Portland Real Estate Blog

The John Ross in the South River Blocks will start taking reservation on July 9th through July 17th by appoinment only and then will release the remaining units to the public on the 19th. They are not selling to investors at this time. A reservation is a non-binding agreement between both the buyer and the seller and is approved by the Oregon Department of Real Estate. Oregon law requires that any and all deposit monies made with a reservation are fully refundable, no questions asked, at any time requested. The reservations will be converted to binding contracts later in the year.

They’ll range in price from $199,000 to $4,000,000. Fully refundable deposits are $5000 for units under $300,000 and $10,000 for units over $300,000.

The building will be 31 stories!

We are not the listing office for the John Ross but can work with you as buyer’s agents.

With any real estate offer, there are three basic choices: Accept, Reject, or Counter. The first two are obvious. When it comes to countering the offer made by the buyer, the seller has to understand that the buyer has the same three options. If it is rejected, the deal is dead.

Twice in June, once as the listing agent and once as the buyer’s agent, we had counter offers from the seller that the buyer outright rejected. In both cases, the original offer made by the buyer was a good offer. The seller just wanted a little more out of the deal.

In reality, the seller would have accepted the buyer’s offer without a counter. In both cases, the deal died because the buyers knew they had made a good offer and felt slighted by the counter. In the Portland real estate market, buyer’s are writing much stronger offers knowing that they have to compete with others for a limited inventory of property.

Sellers need to ask themselves is it worth the risk of having to keep the house on the market, the inconvenience of being on the market and the likelihood that the first offer received on a property is often the best in the effort to earn an extra dollar?

The Strand down at Riverplace was wildly popular when it was released in April. Now, just a few units in the first two buildings remain available. The West Tower will be released later in the year.

One of the units that still remains on the market has risen $10,000 since its release. This progression is what we expect to see with new construction. They’ll get more expensive until they are gone. With new construction there is no price flexibility- you pay what the builder is asking.

Not every house is connected to City sewer and water. When wells and septic systems are on the property, buyer’s inspections are more important than ever.

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I’ve written previously on the subject of buyer’s agency but since the Oregonian brings it up today in a nationally syndicated (but modified for Oregon) story on the front page of the home section, it’s good topic to revisit. The article “What Should I know About Buyer’s Agents” is correct is saying that in most cases, the buyer’s agent’s commission is built into the co-op listing agreement with the seller. The seller is under contract with the listing agent to pay commissions. Therefore, there is no cost to the buyer to have representation.

We need to stop here. The article says that the buyer’s agent may look to the buyer to pay commission on the rare occasion that a For Sale By Owner will not pay commission. That’s true. The article continues though by saying that an agent may choose not to show a home if the offered commission is too low. That’s wrong. The buyer’s agent would be violating their fiduciary responsibility to the buyer by not showing the home. Federal investigators are looking into the practice of “boycotting” listings based on the offered commission.

This is the second case where the buyer’s agent my look to the buyer for compensation. If the commission level is unacceptable to the agent (we recently saw one listing offering $100 for the transaction), the agent needs to have had the conversation with the buyer that the agent will only work for a minimum percentage of the transaction, what that percentage is and whether the buyer is willing to make up the difference. Hopefully all in writing with a buyer-broker agreement.

If the buyer says they will not make up the difference, then it is the buyer making the choice not to see the property even though it may fit their needs. It is not a decision an agent can make unilaterally.

Oregon law requires agent to discuss the agency relationships with a possible client “At First Contact” and to deliver the Agency Disclosures at that time. There should never be any question as to who represents who. Oregon allows for one agent to represent the buyer and seller but it is something that most agents (including us) won’t do to avoid liability and to fully represent their client.

RMLS’s May 2005 Market Action report is out and it confirms that available listings continue to drop. This month’s magic number is 1.6. That translates to if we stopped taking listings today, there would be nothing to sell 1.6 months from today. This time last year it was 2.8 months, 2003: 3.8 months!

