Loan or Line of Credit

There’s a reason the English language’s greatest playwright was called “The Bard of Avon” and not “The Bard of Portland.” In Hamlet, for instance, despite the fact that Shakespeare’s Polonius character is supposed to be a wise counselor, he gets at least one piece of advice wrong when he tells his son, “Neither a borrower nor a lender be.

This is flat-out terrible advice—at least for many northwest homeowners.  

The thing about borrowing is that if done prudently, borrowing can free some of the value a given local residence represents. There are two different ways that happens:

First off, there is the property’s stored value (the equity). As each monthly mortgage payment whittles down the amount owed to the lender, that equity builds—more so if the value of Portland Metro real estate happens to be growing in general, which has been true lately. Unlike the other daily living expenses a family incurs, the dollars paid for your shelter aren’t entirely “spent”—that is, lost. Like a savings account, the portion of the money that isn’t apportioned to interest will be recapturable when the home is sold.

Better yet, you don’t have to sell the place in order to free some of the value of that equity. After all, if you had to move out of your house to make use of it, it would be highly inconvenient. But you can make use of the property’s value in the meantime by naming it as collateral for a loan—either a line of credit (HELOC) or a home loan (a second mortgage). Because both types are smiled upon by lenders since they are secured, the interest rate will be less than for other kinds of personal loans.

The second way that Polonius’ advice would have been wiser in Hamlet’s Denmark or Shakespeare’s England than it is here today involves a more contemporary character: Uncle Sam. Some or all of the interest paid on either a HELOC or a second mortgage may be taken as a personal income tax deduction, depending upon various factors. Polonius might foolishly offer some blanket advice about that—but wiser counsel would be to consult your tax advisor.

When it comes to deciding which makes more sense for tapping into your home’s equity— opening a line of credit or second mortgage—the choice depends on the uses planned for the cash. If you know exactly how much you need (as when a major home repair is needed), the key advantage of an equity loan is that the interest rate and repayment schedule are fixed. With a HELOC, you have more flexibility: it works like a credit card. You can repay a borrowed amount and later tap into the line of credit again without reapplying. On the other hand, the interest rate and repayment requirements can change over time. And like a credit card, there is a built-in temptation to overuse it. Polonius wouldn’t approve…

The financial wisdom of owning your home was around long before Shakespeare’s time— it’s one thing that doesn’t change. Whenever you have a question about your own plans and local real estate, I hope you’ll give us a call. As usual, the Bard had something wise to say about that, too: “Better three hours too soon than a minute too late!

Craig Reger Group

503.893.2022

We sell more because we do more.

Spring Selling Season Moves into Summer

As the northwest’s spring selling season edges toward summer, the allure of vacation houses is more likely to emerge as a front burner issue. The practical rewards of having a second home as a vacation retreat—sometimes one which can also be rented out part-time—is more likely to become an action item as the summer months near.

Earlier this month, we learned about some national trends in a report that detailed the numbers from last year. The NAR® released the summary which went into detail about 2015’s vacation house purchases and the buyers who claimed them.

Prices across the nation were up significantly, which explained why the volume of year-to-year sales had slightly contracted. Even so, they were still the second strongest since 2006, with more than 900,000 changing hands. More than a third of vacation house buyers intended to use their property for vacations or as a family retreat—roughly twice as many as planned to use it for retirement. The lion’s share were single-family residences, with a quarter preferring condos, and fewer still opting for a townhouse or row house.

None of those figures should come as a surprise for Portland readers who are considering the purchase of their own second home. As the rising cost of vacations combines with a seemingly endless escalation in the amount of stress that air travel entails (it’s been called the “anti-vacation” experience), everything seems to argue for practical getaway alternatives. The NAR report showed that typical vacation houses didn’t demand an airport experience. They were distant, but not too distant: the median location was “driving distance” away (about 200 miles).

The biggest turnabout came via the median sales price vacation houses rang up for the year. It’s no exaggeration to characterize the rise as “soaring.” The median sales price was $192,000—a massive 28% jump above 2015 prices! They made up 16% of all residential sales transactions for the year, and although that meant a decline from 2015, last year’s volume had comprised a virtual “explosion” (CNN Money’s characterization): an uptick of 57% over 2014.

The NAR report also sampled the opinions of the buyers, finding that 80% said they believed that now is a good time to purchase real estate. Since they had just purchased vacation real estate, that doesn’t seem to be much of a surprise—although I do have to admit I agree with them! If you’re inclined to agree, I hope you’ll give us a call. Right now our market has a wide roster of great offerings at prices for every budget!

Craig Reger Group

503.893.2022

We sell more because we do more.

