Who knows why. I guess realtors are just super friendly that way. Then, if they seem like smart people that you could hang wallpaper with for an hour or two, maybe consider interviewing them…?
  4. Check for odd grammatical and spelling errors along with weird turns of phrase. Evildoers are getting better at this but are rarely perfect. Also, if the listing details clearly don’t match what the pictures of the place look like or the price is entirely too good to be true, it is very likely a scam.

 You knew this post had to include a picture of the ubiquitous hoodie-wearing hacker, right? You knew this post had to include a picture of the ubiquitous hoodie-wearing hacker, right?

So there you are. These scams will now be successfully avoided by everyone I know. But, I feel like there’s more to say about protecting yourself online that goes beyond real estate. Since this post has been relatively short for me, why not keep going? Just a disclaimer: no matter what you do, there is never a way to be completely protected.

Having made that cheery statement, here’s just a few pieces of advice for greatly reducing your online vulnerability that I find myself frequently dispensing and are just as frequently ignored:

  1. Keep ALL of your devices up to date which means update everything as soon as a new release comes out. That means Apple users, too (the days of thinking that Apple products aren’t vulnerable are over). No, do not wait a week or two to see if you like the feel of the update. Vulnerability patches are entirely too important to wait.
  2. Use a random password generator for everything. Store them in a password keeper (check out LastPass and Dashlane). Make sure that the password you use to access the password keeper is really good (like a passphrase). Yes, there are some downsides to using a password keeper and there’s always debate about the safety of keeping all your passwords in one place. However, the alternative most people use is having one, maybe two, passwords for EVERYTHING. To me this is a lot riskier than relying on a very successful company to maintain sophisticated software that protects your data.
  3. If you do not want to use a password keeper then make sure not to use the same password for everything. Please use a different password for all of your financial accounts. At least in this manner, if one of your non-financial passwords gets cracked, they can’t use it to drain your accounts. Make your financial passwords as difficult as possible (which means more complex than a word followed by a digit or two.) If you find yourself copying your passwords onto Notepad or Word then it’s time for a password keeper.
  4. Do not click links in emails unless they are from a trusted source, no matter how interesting they look. Also, be careful of “attachments”. A recent scam involves taking a screen capture of a PDF or other attached document and inserting it into the email. This way it looks like a legitimate document to download but is actually a link to a site that will install malware on your computer.

Brandi Whitaker

The Case of the Rapidly Increasing Oregon Population

WHY SO MANY PEOPLE ARE MOVING TO OREGON AND WHAT I THINK ABOUT IT

 “Nancy Drew and the Jewel Stealing Sasquatch That Moved to Oregon”

If this were The Hardy Boys or Nancy Drew (I devoured those books as a kid) then I would start this case by hunting for clues. There would inevitably be some type of jewels, paintings, or other objects involved and I would almost certainly get to travel to interesting locations. At some point I would get to ride in a spectacular car, motorcycle, boat, plane, or other oddball method of transport like a Sasquatch or something. In the end, my master sleuthing would uncover the mystery, plus some unexpected twist no one was expecting (or maybe I’m thinking of Scooby Doo).

Figuring out why Oregon is one of the top moving destinations in the United States takes a super sleuth. Some reasons are obvious. People from more expensive areas, like much of California, enjoy moving to Portland because they have a lot more buying power. Their jobs also tend to transfer well to our market. Many companies are opening PDX satellite offices and have found that their employees are jumping at the chance to move up here (I’m looking at you, Google).

There is no denying that you can afford more house in Portland than you can in the heavily populated areas of California. The median home price in San Francisco is north of 1.3M. I’ve seen headhunter after headhunter try to recruit many of my engineer friends to move down there (unsuccessfully). The running “joke” is that a down payment in Silicon Valley could buy you an entire house in most of the rest of the United States.

 This is California. If it were Oregon these people would be wearing Smartwool long johns, Pendleton sweaters, Columbia jackets, and Patagonia puffer coats. And they This is California. If it were Oregon these people would be wearing Smartwool long johns, Pendleton sweaters, Columbia jackets, and Patagonia puffer coats. And they’d still be huddled a lot closer together for warmth.

But, as much as Oregonians love to blame all problems (especially traffic) on Californians and people living in Vancouver, there is a deeper story here.

