Slight Increase in Pending Home Sales Index

The “Pending Home Sales Index”, a forward-looking indicator based on nationswide contracts signed in May, increased 0.1 percent to 90.7 from an upwardly revised reading of 90.6 in April, and is 6.7 percent higher than May 2008 when it was 85.0. The last time there were four consecutive monthly gains was in October 2004.  To understand how this home sales index is calculated go to: http://www.realtor.org/research/research/phsdata

But, is this an indication of a recovery in the Portland home selling marketplace?  Homes ARE selling if they are priced to suggest a “steal or a deal” because homes that are NOT distressed must compete against homes that ARE distressed properties (meaning that sellers must simply sell for less than is currently owed on the property OR the property is bank-owned and has already been foreclosed).  But, if you subscribe to the theory that all sales are good sales because it continues to lessen the inventory then this is a positive indicator (or, at least, not bad news). 

Here are the 2009 Portland Oregon monthly stats for lockbox activity (monitors the number of home showings by Realtors in the Portland area) showing a definite spike in May and slight decrease in June (schools out and family vacations???)

Monthly Stats for lockbox activity for Oregon

Special Tax Break on New Car Purchases in Oregon!

IRS Updates

Special Tax Break on New Car Purchases Available in States with No Sales Tax

A tax break for the purchase of new motor vehicles is available in states that do not have a state sales tax. Under the American Recovery and Reinvestment Act of 2009, taxpayers who buy a new motor vehicle this year are entitled to deduct state or local sales or excise taxes paid on the purchase.  The IRS and Treasury have determined that purchases made in states without a sales tax — Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon — can also qualify for the deduction.  Taxpayers who purchase a new motor vehicle in states that do not have state sales taxes are entitled to deduct other fees or taxes imposed by the state or local government. The fees or taxes that qualify must be assessed on the purchase of the vehicle and must be based on the vehicle’s sales price or as a per unit fee. According to the IRS, Congress intended for these fees or taxes to qualify for this special tax deduction.

To qualify for this deduction, the vehicle must be purchased after Feb. 16, 2009, and before Jan. 1, 2010. Taxpayers can claim this special deduction only on their 2009 tax returns to be filed next year.  The deduction is limited to the fees or taxes paid on up to $49,500 of the purchase price of a qualified new car, light truck, motor home or motorcycle.

Click here for more information from the IRS:

http://www.irs.gov/newsroom/article/0,,id=209624,00.html

Weekly Reviews of Property Showing Activity..Movin’ on UP!

Activity up again in Oregon, down in Washington  

Comparing Supra lockbox openings by RMLS™ subscribers between June 1, 2009 and June 14, 2009 there was a 1.4% increase in Oregon and a 3.5% decrease in Washington from the previous week.

Oregon

Washington

What is Agency and What Does it Mean to a Buyer or Seller?

AGENCY! How exactly does “agency” apply to real estate and the relationships between buyer and seller and their real estate agent in our Portland Oregon real estate market?  What are the responsibilities and obligations?  AND, what are the subtleties that influence everyday behavior of agents and their clients.  I actually practiced the profession of real estate for years (1985 till 1996) prior to having a reasonable and rational “legally defined” relationship with my buyers.  Prior to 1996, all agents had a fiduciary responsibility to the seller.  Which, of course, was always a bit silly for agents who had clients who were buyers, who often never met or had contact with the seller (other than a possible presentation of an offer to a seller….much more common in the pre-technology days) and who were truly advising their buyers on the next home or investment!  The “old way” of thinking was that the seller paid the commission, thus all agents in the transaction were representing the seller.  Thankfully, reason prevailed and the Oregon Real Estate Agency enacted the Buyer and Seller Agency agreements and everyone agreed that the commission structure was built into the pricing of homes! 

Skip forward to present day, where buyer representation and seller representation is SOMEWHAT of an assumption.  However, I think some people are still confused.  When I list a home, I am responsible to the seller.  I prefer the new and next buyer come represented by their own agent.  That way there is NO conflict of interest.  I’m not saying I haven’t handled both sides of transactions in my 24 years of servicing real estate transactions, but those are special circumstances and that’s another blog altogether (having to do with integrity and believing in “win-win”).  Agency simply means my job is to represent your property in the marketing efforts and ensuing negotiations.  My first step is to initiate whatever means I can employ to get “product awareness” to the general public.  That means I’m first communicating with other agents, utilizing the #1 advantage Realtors have, which is the power of the real estate community!!  I employ the power of our Portland RMLS (Realtor’s Multiple Listing System) where all working Realtors are immediately notified of properties that come on market with detailed information, photographs and video tours.  Because over 90% of all buyers begin their new home or investment property searches on the web, your property deserves the very best online exposure possible. 

