Bend Oregon Real Estate Archives - Preferred Residential

Even More Tips for First Time Home Buyers

In step one you selected the real estate agent and mortgage lender you thought were the best fit for you. In step two you set reasonable expectations for your home search. Now that you are ready to begin looking at houses it is time to buckle down and get serious.

The best way to prove to home sellers that you are a serious buyer is to have an approval letter from your lender. Not a pre-qualification letter but a pre-approval letter that states your lender has verified your income and expenses and you have received approval for a mortgage through the desktop underwriting system. Having this letter from your lender will be an important part of any offer you make.

First of all it will put you in a position to be able to make an offer. A smart seller won’t even respond to your offer until they have some sort of verification that you have spoken with a lender. Most buyers only have a pre-qualification letter which just means the lender thinks they can provide the buyer with a mortgage based on what the borrower has told them. Your pre-approval letter will put your offer in a better light with the seller. The seller will be more inclined to consider your offer as your mortgage has already cleared one hurdle to approval. A buyer with only a pre-qualification letter could end up being a colassal waste of time for the seller.

Speaking of wasting time…During this phase of your home search it is vitally important that you communicate with your Realtor and that she understands what you are saying. No one wants all that driving around town to be a waste of time. While you are standing in a house, tell your real estate agent what you like and what you don’t like. Tell her why. The goal is for you and your realtor to be on the same page about what you want so that she can present you with homes that have the things that are important to you. It is one thing to put your “must haves” on paper but once you start looking at houses that list can change. It is not uncommon for first time home buyers to think they know what they are looking for only to look at a few houses and find out that really wasn’t what they wanted or it was something they could live without.

It may take a time or two of looking at houses with your Realtor® for her to really get a feel for the kind of house you are looking for. By the second time you go out looking at houses and for sure the third you should be seeing homes that are in the same ballpark of what you want. They won’t all be THE house but if you want 3 bedrooms, 2 baths and a fenced back yard then you certainly shouldn’t be looking at 2 bed, 1 bath, zero lot line homes just because they are in your price range.

This is the fun part of your home search so don’t forget to enjoy it. Don’t get discouraged if your home search takes longer than you had hoped. The house for you is somewhere out there and it will be clear to you when you have found it. The bonus is that because of all of your hard work and diligence you have two great professionals working for you to make the deal happen.

More Tips for First Time Home Buyers

You started the process of buying your first home by choosing a real estate agent and mortgage lender that meet your qualifications and feel like a good fit. Before you take off, excited to find the perfect home, step back and set some expectations for your home search with more tips for first time home buyers. What you expect to happen during your house hunt will affect how you react to what actually does happen. Setting realistic expectations for yourself now can save headaches and money later.

This won’t be the last home you ever buy. Most first time home buyers can’t afford their dream home. If this is the case for you then try thinking of your first home as an investment in your future homes. As an investment, the most important aspect of your first home will be appreciation/re-sale value. At some point you will likely want or need to sell this home and your best bet to make money on it is to have bought a home that others will find attractive. Look for homes in well kept neighborhoods, close to public transportation, near shopping and amenities and in school districts with good reputations.

Be prepared to set emotions aside. Approach buying a house as a financial decision not an emotional one. There is so much money involved in buying a house that you can’t afford to make an emotional decision based on modern styling or high end finishes that cause you to overlook the four lane highway outside the front door. Be analytical. It might be useful to make a list of pros and cons for each house.

Expect added pressure. Remind yourself that you don’t need extra pressure from yourself or anyone else. Buying a house carries enough pressure on its own. Don’t let anyone add pressure on top of that. We recommend leaving family and friends at home during showings. While they usually mean well, more often than not their comments do nothing more than muddle your thoughts and make you feel like you can’t think for yourself.

Some times pressure can come from a Realtor. Your real estate agent should never put pressure on you to buy a house. If it is ever anything other than trying to convey a sense of urgency in a potential multiple offer situation then it might be time to find a new real estate representative. Listen to advice but don’t let anyone tell you what house to buy. You are the one who will be living there, not them.

