Tag Archives: seller representation

On preparing a Market Analysis and the importance of viewing the homes in the report

When I meet with seller clients in discussing listing their home for sale, one of the many things that we discuss is determining an appropriate listing price. I will almost always generate a report called a Market Analysis to help aid our discussions. Most, but not all, agents provide such a report (some agents just give a number, with no evidence supplied on how it was determined).

I feel that it is imperative that clients understand how the recommended price was generated.
One aspect that is rarely discussed in our industry is the importance of driving by properties that are used in the report evaluate the exterior, if the agent has not already seen them.

Yes, this adds literally hours to my process for generating an analysis. But, this gives me SO much more information than relying on the information that is in the database alone, and gives me peace of mind in knowing that I’ve done as much research as possible.

Examples of the information that I obtain from viewing the properties listed in the report: 
-I can see if any major power lines are passing through the property or over the home directly.
-I can determine how busy the road is.
-Similarly, I can determine how much road noise there is from nearby busy roads.
-I will be able to evaluate the entrance to the neighborhood.
-I can see the grade of the driveway to the property.
-I can view more closely neighboring properties.
-Sometimes the condition of the home is more evident in person. I can see paint peeling off the siding or the roof shingles peeling back.
-I can evaluate the house-to-street orientation. Is the home sitting only a few feet back street?
-I can better gauge the distance into town.
-I can view the parking better – is there a good spot for an RV?
-Sometimes the photos that the agents submit are terribly poor in quality and there is no way to know what the home looks like without seeing the home in person.

All of these factors have a tremendous impact on property values. 

For more information on the services I provide to my seller clients, please see my page outlining my Services for Sellers.

Curious about buying another home, but not sure where to start? A new class offering for you.

NEED MORE SPACE?

Here’s a new class offering! This class is going to be for folks who are thinking of selling their home and buying another, but have lots of questions about coordinating the two. Please follow this link to a downloadable pdf with more details about what we’ll cover. Hope to see you there!

I’m currently soliciting questions for this event… there is so much I can say about this topic, but want to make sure that your questions get answered. Please let me know if you have any specific topic points you think would be good to discuss!

New City of Portland Requirement: Home Energy Audit Required to List Home for Sale

Effective at the turn of 2017, the City of Portland is requiring that home owners who wish to list their home for sale obtain a Home Energy Audit Report for disclosure to potential purchasers. Implementation will begin in 2018.

According to the Portland Metropolitan Association of Realtors, the new requirements state that:
-Homeowners must obtain a home energy performance report.
-Provide said report to their listing Realtor.
-Include the energy score in the listing showing the home for sale.
-Provide a copy of the performance report to the City of Portland.

The rule does not apply to distressed properties, new construction, and there are some low income exemptions. For more specifics on the rule, see the City of Portland’s website.

How My Marketing Differs From My Competitors’

downloadLast year, I listed and sold 5 homes that  were listed with previous Realtors. The following list is just a sample of data sheets of homes I marketed after being previously listed, showing how I use every tool at my disposal to highlight all features possible.

The most important piece in my marketing plan is making your listing as appealing as possible on the data sheets, which are fed to all the major real estate websites. Viewing the home on the internet is the buyer’s first impression of the property, and having hardly any information filled out, inaccuracies, or having blurry, distorted, or dark photos is a disservice to you. Moreover, most buyers have a “Buyer’s Agent” they are already working with who will be showing the home, and this is my way of pitching your home to them without my actual presence. This is the number one job of a Listing Agent.

In each of the following examples, you will see two (or more) listing data sheets. The first listings, showing a status “EXP”, are the data sheets from when the home was listed previously with another Realtor. The next data sheets showing as “SLD” are the data sheets from when I actually sold and closed on the property.

This home, located at 15095 Glen Oak Road, was listed previously with another prominent agent in the area. Note that the square footage is incorrect, the listing does not include a major addition, and many misc details are not filled out on the listing.

This home that I recently sold on Seal Court in Oregon City went on the market over the summer and I received two full price offers within a day of going on the market. Note the differences in the two listings: the photo of the front of the home is much better, I sold it for $100,000 more than it was listed for a few years prior, there are many data fields that are not filled out, and my comments on the property and room descriptions are much more revealing. In addition, you’ll note on the second page of my data sheet, I used an additional page in our database to highlight some features that I could not find room for on the main data page. The review on 9/25/2015 on my Zillow review page is from this client.

