In today’s declining housing market sellers are looking for alternatives for selling their home.  Homes once worth $400k are selling for under $300k and many sellers have limited or no equity.  Do it yourself home owners have tried the “For Sale By Owner” (FSBO) route with limited success.  The majority resort to a traditional real estate agent and pay 5-7% commission.

Viable Alternative to Traditional Real Estate

Flat fee, no commission real estate listings are a recent development that can save thousands when selling your home.  Flat fee listings offer the same services available with a traditional real estate agent but you only purchase the marketing services you need.  The listing agent receives no commission when the sale closes.  You can expect to pay $300-700 for a flat fee listing vs $7,500 (average listing agent commission).

The flat fee mls listing will also give you control.  You decide how to market and price your property without being harassed by an agent.  Many For Sale By Owners choose this “discount listing” service to get the marketing exposure they need while still selling the home themselves.

Selling Method Comparison

For Sale By Owner:
You are responsible for everything:  purchasing signs, installing signs, lockboxes, pictures, home pricing, flyers, newspaper ads, craigslist ads, fsbo listing sites, open houses, showing feedback, sale contract paperwork, negotiations and closing.
Cost = Marketing Expenses ($200-500).  No Commission.

Flat Fee Listing:
You decide what you want and purchase the services you need.  You only pay the buyer agent commission which is generally 2.5% of sale price.
Cost = Flat Fee Listing ($300-700) + $6,300 Buyer Agent Commission (based on $250k sale price) = $6,600-7,000

Traditional Real Estate Listing:
Everything is handled by the real estate agent.  No marketing effort required by you.
Cost = $6,300 Listing Agent + $6,300 Buyer Agent = $12,600!!!

The flat fee listing will save you over $6,000!

For more information about the flat fee service:  www.byownerpdx.com

The Village Appeal

So who does a master-planned community like Villebois attract?  Homeowners with kids that enjoy the parks and open space, empty nesters who like to mingle with neighbors, young professionals that commute on the WES to Beaverton or downtown Portland, local workers from the surrounding corporate headquarters (including companies like Xerox, Mentor Graphics and the Cocoa Cola distribution center) and even commuters to Salem call Villebois home.  The demand for housing for the 15,000+ jobs that Wilsonville offers played a huge factor in the design and creation of Villebois by Wilsonville city planners and Clackamas county.

But overall, the community appeals to people like you and I.  Homeowners that want a sense of community, who want to know their neighbors, spend time at the play structures with their kids, fly kites in the green spaces, walk their dogs in the park, go for bike rides in the evenings and support the local Sunday Farmer’s market and retail shops during their weekends and spare time.

When construction is all said and done, Villebois will boast 2,600 homes, with more than 7,000 of these types of residents, 35,000 square feet of retail space, and 160 acres of open green space, trails, bike paths, parks and even a pool and clubhouse.  Certainly a lifestyle fit for today’s discerning homebuyer.

Villebois: It Takes a Village to Have Fun

No one cares more about the success of the master-planned community of Villebois in Wilsonville Oregon, than its residents.  That’s why they come together to spread the word about this unique community and invite others to join them in this 500-acre plan that includes a downtown plaza, narrow streets and manicured roundabouts reminiscent of a small European village.

Villebois homeowners have organized a neighbor-run group called the Villebois Events Committee (V.E.C.).  One of the main items on their agenda is FUN.  The V.E.C. coordinates an annual community-wide garage sale, neighborhood book exchange, July 4^th parade and BBQ picnic, Easter egg hunt and Christmas caroling.  In fact, the group submitted entries into …and won…a free ice cream party for 200 from the Dreyer’s Slow Churned Neighborhood Salute (for more information, see http://dreyers.neighorhoodalute.com).  They invite surrounding neighborhoods to participate in these events and even organize events outside of the neighborhood to help keep Villebois in the minds of other Wilsonville residents.

There’s also a neighborhood watch run by a previous police officer.  And neighbors make up 99% of the fully volunteer staff at the Villebois Sunday Farmer’s market.  And current residents are in the starting stages of planning for the first retail coffee shop in the downtown area of Villebois.

Local Wilsonville businesses are getting in on the action as well.  NW Wellness Center is offering Health and Wellness classes.  With topics like cooking healthy foods, stretching and strengthening, longevity and menopause and natural remedies, these free events will promote their business as well as a healthy lifestyle to Villebois residents.

It’s easy to get involved too, there’s plenty of new and exciting things to do at Villebois.  If a resident has an idea, all they need do is approach the V.E.C. Chairperson and suggest it….then start the plans to make the fun event a new part of the Villebois Lifestyle.  After all, the best communities are those that involve everyone.

