Portland Real Estate Blog

This is a highly subjective topic. Since no two houses are alike you can’t just take on a busy street and one not and say there’s the “cost” of living on a busy street. The Oregonian ran an article a couple of weeks back. One of the key points being that buying a house on busy street might allow you to enter a neighborhood you could not afford otherwise.

I chose a couple of streets: one busy and another a couple of blocks off that street. The difference between SE 39th and SE 41st is just what I expected; $26/SQFT (all listings single family detached and sold in the last 12 months).

Between Burnside and the 4000 block of SE 39th and 41st:
39th $140/SQFT (8 sold)
41st $166/SQFT (8 sold)

That equates to a $52,000 difference on a 2000SQFT house.

NE Fremont and NE Klickitat between 30th-50th:

Fremont $206/SQFT (2 sold)
Klickitat $210/SQFT (4 sold)

Much closer but twice the number (though still low) sold on Klickitat. I’m not sure that comparing two and four sales over a one year period is statisticly valid. Other factors that contribute to the difference is the client that never gets out of the car when they realize it is a busy street. Also interesting is that the time on market was 10 days for the two Fremont houses and 62 for the Klickitat houses. So much for proving a point with these stats.

TEST RESULT:
Total Count of Mycelial Fragments (fungal structures capable of reproduction): 23,100
Total Count of Fungal Spores (reproductive bodies): 58,200
100% of sample: Aspergillus/Penicillium-like (potentially allergenic, potentially toxigenic, water indicator mold type)
SAMPLE CONCLUSION: Condition 3 (actual mold growth) Confirmed

Your first reaction is, “that can’t be good.” You’re right. That’s pasted right out of the mold inspector’s report (who was brought in after the home inspector recommended a specialist). The solution is $7500 in remediation. The three steps to remediation are:

1) Removing the source of moisture by replacing the roof
2) Providing adequate ventilation to prevent high humidity levels
3) Treating and removing the existing active mold growth

The lesson learned here was the importance of roof maintenance. Moss growth hadn’t created visible leaks but allowed moisture to seep in.

Oregon property disclosures ask a series of questions about the past remodeling of a property:

1) Are there any additions, conversions or remodeling?
2) If yes, was a building permit required?
3) If yes, was a building permit obtained?
4) If yes, was a final inspection obtained?

If you answer “yes” to a question, you hopefully can answer yes to the question that follows. “Unknown” is an allowed answer to each question but when push comes to shove (in court) I doubt that ignorance is going to be bliss.

You can answer question number two by looking it up on line on the city’s website, the Bureau of Development Services published this list of what does or doesn’t require a permit (again, if you aren’t sure, consult them). You’ll find that there isn’t much you can do, even as a homeowner, that isn’t cosmetic without a permit. A homeowner can do their own wiring, own pluming and own mechanical work but none of it can be done without a permit. That includes replacing existing plumbing fixtures (dishwasher, toilet, sink).

As discussed before in previous posts, Portlandmaps.com is your one stop source for most recent permits. You can see if the permit was issued and whether it was finalized (as can any potenital buyer).

The City also runs the Get Legal Program which may be able to help legalize unpermitted work:

The Get Legal Program is not intended to replace the bureau’s existing process for permitting and legalizing work, and is not a fast-track program. The program is intended to provide an avenue for customers who have a complex situation and need specialized assistance with legalizing work on their property.

As Realtors, we check out PortlandMaps (you can also check right off the BDS website) for permits. The records go back to about 2001. If we think that a seller has done work that required permits, we advise them that they need to be clear on the disclosures and that it might come back to haunt them if a buyer asks for repairs. As buyer’s agents (remember that we are never the dual agent) we advise the client that some work may have been done without permits and that they will be inheriting any problem in the future by accepting the condition now.

I previously posted on David Leahear’s theory that real estate is local (though I may not agree with him on everything, on this one I think he is right). Joel Bruslem, on the Future of Real Estate Marketing blog asks, “How do you find the perfect Realtor online?” It’s a good question when you consider that at the end of the day, though we have known each other online for years, it was probably a personal reference that sealed the Realtor/Client relationship. Real estate is PERSONAL.

If it wasn’t there would be no need for Realtors. No two Realtors work the same and no two clients have the same needs. A first time buyer does not have the same needs or view of the exact same property that the investor with 1031 Exchange money that must be allocated by next week has.

Real estate is just one of the many industries that look nothing like it did prior to the Internet revolution. Information is much more available to the buyer and it is not unusual that a buyer knows more about an area than the agent does at any given moment. It isn’t feasible for a buyer’s agent to know about every listing in every neighborhood. Some buyer’s “stalk” a certain area constantly because that is where they want to live; others couldn’t care less if they live in Hawthorne or Multnomah Village as long as the house is right.

The Realtor’s role is managing the transaction and protecting from search to close (and after) depending on the buyer’s needs and providing the necessary tools to make that as smooth as possible and then becoming an expert in that transaction. You may find ads for “buyer’s agents” but you won’t find “first-time-buyer’s agent in North Portland for clients needing 100% financing and seller paid closing costs for property under $200,000.” We will and do work with these clients.