California’s net gain/loss is actually pretty close to zero (about the same amount of people move in as move out). Oregon, on the other hand, stands at about a 67% gain vs 33% loss rate. It seems that word has traveled far and wide. People from Arizona, Texas, Colorado, Illinois, Kentucky, West Virginia, and others are all finding their way to the Pacific Northwest (Seattle is getting them, too).

However, one of the biggest sources of transplants is New York and other northeast states. New York itself is one of the most moved from states at a 63% loss vs 37% gain rate. It’s easy to see why this would happen. All the reasons Californians love to move here make sense for New Yorkers. And unlike Southern Californians, East Coasters aren’t trading year-round mild weather for the privilege of growing webbing between their toes.

 Pro tip(s) for migrators: Only wimps carry umbrellas in Oregon. Never buy a piece of outerwear without a hoodie. Beards are not optional. Pro tip(s) for migrators: Only wimps carry umbrellas in Oregon. Never buy a piece of outerwear without a hoodie. Beards are not optional.

Although, they’ll still have to grow webbing between their toes.

They’re also going to have to deal with an ongoing housing crisis. But that’s another story.

Even though the majority of people move to Oregon for a job (52.75%), there are other reasons. The next most cited response is retirement (19.90%) and people over the age of 65 are actually the largest age group moving to Oregon (24.35%). Although it’s fairly even across the board.

Oregon doesn’t seem like the most likely place to retire but when you factor in Bend, Sisters, Ashland, and the entirety of the coast, it does make sense. Not to mention the fact that we have some kickin’ retirement communities around the Portland metro area.

Family and Lifestyle round out the other major reasons people move to Oregon. Family will always be a good reason to move but not every state offers quite the same lifestyle as Oregon. Whether you want to start a tech company, keep it weird, or follow your outdoor adventure dreams, we’ve got it all.

Weather wasn’t a survey option but I’m sure if it had been, that would have been the top response, right? Or the prevalence of bicycle lanes. That would have been way up there.

 This isn This isn’t a bicycle race. It’s just Portlanders on their normal morning commute.

So, we have a pretty good idea now of why so many people are moving here. The next question would be: Is this a good thing?

I would have to say, “YES!” Many of the people moving here are accepting jobs that sorely need to be filled. Because companies are beginning to realize that Oregon is more than just the end destination of their favorite 80’s computer game, the job market is booming. We’ve been setting records for job growth and we need talent, stat.

Of course, we also need available housing, stat. But, that’s still another story.

Full disclosure: I am not a native Oregonian. I moved here in 2001 from my home state of Georgia. I have an enormous soft spot for anyone from the eastern seaboard because I worked sales for years to New York and the surrounding states. For some reason, my straight-forward, analytical, “get ‘er done” personality jives well with New Yorkers. I sometimes miss traveling back there and being able to visit 6 states in a day (although I don’t miss the tolls).

So if you’re looking to transplant yourself to the Portland area, look me up. We’ll see all kinds of interesting locations, maybe weather a few twists, and eventually uncover a jewel of a home. But no Sasquatches. I promise.

Brandi Whitaker

Property Investment and You

As a property investor,

I’m frequently asked for advice about buying rental properties and how to achieve that goal. There are many factors as to how to make this happen, but I’ll focus on the first time buyer that wants to buy a home and then buy another house or duplex as an investment.

To achieve this there are a few ways to go about it. One way is to let the first purchase appreciate through either time or sweat equity and then refinance to pull cash out or take out a home equity loan in order to have funds for the the down payment. This is a very common direction to go and works quite effectively. In fact, this is how I bought my first rental 20 years ago.

Would I do it again?

I would, but I now have an alternative suggestion to buying investment properties and that is to start with the investment as opposed to purchasing a single family home and parlaying it into an investment property. A duplex is the perfect start as you can live in one side and rent out the other. If the right property is identified you may even be cash flow positive from the start, allowing you to grow your cash reserves for a downpayment on the next investment.

I’ve advised multiple clients to follow this path and they have all been grateful of this direction. In one transaction a young couple purchased a nice duplex in need of some cosmetic touches. After spending nearly a year working on their property they decided they didn’t like living in a duplex so after the home improvements they refinanced to pull some cash out and purchased a single family home and kept their duplex as an investment property. I honestly feel they would have never purchased the duplex if they started with a single family home and now they have the potential of 3 rental units.