A Real Estate Gimmick That Might Save the Planet

The headline had to stop everyone who even glanced at Bloomberg’s Technology section: Town readers (even those who are relatively gimmick-immune) would have been hard pressed to pass up last Wednesday’s Bloomberg Technology headline: “Can This Real Estate Gimmick Save the World?”

Whether the subject of the article really is a gimmick or “the greatest real estate amenity since running water” is yet to be determined—but it’s certainly, at the very least, an intriguing idea. Steve Wynn is tearing up the golf course behind his Las Vegas Strip hotels to replace it with an installation. And with 60 of them already in place (and 250 on the drawing board), if it’s a gimmick, it’s one that’s making a large splash beyond the real estate world.

The core of the idea is the creation of gigantic artificial clear-water lakes (“lagoons” is the preferred word). It is hoped that real estate promoters will see the innovation as adding an attraction that turns otherwise featureless landscapes into much more desirable (real estate developer-speak would be valuable) recreational oases.

The whole thing is the brainchild of Fernando Fischmann, a Chilean entrepreneur who calls his company “Crystal Lagoons.”  Its website shows a stunning vista of what looks to be an enormous, other-worldly swimming pool—acre upon acre of swimming pool—with a beach visible off to the side, a distant sailboat slicing through the water, people swimming, kayaking, etc. Since this is an actual photograph, it does lend credibility to the immodest claim: “Crystal Lagoons can transform any destination into an idyllic beach paradise.

Even if (as the video announcer says) the size of any given lagoon is “unlimited,” this alone might not seem likely to save the world. But it turns out that the technology behind it could have wider ramifications…

The idea started when Fischmann set out to improve the murky, bacteria-laden water quality of a developer’s artificial lagoon that had gone bad. A world-wide search confirmed that the technology didn’t exist. Since he was a trained biochemist himself, he decided to see if it could be developed. The result is an ultrasonic filtration system, strategically released computerized “disinfection pulses” (said to release just 1% of the volume of chemicals used in swimming pools or water treatment plants), and a few more patented innovations that combine to create the inviting aquascapes. The CityStars resort in Egypt covers 30 acres.

How does this save the world? Unless your world hinges on selling waterfront condos in bone-dry landscapes, it wouldn’t seem to be the case. The answer is that the technology also uses very little energy and very little water: it’s reclaimed sea water, using a process that requires about a tenth as much energy as previous methods. Maintenance uses a quarter of the water required for a like-sized golf course. And the dream extends to developing systems that cool electric power plants and use the excess heat to power desalination facilities. Since freshwater production figures high on the world’s imminent shortage list…

Portland may not be in line for any million-gallon artificial lagoons anytime soon, but if the technology continues to evolve, I guess we can’t rule it out eventually. In the meantime, we have plenty of our own captivating real estate amenities—they’re showing in northwest properties that are available right here, right now. Call us!

Craig Reger Group

503.893.2022

We sell more because we do more.

Swings and Bridges

They’re called “swings” or “bridges”—but they don’t belong on a kindergarten playground. They’re the specialized loans that can help Potland home buyers get past the kind of cash crunch that can snag an otherwise perfectly achievable purchase.

This is a timing situation that happens quite frequently; it’s in the nature of residential real estate transactions. Suppose you are selling your Portland Metro area home to an out-of-state buyer. The deal is well on its way to being finalized on the agreed schedule. Meanwhile, you have found a new, bigger place that’s perfect for your family (it’s in Portland, too—also in a great neighborhood). The problem is that you need to close on the new home before the sale of your current one is finalized. That’s the cash crunch.

The solution can be a bridge loan (AKA, a swing loan). It’s a loan for the short period of time that will allow a home buyer to close on the new home purchase as the other sale closes. Of course, the problem is (this is what the lender has to be thinking) what if the sale of the old house falls through? The answer is to be able to produce a binding contract for that sale—without it, there is little chance the loan will be granted.

Bridge loans aren’t terrifically popular with lenders, since they involve a certain amount of paperwork for a transaction with such a short duration. I find that lender reluctance is minimal when we deal with one which is already involved—either holding the earnest money deposit or otherwise engaged with the parties. Even so, the terms of a bridge loan will be more expensive than other kinds—but since the term is brief, the higher interest cost does not amount to much of a deterrent.

Bridges and swings aren’t the only possible way to solve the buying-before-closing dilemma. Sometimes a line of credit (HELOC) on the old house will fill the void, particularly if it has not yet been entered in the local MLS. If it is already listed, the line may come with some extra charges, including cancellation or closing charges to compensate for the likelihood of its short duration. It is sometimes also the case that the lender financing the purchase of the new home is willing to provide a bridge loan by using the old property as security. Although that is a secured loan, it’s likely to be an expensive one.