Extra pressure can also come from you. Expect that you aren’t likely to find the home you will buy the first time you look at houses. After multiple showings and weeks of looking, buyers some times convince themselves that the house they are looking for just isn’t out there so they should settle for something less. Starting your house search with the knowledge that it can take weeks or even months to find the right house (especially in this market with little inventory) will help keep you from pressuring yourself to settle.

Having set some reasonable and realistic expectations now it’s time to start your home search!

We have even more tips for first time home buyers.

Is a Fixer Upper Right for You?

Whether you are a handy home owner looking to “buy up” at a discount, an investor looking for a flip or rental, or a first time home buyer looking for an affordable house you can make your own, a house that needs some repairs can present you with a good opportunity to create equity.

It sounds pretty simple, find a house that needs some help, buy it and fix it up. However, if you aren’t careful it can be quite easy to lose money on a fixer upper. Here are some things you should consider when shopping for a fixer upper.

Get an inspection: It is one thing to be handy with a hammer and saw but quite another to be able to properly inspect a home. Many problems in a house may be obvious: plumbing leaks, failing windows, and a leaky roof for example but it is the ones that aren’t so obvious that can be the most costly to fix. Mold, termites in the walls, water not being properly directed around the foundation and siding that no one knows how to fix or replace (we’ve had this happen) are not always so obvious. We always recommend a professional inspection, even for experienced buyers.

Get bids from a licensed contractor for all repairs: Unless you have been buying and fixing homes for a long time, the best way to know how much a repair will cost is to ask a contractor. Then add ten percent. This will give you a worst case scenario of how much it will cost to fix your home. If you can’t afford to pay someone to complete all the repairs (even if you are planning on doing all the repairs yourself) then it might be a good idea to move on to the next fixer upper. Think of it as an insurance policy. You never know when a timber might fall on your head or a spider might bite you while crawling under the house and if you can’t complete the house you could end up in a really bad place financially.

Calculate the time to completion and be realistic about your ability:

The goal on any fixer upper is to keep cash expenditures to a minimum. For most, the easiest way to do that is to do the repairs yourself. The trick is to know your limitations and not over estimate your ability. Time is of the essence whether you are trying to get the house on the market, get it rented or just ready to move in. Be sure to carefully consider whether or not you have the time to get the repairs done yourself because often there is a surprise hidden behind those walls that can set back your timeline.

Determine if you are creating value and/or equity: It’s great to make a house attractive with stainless steel appliances, granite counter tops, and tile bath surrounds but if you aren’t creating something that people will want to rent or buy at a price that allows you to make money then you better be planning on living there for a long time. Your real estate agent and/or property manager are great resources to help you determine how much value your improvements will add and how they will affect rentability.

Buying a house that needs some work is a great opportunity to make some money whether you are an investor or not. Just be sure to take your time and do your homework because it can also be an easy way to lose a lot of money.

Winter May be the Best Time of Year to Buy a House

One thing we could probably all agree on is that winter is not our favorite time of year to move. From the cold to the potential for snow and rain it just doesn’t seem like the best use of one’s time. It doesn’t seem like it but there are some advantages to putting on the over-coat and galoshes and climbing in the Subaru to find your dream home.

Visit during bad weather. This can be especially beneficial to a home buyer in Bend when there is snow on the ground. How much sidewalk is there to shovel? Which way does the driveway face? If it is a steep driveway and it doesn’t face south you could be in for a long winter of parking on the street instead of in your nice (relatively) warm garage.

Another advantage of doing a drive-by with snow on the ground is being able to see the snow or lack of snow on the roof. The snow on a well insulated roof will melt much slower if the house is well insulated. Compare the snow on the roof of the house you are considering to the snow on the roof of the neighbors’ houses. Just remember compare sections of the roof that are facing the same direction. Especially if you are shopping on a sunny day in Bend.

Spend time in the house on a cold day. Walk around the house from room to room to see how well the furnace heats the whole house. Figure out where the furnace is located and go the the rooms located the farthest away. Also, make it a point to check as many windows as possible while the furnace is running. Run your hand around the inside edges of the window to feel for a draft.