In another case, I sold my client a duplex, after looking at many single family homes and, instead of parlaying the duplex into another property, he has decided to stay with one investment property and one side of the duplex nearly pays his entire mortgage payment.

So my advice today:

Start with the investment property and when the time is right move into the house of your dreams.

Byron Twyman

Portland Zoning Changes

WHAT YOU NEED TO KNOW (AND PROBABLY A BIT MORE)

 The joy of understanding zoning. The joy of understanding zoning.

Depending on whether or not you’ve received snail mail concerning zoning changes, and depending on whether or not you read the fine print, your Portland home may undergo a change of zoning next year. This leads to a lot of questions and one very important piece of advice:

  1. Why is the zoning changing?
  2. When does the new zoning take effect and who does it impact?
  3. Where can I go for more information?
  4. Can I stop the change or change my current zoning?
  5. How does zoning work?
  6. What does this mean for home buyers and sellers?
  7. Most Important Advice Ever

1. Why is the zoning changing?
For the past ~8 years the Bureau of Planning and Sustainability (BPS) has been working on a new Comprehensive Plan for the City of Portland. This is a long range (20 year) planning tool that sets the framework for physical development in the city. Most of the legislative work is done but there are always additional projects in the works that you can comment on and provide testimony for (such as Central City 2035).

2. When does the new zoning take effect and who does it impact?
Approximately 24,000 homes will be affected by the zoning changes (including yours truly!). These changes are going to be effective on January 1st, 2018. However, there is the possibility that it could go into effect later than this date depending on the state acknowledgement process.

3. Where can I go for more information?
To find out whether or not any particular home will undergo a zoning change, you can visit this website. To find out what your current zoning is, visit this website and enter your address. Feel free to contact me for help and any questions you might have.

4. Can I stop the change or change my current zoning?
There’s no way that I know of to stop the zoning change if you are part of this particular update because it was adopted by the City Council in December of 2016. However, zoning changes all the time and there are a lot of factors to consider if you think your property should be zoned differently.

While your current zoning may not allow for the development that you want, your property may be part of future zoning changes (comp plan). If so, you may be able to go through a quasi-judicial process to apply for a zoning change which will have a good chance of success. Otherwise, you can apply for a change of zoning but there is absolutely no guarantee of success. Either of these processes carries a high cost and should be carefully considered. Input from professionals is crucial.

5. How does zoning work? (high level overview)
Your base zone may be something like R2.5 or R5. R means residential and the number corresponds to the number of units that can exist per thousand square feet (2.5 = 1 unit per 2500 square feet). Except when it doesn’t… don’t ask. It can be more complicated than this based on other rules, such as location (for instance a corner lot may allow for more density) and overlay zones (such as design overlay zones that require certain design elements). Specific overlay zones, plan districts, and other regulations will all impact the development potential for your property.

Zoning is (unnecessarily?) complicated so don’t expect to understand everything just from knowing what the code is for your zone. You can consult your realtor for help to better understand your situation.

 This is a zone map of a little piece of Portland. You definitely do not need to understand what all this means. This is a zone map of a little piece of Portland. You definitely do not need to understand what all this means.

6. What does this mean for home buyers and sellers?
For buyers and sellers, zone changes can certainly impact the highest and best use for your property. A change from R1 to R5, R10 to R20, etc. may mean that a property no longer has the development potential it once had. Or the property may be changing to allow for higher density development. For a seller, knowing and understanding the current and planned zoning is crucial.

For buyers, understanding the zoning of both the home that you are interested in, as well as all the neighbors, can make a huge difference in whether or not it makes sense to buy the property. For instance, the home you are wanting to buy might be zoned for lower density residential but the corner lot next to it may be zoned for higher density development. Even if that corner lot only has a single level house on it now, it could be developed into a 3-story complex in the future!

Most Important Advice Ever (well, maybe not ever but it’s still good advice)
There’s a lot more to selling and buying homes than listing on the MLS or placing an offer. Find a real estate agent with the knowledge, smarts, and time that will do the work for you to maximize your dollars! (Along those lines, feel free to contact me anytime.)

Brandi Whitaker

Overcoming Obstacles

I work very hard for my clients to make sure each transaction is as stress free as possible. However, things happen that are out of my control, and that was the case when my fantastic first time buyers purchased their home in SE Portland last month.