When my clients buy or sell, or, as in some of these situations, buy and sell, some of what we do is to help put together creative solutions. Seeing you successfully sell—or move into—your home is what our service is all about. It starts when you give us a call!  

Craig Reger Group

503.893.2022

We sell more because we do more.

What’s the Best Time to Sell a House?

The Huffington Post (“Huffpo” to its friends) has an entire section devoted to real estate doings. Although the vast majority of those dispatches are tidbits about awesomely expensive celebrity condos in Manhattan, sometimes the Huffpo editors’ attention wanders momentarily to other matters. Last month they uncovered a study which delved into a topic of interest to any local homeowner who’s been thinking about when to enter the northwest listings.

The best time to sell a house, according to the study, is, specifically, RIGHT NOW!!!!

That is, between May 1 and May 15!

Or maybe not.

The picture for Portland was a little less definite than the Big Picture claim that “homes that sold in the first half of May…sold, on average, around 1.5 days faster than homes that weren’t listed in that timeframe.” It turns out that the study, which was put together by Zillow, was wishy-washy when it came to specifying individual areas. The “on average” part of the claim makes the conclusion less conclusive.

Because the sales statistics that were analyzed were collected from all over the country—differences in seasonality was given as the reason why any individual region might not line up with the average. Seasonality was what we think of as weather. And since weather is not the same everywhere…

In other words, the best time to sell a house in the Portland Metro Area might not expire at the end of this week, after all. There’s no need to panic if you plan to list your own property but haven’t quite put the place in show condition. The window isn’t going to slam shut on Sunday. The reason for the uncertainty about the best time to sell your house specifically here in Portland (in addition to seasonality) has to do with data smoothing and suppression. The study went into how data experts apply those to raw numbers before reaching a conclusion—but since they weren’t going to be able to zero in on the best time to sell a house in Oregon, let’s skip those details.

It was noted that the entire month of May is a good time to sell your house, in most areas. That’s something everyone can agree with. In fact, the whole spring selling season is universally recognized in those terms—the Huffington Post included.

Meantime, we here will be doing our best to continue to make right now a very good time to sell your home. That will begin to happen as soon as you give us a call!

Craig Reger Group

503.893.2022

We sell more because we do more.

Top 10 Top 10 Real Estate Lists

Why it is that we’re drawn to “Top 10” lists in general is a matter we can leave to the psychologists. Suffice it to say that the lists are a staple on the supermarket tabloids and they’re all over the web. I admit they get more than their share of my own attention, even when my curiosity about a list’s subject matter is negligible. It’s probably because they’re quick to skim through and agree or disagree with…

Since they are so pervasive, it occurred to me that there might be something to learn if we could determine which ones that deal with real estate topics get the most attention. Northwest real estate didn’t have its own area-focused Top 10 real estate lists—but for the whole country, I guessed there could be hundreds (there were).

There turned out to be a lot of ads mixed in with the ones that were legitimate; but after 15 or so minutes of deep internet research, here’s what registers as—

The Top 10 Top 10 Real Estate Lists

(Out of deference to the now-retired David Letterman, they’re presented in reverse order):

#10. Top 10 Choices for a Rental Apartment with Pool in NYC

#9. Top 10 Real Estate Terms Everybody Should Know

#8. Another Top-10 List—Best (and Worst) Cities for Real Residential Estate [sic]

#7. Top 10 Real Estate Traps (fyi, Number 10 is ‘Bad Laws’)

#6. TopTenRealEstateDeals (it’s actually a website, so no spaces between words)

#5. Top 10 Real Estate Trends

#4. Top 10 Real Estate Myths

#3. Top 10 Real Estate Markets to Watch in 2016

#2. Various Top 10 Real Estate Lists [honest, that’s the name of a list!]

-drumroll, please:

#1. Top 10 Celebrity & Spectacular Homes

Number 1 won’t come as a surprise to many here in Portland—who can resist an invitation to take a peek at spectacular celebrity homes?

Closer to our home, we have some pretty spectacular properties on the market right now (you can find them here on my site). Interested? Give us a call for a closer look!

Craig Reger Group

503.893.2022

We sell more because we do more.