There are some agents that appear to dominate certain areas with listings because they have earned that position with years of experience. Successful agents on both the listing side and buyer’s side are the ones that successfully use the tools that are needed and leave the other ones alone. That comes in the form of experience, negotiation, attention to detail, process, and meeting the client’s needs. The only way you are going to find out if any particular agent is right for you is to talk to them.

The Internet can provide the introduction, email can establish a relationship but at some point, you’re going to have to talk and in the case of a buyer, get in a car together. As for referrals, ask for failures even. If they haven’t had a failure by some measure, they’re either lying or new. I’m not going to type mine out but if you ask as a serious potential client, I’ll share. I will say that I lost a friend over a real estate transaction.

Determining whether you need a building permit and/or a contractor’s license to buy and resell a property is a topic that isn’t entirely clear cut but very important to both the buyer and seller through both the purchase of the target property, the remodel and the resale to the new owner. IF YOU AREN’T SURE, CONTACT THE AGENCIES.

Building permits are city specific (PortlandOnline.com for Portland). Contractor’s licensing is overseen by the state (the Contractor’s Construction Board or CCB). This post will just focus on the CCB portion.

Straight off the CCB website:

Who Needs To Be Licensed

Oregon law requires anyone who works for compensation in any construction activity involving improvements to real property to be licensed with the Oregon Construction Contractors Board (CCB). This includes roofing, siding, painting, carpentry, concrete, on-site appliance repair, heating and air conditioning, home inspections, tree service, plumbing, electrical, floor covering, manufactured dwelling installations, land development and most other construction and repair services.

A CCB license is also required for:

those who purchase homes with the intent to fix them up and resell them, even if they do not perform the work themselves.

material suppliers that receive compensation for installing or arranging the installation of the materials.

Current law is pretty clear. Oregon House Bill will change that but you’ll have to wait (from OARO):

HB 2498B, introduced at the request of the Oregon Association of REALTORS®, has passed both the House of Representatives and Senate and now moves to the Governor for his signature. HB 2498B would amend the construction contractor licensing laws to allow property owners to hire licensed contractors to work on up to three existing homes, and then put those homes back on the market for sale. Current law requires owners who arrange for remodeling work to have their own contractor’s license unless they are living in the house. HB 2498B passed the House unanimously (47 – 0) in May, passed the Senate unanimously (29 – 0) on June 6 and re-passed the House (52 – 1) earlier today. The one Representative who voted “no” told the Association’s lobbyists that he had made a mistake and would seek permission to change his vote to “yes,” giving HB 2498B unanimous approval throughout the process.

This will exempt the guy with the deep pockets from needing a license but those planning on using sweat equity and getting hands on will still need to have a contractor’s license.

I found this article on subprime lending interesting. It defines a lot of the terms that we hear. Note that the link at the bottom of the article discloses his relationship with the lending industry. There are also more definitions there.

In a different news article on subprime, AIG has agreed with regulators to talk to their clients regarding the loans they received from the bank. Washington Mutual has already had a similar conversation with the Feds. Also in the article:

Earlier this week, Federal Reserve Board Chairman Ben Bernanke said the Fed will meet with mortgage lenders and consumer advocates on Thursday to discuss whether so-called low-doc or no-doc loans marketed to subprime borrowers should be prohibited.

The changes in the subprime market have not done away with below 20% down financing. The restrictions (lender imposed) on them have made them less common.

Back on May 2, I wrote about days on market versus price range. The recent sale of former Blazer, Scottie Pippen’s house underscores that the higher the price, the smaller the pool of buyers.

At the median home price and below, there are lots of potential buyers. The majority qualified (and desiring) to be in the market can compete. The first time buyer competes with investors, downsizers and anyone else. As price moves up, segments drop out until the pool shrinks and there are just a few buyer’s left. Pippen’s house took 812 days to sell and had two different agents. He also lost 25% whereas the market increased at least that amount. If you have 500 homes that sold in an average of 50 days and you add one that sold in 812, the average time on market shifts 1.52 days up. Also note that it was listed under four MLS numbers and the last was only six days old at time of close!

Think there is some truth about not owning the most expensive house on the block? In Portland, there are two different houses priced at $5,750,000. There are some more expensive residential properties in the area but are typically on acreage.

Last week’s poll results put the kitchen and investment potential dead even. The classic result though was posted under other: “Wife’s Opinion.”

Here’s an interesting stat from April’s RMLS Market Action: there were more closed sales in April of 2007 (2598) than there were in April of 2006 (2558). Properties are moving. Yesterday, we lost out on a multiple offer situation at full price. After looking at about ten properties, one was clearly the favorite. It was listed at the beginning of May and the first accepted offer failed (apparently when the buyer got cold feet). Back on the market, our offer was competing with someone who had missed out when the first offer was accepted. The seller chose that offer simply based on the fact that they had been interested in the property longer than we had. We were told the offers were almost identical (after the fact). That happens.

Part of the discussion we had was, “what price to offer when we think there is a competing offer?” If we have comped the property out and see that it is fairly priced, you have to ask yourself, “will I be upset if I lose this property to someone else for X dollars?” In this case, the conversation was over $5000. At 7% interest the difference in payment is roughly a dollar a day. Analytically $5000 is a good chunk of change to most people. Emotionally, it was decided that it was a small price to pay for what we thought would be the stronger offer.