Portland Real Estate Blog

The Department of Treasury defines earnest money as:

a sum of money given to bind an agreement, such as the sale of real estate, the advance of a loan or some other transaction requiring a deposit. Earnest money is forfeited by the donor if he or she fails to carry out the terms of the contract or agreement.

In Oregon, earnest money is collected at the time the offer is written. Most commonly by check, a personal check is okay, a promissory note may also be used that will be redeemed if the offer is accepted. In a check is taken, it is held pending mutual acceptance and then deposited within 72 hours. The Note is redeemed and deposited within the same 72 hours. It has the same effect but requires more paperwork.

The Oregon Residential Real Estate Agreement includes this verbiage about earnest money.

EARNEST MONEY PAYMENT/REFUND: If (1) Seller does not approve this Agreement; or (2) Seller approves this Agreement but fails to furnish marketable title; or (3) Seller fails to complete this transaction in accordance with this Agreement, or perform any other act as herein provided; or (4) any condition which Buyer has made an express contingency in this Agreement (and has not been otherwise waived) fails through no fault of Buyer, then all earnest money shall be promptly refunded to Buyer. However, acceptance by Buyer of the refund shall not constitute a waiver of other legal remedies available to Buyer. If Seller signs this Agreement and title is marketable; and (1) Buyer has misrepresented Buyer’s financial status; or (2) Buyer’s bank does not pay, when presented, any check given as earnest money; or (3) Buyer fails to redeem, when due, any note given as earnest money; or (4) Buyer fails to complete this transaction in accordance with this Agreement, or perform any other act as herein provided, then all earnest money paid or agreed to be paid shall be paid to Seller either as liquidated damages or as otherwise allowed under Oregon law, and this transaction shall be terminated. It is the intention of the parties that Seller’s sole remedy against Buyer for Buyer’s failure to close this transaction shall be limited to the amount of earnest money paid or agreed to be paid herein.

The section outlines who gets the earnest money and for what reason. In Oregon, earnest money is usually deposited with the escrow/title company. They are the neutral third party and only move money when all parties agree in writing. If the buyer fails to perform and loses their earnest money, they cannot be held liable for any additional damages. If the seller fails to perform and the earnest money is returned to the buyer, the buyer may still sue the seller for further damages or the transfer of the property. If your transaction was to get to this stage, legal council would be a must.

How much earnest money? We’ll discuss that in a post soon.

Straight from the Bureau of Development Services website on the issue of whether you not you need a permit.

When it comes to sell your property, one of the disclosure questions asks if you needed a permit and whether it was acquired. If you did and you didn’t get one, most buyer’s are going to ask for a concession.

Yesterday was a milestone of the Portland Real Estate Blog: it turned 50,000 page views. In the just over two years since we started this, we’ve put up 191 posts and had 170 comments, some of which we have written as replies.

At our bi-weekly sales meeting today, we talked about the current market condition and what different agents are personally seeing. A couple of weeks ago, I wrote that we were really busy for this time of year and that was the consenus at today’s meeting as well. Buyers are returning to market and properties that have had long days on market are suddenly seeing activity to the extent that buyers that were on the fence missed out to another offer.

One agent said that she’s seeing more flexibility with downtown new construction condos. Developers will look at contingent offers. That’s new in this market. Others are throwing in upgrades. The one thing they remain firm on is price. The listed price is the price, what you can get thrown in on top is to your advantage. Prices in the Pearl District start at about $400 per square foot.

I showed six houses yesterday around Irvington yesterday priced between $500,000 and $750,000. All of them were vacant. There are disadvantages and advantages to being occupied or vacant while a listed.

With a vacant house, what you see is what you get. A piece of furniture doesn’t hide a hole in the wall and the buyer can picture their furniture in the rooms rather than what the seller owns. There is a temptation though for the seller to shut the house down when they walk out the door for the last time. All the lights get turned out and the heat is lowered to an uncomfortable level. Not only can the physical cold be a detracting factor, so can the loss of warmth that decor provides.

You can’t live in a listed house like you live in your house on a normal basis. There is no better way to get your house shown than running out the door late with the bed unmade, the dishes in the sink and yesterday’s clothes still on the floor. Guaranteed way to generate a showing. If you’ve got clutter, it’s time to purge. Box it up or get rid of it. Your basement or garage shouldn’t be your storage facility. Try to get it off-site. Your goal is crisp and clean.

Somewhere in the middle is staging. It can be done with your existing furniture and decor or with hired furniture if the home is vacant. Staging softens the coldness of a vacant house and can offer some sound dampening. A good stager can tell you what needs to be packed up before the sign goes into the yard.

We’ve got a new look over on TurnerRealtors.com. It’s a crisper look with map-based searching on the homepage. You’ll also see our Featured Properties. These are the properties that we have listed or have selected to rotate as the page is refreshed. We put a lot of time and energy into making the site the best it can be. Our Internet marketing works. The site constantly has the highest number of visitors and user activity month after month of all the Prudential Northwest Properties agent websites; there are over 700 of us.

You’ll also notice we’ve placed a linked map on the left sidebar that will take you directly to the search page. Registration is not necessary but registered users can save searches, favorite properties and set up email notification of properties that meet your criteria. If you’re serious about finding a home, you should seriously consider signing up for Home Finder.