Fewer buyers to compete with. Many people don’t like to move during the winter so while they are hiding out you can take advantage of sellers who are motivated. Fewer buyers means that you can take more time to consider a home before you make an offer. It also means that you may have more negotiating power with the seller when you find the perfect house.

You can have your Realtor and lender all to yourself. We have already established that most people have a general dislike for moving during winter months. Now is the perfect time to take advantage of your real estate agent and mortgage lender. They will be able to spend more time on your search for a new house and process your loan faster.

If you are thinking about buying a home come spring why not start your search now? You aren’t in a rush so you don’t have to make an offer unless the house is exactly what you are looking for. And if you don’t find your dream home what have you lost? Maybe a little time but when the competition picks up again you will know exactly what you are looking for and be ready to pounce before the other guys even know what happened.

Where is the Best Place to Live in Oregon? Bend

If you have spent any time in Bend, you likely feel the same way the good people at Movoto Real Estate do, that Bend is the best place to live in Oregon. We have devoted a lot of space on our blog to telling you how much we love living in Bend but you don’t have to take our word for it, here’s what Movoto Real Estate had to say:

This city certainly didn’t have to bend over backward to make it to the top of our list—it won outright. Bend is not only just a few miles away from some of the best hiking trails and ski resorts in Oregon, but it also has a stellar education system, with a high school graduation rate 10 percent higher than the state average, and some of the highest home values in the state as well.

Over the past five years, Bend’s population has been booming. Outdoor enthusiasts flock from far and wide for parks like Pilot Butte State Scenic Viewpoint, skiers to Mount Bachelor, and runners to the Haulin’ Aspen Trail Marathon. It truly is a wonderful place to raise a family—or at least, raise your heart rate.

Here is the link to the 10 Best Cities in Oregon.

What You Should Know About a Home Before You Buy It

There are some very important things that every buyer should know about a home before signing on the dotted line. Most people, real estate agents included, think a professional inspection and an appraisal will uncover everything you need to know about a house. While we agree that no home should be bought without an appraisal and full property inspection, we also think there are a few other items that are equally as important.

Utilities: A good way to tell how well a home is built is to call electric and gas utility companies to get a sense for how much it will cost you to heat the home in the winter. Most utility companies will give you an average and a high and low over the last year and some will even go back a few years. This information will not only give you a good idea of what to expect but also might point to some repairs or improvements that need to be made.

Also, be sure to take a look at the furnace and hot water heater during one of your visits. There should be a sticker on each that will tell you how often they have been serviced and when. If it has been a few years since the last service on either piece of equipment it might be a good idea to call a local HVAC company or plumber to come take a look. A simple $85.00 inspection could save you a lot of money down the line.

Permits: Check Deschutes County Dial for permits pulled on the property. If you find permits that were opened but never closed you could end up buying a house that you can’t sell without performing thousands of dollars in repairs first. We had buyers who found a house they loved. One of the attractions of the house was a living space under the house the sellers had finished but never received final approval for. Turns out the sellers made some errors in their construction that would have cost our buyers almost $10,000 to correct. The buyers wisely walked away from the deal.

Listen to the sellers and their agent. If they talk about remodeling this or that ask them exactly what was done then check for permits. Not every improvement requires a permit but the city or county can tell you if one should have been applied for.

Neighborhood: If you are going to buy a house the neighborhood comes with it. Good, bad and unbelievable. Drive around the neighborhood not just the street your house is on. What do the houses two streets over look like? Are you going to have to drive that street to get home? Visit the neighborhood at various times of the day and night. The street your house is on may have been quiet for your showing at 11 am but what happens when everyone comes home after work? What route do your neighbors use to leave the neighborhood? Do they all have to drive by your house?

What about your immediate would-be neighbors? Do they have barking dogs or children that like to use your yard as a shortcut? Or maybe one of them (imagine a big over-weight man) likes to water the yard half naked but uses a hose instead of a sprinkler so you have to watch him.

Taking a few extra steps can be the difference between buying the home of your dreams and a home that nightmares are made of.