One Key Quality to Seek in a Realtor®

When you find yourself being drawn to the real estate listings, even only to peek, it’s a clue that something big may be on the horizon. Either you’ve begun to think you’ve begun to outgrow your current northwest home, or you’re just curious about what could be available in case you should decide to upsize, or downsize—or to move on because of a professional change that only just might be hanging there as a possibility…

The tipoff is the twinge of curiosity about those other local homes—the ones that are out there on the market this spring. It’s always somewhat interesting to see what’s on the Portland Metro market at any time, but if you find yourself visiting the listings more than every once in a while, it’s probably because you sense that you might find your own future somehow intertwined with one of them. Or that these could become the competition if you decide to put your own home on the market. If that particular twinge sounds like something you recognize, there’s a logical next (post-twinge) step: it’s finding a sympathetic Realtor® to talk things over with.

If you already know and have come to trust one of our northwest Realtors, that’s a done deal. Call ‘em up! But if that’s not the case, what to do? Finding the right professional may not seem awfully important when you are in the earliest pre-planning stages—just looking to have a brief chat about what’s going on currently—but there’s another way to look at it. In case you do wind up making an important residential move, even if it doesn’t happen for a while, having been in touch with the right Realtor over an extended period can be a significant benefit when the time comes. Professional relationships strengthen over time, as individuals get to know each other and grow comfortable talking things over. That’s makes for the kind of team-building that’s a hallmark of success in any enterprise.

That being the case, what’s a short and direct way to distinguish a likely candidate for your Realtor? The right Realtor for you will of course be a strong salesperson—so any of us will be able to tell you about our skills, experience and accomplishments. The best will present those bona fides without seeming to brag—you just find out about them in the course of chatting.

The key to finding a Realtor who is most likely to help you accomplish your goals is to find someone who is genuinely interested in you—in your situation, your background, likes, dislikes…the works! The fact is, selling a home, or buying one, is a uniquely personal business transaction. It is not like buying an automobile, because no two residential properties are identical. Buying and selling a home is a life-altering event in which personal likes and dislikes must be taken into account. The right Realtor is one who won’t hesitate to take the time to understand who you are—and what are the set of expectations that are uniquely yours. That only happens when you find someone who is interested in more than selling a house. The right Realtor is one who’s thinking how to help you build the future you envision.

It’s one of the key reasons that being a Realtor is such a satisfying profession. Being able to help a family find the right home and make it their own is immensely gratifying—as is shepherding a sale from preparation to closing. Of course, either only happens when we know as specifically as possible where my client’s best hopes reside…and that’s not just about listening—but also caring!       

Craig Reger Group

503.893.2022

We sell more because we do more.

Navigating the Short Sale Process

Any dedicated bargain hunter who scours the Portland listings is not surprised to find among the most deeply discounted entries one of two notations: foreclosure or short sale.

Everyone knows what the “foreclosure” designation means—it’s been repossessed by the bank. It’s an REO (real estate owned). By discounting the asking price, the lending entity invites buyers to take the property off its books. It is here that the economists’ favorite acronym, “TANSTAAFL” (There Ain’t No Such Thing As A Free Lunch), comes into play. Foreclosed properties have frequently been neglected by their previous owners, who are not happy campers. So the cost of rehabilitation must be factored in before any offer is made. Still, foreclosures can represent real opportunities for buyers with patience and determination.

Slightly different are foreclosures’ first cousins: Portland’s short sale listings. There are any number of unforeseen circumstances that can cause an owner to fall into financial distress, but when their home has to be repossessed, the impact on the borrower’s credit is immediate and drastic. It can make finding a new place to live difficult, and can even make future employers hesitate to hire someone whose record includes that kind of hefty unpaid debt.

Local properties which fall in the “short sale” category are those in which the borrower has been unable to keep up with the mortgage payments, but who is arranging for the lender to agree to accept a payoff that’s less than the full amount owed. When a short sale is finalized, the result is still some damage to the original borrower’s credit, but less than had a foreclosure proceeded. The buyer will benefit from what should be a substantially lower price than a comparable Portland Metro Area property would bring—and a home that is usually in better condition. An eager lender can also sometimes offer favorable financing terms, too.

But remembering what the economists say about TANSTAAFL, there are also these points to keep in mind:

  • Short sales involve extra bureaucratic red tape. The fine print includes items such as the lender having to approve details of the sale—and that can result in nerve-racking delays.
  • Although the owner is usually trying to keep a short sale property in good shape to facilitate the deal, banks won’t allow a short sale until the borrower has seriously fallen behind in payments. That can mean an inability to keep up with the expense of proper maintenance. As in a foreclosure, canny short sale buyers make certain they know the cost of rehabilitation.
  • The possibility of sticky legal issues needs to be recognized. For instance, if the seller has filed for bankruptcy, it could squelch the whole deal. Negotiating a short sale can be considered a “collection activity”—and those aren’t allowed in most bankruptcy courts.