A Smooth Start

Things started off smoothly – the earnest money deposit was wired to the title company, inspections were scheduled and disclosures were reviewed. Our home inspector called out the roof and we successfully negotiated a credit from the seller to have the roof replaced. So far so good, right?

The Appraiser Throws a Wrench

Enter the appraiser. An appraisal report is not just an opinion on value, it also includes remarks about the property’s condition. In this case, the report included the following verbiage:

“Roof is nearing the end of its economic life with noted composition loss and patched shingles. An extraordinary assumption has been made that the roof has 3 to 5 years of remaining life. If the client has concerns regarding the condition and remaining life of the subject roof, an inspection by a licensed roofing contractor is recommended.”

This threw a wrench in the works. The underwriter would not approve the loan without a certification from a licensed roofer stating that the roof had at least 5 years of life left. Since we were less than a week away from closing, the buyers and I had to scramble to come up with a plan.

Coming Up With a Plan

The first thing I did was to ask the loan officer to push the roof certification condition from a prior-to-doc condition (a condition that has to be satisfied before loan documents are issued) to a prior-to-funding condition (a condition that has to be satisfied prior to the loan funding, which typically happens on the day of closing) to give us more time to get a roof certification issued.

The second thing the buyers and I did was sit down and call every roofing company in the city to see if anyone could come out the next day to review the roof. Our concern was that the roof would not qualify for a roof certificate so we also scheduled roofers to go out there to bid on having the roof replaced. Being that this was 4 days before closing and this was one of the wettest winters on record, we knew that the chances of finding someone who could go out there, bid the job, and get it done in less than a week were slim to none.

The Solution

My buyers reminded me that they had seen a roofing company truck at the neighbors house and said they would go over there to see what that company’s availability was like. Well, fortune favors the brave, as they say, and them going over there to knock on the door turned out to make all the difference. Not only was the company available to provide a bid right there on the spot, they were also able to move some other appointments around to replace the roof on this home and allow us to close on time.

The weather refused to cooperate but the company was still able to replace the roof in pouring down rain and a wind storm. The completion certification was sent to the lender who funded the loan and the transaction closed!

 New roof being installed New roof being installed  Roof Before Roof Before  New roof being installed New roof being installed  Roof After Roof After

-Calle Holmgren

To Rent or to Buy…That is the Question: Market Insights from Starr Gartner

 To Rent or To Buy? Inhabit Portland Real Estate

Happy New Year! 2015 is forecasted to be a great year for the economy and real estate.  The U.S. dollar is the strongest it’s been since 2006, trading at $1.19 per Euro and the GDP increased 5% in the third quarter.  In Portland, rising rents are shrinking the amount of time (2.2 years, down from 3 in 2013) it takes for homeowners to gain a financial advantage.   Homes rise in value on average from 4% to 6% a year and mortgage rates are incredibly low!  Depending on your financial position, it’s a great time to buy vs. rent.  Check out the following financial and lifestyle advantages and considerations to homeownership.

Financial Advantages

  • Equity!!!  Buying a home is a great way to build wealth. You build equity as your pay down your loan. On average, homes rise in value between 4% to 6% per year. Even if your home doesn’t increase in value, you’ll be building equity as you pay down your mortgage. As a renter, you’ll never see your rent money again. You’re are paying down your landlord’s mortgage.
  • Tax Breaks.   Homeowners can deduct their mortgage interest payments and property taxes when they itemize their federal income taxes. These deductions offset the cost of your housing.
  • Fixed Mortgage payments.  With a fixed-rate mortgage, your principal and interest payments remain the same for the duration of the loan. However, your homeowners’ insurance and property taxes may change each year.
  • Wanderlust? Unexpected relocation? Investing Bug?   If you buy a home and choose to leave it, you can either sell it or rent it out and generate income. This works best if you can cover your mortgage (or more) with rental payments. With this in mind, it pays to choose a home that will make a good rental property in the future.