The Value of Real Estate Agents for Buyers

It is easy to think that buying a home is something that can be done without a real estate agent. After all, we live in the information age and have access to all the current listings (we think). Examples of purchase contracts can be found with a quick Google search and county assessors provide online access to plat maps, ownership and tax information. What more could a buyer need?

Efficiency: Start with the online search. Buyers often incorrectly assume that the listings they see on sites like Zillow and Trulia are accurate. They aren’t. A Realtor® has access to the most up to date listings available. An experienced agent has also shown hundreds of houses with buyers just like you and can help you narrow down your search parameters after looking at just a few houses. That will save you countless hours of driving around town looking at houses that look good in pictures but in reality aren’t something you want.

Value: Most home buyers don’t have access to sales data to be able to determine what a house is worth. Your real estate agent does. Not only does she have access to that data but it is likely that she has been in a number of the homes that have sold in your desired neighborhood. This knowledge will allow her to use more than just data to determine a fair offer price that 1) will be competitive in a multiple offer situation, 2) won’t offend the seller because it is so low or 3) isn’t too high based on the current market and condition of the home.

Negotiation: Sure, most home buyers would be able to negotiate a price that they would be happy with but that’s not the end of the negotiations. It is when you find out that the hot water heater is failing or half the outlets in the living room don’t work or you tell the seller that you can’t stand the wood paneling and window treatments that negotiations can get sticky. Real estate agents negotiate home sales and purchases on a regular basis and can help you negotiate compensation for these things.

Part of the Realtor’s® role in negotiating is as a buffer between you and the seller. Some sellers will tell you to take a hike if they think you aren’t showing enough appreciation/respect for the house they love. Having someone on your team between you and the seller can also prevent you from saying something in the heat of the moment that the seller doesn’t need to hear whether it be an emotional reaction or a financial slip-up.

Paperwork: An experienced real estate agent has dealt with real estate contracts for years. She knows how to use the real estate contract to protect you. She knows which conditions and contingencies should be included in the contract and when they can be safely removed. The importance of conditions and contingencies can’t be overstated. Without them, something as simple as wanting to terminate a contract because you didn’t qualify for a mortgage can lead to lost earnest money and even a lawsuit.

Process: What comes next? How long do you have to get an inspection? Does the title company have all the paperwork ready? What about the appraisal? What about the lender? There is a lot that goes into keeping a real estate transaction in contract and on schedule. As a home buyer, do you have enough time to stay on top of these things and enough familiarity with the process to know what comes next?

There is a lot that goes into bringing a real estate transaction together and you have a lot of money on the line. Doesn’t it make sense to have an experienced professional on your team?

Time to Sell Your House and Move-Up?

One segment of the real estate market that has been missing for the last 6 years is the move-up buyer. These are the home buyers that have outgrown their current home and are now in need of something more. Or maybe they don’t need more house but they want to live on a golf course or have panoramic views of the Cascades or they just don’t want to be able to reach out their window and touch their neighbor’s house.

The reasons these folks haven’t been in the market is primarily because of all of the equity they lost in the real estate crash. Despite super low prices in 2011 and interest rates below 3 percent in 2012 many would-be buyers needed more (or even some) equity in their current home before they could consider buying something new.

The run up in home prices over the last twelve months appears to have provided the boost in equity people were looking for. A recent article on HousingWire.com quotes Daren Blomquist, vice president of RealtyTrac a real estate market research company, as saying 18.5 million homeowners, 40% of all homeowners, have at least 20% equity or more.

He goes on to say, “We show 8.3 million homeowners who are on the equity fence, and should have at least 20% equity in the next 15 months if home prices continue to appreciate at the same rate we’ve seen over the past 15 months.” Blomquist noted that if 5% of these 8.3 million homeowners list their homes for sale, that’s an additional 415,000 homes that will be available for sale in the coming months.

How much equity do you have in your home? The best way to find out is to call your Bend real estate agent. Be careful about holding out for the price of your home to go up further because while the value of your home is rising so is the value of the home you want to buy. The other thing that is likely to rise while you wait for more equity is interest rates. The combination of rising interest rates and home prices can make a real difference in the kind of home you qualify to move up to.

