I picked up a couple of interesting bits of news this week about the economy. Thought I would share:

Last week’s Pending Home Sales index from the National Association of REALTORS® (nar) went up 7.3% in November, the highest level since April of 2010.  The 2010 numbers were pumped up because of buyers that were in the market to take advantage of home buyer tax credits available then, that are not available now.

NAR chief economist, Lawrence Yun (and one of Inman’s 100 most influential)  said,  “Housing affordability conditions are at a record high and there is a pent-up demand from buyers who’ve been on the sidelines,  but contract failures have been running unusually high. Some of the increase in pending home sales appears to be from buyers recommitting after an initial contract ran into problems, often with the mortgage”.

I think that some some contract failures are preventable, especially when both the buyer and seller want to see the transaction through — having the right team in place, real estate professional, lender and title/escrow in place, can make a huge difference on an individual basis. Local markets and individual circumstances drive the reasons for contract failures.

According to NAR, It should be noted that “Pending home sales are not affected by the recently published rebenchmarking of existing-home sales because the index uses a different methodology based directly on contract signings, and is adjusted for seasonality.

and

According to USA Today, news sources and the Bureau of Labor Statistics, the, U.S. unemployment numbers are the lowest in 3 years.  “The U.S. job market strengthened in the second half of 2011 and added 200,000 jobs in December while the unemployment rate fell to 8.5% from a revised 8.7% a month earlier.”

Bright spots.  I’m looking forward to serving your Real Estate needs to 2012.  If you have questions about Corvallis, Albany, Philomath or other mid-Willamette Real Estate feel free to get in touch.

Contact Dava

Broker tour

Q. What is Broker Tour?

A. Broker Tour is a time when sellers make it easy for Brokers to see properties that are on the market.  The “tour” is a process by which brokers can look at properties without making prior arrangements.  In the Corvallis, Albany and Philomath areas the agents let themselves into homes that are pre-set; in some areas, like Lebanon or Sweet Home there is a “caravan” type tour that is rigorously scheduled and the agents group together and all go in a few cars at once.

Q. How does this process work? 

A. The listing agent sets the tour time up in the MLS system. In Corvallis, Philomath and Albany brokers “tour” on Wednesdays. The time of the tour is flexible, but most commonly around 9:00 am until early afternoon.  One of the nice features about the way we tour here is that we can flex a little and work around our client’s schedules and needs. Other areas have different methods, for instance in Lebanon the tour is more of a “caravan” with a list of pre-scheduled properties.  Additionally, some offices have an established “office tour” which may or may not be established as part of their office meeting agenda.

Q. Which properties are on tour? 

A. Tour is often comprised of the “new” listings for the week. Sometimes a “new” property  has been on the market for a while (days or even weeks) before it is scheduled for tour.  Sometimes homes that have already been on tour once are re-set for additional tours. Generally, those homes have had a “change” like in price or décor.  Occasionally, the first tour had a poor turn-out, so it’s re-set to give the brokers another chance to see the property.  It’s never a bad thing to let brokers have easy access to preview a property.  Broker tour is a little like “open house” just for agents.

Q. Why is it beneficial for brokers to tour?  

A. This is a chance to see the property and be familiar enough to discuss it with clients.  Sometimes, brokers tour with a specific client in mind, other times not. It is also a way to become familiar with the market, understand the various homes that are for sale and associate a price point with them.  This is also a social opportunity, brokers on tour often cross paths and has a chance to talk with colleagues, exchanging ideas and needs.

Q. Why didn’t more agents tour my home?

A. There could be any number of reasons why some agents didn’t tour. Often it’s because they have conflicts in their work schedule. It’s possible that they’ve seen the house (either on tour previously or even when it was on the market in the past).  Sometimes the time that is set is not practical or long enough to allow them to see every property.  Rural properties are often under-toured due to drive times etc.  There may have been a number of properties on tour and the volume made it impossible to see them all. Some brokers only tour if they have a client that may match a property, some never tour at all.

Q. What about a luncheon or give-away?

A.  A lot of brokers offer luncheons or give-a-ways with the idea in mind that more brokers will tour the home.  It’s my opinion that the brokers that need to see a specific home, make a point to visit with or without incentives. 

According to a recent survey by Trulia¹ the American Dream of homeownership is alive and well.  

One interesting fact to me is that the number one concern of potential home buyers is the ability to save up a sufficient amount for a down payment. 

I find this  a bit ironic given the political trend to create an environment of even higher downpayments. As recently as this spring, regulatory agencies were working on rule making that would further increase the downpayment requirments. This was covered by The National Association of REALTORS^® (NAR) in REALTORS® Oppose High Down Payment Requirement for Qualified Residential Mortgage Exemption . 

The survey also covers the age demographics and ideal home sizes and locations.  Interesting information.  It’s worth a look.