If one of the northwest’s foreclosure or short sale-denoted listings has grabbed your attention, we can help. It will require attending to some technical issues attached to the specific property—but we’ll be pleased to help you navigate the process from beginning to end!  

Craig Reger Group

503.893.2022

We sell more because we do more.

Pre-Sale Checklist

Selling your Portland home is the kind of major undertaking that has so many facets just deciding where to start can delay liftoff. Since there is no actual “right” place to begin, like other mammoth projects, just digging in anywhere will do. The happy truth is that when you’re selling a home, once momentum gets going, the rest of the pieces tend to fall into place.

To get the ball rolling, here is a pre-sale checklist of major activities that selling your Portland home will entail. To get started, pick any one:

  • Nagging problem elimination. Very few of us attend to every home maintenance problem as they gradually develop. If there were a reliable poll on the subject, I’d guess that 95% of local homeowners have at least a two or three areas that we’ve learned to live with—but those areas will need to be attended to before we get very far toward selling our home. Identifying them is a pre-sale first step…then fixing them is the action item that transforms the idea of selling your home into reality.
  • First impression inspection. Any time you return from an outing you have the opportunity to get started on what will become your marketing approach. Do this by stopping and seeing what kind of first impression your property makes on someone setting eyes on it for the first time. What seems least fresh and appealing? Is it fencing that could use a quick coat of paint? A planter that needs colorful blossoms? The numerals on the mailbox? Selling your home starts with favorable first impressions.
  • Lights! Camera! Action! An essential element to get prospective buyers clamoring for a tour is the photography that highlights your listing. To start preparing for that, pick a room—any room—and stage it: clear it of unneeded objects, furniture, etc. This will entail figuring out where to store the objects that you want to keep, but which clutter up the visual appeal…and once you’ve identified where they will be stored, you’re seriously on your way to selling your home.
  • Getting down to business. Educating yourself about the competition means taking a look at this spring’s Portland listings to get a feel for where the market is. Which comparable homes have just sold, and which haven’t moved for months? Your home may not be ready for market for a while, but the earlier you start familiarizing yourself with today’s local real estate market, you better the odds that your listing price will be right.
  • Exit strategy. (My favorite of all) Be prepared to move! Any action you take in this direction, be it checking out reliable moving companies or beginning the hunt for your next house makes selling your home that much less of a long shot.

Each of these is a step that begins to transform the idea of selling your home from a looming cloud of uncertainty into a doable certainty. I didn’t even mention the easiest and surest pre-sale checklist item. It’s one certain to get the ball rolling:

  • Call us!     

Craig Reger Group

503.893.2022

We sell more because we do more.

Accidental Investors

Local real estate investors include a subset that’s more common than you might think: the unplanned ones. The press calls them “accidental investors”—but that’s unfortunate. Let’s face it: when you read “accidental investor,” it conjures up mental images of a car crash. Or falling down stairs. Or failing to smell a gas leak…

The phrase is inappropriate. When you think of accidents waiting to happen, the last thing you think of is west coast real estate. Yet the phrase “accidental real estate investors” continues to pop up to describe individuals made property owners through happenstance—even though that turn of fate does, in fact, turn out to be beneficial. More than anything, that’s a happy accident!

Accidental real estate investors can be created because of any number of common situations. Sometimes, inheritance plays a role. If a family home is willed to children whose careers have taken them far from town, time may need to pass before a clear-headed decision is best made about the disposition of the property. Perhaps the accidental investor will ultimately choose to sell. In that case, because distance can cause a special complication, it’s important she or he team with a Realtor® who knows how important prioritizing communication can be.

In some cases, the “accident” involves a sudden promotion or other unanticipated life change calls a homeowner away from home for an extended stretch of time. Whether or not it’s clear that the owner will return, the best course of action could be to become an accidental landlord. That’s eminently doable when there are reliable property management professionals in the area—and our area is fortunate in that regard. From rehabbing, painting, and renovating to screening potential tenants and handling emergency calls 24/7, we can help assure that potential landlords—accidental or not—have access to professional property management services that not only remove the burdens of remote ownership, but provide consultation services aimed at improving the ROI of ownership.

Town’s accidental real estate investors would better be described as fateful, or fortuitous, or even providential real estate investors—but that’s not going to happen any time soon. What might happen any time at all is your own decision to join the prosperous ranks of our local intentional real estate investors. A deliberate, premeditated first step is to give me a call to check out the inviting possibilities that are out there this spring. They’re waiting, right now!  

Craig Reger Group

503.893.2022

We sell more because we do more.