Click here to read Part 1: Villebois in Wilsonville

Jaimy and Sherine Beltran are Villebois residents and have sold a number of owner-occupied and investment homes in Villebois.  For questions about Villebois housing, contact contact us.

To appeal to this demand in new housing, Costa Pacific Communities, developers of popular Orenco Station in Hillsboro, crafted a 500-acre project that incorporates more in their new construction than terrific finishes and quality craftsmanship – they’ve captured a lifestyle that is second to none.  And they’ve called it Villebois.

Village Near the Woods

Villebois, located in Wilsonville Oregon, just a few miles south of downtown Portland, is French for “Village Near the Woods.”  Pronounced Veal-Bwa, it is an appropriate name since the community planners saved 90% of the mature trees, preserved ten acres of wooded area and included existing trees into the open green space and parks system.

But living in the Northwest is not just about the greenery.  It’s also about green building.  The three different Villebois builders have it figured out.  Energy saving features abound in their new homes, recycled materials are used in the streets that line the plaza and recycled water is naturally filtered through the master-minded rainwater management system. This complicated engineering task of directing rainwater to naturally existing wetlands and drainages was a major task for the developers.  The plan includes the streets of Villebois acting as natural dams for the flow of water, permeable pavers and asphalt, water retention ponds and bio-retention cells in community planters.

Plus, the national magazine Cooking Light took its turn in Villebois, designing the 2008 Cooking Light FitHouse along with Portland builder Arbor Homes.  The FitHouse is wheelchair-friendly with an ADA-accessible bathroom, skid-free ramps, wide hall and doorways, custom lower kitchen counters and hard surface flooring.

Diversity Calls: Sustainability and a Sense of Community

This new master-planned community is designed to emulate a European village and features 3 distinct exterior styles, French, English and American.  And living in this village is about the amenities and community diversity more than ever before.  It’s about enjoying where you live, not just buying a home in a specific zip code.  Villebois offers its residents precisely that.  The Villebois lifestyle includes friendly neighbor BBQs, impromptu games at the park, community wide events and fully self-sustainable retail and office space.

With its downtown plaza at the center of the community, the Piazza Villebois promises to house nearly 35,000 square feet of retail including restaurants, shops, a grocer and even the neighborhood dentist office.  During the weekends, a casual but buzzing Sunday Farmer’s Market is in full bloom with live music, vendors from nearby farms and local artisans selling their wares every Sunday from 10-2 May through October.

Housing Styles for Every Stage of Life

Surrounding the Village center will be loft-style condo’s, row houses and apartment rentals.  And, because the site was originally a state-run mental health facility, the master plan designated more than 20 residences throughout the community to be set aside for community housing for people with disabilities.

The architectural style of Villebois homes lends itself to the distinctly European feel, with wrought iron banisters on the balconies overlooking the Piazza Villebois and the brick and stone exteriors on the English-style townhomes and houses. Most floor plans offer alley loaded garages so the front courtyards open to shared green space and tree-lined streets. With its mix of townhomes, rowhomes, detached cottages and larger manor homes, Villebois has a style and floor plan for nearly every type of buyer.  Whether you’re looking for a home with a master suite on the main floor or a 3,000 square foot place with a 3-car garage to store all your stuff, Villebois has something for everyone.  Prices start in the high $200,000’s for attached townhomes and low $300,000’s for detached homes with alley-loaded garages.  The more traditional garage in the front styles start in the high $400,000’s and continue up to the mid $600,000’s.

Click here to read Part 2: Villebois in Wilsonville 

Jaimy and Sherine Beltran are Villebois residents and have sold a number of owner-occupied and investment homes in Villebois.  For questions about Villebois housing, contact contact us.

But seriously, it isn’t rocket science.  Or brain surgery for that matter.  Truth is, anyone with the desire to own real estate can be an investor.  But, not everyone has the stomach for the down markets like the one we’ve seen across the country over the last few years.  This is when it’s harder to not knee-jerk and sell , when it’s time to hold.  But I’m getting ahead of myself.

What other investment allows you to buy the entire thing with just 25% (or less) down?  Certainly not stocks or CDs.  Real estate is unique in that it is an appreciating asset that allows you to build wealth over time.  Now, there’s the normal cyclical nature of real estate that may not cater to everyone.  But, with a strategic approach to your new business, called Your Name Properties, you can create a smart, growing nest egg.