Lifestyle Advantages

  • Community.  Once you commit to owning a home, you are more likely to become more involved in your community because you know you’ll be there for years. You can get to know your neighbors, join a neighborhood association, or volunteer for projects that benefit the community or the local school.
  • Privacy.  Depending on the property type, you may have more privacy in a home. You can’t pick your neighbors, but at least you won’t share a wall or ceiling and floor with them. Of course this isn’t true if you already rent a single family home (where you may have a yard and/or fencing) or purchase a condo (where you might share walls, ceilings and floors).
  • Freedom.  You want a roommate? Miss having a furry friend? If you rent, there are occupancy and pet restrictions, noise restrictions, use restrictions.  Homeownership,  you have the freedom to do what you want to do.
  •  Security.  Your home is yours. You don’t have the move if the landlord changes his mind (rent increases, decides to sell or rent to his nephew, etc.)
  • Style expression.  With a rental you are often limited with what types of changes you can make. If you own your home, you can express your style inside and out. Want to paint your house pepto-bismol pink? Go ahead. Add a satellite dish to your roof? No problem. Because you own the home, you don’t need permission from anyone-unless you belong to a homeowners association that dictates certain rules for changes to the home.
  • Remodeling. In addition to making cosmetic changes to your home, you may also make construction changes. For instance, if you love your neighborhood, but have a teeny-tiny kitchen, you may opt to remodel and expand the kitchen rather than purchase another home.

Considerations?

Base your decision to rent or buy on your net income rather than your gross income. Payment estimates should include principal, interest, property taxes and homeowners’ insurance (“PITI”). Home ownership means you can’t decide one day you just don’t want to pay for it without major financial repercussions or a plan of action. You must continue to make payments and rent or sell the house.

There is also home maintenance to consider. As a homeowner, you must spend time and money keeping your home in good repair. It is recommended to keep a cash reserve equal to two mortgage payments in addition to an emergency savings account to cover unexpected expenses, such as appliances that break, a service contract on your furnace, or the need to replace your windows or roof.

Starr Gartner

What Is the Best Time of Year to Buy a House

When the sun’s away, the inspector will… scratch his head?

When is the best time of year to buy a home here in Portland? We get asked that a lot, and it’s a tricky beast of a question. Probably, it comes down to your priorities as a buyer. What worries you most about choosing a “good” house? As the season changes from long, very warm and sunny days into short, rainy, cool ones, there are some challenges that emerge with respect to the inspection process. However, there are also some hidden benefits to a Winter purchase.

Here are some things to consider:

  1. Air conditioning can only be effectively tested when the outside temperature is above 65F. The cooling element will not be fooled into a setting request for 55F when it’s 52F in the yard… or even vice-versa. All the inspector can check is whether the unit powers up and doesn’t make any troubling noises. Similarly, it is difficult to test the “heat” aspect of a “heat pump” on a day where everyone who can be swimming, is.
  2. The roof – or parts of it – may be subject to a “from the ground” inspection if the pitch is significant; the more wet and cold (read: slippery) the conditions, the more likely you’re going to hope the inspector’s corrective vision prescription is up to date, and/or there are a minimum of raindrops on his eyeglasses. That said, if the roof is leaking, you’ll need rain for a sure assessment of where and how much… not to mention for proof to a skeptical seller.
  3. The basement may indeed be dry as a bone whether there are gaping cracks in the earth or tsunami conditions outside. It’s hard to have confidence in August, but you sure will in December!
  4. Do the gutters work? Only the rains will tell the unvarnished truth.
  5. Is the landscaping thriving or dying? A Spring or Summer sale will give you great confidence about the seller’s assurances of great bounty. Almost everybody’s yard looks like a gravesite in February.

When all is said and done, a good home inspector will do the very best they can to sniff out clues during unhelpful seasons or weather conditions. Your Realtor may have recommended them, but it is YOU who hires them. Don’t hesitate to call them ahead of your inspection to ascertain their approaches to air conditioners in November, or to a low-pitched roof that got too icy under a freak storm the night before – will they come back at no charge when the conditions return to normal?

Generally speaking, be informed of, and prepared for the limitations that the seasons can inflict upon a productive examination of everything you want to know about your house – before the deed has your name on it!

Navigating the Simultaneous sell-buy/buy-sell

Challenge: You want/need to “move up” but you need to sell your current home in order to buy (because you either need the equity for down payment, or your debt ratios are too tight to be approved for an additional mortgage).

Many of our clients are in this boat, and the current competitive market makes this pickle especially challenging. Right now it is difficult to compete in the buying process with a contingent offer. (In this case the contingency would be that your home must sell before you can close on the new purchase)

There are a few solutions or options for home owners in this predicament. None are perfect; however, with a great Realtor, the goal can be accomplished.