This acreage home on Neibur in Oregon City had been recently listed with another Realtor for 6 months. The photos are the same on these two listing reports because the seller wanted to use his own photos. As you can see, there are many errors on the first report. First and foremost the square footage breakdown and the overall total amount of square footage is incorrect. The listing says that “tax credits” are available when the property taxes are “deferred” which is different. Lots of other little errors, such as mentioning cedar siding and slate floors – neither of which were present on this home. I listed this property during the slowest party of the year, two days before Christmas. It received an offer after 60 days on the market. The review on 4/10/2015 on my Zillow review page is from this client, and further outlines the differences that my client experienced with me versus another broker.

This home on Glen Oak Road, also in Oregon City, was previously listed for 214 days. When I put the home on the market, I received four outstanding offers within two days.  Note the difference quality of the photo, substantial price difference between what it sold for and what it was listed for previously, how much more descriptive the details are, utilizing every field possible. The biggest disservice to this listing was not saying much about the shop. That shop was one of the most exciting garages I had ever seen! I made sure to outline all features of the extensively wired and spacious shop which is hardly mentioned in the first listing. I also utilized more pages at my disposal, and even attached another PDF for Realtors to download for their clients, showing even more outstanding features on this home.

This home on Wake Robin in Oregon City was listed just a few months prior as a For Sale By Owner and then by another Realtor for 113 days. I sold it for slightly more than the previous broker had it listed for and got a full price offer within two days of hitting the market. Note that the square footage is incorrect on the first listing, and again the differences in how descriptive the listings are.

This home that I sold on Talawa Drive in Oregon City was listed once in 2011, again in 2013, and finally sold by me in 2015. The biggest differences in the way the first two listings are presented and my listing is my much more descriptive comments and utilizing all fields possible to highlight as much as I can on the property. Also note that I sold the home for $389,900 whereas it failed to sell at much lower prices previously. When I listed the home, it received a full price offer in under 30 days.

As always, feel free to email or call with any further questions, and I look forward to helping you!

Accuracy of Zillow Zestimates: a review of recent data.

Ever wondered how truly accurate those Zillow estimates are in showing what your home will sell for? Wonder no more! I’ve been telling clients since Zillow’s inception that their values are usually way off, but here is some raw data so that you can see it for yourself.

For my data, I selected all homes that sold and closed within the last week in Oregon City and show you prices that these homes sold for versus Zillow’s Zestimate. Here are the cliff notes:

There were twenty homes that closed within the last 7 days.

Of those twenty homes, Zillow’s Zestimate was within $5,000 of the actual sales price on four of the properties.

Six were within $5,000-$15,000 of the actual sales price.

Two were within $15,000-$25,000.

Two were within $25,000-$35,000.

One was within $35,000-$45,000.

Lastly, four homes out of the twenty that sold were at least $45,000 off from the actual sales price of the home. 

The take away message from this? Zillow’s Zestimates are probably accurate within $50,000 of what a home will actually sell for. Maybe half of the time the website will be within $15k of the sales price. However, many of these will sell for vastly more than what Zillow’s estimate shows, some will sell significantly under, and a handful will sell right around the estimate.

Address Sold price “zestimate” Home sold for ___ % above/below zillow’s zestimate:
511 1ST ST $158,000 $188,879 84.00%
18817 ROUNDTREE DR $240,000 $242,657 99.00%
19201 MILES ST $250,000 $242,263 103.00%
522 JACKSON ST $253,000 $204,306 124.00%
18777 BLUE RIDGE DR $265,000 $270,781 98.00%
19132 BEDFORD DR $270,000 $261,822 103.00%
13183 WASSAIL LN $280,000 $233,219 120.00%
19316 TOWERCREST DR $280,000 $257,416 109.00%
14388 TALAWA DR $289,000 $257,416 112.00%
23529 S TRILLIUM HOLLOW RD $290,000 $243,878 119.00%
18701 LASSEN CT $296,500 $292,576 101.00%
17445 WAKE ROBIN CIR $305,000 $317,272 96.00%
20005 MOSSY MEADOWS $329,900 $323,158 102.00%
13633 BARCLAY HILLS DR $330,000 $335,177 98.00%
146 PARK DR $350,000 $350,954 100.00%
18927 Wynton DR $351,450 No zest. listed
16265 BARLOW DR $381,500 $388,101 98.00%
16300 S HENRICI RD $407,000 $368,020 111.00%
1307 15TH ST $425,000 $404,270 105.00%
18598 ALADDIN WAY $540,000 $487,452 111.00%

There is no substitute for a human to help guide you through pricing your home. Having about 25% of the properties off by $50,000 is way too big a financial risk to take. And, in the past, I’ve seen sold price/zestimates that were even larger discrepancies than $50k.