Getting Started

Step One: have the desire and make a plan.  Planning takes care of as much of the “unknowns” as possible and eliminates the urge to buy on impulse.  Here are things to consider for planning purposes: Do you want to live in your first real estate investment?  If not, do you have access to 25% down?  If not, then you DO want to live in your first investment.  Also, decide how hands on you want to be….can you handle tenant screening?  Advertising for rent?  Showing the property every evening and weekend?  If so, then you’ve just saved yourself roughly 10% of the rent amount by not hiring a property management company.  If you need one, then shop around, find the company you feel comfortable with and that comes recommended.

Think about where you want to own….is there a college or university nearby that always needs student and faculty housing?  Consider buying something you’d consider living in.  If the neighborhood is ridden with crime or near something undesirable, then renters will probably not want to live there either.  Once your plan is formulated, stick to the plan.  Do not go shopping for a house you cannot afford or cannot afford to rent out.

Taking Action

Step Two:  Find a real estate agent who can help you find property that is in the right areas for your type of real estate investment. Buy it!

Step Three:  Live in it for two years, move out and rent it.  Buy your next investment, move in. Repeat.

Step Four:  Evaluate your plan and look at each property every year to decide if it’s time to sell and exchange, buy more, liquidate or trade.  Your Name Properties is a business that continually needs attention and possible modification.

Being a real estate investor isn’t difficult, but it does take planning and strategic purchases and sales.  Don’t skimp on the preparation and you won’t have the knee-jerk reactions that you can live to regret later (like selling at the wrong time or buying with your heart and not according to Your Name Business plan).

Living the American Dream

Enjoy the process….real estate can be really fun, especially when you get to help a family live in a nice home in a safe neighborhood or when you see the equity grow or when you realize you’ve just paid for your kid’s college education simply by owning a rental.

If you have a questions about buying your first real estate investment in the Portland area, feel free to contact us

1. Inventory:  It’s like being a kid in a candy store.  If you love real estate, this is an exciting time to be looking to purchase.  There’s a large amount of homes to choose from.  Things take longer to sell, so you can take your time selecting the right place for you.  Plus, with more to choose from, you’ll get exactly what you want.  Gone are the days of settling for a property simply because of a school district or zip code.  Pick the right home for your unique lifestyle needs.

2. Rates:  We all know that securing a mortgage is the way most of us still buy a home.  So, wouldn’t it make sense to borrow money at a low rate?  Of course, you still get the benefit of a tax shelter at year end.

3. Slow sales = motivated sellers:  Sellers need to sell which creates opportunities to buy at record lows, or to get additional benefits like a flat screen TV or stainless appliances thrown in to sweeten the deal.  Now, Jaimy and I do not condone taking advantage of sellers who are in a bind.  But, the truth is, there are some amazing deals out there.  We see them every day!  Call us, we’ll be happy to show you the best deals in different neighborhoods all over the Portland metro area.

4. Ownership:  This is the same reason your folks bought their first home, owning real estate is part of the American Dream.  And folks, right now the American Dream is ON SALE.  It’s such an amazing time to buy at up to 4-8% under list price in some cases…while the Portland market as a whole is still appreciating, albeit in smaller percentages than we’ve enjoyed over the last 8 years.  However, if you plan to own a home — paint the walls, knock down a few, update the kitchen cabinetry, change out the light fixtures….all the fun stuff that comes with making a home your own — then now is the time to buy.

I am not the only one doing so or saying so….even “The Donald” is buying real estate left and right.  So are foreign investors.  Check the stats, many overseas buyers are coming over and buying up their own American Dream.

Did you know that down markets like this one often make people more money than flourishing ones?  Yep, it’s because the savvy buyers buy low and sell high.  Um….it’s low right now.  So buy!

If you’re a first time home buyer or an investor feel free to contact us with your questions.

Last week I received word that MGIC, the largest and most used mortgage insurance company in the nation, would probably be cutting their mortgage insurance coverage for owner-occupied loans with ltv’s (loan-to-value ratios) greater than 95% on 3/1/08. With the practical extinction of piggyback 2nds, what this means is that borrowers are going to have to start putting 5% down if they want to buy a home. Lenders are already starting to react, as I just received an email from US Bank that effective tomorrow they will no longer allow ltvs greater than 95%.

If you are a buyer who is pre-approved for 100% financing you may want to double check with your lender to make sure you are locked. If you haven’t decided on a property yet I recommend acting fast. Most lenders do not allow loans to be locked until you have found a home and can provide an address. If you are a seller with a pending sale, I recommend double checking with the buyer’s lender to make sure they are locked and good to go.

Hopefully this scare won’t last, but it seems to me that we haven’t yet fully hit bottom with the credit crunch. I am hoping that zero down mortgages don’t completely vanish since most first time home buyers I meet don’t even have money for closing costs let alone a down payment. If this does happen I see FHA loans being our next best bet.