 ¹ Trulia is a major site that provides information about real estate and homes for sale and rent

A New Resource for First Time Homebuyers

Coldwell Banker Corporation has just added a new resource for First Time Homebuyers to its web site ColdwellBanker.com.  The First-Time Home Buyer Resource Center includes videos, articles and tools to answer questions and guide new home buyers through the real estate search process.  If you’re thinking about buying a home for the first time in Corvallis, Albany, Philomath or for that matter, anywhere in Oregon or the U.S., this site would be worth a visit.

If you want to ask questions or need help buying your first home, Contact Dava.

My clients that are buying and selling homes in the Corvallis and Albany areas frequently, ask  ”What is escrow?

In general, “escrow” is the neutral third party that holds instruments (deeds or other documents that convey ownership); funds (or other items of value); or evidence of title for real or personal property.  In Oregon, the escrow agent is typcially a Title Insurance Company (but this does not always have to be the case).

In a real estate transaction, “escrow” is the neutral third party that holds the deeds, collects and disburses the funds and follows instructions on behalf of the parties to the transaction.

It is the function of escrow in a real estate purchase transaction to make sure that all the instructions (which are really the terms of the sales agreement and the lend, er instructions) are followed; that all bills are paid (through the instruction of the buyer, the seller or the lender) and that funds are disbursed (lender loan proceeds, seller’s proceeds and any excess monies deposited by the buyer to the buyer).

Escrow follows the instructions of the parties to the transaction to determine how proration of taxes and other re-occuring charges such as homeowner association fees are handled. Escrow also makes sure that appropriate parties such as taxing authorities, homeowners associations, water districts and so forth are notified when there is a change of ownership. Escrow does not typically notifiy public utilites of changes of ownership.  An owner that is selling should notify their hazard/homeowners insurance of the sale (but not until the sale is completed and the sellers proceeds are disbursed.)

Escrow is also responsible by law for the collecting of information and reporting of sales information to the state and federal government in the event of a possible income tax liability on the part of the seller of real estate.  It’s important that sellers and buyers understand the tax ramifications of their transactions prior to closing.  Escrow will send out questionnaires to be completed early in the process to help alleviate problems that can arise from tax consequences of a sale (such as FIRPTA and State and Federal witholding requirements), if for some reason you do not receive paperwork from the escrow company early in your transaction, you will want to check on it.

Escrow is not allowed to act independently.  In general, once a buyer’s earnest money deposit is “in escrow” escrow cannot release those funds without express instructions from all parties.  Escrow is not allowed to proceed with finalizing or cancelling a transaction without instructions from all parties.  If there is a dispute that arises from disagreements from any of the parties to the transaction, escrow must wait for instructions between the parties that are consistent before they act upon them.

It’s important the that escrow agent: be finanacially responsible (and have financial strength); have expertise in handing complex transactions; act in a manner to assure that payment of liens and other encumbrances is accomplished; provide single point of contact for coordination of flow of documents and funds; remains an impartial third party.

If you need more information or have specific questions I can answer, please get in touch. Contact Dava

Another humerous video by Coldwell Banker illustrating that Coldwell Banker is a Real Estate Company, not a bank!

Just for fun.   Evidence that even though real estate is a serious topic, it can also be fun!



Coldwell Banker Releases its Annual Home Listing Survey Report

On Wednesday, June 15, 2011, Coldwell Banker released its annual survey which provides a “snapshot” of the average listing price of four-bedrooms two-bathroom homes that appeared on ColdwellBanker.com in a 6 month period, covering more than 2,300 North American Markets. This year’s report is more extensive than ever before and covers more markets.  As a Coldwell Banker agent, I appreciate it that Coldwel Banker provides excellent interactive tools for buyers and sellers making the information easily accessible and useful.  

Jim Gillespie, chief executive officer, Coldwell Banker Real Estate LLC said, “We’ve included nearly ten times more markets than ever before, which gives us unmatched real estate insight into thousands of North American cities…. We know that home buying remains a deeply personal lifestyle decision, and we believe that reports like this, along with trusted real estate agents, will help today’s buyers make smart decisions .”

 For the full report: Coldwell Banker Home Listing Report.

While visiting this page, take a look at the charts included in the press release or compare the price of your home to other markets by filling out the data at the lower half of the page, check out the infographic for a visual of the ten most affordable and ten most expensive markets or check out the ranking of your community in comparison to other communities in your state with the State Survey List.

Buying or Selling Investment Properties (Real Estate) When Involved in a 1031 Exchange, it’s what you don’t know and don’t do that can really cost you.

This is a really good article about getting the correct level of assistance when involved with a complex real estate transaction. I think the lesson translates to a great deal of things we do in LIFE. Also, a reminder that the courts don’t really care what the “intent” is when the rules are not followed in regard to IRS rules and laws. It’s what you do that counts, not what you meant to do.