Should you price your home for sale low high or low? Let’s look at the raw data.

When my seller-clients call me to start the process of getting their home on the market, one of my first tasks is to do a CMA (Comparative Market Analysis) on the property. This thorough report will show us a range in prices in which the home is likely to sell. My seller-clients often ask me what price they should start out at. They frequently tell me that they feel they should start higher than what they think it will actually close for, because buyers are almost always going to come in with a low price. I tell them this isn’t necessarily true, that in *this market* homes that are priced well tend to sell full or above full price, but homes that are priced too high tend to sit on the market awhile, often selling for less. This post shows data to back up that advice.

The following is a list of ALL homes that have sold in Oregon City in the last thirty days. This is just a “snapshot” of one local Portland metro suburban market.

The left column, “Days on Market” shows how many days the home was on the market prior to going pending. The next column is the ML#, identifying which property was on the market. After that is what price the seller had started out at, and after that is the price the home sold. The column on the right shows the ratio of list to sell price.

Here’s a synopsis of the data: 
-The homes are organized by how long they stayed on the market prior to getting a pending sale.
-There were 87 homes that closed in the Oregon City area in the last thirty days.
-The vast majority of these homes sold very quickly.
-I see trends in list/sell price ratios in homes that sold within ten days, ten to thirty days, thirty to 90 days, and homes above the 90 day mark:

Homes that sold within ten days: 
-About half of the homes that closed in the last thirty days sold within ten days of hitting the market!
-Of the homes that sold within ten days, about half sold full-price, half sold more than full price, and only couple sold under full price. 

Homes that sold within ten to thirty days: 
-About 1/4 of the homes that closed within the last thirty days sold within 10-30 days of hitting the market.
-List/sale price ratios are about equally divided between homes that sold above, at, or below the asking price.

Homes that took 30-90 days to sell: 
-About a dozen homes that closed within the last thirty days took 30-90 days to get an offer.
-These homes typically sold around 95% of the asking price.

Homes that took more than 90 days to sell: 
-There were about 10 homes that needed 90 days or more to go pending.
-These homes tended to sell for about 90% of the sales price, unless they were new construction or a short sale, which take more time to get offers.

The take away message from all of this data: 
This data clearly displays that buyers offers do not “always” come in below the asking price. In fact, many times they come in higher if the home has not been on the market long. And buyers DO pay attention to how long the home has been on the market, and will adjust their offering price accordingly. See tip #2 on this advice column on Trulia for more on why buyers adjust their prices this way. 

Here is the raw data for you to review:

