Is the "Buyer's Market" over?

Before I actually say it, I’m going to start knocking on wood.  Ok, are you ready? …

The Real Estate Market in La Pine and the surrounding areas is coming back, and in a big way!! 

That’s right, I said it.  (Gulp.)

Finally, after more than four years of decline, demand for Central Oregon Real Estate is up and the buyers are back.  Halleluiah!  I’m happy to report that beginning with the strongest 2011 Fall, many of us have ever seen, we’ve seen brisk activity that has somehow, some way, continued to maintain itself through the winter to what now has become one of our strongest Summers ever.

I’ll quote some actual statistics later, but this is the best market we’ve seen in quite some time, and for many of us, it’s never been busier, ever. 

Prices are still lagging behind however, but the influx of mostly investor activity that we saw beginning last year, buying up cheap, flip-able or potential rental property, demand has given way to what appears to be “real” buyers looking for homes that they actually intend to live or vacation in.  This is very, very good news indeed because this will inevitably trigger higher prices and a much healthier market overall in time.

Statistics supplied by MLSCO Central Oregon indicate that Bend residential sales are up 12.6% over the same period in 2011, residential Sun River is up 20.8% and La Pine residential with acreage is up 2.22% with 20% of those sales being “short sales” and 36% being “Bank Owned.”  I have a feeling, judging by what I and many of my colleagues are felling, that once the new quarterly statistics come in, a very strong third and fourth quarters should be indicated.

Let’s keep our fingers crossed!

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Fred Jaeger is a licensed Oregon Principal Real Estate Broker and an e-PRO and CDPE Certified Realtor® with High Lakes Realty in La Pine Oregon.  He can be reached directly via 541 598-5449  or fred@fredjaeger.com .

Hey Mr. Realtor... What's this "MLS" thing?

Not long ago, a young woman walked in to our Real Estate office and wanted information about a house she had seen with our company's "For Sale" sign in the front yard.  After talking to us briefly and getting the information she had wanted she said she was in a hurry to go.  She explained that in order to get the information that she needed by the end of the day about the two other houses she was interested in, she would have to get moving because they were "with" other companies. 
Wondering why she was going to all of this work on her own we asked her if she was already being represented by an agent, and to our surprise she said "Yes."

We realized at that moment that our new friend neither understood about how the Multiple Listing Service (MLS) worked, nor what should have been the proper role of the Agent with which she had already engaged.

The Multiple Listing Service is a cooperative arrangement between most Real Estate Brokers to pool information about Real Estate for sale into a common data base from which all cooperating members can access.  When a house is listed by one company, that information is shared with all cooperating companies.  In most cases any commissions generated by the sale of such a property are then split between the listing agency and the selling agency.  It's a win-win arrangement that allows listings to be effectively shared among the membership.

The most important result of this arrangement is that any property placed on the MLS can be sold by any other member (Real Estate Broker) of the MLS.  In other words (and this is important,) real estate brokers don't just sell their own company's listings, they can sell any within their MLS.  This is extremely important for the seller as well. Without information being shared via the MLS, Real Estate would be exceedingly difficult to market beyond what newspapers, periodicals or any other advertising would be able to accomplish.

Because information is shared among brokers and a broker is not limited to selling property listed within his/her agency, that broker is capable of doing extensive research via the MLS for his clients.  The role of a "Buyer's Agent" is to conduct such research on behalf of his/her client, and to represent that client throughout the whole process.

A Buyer's Agent is the client's advocate in every regard whose job it is to provide the client with all possible information and or services that will be of benefit to the buyer throughout the transaction.

Once a broker is engaged by the client, it is hopefully understood at this point that because the client is asking a broker to go to work for them, conduct research, show property, allocate time without compensation until a sale is executed etc., that the client will not engage another broker at the same time.  Although there's nothing by law stopping a buyer from talking to multiple agents simultaneously, it's strongly discouraged.

A common scenario occurs when a potential buyer will make multiple inquiries to a variety of agencies in response to advertising they've seen in a periodical.  They'll talk to lots of different brokers but eventually will ask for one of them to do more research or show a property.  At this point, or any point where a buyer has asked a broker to provide more than just cursory information, the buyer should engage that broker (at least informally) to act as their "Buyer's Agent," by allowing that agent to conduct additional research, show other properties beyond his own agency and act as the advocate of the client from that point forward, unless notified.