But, here’s where clarification is important.  As a listing agent I’m, personally, “famous” or “infamous” in quickly reacting to potential buyer inquiries.  I never even ask if someone has a real estate agent representing them.  If they want to see MY listing, I want to show them!  It’s in my best interest and the best interest of my seller for me to show my listings.  I know THAT particular listing better than most!  Do I care if they have their own representation…absolutely NOT!  That is in the best interest of the buyer, which means ultimately, its in the best interest of my seller.  So, therein lies the confusion.  When a seller calls and asks, “how many times have YOU shown the listing” it’s a meaningless question.  If you’re talking to me, I’ve shown it as many times as I had an opportunity!!!  But, that’s not representative of how many inquiries I may have had.  An agent will often get multiple e-mails and phone calls from both agents AND the general public, looking for any specific information they can’t garner from their web experience.  At higher price points, you don’t generally have buyers wandering “willy-nilly” through open houses or calling a ga-zillion agents for information.  Those buyers will hire a specific agent, utilize that agent’s expertise and contacts and have that agent organize a targeted and efficient tour of homes that fall within their chosen price point and other search parameters.  They don’t waste their time looking at overpriced listings or those that don’t present well on the web.  At lower price points, there are more buyers available who, perhaps, have not yet identified an agent of choice and will be more likely to call the listing agent to gather information or schedule a showing.  But, understanding exactly what you are hiring your agent to do is paramount to a successful relationship. 

If you are selling your home, you are hiring an agent to market your property!  This includes exposure to the other agents as well as enticement to agents AND potential buyers through descriptive narrative, professional photographs and multiple web displays.   You are also hiring their expertise on pricing and staging your home to sell.  Listen to them! Remember:  “pricing, pricing, pricing is the new location, location, location”.  Once an offer is procured, your agent is your conduit for negotiations and a resource for various possible repair help and referrals. 

If you are buying a home, you are hiring an agent to provide service through arranging tours and professional advice through their understanding of the local real estate market.  Very few people get “sold” a house.  It’s much too big a decision for someone to “sell you”.  A good buyer’s agent helps you sift through the pros and cons and make an educated decision.  Your agent is a great sounding board and support through brainstorming.  Once you’re ready to make an offer your agent is your negotiator, mentor and source for various referrals to lenders and property inspectors.  Remember:  “buy the least you can buy and still be happy”.

Converting your Existing Home to a Rental!

The Portland Oregon real estate market has, thus far, been spared some of the losses suffered by other areas of the country.  None the less, our market has taken a hit.  Some homeowners have decided that other priorities motivate them to make a move despite the fact that attempting to sell their home may be a challenge in the present market.  Perhaps the challenge is that they haven’t owned it long enough or they’ve taken 2nd mortgages or lines of credit on the property.  Whatever the circumstances, the numbers just don’t work, but that can’t or won’t deter them from their goal.  Many of these homeowners would like to convert their present residence to a rental property instead of selling.  With so many former homeowners coming back into the marketplace as renters, the local Portland rental market has been good and rents were rising through 2007/2008.  Although, I’m noting a bit of a slow-down probably due to the sheer numbers of residences being converted to rentals.  This conversion process of a present principal residence to a rental property, as an alternative to selling, while trying to purchase a new home has been complicated lately by the lending requirements. 

The most stringent new rule requires borrowers to have a reserve amount set aside equal to six months of principal, interest, taxes a insurance (PITI) payments when converting the primary residence to an investment property.  The restrictions placed on the departing property (the one to be rented) (30% equity, 6 months of reserves, signed lease agreement and copy of cancelled security deposit check) are ONLY necessary if the buyer needs to use the proposed rental income in order to qualify for the new mortgage.  If the buyer has enough income to carry the payments on both properties and still be below the debt ratio threshhold, then those criteria don’t apply. The only requirement would be the 6 months of reserves for the rental property. Real Estate Resource is now handling rental properties for our clients, please call if we can be of service!

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