In this case the taxes were due and penalties were applied.

Protect Oregon Homes

In Oregon, the Oregon Association of REALTORS® is mobilizing residents across the state in support of Initiative Petition 5 to constitutionally protect your real estate property from a sales tax.

A real estate transfer tax is a sales tax on your property. It is a form of double taxation that lowers homeowner equity; negatively impacts the process of buying and selling a home; and unfairly targets property owners and lower income residents alike.

Learn More About The Issues

• What is a Real Estate Transfer Tax?
  A real estate transfer tax is a state or local government imposed tax that is collected when you transfer ownership of your home, land or commercial real estate. Typically, once the tax is initiated, the rate can be increased by the state, county or city at any time.
• What is the language of the constitutional amendment being considered?
  Amends Constitution: Prohibits real estate transfer taxes, fees, other assessments, except those operative on December 31, 2009.
  • Result of “Yes” Vote: “Yes” vote prohibits state/local governments from imposing taxes, fees, assessments on transfer of any interest in real property, except those operative December 31, 2009.
  • Result of “No” Vote: “No” vote retains existing law, prohibiting local governments from imposing real estate transfer taxes/fees (with exceptions), allowing state legislature to impose such taxes/fees.
  • Summary: Amends constitution. Current statutory law prohibits a city, county, district, or other political subdivision/municipal corporation of this state from imposing taxes or fees on the transfer of real estate (with certain exceptions). However, the state legislature has the authority, subject to governor approval, to impose such taxes and fees or to change current statutory law. Measure prohibits the state and any city, county, district, or other political subdivision or municipal corporation from imposing taxes, fees, or other assessments based upon the transfer of any interest in real property or measured by the consideration paid or received upon the transfer of any interest in real property. Measure exempts from the prohibition any taxes, fees, or other assessments in effect and operative on December 31, 2009. Other provisions.         
• Does Oregon currently have a Real Estate Transfer Tax?
  The State of Oregon does not impose real estate transfer taxes; however, Washington County in the Portland metropolitan area does impose a tax on the sale of real property.
• Do other states impose a Real Estate Transfer Tax?
  Currently 36 states impose transfer taxes on real property, and even more impose sales taxes on most purchases of personal property as well. As state and local governments search for additional sources of revenue, they are increasing or adding sales taxes.                  
• How would a Real Estate Transfer Tax work?
  Each level of government that imposes a tax would charge a percentage of the sale price (rates typically vary from 0.1% to 4%) when you sell your home or real property, thus there could be multiple layers of taxation on a single transaction. The tax is imposed whether or not you make any profit on the sale.
• Wouldn’t a Real Estate Transfer Tax just be rolled into the cost of a mortgage and not impose a heavy burden on the buyer?
  Some jurisdictions impose the tax on the seller of the property, so it would have to come out of the profits (if any!) of the sale. This is money out of the pocket of the homeowner who has paid property taxes for years, thus opponents of real estate transfer taxes argue that it is an unfair double tax. Other jurisdictions do charge the purchaser of property; however, any increased cost to purchase a home will negatively impact whether or not the buyer can afford to purchase the home.
• Why is this measure necessary if we don’t have a transfer tax currently? Couldn’t we just work to defeat one if the state legislature or our local government proposes it?
  After having passed the largest tax increase in Oregon’s history in the 2009 Legislative Session, we can’t afford to take the chance when people’s homes and hard-earned equity are at stake. During the past five legislative sessions there have been ten attempts to authorize such a tax.
• Why is it necessary to amend the State Constitution?
  Making the current law permanent is the only way we can guarantee that homeowners will be protected from this tax. A constitutional amendment protects Oregon families and businesses from the possibility of a real estate transfer tax being imposed in the future, stealing the equity that they have carefully built up over time. Amending the constitution puts the people of Oregon on record against the unfair imposition of a real estate transfer tax.
• Does this measure take away any existing revenue from state or local governments?
  NO. This proactive measure does not negatively affect current school funding, local government funding or state revenues in any way. Instead, it prohibits local and state government from imposing a new real estate transfer tax in the future. The one existing transfer tax in the state – in Washington County – is left in place under this measure.
• Does this measure protect both residential and commercial property from a Real Estate Transfer Tax?
  YES. The measure explicitly prevents a sales tax from being imposed on the transfer of any interest in real property including agricultural, commercial and residential property.

To calculate your potential transfer tax, sign the petition, or for more information about Protect Oregon Homes, please visit: www.ProtectOregonHomes.com

Did You Know?

• Homeowners may deduct mortgage interest and property taxes as an expense against income. 
• You may be able to deduct mortgage interest on a second home, second mortgages, home equity loans, and HELOCS.
• You can cancel PMI when your home equity hits 20%, even though your lender isn’t required to cancel it until it hits 22%.

Information provided from the National Association of REALTORS®