The FHA (Federal Housing Administration) provides insurance for FHA loans giving great rates and lower mortgage insurance for borrowers. Since the mortgage meltdown FHA has taken the place of sub-prime loans since they only require a 580 fico score. Currently FHA requires a 3% down payment on purchases although there is talk of that being reduced to 1.5%.

Last week the economic stimulus plan was signed by President Bush temporarily raising the FHA loan limit from $304,950 to $401,250 until Dec. 31 2008. As a side note, the plan will also raise the conforming loan limits (a conforming loan is any regular loan that is less than or equal to $417,000) in some areas of the country to $729,750. Unfortunately, this will not affect us in Oregon as they have determined that our median home price is too low to qualify for the raise. So for now borrowers will have to qualify for jumbo loans if their loan amount is above $417,000. For that group of folks this translates into higher rates and more restrictions since jumbo mortgages are seen as riskier and less desirable.

If you have a question relating to mortgages, feel free to contact us with your questions.  I am always happy to help!

1. Make your payments on time!

2. Avoid collections at all costs.

If you have any new collections, pay them off as soon as possible. If you have any collections that are older than 2 years, you may not want to pay these off. The reason is that once you pay a collection it will not disappear from your credit report, it will only show as paid instead of unpaid. When that happens, it will pull the collection current and your score will drop (the older the collection, the less it impacts your score).

3. Make sure you keep all credit card balances low.

You’ll want to keep your card balances below 50% of your credit limit, although 30% is even better.

4. Don’t apply for extra credit cards.

Don’t sign up for cards you aren’t going to use just to get the “10% off your purchase” many retail stores offer for applying for their card. Be choosy about who you allow to pull your credit.

5. Don’t close accounts thinking it will improve your score.

It usually hurts your score. Remember that a credit score is a measure of credit. If you have less open credit than there is less to measure!

6. Don’t open a lot of new accounts rapidly.

7. If you’re rate shopping, do it within a 14 week period.

8. If you are going to be buying a home soon:

Don’t wait until the last minute to speak with a loan professional. They can tell you exactly what to do and what to avoid giving you the best possible rate when you are ready to buy.

9. Check your credit at least once a year to avoid inaccuracies.

By law you are entitled to one free report a year. You can access your report at www.annualcreditreport.com. This report does not include your score, but you can purchase a copy of your score from the website for a minimal fee.

Credit repair

People often ask me how long it will take to improve their score. It could take weeks or it could take a year depending on what is impacting it. If there are inaccuracies on your credit report, by law you have a right to dispute them. To do this, send a letter to whichever of the three bureaus (TransUnion, Equifax, and Experian) that are reporting the item, detailing your dispute. They must do an investigation and get back to you within 30 days. This usually takes some work but can be very beneficial. There are companies out there that offer credit repair but be very careful. Some are very good but others are scam artists. I am very careful of who I will send my clients to.

If you are thinking about buying or refinancing a home and have a question regarding credit, please feel free to contact me!

How credit scores are calculated

Credit scores run from 300 to 850 and are calculated based on a mathematical equation which calculates and weighs various items from your credit past. In the US, we use the fico equation developed by fair Isaac and company. All of your credit for the past 7 years (10 with certain types of bankruptcy) is complied and used to determine how good of a credit risk you are.

The equation has five main categories that grade your credit history with each category being weighted differently.

35% of your credit score is payment history

This is where on time payments will help you and late payments or collections will hurt you. Late mortgage payments will especially drop your score. Late payments are only reported once they are 30 days or more past due so if you miss that payment by only a couple days it shouldn’t hurt your credit.

30% of your credit score is how much you owe

Your debt may be a revolving trade line or installment loan.  A revolving trade line is credit that has balances that can go up or down at anytime like a credit card. An installment loan is credit that has a set pay off, like a mortgage, car loan, or student loan. Keeping your balances low or paying down what you owe on these types of loans will increase your score. For good scoring keep your balances below 50% of the limit. For great scoring keep them below 30% of the limit.

15% of your credit score is credit history

For this category the scoring model looks at the age of your oldest account and the average age of all accounts. It also looks at how often you are using these accounts and how long it has been since you used them. Having a lot of old accounts is better than a lot of new accounts.

10% of your credit score is types of credit

Ideally what it is looking for is a healthy mix of credit such as one mortgage, one installment, one credit card, etc.

10% of your credit score is based on inquiries

Every time you apply for a loan or credit card and someone pulls your credit within the past 12 months it will show on your report and hurt your score . The reason inquiries are counted is because someone who is applying for a lot of credit within a short period of time indicates someone who could be over overextended and is not a good risk.