Days on Market ML # List price Sales Price Ratio note
0 15379912 349,900.00 349,900.00 100.00%
0 15322645 265,000.00 270,000.00 102.00%
1 15581730 299,900.00 296,500.00 99.00%
1 15607584 350,000.00 360,000.00 103.00%
1 15296533 179,000.00 277,000.00 154.00%
1 15581731 299,900.00 296,500.00 99.00%
1 15476059 299,990.00 316,100.00 105.00%
2 15450131 349,900.00 357,000.00 102.00%
2 15494859 389,999.00 392,999.00 100.00%
2 15655278 249,950.00 250,000.00 100.00%
2 15601606 280,000.00 285,000.00 102.00%
2 15649940 307,500.00 307,500.00 100.00%
2 15456426 289,000.00 313,000.00 108.00%
2 15034410 324,900.00 324,900.00 100.00%
2 15047178 324,900.00 331,000.00 102.00%
3 15239577 329,900.00 341,000.00 103.00%
3 15615840 539,000.00 540,000.00 100.00%
3 15544653 245,000.00 244,035.00 100.00%
3 15029746 285,000.00 290,000.00 101.00%
4 15244462 360,000.00 360,000.00 100.00%
4 15691953 499,900.00 499,900.00 100.00%
4 15175870 239,900.00 239,900.00 100.00%
4 15529200 269,900.00 275,000.00 102.00%
4 15391532 269,900.00 280,000.00 104.00%
4 15632787 268,500.00 280,000.00 104.00%
4 15012109 289,900.00 $290,000 100.00%
4 15559876 279,900.00 290,000.00 104.00%
4 15272464 319,000.00 325,500.00 102.00%
5 15466370 325,000.00 340,000.00 105.00%
5 15107424 329,000.00 332,500.00 101.00%
5 15466370 325,000.00 340,000.00 105.00%
6 15035049 339,900.00 339,900.00 100.00%
6 15530536 344,900.00 350,000.00 101.00%
6 15570596 359,000.00 359,000.00 100.00%
6 15473045 170,000.00 180,000.00 106.00%
6 15202381 200,000.00 200,000.00 100.00%
6 15435611 199,500.00 240,000.00 120.00%
6 15050036 259,900.00 270,000.00 104.00%
6 15585965 289,000.00 289,000.00 100.00%
6 15035049 339,000.00 339,000.00 100.00%
7 15647733 374,900.00 374,900.00 100.00%
7 15563531 425,000.00 407,000.00 96.00%
7 15096104 319,900.00 318,700.00 100.00%
8 15074987 240,000.00 245,000.00 102.00%
9 15667826 399,900.00 400,000.00 100.00%
11 15293497 349,900.00 350,000.00 100.00%
12 15396773 259,900.00 253,000.00 97.00%
12 15665087 300,000.00 290,000.00 97.00%
12 15589357 329,500.00 330,000.00 100.00%
13 15233888 300,000.00 292,500.00 97.00%
13 15250604 358,999.00 381,500.00 105.00%
13 15311351 568,000.00 543,611.00 96.00%
13 15233888 300,000.00 292,500.00 96.00%
14 15294110 358,900.00 358,900.00 100.00%
14 15095749 594,700.00 594,700.00 100.00%
14 15261625 269,900.00 265,000.00 98.00%
15 15139198 220,000.00 226,500.00 103.00%
16 15232008 349,900.00 335,000.00 96.00%
16 15508023 339,000.00 336,000.00 99.00%
20 15461779 374,900.00 374,900.00 100.00%
21 15578366 235,000.00 235,000.00 100.00%
21 15022494 299,000.00 $289,000 96.00%
31 15142657 425,000.00 425,000.00 100.00%
34 15221005 294,900.00 286,000.00 97.00%
34 15330552 339,000.00 325,000.00 95.00%
52 14038853 429,900.00 450,000.00 105.00% new construction
53 14660142 449,900.00 447,500.00 99.00%
58 15306094 356,900.00 349,900.00 98.00%
60 15627885 325,000.00 $305,000 94.00%
63 15426426 319,900.00 311,400.00 97.00%
68 15442766 325,000.00 299,000.00 92.00%
68 15201503 324,500.00 318,000.00 98.00%
79 15655651 354,900.00 356,900.00 100.00% new construction
79 14081155 389,900.00 389,900.00 100.00% new construction
79 14176899 169,900.00 158,000.00 93.00%
82 15607375 255,000.00 229,700.00 90.00%
91 15648604 285,000.00 278,000.00 97.00%
112 14654121 425,000.00 370,000.00 87.00%
135 14070284 598,900.00 590,000.00 98.00%
138 14282473 695,000.00 670,000.00 96.00%
141 14671525 265,000.00 270,000.00 101.00% short sale
182 14297397 229,900.00 217,000.00 94
198 14373063 265,000.00 231,500.00 87.00%
229 14360151 384,900.00 376,950.00 98.00%
270 14607200 559,900.00 559,900.00 100.00% short sale
446 13104108 329,950.00 351,450.00 106.00% new construction

Please call or email me with any questions. I look forward to helping you!

Local tax assessors are using aggressive methods to find ways to increase property taxes

Tax assessors have been using the RMLS (Realtors Multiple Listing Service) database to search for properties that have been remodeled or updated in order to raise the assessed value and tax more money on real property.In Portland, there are several reports of assessors stopping by homes that have recently closed and leaving notes saying that they want to see the house to see the home for valuation purposes. The upgrades that they are looking at are not things that would typically require permits from the city or county (cosmetic updates).

Please note that if there is updating done on your home, the assessed value can change, regardless if the assessor actually sees the changes in person (the assessor can use the RMLS photos to see the condition at the time the home was listed). If you find than an assessor is attempting to re-evaluate the value on your home, you may find this write up by PMAR (Portland Metropolitan Association of Realtors) helpful: https://pmar.org/wp-content/uploads/5.20-Property-Tax-Update.pdf

 

Why working with a mortgage broker is different than going to your bank or credit union

When I first start working with my buyer clients, they often tell me that they are considering getting their loan through their bank or credit union. Most often, I will need to coach them into understanding the difference between the services offered by a mortgage broker and a bank.

First of all, a bank and/or credit union usually only has access to their funds, unlike a mortgage broker, who shops around to all private and public sources of loans, and generally offers you the best rate that they can find. Their fees for closing a loan (“closing costs”) tend to be significantly higher than mortgage brokers as well.