Top 7 Reasons You Should Invest in Bend OR Real Estate

You have been thinking about investing in real estate for a while now but you don’t know where you should invest. Should you buy a rental in your home town? A college town? Why not invest in Bend real estate? Why not indeed? Here are our top seven reasons to buy a rental in Bend.

#7: You already vacation here. Owning a real estate investment in Bend could make part of your travel expenses to Bend tax deductible. Talk to your accountant.

#6: People want to live here regardless of the job market so finding tenants isn’t as dependent on the job market in Bend as it can be in other cities. Let’s face it, the job market in Bend isn’t the best in the state yet Bend’s population grew faster than all other areas of the state in 2011 and 2012.

#5: There is a large segment of the population in Bend that works in jobs related to tourism. Restaurants, golf courses, resorts, motels, breweries etc. These businesses are all a part of what makes Bend great but those jobs don’t always pay enough for someone to afford to buy a home. In our experience, service industry employees love to live in Bend where all the action is.

#4: 37% of the people who live in Bend rent the home they live in according to City-Data.com. That number is slightly higher than the national average and it appears that number will continue to grow as home ownership is at a 17 year low according to Reuters.

#3: Home prices are rising in Bend. The first quarter of this year was especially strong with the Bend real estate market out-pacing all but a few of the Metropolitan Statistical Areas (MSA) monitored by the Federal Housing Finance Agency.

#2: There is a lot of competition for rentals in Bend. This can be seen in Bend’s vacancy rates and our anecdotal evidence as a Bend property management company. According to a Survey conducted by the Central Oregon Rental Owners Association vacancy rates in Bend are at 2%.

…And the number one reason you should invest in Bend, Oregon real estate is:

Business Insider called Bend the best real estate market to be invested in for the next five years.

Should You Wait for Interest Rates to Fall Before Buying a House?

Over the last month and a half mortgage interest rates have risen 3/4 of a percentage point from 3.5% to 4.25%. That is a big move over a short period of time prompting prospective home buyers to ask, “Will interest rates continue to go up?” And, “Should I buy a house now or wait for rates to fall back below 4 percent?”

Federal Reserve sparks speculation: Ben Bernanke, Federal Reserve Chairman, indicated last week that they will begin cutting back on their purchases of mortgage backed securities and Treasuries later this year. His comments served to further weaken demand for these securities causing prices to plunge and mortgage interest rates to go up (bond prices and yields move in opposite directions). The Fed is expected to stick with this plan and let the market determine mortgage interest rates as long as the market continues to show signs of improvment.

Three percent a thing of the past: Don’t expect interest rates to drop below four percent again this year but don’t expect them to keep climbing so rapidly either. Many experts believe that the dramatic rise in rates over the last few weeks was the bulk of the move we will see in response to the Federal Reserve’s shift in policy. They also say that moving forward, rates should stabilize in the four percent range.

Erosion of purchasing power: If mortgage interest rates do stabilize then most of the damage from interest rates has been done, to the tune of about $40 per month for every $100,000 financed with a 30 year, fixed rate mortgage. The other threat to buying power that has yet to show signs of stabilizing is home prices. Since January of this year the average price per square foot of homes sold in Central Oregon has risen 16 percent and in Bend it has gone up 11 percent. For a $200,000 home, an 11% price increase translates to a monthly payment increase of $88 on a 30 year mortgage at 4.25% with 20% down payment.

Lack of inventory has been and continues to be the main contributing factor to rising home prices here in Bend. Although it has improved this Spring, the number of homes for sale in Central Oregon was still below 2000 for the ninth consecutive month. You have to go back to 2004 to find a time when there were three consecutive months with fewer than 2000 homes for sale.

For those home buyers who have been sitting on the fence, the events of the last few weeks (and months even) should be enough to drive them to action. Fear of further interest rate spikes is already motivating buyers to move quickly to find a house, placing more demand on already low inventory and, you guessed it, driving prices higher. This Bend, Oregon real estate market is a prime example of a situation where it doesn’t pay to wait to buy a house.