Option 1: Prepare, list and sell your existing home. You would then obtain a short term rental or interim housing while you look for your new home to buy. This requires 2 moves, but puts you in a much better buying position with liquid down payment, your purchase not being contingent on the sale of of your house, potentially more flexible closing period, and no need to request a rentback period.

*We realize many people don’t want to move twice, so here are a few other options.

Option 2: List your home at fair market value, or slightly below. You will likely obtain more than one offer, be more in control the closing terms, and negotiate a longer closing period which would allow you time to shop for a replacement house. The sale would be “subject to finding a suitable replacement property” within a certain period of time. You can then write an offer “subject to the closing” (rather than the sale) of your existing home already in pending status.

Ideally in this situation you’d be through the inspection and appraisal contingency on the sale of your home when you write the offer to purchase your new home, while still contingent on closing. This is perceived as a stronger position, with no predictable obstacles in the way. The close of escrow of both the sale and purchase would be scheduled simultaneously.

Option 3: You prepare your property for sale, find a replacement home, and write an offer contingent on the sale and closing of your current home. If the offer gets accepted, the status of the sale agreement becomes “bumpable” meaning that the contingent offer can be bumped by another buyer under certain terms and conditions prior to closing.

Option 4: There’s got to be a rich Aunt or Uncle out there somewhere that will give you some “bridge” financing, right??

News & Events – Prices and rates expected to rise in ’14

Rare, Double-Whammy

There’s a lot of excitement in the air in anticipation of a very strong 2014 nationally and locally. Check out this Portland Business Journal article ranking Portland in the top 10 of the countries hottest markets next year. Fasten your seatbelts and get ready. Prices up and rates too….this will be interesting.

If you’ve been on the fence to buy or sell, now may be the time.

For Buyers – Don’t fear the unknown

Buying a house is a complicated process and, to put it plainly, things just come up. The key is not to fear the unknown. Almost every problem has a solution. It’s crucial that you trust us to guide and advocate for you. We are experienced, we keep you informed at every turn, and we will put your best interests first.

For Buyers – Use the tools available to you

There are many tools aside from online databases that can aid you in your search for a home. Use Google Earth and Portland maps. Use Melissa Data. Do drive-bys at various times in the day and evening. Talk to the neighbors. Use any tool that will help give you a sense of any desired neighborhood and properties.

For Buyers – Be open & flexible

Though you have a good picture of the house you want, it’s important to be open and flexible. Portland is a city that offers a very diverse housing stock. Allow the home search process to reveal things that you may not have considered before. Home buyers typically have to compromise on some aspect of their house so make a list of your priorities and be ready to bend a bit. Having an open attitude will allow you to effectively evaluate your options and make the best decision.

For Buyers – Get pre-approved and be ready

When you are looking to buy a home you should be both pre-approved and ready to go. Good homes go fast in Portland so when you are interested in a house, it is likely that others will be interested, too. If you are not pre-approved, you are not competitive and could lose the house to another buyer. One of our first steps is to connect you with trusted local lenders for pre-approval. And because buying a home is a big decision, we will help get you prepared and informed about buying a home in Portland.

For Buyers – Get a clear picture of the house you desire

We offer a highly customized process for home buyers so that you get a very clear picture of the home you want. It’s not just about beds, baths and square footage; it’s about the life you want to live. For example, maybe you want a south-facing backyard, abundant natural light, a master bedroom on the main floor, and a quiet street that is bike friendly. Maybe there is a specific neighborhood you love that works well for your work commute.  We support you in being as broad or as specific as you like. Once we have a clear picture of the house you want, we work together to find it.

For Buyers – Trust your agent & be loyal

One of the most important things you can do as a buyer is to choose an agent you can truly trust. The right agent likely comes by referral, is local to the area in which you want to buy, and is full-time. The right agent has a communication style that works with your own, is prompt, professional, and responsive. The right agent is someone you feel comfortable riding with in the car. If you do decide to trust us with your real estate needs, we ask that you be loyal and stick with us through the whole process. We believe that you will never be in better hands than when you work with us. If you stick with us (even when there are hiccups) you will be very happy with your home buying experience in the end.