The other big difference in the two is that mortgage brokers typically have much better customer service. The few times that I have had clients use a bank over a mortgage broker, many problems come up. Appraisals don’t get ordered on time, the estimates that my clients received weren’t accurate, the loan officer pulled up too many credit reports (lowering my clients credit rating), and most often, the loan doesn’t close on time.

If you end up in a multiple offer situation and you have a pre-approval letter from your bank versus a mortgage broker, the listing agent is likely to make a note of this and it will be one of the considering factors when looking at all the offers.

When you shop around for different loans, ask for a Good Faith Estimate, and compare them side by side. You will want to make sure that everyone has a ball park amount of things like taxes and hazard insurance included, which will affect the amount of the monthly payment.

If you need a referral for an excellent loan officer, please check out my referrals page.

The Difference Between Pre-approved and Pre-qualified

In one of my posts I had discussed the importance of getting pre-approved for a home loan ASAP if you are considering purchasing a home. Now I want to explain the difference between the terms “pre-approved” versus “pre-qualified.” The difference in terms is meaningful to both buyers and those wishing to sell their home.

A “pre-qualification” simply means that the buyer has had a verbal discussion with a loan officer regarding how much money you make. “Pre-approved” means that the loan officer has actually received supporting documentation regarding your assets, and has taken loan application on the buyer’s behalf, pulled a credit report, etc., and is approved for a loan based on these factors.

When you are looking to purchase real estate, a buyer’s agent is going to be hesitant about representing you if you have not gotten fully pre-approved.

When you do find the right home to buy and want to write an offer on it, the Realtor representing the seller (Listing Agent) may advise the seller to not accept your offer until you’ve gotten fully pre-approved. A seller will not want to take their home off the market, only to have it go back on the market a week later for a buyer that does not qualify. This damages the seller, because many people assume that something went wrong with a home inspection. This means that another buyer can come along and buy the house before you’ve gotten fully approved for your home loan.

The distinction is particularly important in multiple offer situations. Even if you write an offer on a home that is well above another offer, the fact that the buyer is not fully pre-approved discredits the entire offer.

For recommendations of mortgage brokers that past clients have had good experiences with, check my resources page.

Why hiring an unlicensed person to perform a home inspection might be risky

I’ve had a few clients in the past who have wanted to save money on their home inspection fees by having their friend, usually a general contractor, perform a house inspection for them for a free or reduced cost. This is usually not a good idea, and here are the reasons why:

First of all, please note that it is Oregon law that anyone who inspects two or more systems in one property must be licensed as a home inspector. Therefore, Oregon law does not recognize “general contractors” as home inspectors. To be licensed as an actual Home Inspector, the person must have gone through specific training and be licensed as such.

Home inspectors have a checklist of items that they must cover in their home inspection report. They should spend at a minimum of several hours going over the entire property: physically going up on the roof to check the condition, going down into the crawlspace and checking out the entire area to check for water/pest intrusion and looking for cracks in the foundation, pulling off the electrical panel to check for overheating, etc., etc.

If you do find something on your “inspection” that you would like the seller to remedy, the seller is likely to request a copy of the inspection report. The current standard sale agreement* states that the seller is entitled to a copy of the inspection report should they ask for one. If you do not have an actual inspection report to refer to, this will not hold much weight with the seller, and they aren’t likely to be inclined to do anything about the problem.

In addition, the current sale agreement* states that you may withdraw your offer based on a professional inspection report, but note the word “professional” in the sentence: since Oregon law does not recognize anyone who is not a licensed home inspector a “professional” it is possible that you may not have a contractual right to withdraw your offer. When I proposed this question to my Principal Broker (my supervisor) they got in touch with PMAR‘s (our local Realtor association) top legal counsel, and he had agreed – the home inspector must be licensed with the CCB in order for the buyer to withdraw their offer based on the home inspection report. This is still a question of law, and if you find yourself in this situation you’ll need to contact an attorney for advice on how to proceed.

In addition, I am concerned that if something is overlooked on your inspection, I worry that there will be no recourse against the person that you hired as an inspector. Licensed home inspectors are held accountable if mistakes are made, but if the person is not licensed as such, I am not sure you would have any recourse.

However, please note that home inspectors come in all different shapes and sizes and therefore their costs can vary considerably, but you get what you pay for. Stay tuned for an additional post regarding the differences in home inspectors.

*I am referring to the current OREF form in Oregon, which is subject to change.