Of course, a buyer is free to hire whomever they please at any point in the process (unless under specific contract.)  If a buyer however, does intend to switch to another agent and/or agency, the courteous thing to do is to at least notify the first agent of their intention to move on.  There's nothing more heartbreaking to a Real Estate agent than to find out third hand that a seemingly active client that had been given countless hours of time and energy had moved on and had completed a transaction elsewhere without notification.

The MLS is one of many tools at the disposal of your agent who will gladly use it to conduct extensive research on the behalf of the buyer.  As that Buyer's Agent he/she has the ability to locate property well beyond the boundaries of a single agency as well as to provide other services that would be difficult and/or impossible for a buyer to accomplish on their own.
   
An excellent source of useful information for anyone considering buying Real Estate can be found via the Buyer's Advisory at: http://www.oregonrealtors.org/.docs/pg/10421

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Fred Jaeger is a licensed Oregon Principal Real Estate Broker and an e-PRO and CDPE Certified Realtor® with High Lakes Realty in La Pine Oregon.  He can be reached directly via 541 598-5449 or fred@fredjaeger.com .

Selling your House? Don't forget these tips....

Here's another look.. at some fundamental tips that should be kept in mind in order for your property to be sold quickly, while maximizing your return on investment:

• The first and most important step in selling any Real Estate is to Maximize Curb Appeal.  The importance of the first impression cannot be overstated.  If a buyer is put off by the first glance, the chance of swaying that person by the end of a showing is negligible.  That is, if they're even willing to exit the car in the first place.  I can tell you from experience that many a home showing has ended before even pulling into the driveway.  Make sure the outside is clean, free of debris and, of course, trash.  Get it painted, do whatever you can, including possibly hiring a landscape architect and/or designer, to not only make suggestions, but execute a plan to make the house look its very best from the outside.  This might sound a little extreme, but the investment in experts of this kind may result in profits far exceeding their fees.
  
  
• Inside, reduce the clutter!  Keep in mind that your task now is to stage it for sale, not necessarily make it the way you want to live in it.  Get rid of nearly all personal knick-knacks, family photos, and that stuffed Elk Head on the wall.  Your family loves that 4x4' portrait of Aunt Helen, but potential buyers can be distracted by personal items in the home.  Once potential buyers have begun criticizing the decorating, you've lost them.  Again, the value in getting professional help for staging a home is, more times than not, well worth the cost.
    
• This is an oldie but a goodie ...Ask a good friend to come over and tell you the awful truth.  Ask that person for an honest assessment of how the house smells.  Believe it or not, you may not smell odors that you live with every day.  It just happens that way.  Ask someone to not be shy and to, again, tell the truth!  If your home does have odors,  (and by the way, most do) a good carpet shampooing and fresh paint will do the trick a good deal of the time.  Removal and/or replacement of carpet might be what it takes in severe cases.   If you're a smoker, take it outside until the house is sold and then wash every stitch of clothing in the house and the draperies as well.  Smell is a biggie not to be disregarded.
  
  
• Here's one that sounds obvious but must still be stressed as ever so important.  Make the house not just clean, but Sparkling Clean!  A lot of faults in a home can be forgiven, if at least the first impression is, that it's clean.  Again, you might want your best friend to lay the truth out for you on this one because when you live with something everyday, some things just become invisible and you may simply not be seeing something that can turn a buyer off. 
  
  
• You're going to hate me for this one, but keep the pets at least out of sight for any showings.  You don't want a potential buyer distracted or, worse, scared by your pets.  The smell and/or allergy factor may come into play with pets too, and you don't want that to happen.
  
  
• Don't forget what is perhaps the most important step, which is to obtain a Comparative Market Analysis (CMA) from a local Real Estate professional who knows the neighborhood.  Over or under pricing your home can cost you time and/or money that you don't want to lose.  Don't just get one at the beginning, ask your agent to "run comps" periodically over time in order for you to determine if price adjustments are necessary. 
  

Unfortunately, as I've always said, if the property isn't selling, it's the price, more times than not, that needs to come down.  Ouch.  However, if you get that price right in the first place, you'll not be chasing it down-hill, for months to a point that ends up being way lower than it could have been initially.