The average sales price is also up 10.8% over a twelve month period to $256,600.

Average time on market is just 41 days (57 day this time last year). North Portland’s days on market are only 25!

Jeff Manning’s story on moisture intrusion and construction defects continued on Monday with another long article in the Oregonian. “Builders Battle Tide of Lawsuits” continues Sunday’s story, “Building defects spoil homeowner’s dreams.” These front page stories were followed up by a story in Tuesday’s metro section, “Home Defects May get Scrutiny.”

The looming questions is what is the root cause of the problem? Is it poor workmanship? Is it shoddy materials? Or is it building requirements that require the building to be so tightly sealed that any moisture that happens to find its way inside has no chance of ever drying out. The Oregon Construction Contractors Board aims to make it one of its goals during the following year to try to find out.

The online article doesn’t appear to include the 15 item list of “What to Look For” graphic so:

1) Staining at the heads of windows
2) Water collection within the windows

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We’ve already talked a lot about the Strand, Vaux, Merriwether, and other complexes already under construction. A special note and condolences goes out to the friends and family of Erik van Doormick, the developer of the Benson Tower, who was killed in a private plane crash at the beginning of June.

So what’s next? Rumor on the street based on what I’ve heard:

Portland City Council had a change of heart and approved the Uptown Condo project behind the Uptown Shopping Center at NW 24th and Burnside. The building will be 150 feet tall, twice the height city code allows for.

The Cambridge is seven units on NW Westover between Flanders and Glisan. They are listed in the mls system between $665,000 and $749,000 and are scheduled for early spring 2007 completion.

Demolition is in full swing at NW 13th and Marshal. The Coplin will take its place.

Hoyt Street Properties has two projects coming up. The Metropolitan will be in the block south of the new park under construction. It will be very high end. After the Metropolitan is online, they will start a loft project on the block north of the Pinnacle.

Sales of the John Ross units in the South Waterfront should begin soon. These, of course, are in Southwest, not Northwest like the places mentioned above.

We are not the listing agents for any of these projects but can work with you as buyer’s agents.

In case you haven’t noticed, it rains in Portland and the rest of the Northwest. Today is a pleasant exception. We spend many months each year with wind and rain driving into the sides of our homes. Hopefully the moisture stays outside. Today’s front-page Oregonian article chronicles both newer construction single family and condos where the water has found its way inside. The headline reads “Building Defects Homemaker’s Dreams.” The entire article covers more than two full pages. The author, will be having a live webcast on Monday the 20th at 1PM on www.oregonlive.com

We’re seeing more and more litigation with condominiums built in the late 90s and later. I sold four units in the Riverpark Condominiums following a settlement ($5.2 million according to the article) with the builder that had prevented owners from selling for nearly a year. About the only way to sell a condo that is in litigation (usually the homeowner’s association against the builder) is a cash deal. Banks will not lend knowing that the owner could get stuck with a large repair bill if the litigation is unsuccessful. There is a distinct lack of curb appeal when your building is surrounded by scaffolding and wrapped in plastic!

We just worked with a buyer that purchased a unit in the Pearl District where the HOA was in negotiations with the builder for construction defects. The buyer did enough research, talked to their attorney and felt that a settlement is eminent so they paid cash for the unit. The price of the unit certainly reflected the uncertainty in the settlement. We’d hoped that it would settle while in escrow and they would have locked a great price in but the settlement is still outstanding but they feel that even in a worst case situation where settlement fails and they get stuck with an assessment, they’ll still be sitting on equity. Hopefully it will work as planned!

Basements used to be scary places where we crammed all the stuff we couldn’t find a home for in the main living areas. Many are still scary but others have been converted into livable space that rivals the rest of the home in features and quality.

Like all successful projects, plan and get a permit. Before you start, there are some basic questions you need to address. The best place to start is the City’s guide on converting attics and basements.

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