As always, if you have a question, let us know and we will do our best to help you find the answer.

It may be a mild case of Big Brother, but I can see what searches result in visits to the site. One of the most common recent inquiries is about whether the Portland real estate market is a good investment market.

Last week, I wrote “What Do We Look for In Investment Properties?” That’s our strategy. We may have to adjust in the future but for now we are happy with it.

The investment market has changed. The proliferation of condo towers appears to meeting market demand now where in past years there was a clear shortage. Buying a condo today may not have the flip potential it did just 18 months ago. I’d agree with a recent newspaper article (sorry, can’t find) that said that a buyer who got in months ago will probably do okay with their investment. Those that get in today may have a harder time. We’ll have to wait and see. Developers are pushing forward with their plans to build.

There is always going to be a rental market. The challenge for the investor is that rents have not increased at nearly the same rate as property prices. We used to look for positive cash flow with 20% down. That’s getting increasingly challenging, especially with the close-in property that we covet.

Where would I look for property? North Portland, especially around St. Johns, SE around Division, and other close-in neighborhoods where there are still a lots of homes in need of rehab. As the neighborhood matures, the entire area benefits. When we bought our first investment property on NE Ivy, only one house on the street had been recently remodeled. Five years later, there were only a couple of houses on the block that had been updated. It was an area that pizza chains stopped delivering to in the 90s!

It’s 26 degrees outside. The color from the morning sunset is beginning to fade and the sky is crystal blue. If it wasn’t for the 26 degrees part, it could be a perfect Portland day. I’d take a day like this anytime over 59 degrees and raining.

The weather effects how we sell and show homes. Winter months can be rough. It isn’t a lot of fun looking at a house in the pouring rain, close to sunset, then loading back in the car to do it again. Having shoes that are easy to remove is important.

Sellers need to remember (and be reminded by their agents) that the first impression is important. I showed a vacant house during the week and the heat was turned off. Not the best idea when there is the threat of freezing pipes but also, “Damn, it’s cold in here” isn’t your target first impression. It was 46 degrees inside. The goal is to make the buyer want to linger, not get back outside and into the warmth of heated car seats. Keeping some lights turned on, especially the front door light and entry way, is a great idea.

Asking buyers to remove their shoes is a totally reasonable and expected request. It is also important to remember how they are going to see your house without shoes. Walking out on the back deck in socks when it is 26 degrees isn’t appealing. Door mats are important at all entry points, not just the front door. Buyers want to look at everything, not just the way you live in your house.

The landscape of the Portland real estate market changed greatly in 2006 and we made adjustments to meet the challenge. At the beginning of the year, sellers were enjoying a market where buyers were competing for homes at a frenzied pace and it was not unusual for a buyer to miss out on two or three homes at, near, or over asking price before securing a home.

The local market cooled in the second half of the year as the national market froze and many stepped to the sidelines to see what was going to happen to our market. Against expectations, the slowdown was real but appreciation continued to show respectable gains. In the last month, we’ve seen buyers returning to the market in droves and are looking for an even better year than 2006.

We’ve added staff and tools to meet the demand of a more competitive market. Lisa Nylander is our licensed assistant working our of our Portland office. She handles a lot of the back end of your transaction and works as a buyer’s agent. Susan Horvat works in Stayton, outside of Salem, and covers the market served by the Willamette Valley Multiple Listing Service (WVMLS).

Our first Lexus RX400h hybrid SUV just completed its first year of service. It proved to be such a worthy client-friendly vehicle with its roominess, GPS navigation and impressive 24 miles to the gallon (for a full size SUV), we bought a second one in June. You may see them driving around town with our names on the rear window.

The Portland Real Estate Blog is nearing 50,000 visitors since inception two years ago. It is the sister site to our primary real estate www.TurnerRealtors.com. The blog has all the links to the search tools available on the main site. By registering for Home Finder, you can set up searches that will email you according to your schedule. You can save favorite properties and we can use them to create more detailed reports for the properties you save. Log back into the site at any time and continue looking where you left off. Search-by-map tools have greatly improved recently.

Our technology tools continue to improve. In 2006 we introduced the Property Investment Profile (PIP) that emails out a market analysis specific to your home. The PIP creates a snapshot of the market. It is computer generated and without the touch of a human will never be as accurate as a Comparative Market Analysis (CMA) that we put together to pin down an accurate listing price for your home.

We’ve joined forces with The Inn at Northrup Station and Pyramid Breweries to create a Relocation program

for those moving into the area. The Inn provides a special room rate to our clients and Pyramid provides some great incentives at MacTarnahan’s Taproom. All we ask in return is your commitment to use us for your real estate transaction.

Please feel free to contact for all your real estate needs. We look forward to working with you this year and in the years to come.

I’ve posted before about there being too many Realtors and too few barriers to entry. The National Association of Realtors approved their budget based on 1,230,000 members for 2007. That’s a 10% drop from the current level. It’s sure sign that those that got it into real estate thinking that it was easy money are feeling the crunch of a slower national market.

The RMLS number cannot tell you the absolute listing date but it can give you a pretty good idea. All RMLS numbers are seven digits and are assigned in order. The first number designates the last number of the year. 2006 started with a six. 2007 starts with a seven.

The last listing for 2006: 6109235

The first listing for 2007: 7000006