Note that if you check your credit yourself it is known as a ‘soft pull’ and will not impact your score. Also if you are rate shopping for a car or mortgage, any inquiries that are made within a 14 day period are counted as one inquiry.

If you are thinking about buying or refinancing a home and have a question regarding credit, please feel free to contact me

Active listings are up 11.9% compared to January 2007 but closed sales are down 31.9% and pending sales fell 34.3%. There are currently 13,904 residential homes for sale in the Portland Metro Area–and with Portland’s current rate of sales this number of homes will take 12.8 months to sell.

*This chart shows the number of homes for sale in Portland, Pending Sales, Closed Sales, Average Sales Price, Median Sales Price and Market Time compared to January 2007.

Median Sales Price and Appreciation by City:

Home prices in the Portland area have continued to increase even though the housing market has slowed. This graph shows the average sales price of the homes sold in the Portland Metro Area.

Here are the pricing statistics for individual areas that reflect that increase.
(average sales price – Year to date appreciation)

North Portland – $268,100 – 8.3%
Northeast Portland – $329,900 – 7.3%
Southeast Portland – $279,600 – 6.7%

West Portland – $503,100 – 4.6%
Gresham, Troutdale, Sandy, Corbett, Fairview – $249,600 –4.4%
Milwaukie, Gladstone, Clackamas, Estacada – $369,000 – -6.4%

Oregon City, Canby, Molalla, Beavercreek – $319,300 – 1.1 %
Lake Oswego, West Linn – $588,800 – 7.5 %
Beaverton, Aloha – $257,100 – 3.2%

Tualatin, Tigard, Sherwood, Wilsonville – $377,700 – 4.8%
Hillsboro, Forest Grove – $280,600 – 4.2%
Mt Hood: Zigzag, Welches, Rhododendron, Brightwood – $239,800 – 2.5%

This is the optimum time for home buyers and investors to go shopping: foreclosures are on the rise, housing options are plentiful and sellers are motivated to sell.

If you’re a first time home buyer or an investor feel free to contact us with your questions.

* Market statistics provided by RMLS Market Action Report.

When should I refinance my home?

It would be wonderful if I could just tell you, or if there was a simple formula that would determine when refinancing is warranted. The truth is, there are many variables (different for each homeowner) that should be considered before making a final decision, and it’s always best to consult a loan officer who understands both the advantages AND the hidden pitfalls of refinancing.

That being said, you should always consider the following:

1.The total cost of the refinance. (Can you afford it?)

2.The length of time the new loan will be kept. (Do the savings over time offset the cost of the refinance?)

3.The impact of a new loan on the salability of the home. (Low-rate assumable loans can be highly beneficial in the marketing of a home.)

4.The stability of the new loan compared to the old loan. (Refinancing an adjustable rate loan into a fixed-rate loan is often a wise choice.)

Another particular caution is the “two percent” myth. The industry is riddled with the mistaken belief that refinancing is worthwhile only if your new rate is two percent lower than your current rate. That’s like saying you shouldn’t buy a new house unless it’s at least 20% larger than your current house!

In some cases refinancing may be worthwhile for a very small drop in rate; in other cases refinancing may not be worthwhile even with a huge reduction in rate.

Should I pay discount points to “buy down” the rate?

Buying down the rate refers to the payment of discount points in exchange for a lower interest rate. A discount point costs one percent of the total loan amount. Hence paying two discount points on a $100,000 loan requires $2,000. There are both simple and complex methods of determining whether to buy down the rate.

The simple approach requires a basic mathematical calculation.

First, take a look at your payment options with and without points. For a $100,000 loan, if your alternatives are a 6.25% rate at zero points or a 6.00% rate at one point, you’re effectively choosing between two monthly payments: $615.72 or $599.55.

Then divide the cost of the point ($1000 in this scenario) by the amount you’ll save per month due to the lower interest rate ($16.17) and you’ll see that it will take you just over 5 years to make up for paying the point ($1,000/16.17 = 61 months).

If you’ll be keeping the loan longer than the number of months indicated, then the payment of the discount points is mathematically warranted.

How long do I have to lock in an interest rate?

That depends on the loan product and the lender. Some interest rate lock-in periods are as short as seven days, but most reputable lenders provide for a range from seven to at least 60 days.

Extended rate-locks are sometimes available with lock-in periods as long as 270 days, but these extended locks may require extra discount points or a slightly higher interest rate. Keep in mind, talking with a loan officer experienced in refinances can be invaluable in your decision process.

If you’re located in Central Oregon near the Bend area, feel free to contact me with your specific questions about refinancing.