Don't let the sign on your property be just another drop in an ocean of listings.  Keep in mind the points above and give your property a fighting chance to compete!
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Fred Jaeger is a Principal Real Estate Broker licensed in The State of Oregon and is an e-PRO and CDPE designated REALTOR associated with High Lakes Realty & Property Management.  He can be reached at 541 598 5449 or fred@fredjaeger.com .

How much is your house worth?

Thinking about selling your home?  The single most important step in the process is  determining the value of that property.  As much as I'd love to take this opportunity to convince you that one agency is better equipped than another to sell your home (I'll save that for another time) the decision about price, not agency is the question which should be paramount in your mind.

A home that is "listed" too high may waste precious time sitting on the market for longer than it should.  Waiting for that mythical uninformed buyer to show up who doesn't have a good sense of the market is usually an exercise in folly.  Even if a buyer does appear who is willing to pay an unrealistic price, the fact is that unless that buyer is ready to pay with cash, the house is going to have to "appraise" (value set by a certified appraiser) at a level that is at least as high as what is going to be financed.  If the house doesn't appraise, the financing and thus the deal, are both destined  to fall apart.... end of story, with your house still sitting there with a sign in the yard.

The harsh reality is that when a house hasn't sold in a timely manner the reason is almost always because it is over priced. 

Seller's never want to be told that their house is over priced but Realtors® are duty bound to abide by a Code of Ethics by not misleading their clients, regardless of how badly the truth might sting (either party)...
(Code of Ethics and Standards and Practices / National Association of Realtors® Standard of Practice 1-3: "Realtors®, in attempting to secure a listing, shall not deliberately mislead the owner as to market value.")

"Buying a listing" or convincing a seller to price their property at a level that is much higher than true market value in order to please the client and secure a listing is a practice that is highly frowned upon.  Ironically, what usually happens is that the price eventually does get lowered, but only after more precious time and money have been wasted.

The point is, overpricing a property usually does little good in the long run.

On the other hand, what could be worse than to price your home too low?  Other than the likelihood that it will probably sell in record time, there's nothing good about losing money that you shouldn't have by under pricing your property.  Having done so, you have not only hurt yourself, but the market as a whole.  Future sales and pricing of comparable properties in your neighborhood are now burdened with weight of your under-sale as well.  Here's why:

The best way to determine the current value of your property is to ask a local Real Estate professional to perform a Comparative Market Analysis.  A local Real Estate Broker lives and breathes in the market in which he/she operates and in addition has immediate access to the sales history of every combination of property, finish level, neighborhood location and every variation in-between. 

The Comparative Market Analysis (CMA) prepared by your broker will compare active listings, recent and pending sales, days on market, price adjustments etc. of "like" or comparable properties first in your immediate neighborhood, then in the surrounding similar neighborhoods within the region.  Selecting comparable properties or "Comps" is a bit tricky but will ideally include a cross section that can be ranked in groupings which are "Similar," "Clearly Superior" and finally "Clearly Inferior" to help the seller see exactly what they're up against with regard to price relative to value in their immediate market.  

Although a CMA can not be used as a formal appraisal, it is often the case that a local Real Estate Broker can draw a more accurate picture of the value of the properties in his or her sphere of influence than the estimate of an inexperienced or out-of-town appraiser.  CMAs are given by brokers in pursuit of a listing free of charge and take far less time than a formal appraisal as well.  It's important to stress however that a CMA is an informal instrument meant to be used as a guide, never as a substitute for an appraisal.

It is you that ultimately decides at what level your property should be priced; after all, it's your house.  A properly prepared CMA by a local Broker familiar with your town and neighborhood should prove to be a useful tool to help you make an informed decision, and not a mistake that may cost you money.
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Fred Jaeger is a Principal Real Estate Broker licensed in The State of Oregon and is an e-PRO and CDPE designated REALTOR associated with High Lakes Realty & Property Management.  He can be reached at 541 598 5449 or fred@fredjaeger.com .

Fred's Top 10 Real Estate Tips

Hire a local Real Estate Professional.  You'll be glad you did in the end.  Your local Real Estate professional is your advocate in every regard whose job is to provide you with all possible information and/or services that will be of benefit throughout the transaction.  A lot of footwork is needed during any Real Estate deal, and you will need and appreciate the resources that can be made available to you via your local Broker.  These days, especially if you're selling, you need a REALTOR® now more than ever.

Shop for loan rates and Pre-Qualify for financing before you start to look at houses.  If you're not sure where to begin, ask your local Real Estate Professional for recommendations.  Having a letter in hand from a lender saying you're qualified and ready to proceed can be a tremendous tool that will strengthen your offer when your ready to buy.  It will also take away an enormous amount of stress that you don't need in the first place. 

Be careful with the financing.  Interest-Only, variable (ARM,) or other non-traditional loans often have enticing rates to begin with that might make a home normally out of your reach seem affordable.  As has been all over the news lately, these types of loans can be trouble if taken out for the wrong reasons.  Generally speaking, if you intend to remain in a home more than just a few years, a fixed rate, long term loan is preferable.  Conversely, if you intend to be selling within a couple years anyway,  (and hopefully at a profit) it doesn't make sense to spend more cash than is necessary every month on a fixed rate loan (generally.. however, rates are crazy low right now, even on fixed 30s.)  Talk in depth with your lender about exactly what your plans are over the term of your loan.  Know the details of any loan you're getting and the reasons why.

Long term loans shorter than 30 years will pay off your home much faster, but be careful. Instead of locking yourself down into a 15 year loan (for example) in lieu of the traditional 30, get a thirty year loan and double up your payment, or at least make a practice of paying extra money each month toward the loan "principle."   (Do the math.. it's amazing.)   By using the extra-to-principle method, you will always have the optional safety valve, during hard-times, of simply paying the actual amount due on the your loan (and not the accelerated amount) when or if cash ever becomes hard to come by.  If you lock yourself down to say, a fifteen-year loan, that monthly amount due is set.

Don't buy more house than you can afford.  Most of the time, with good credit, the majority of buyers can be approved for more loan, and consequently more house, than they can really afford.  Don't let anyone push you past your financial limits.  The combination of excitement, loan approval, outside pressure and sheer good old-fashioned impulse, is often a classic formula for financial disaster.

Don't buy less house than you can afford, or worse nothing at all.  I know that sounds like a contradiction of the above but it doesn't make sense to buy less house than you can afford or no real estate at all.  Keeping in mind what I said about not buying too much house, try to reach just a little.  As long as you can afford it, in the long term, as with all investments, generally the more you invest, the greater will be your corresponding return.

Buy what feels right.  Don't get talked into buying a house that feels wrong for any reason.  If it's a significant-other doing the pressing, sit down and have an honest talk about your feelings.  Even if you can't quite put your finger on why you feel ambivalent, unless you're 100% certain about a potential purchase, don't do it.

Do your homework.  In most cases, a home inspection for structural, electrical, and plumbing issues is good advice before closing, but that's not all you should check out.  What about Insects and Dry Rot?  Asbestos, Lead Paint etc?  These things are not part of a normal inspection, so don't just assume that they are. What about the lot lines?  Are you certain that the fence you had been looking at is a good indicator of the property line?  Does the property have Home Owner's Association dues?  Has the escrow company given you a clean title report?  Have you checked the local neighborhood Covenants (CC and R's?)  Perhaps your beloved horse or other pet simply isn't allowed in the neighborhood.  Check out all of these things well in advance.

When selling, get a Comparative Market Analysis (CMA) from a local Real Estate professional who knows the neighborhood in order to get your house priced properly from the very start.  Over or under pricing your home can cost you time and/or money that you don't want to lose.

Try to have fun.  Think positively.  Buying or selling Real Estate can be among the most stressful exercises in life.  Most of the time, however, given the right circumstances, it can also be a lot of fun.  Let your Real Estate Professional carry as much of the burden as possible (not you) and try to remember that when and if things go a little sideways, that it is that very awkward moment (or more) that will make the happy times to come all the more satisfying.  Almost every Real Estate deal, is in the end, a sweet and unparalleled happy Champagne-popping experience.
Once it's over that is!  See you next time!
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Fred Jaeger is a Principal Real Estate Broker licensed in The State of Oregon and is an e-PRO and CDPE designated REALTOR associated with High Lakes Realty & Property Management.  He can be reached at 541 598 5449 or fred@fredjaeger.com .