Get Real Estate Blog: Salem Oregon Home Trends and Relocation Information

Paul Slaybaugh, an excellent Scottsdale Arizona real estate agent, wrote a great blog post today.  I wanted to comment on it because I have talked about this issue so many times in the past few years.

In the world of real estate there seems to be this polarization occurring, agents like myself and John Kirk, that take due diligence for our clients very seriously and those that step out of the transaction as much as possible.  I guess I figure that if I don’t have an opinions, advice or knowledge to share with you, I’m kind of worthless.  Why hire me, if all I have to offer a client is knowledge of how to open a door and announce “here’s the kitchen!”   I really think most consumers can figure out that the counters are Formica.  What I am being paid for is to learn and study the things that Salem Oregon area home buyers and sellers just don’t have the time to learn.

In Paul’s post he wrote ” No businessman walks around looking for a financial colonic, but the very real potential for having his inner sanctum legally hollowed out exists in each and every transaction he undertakes.  As such, it has become customary for many to simply ward off as much exposure as possible by abstaining from any form of guidance that can later be labeled  malfeasance or conflict of interest.  Heaven knows, if the contractor you recommend for repairs screws the electrical pooch, any rabid attorney worth his salt will gleefully encourage the client to pursue the deep pocketed brokerage (and agent by proxy) as well as the contractor for damages.  Why put yourself on the line by recommending a home inspector when the potential for blow-back on a balky A/C unit can put you directly in the cross hairs?  For that matter, why even bother to attend the inspection if the due diligence can be misconstrued for interference?”

Paul is quite colorful in his writing and an incredible blogger, by the way.  Don’t tell him I said so or it’ll make his ego grow even larger   What I do agree with is this…real estate transactions by nature can be difficult and risky.  There is risk in every transaction, and some agents have chosen to “lessen” that risk by recommending three lenders, recommending three home inspectors, not attending home inspections, etc.  I don’t think people hire me to step out of the transaction; they hire me to step into it and become intensely involved in the details of it. With that…comes risk.  Risk that a contractor I recommend does something wrong; risk that a home inspector I use misses something; and risk that I miss something in my due diligence. I have had contractors I recommend do a horrible job for my clients.  I scratch them off my list; I learn;  and I move on.

But here’s the deal.  Life is filled with risk and I cannot control everything, as hard as I try sometimes.   I also firmly believe in the intelligence of the consumer.  You all know when I am being honest and acting in your best interest.  You all know I can’t see inside walls so there might be something lurking there in your house.  You all know that there is risk in everything we do, even driving to the grocery store.  All you ask, is that I study, learn, and share my knowledge with you so that YOU can make the best choice for you.   The last thing you want from me is to abstain from participating in your real estate transaction because you might sue me.

I, like Paul, think that the best defense to preventing a lawsuit, is to have a good offense.  I don’t hide behind the fear of a lawsuit as an excuse to not step into a transaction; to not ask the questions that need to be asked for your benefit.  If I get sued, I get sued.  I am a firm believer in the golden rule and run my business with that in mind.  I can go to bed every night knowing I did my best for my clients that day.   I prefer to insert myself into the transaction offer my opinions and make recommendations because in the end,  it’s how I would want to be treated, if I was you.

Anyone involved with the world of real estate including little ol’ Salem Oregon,  knows that lending is a pain in the behind for many folks.  Working with good mortgage brokers is essential these days or buyer risk spending a lot of money on home inspections and appraisals only to have deals fall through.

I know I want my buyers to talk to a good lender and have their ducks in a row before house hunting. I can’t imagine anything worse than falling in love with a house only to find out you can’t get it.  If you are a first time home buyer, you need to get your ducks in a row BEFORE you start to hunt for homes.  Sometimes you have things on your credit report that don’t really belong to you that impact your credit.

If you need to know who some good local mortgage brokers are, just shoot me an email and I’ll give you some names, but here is what you want to do to start getting ready…

• If you have recently moved here from another state get your Oregon driver’s license and make sure it has a current address.
• Social Security Card. Yes, they will request your social security number and run them.  If you don’t have a real social security number then it will be found out during this process when they are “unable to verify” the social.  My seller got some earnest money on that buyer snafu.  Don’t lie on mortgage applications.  That’s fraud.
• Pay stubs. If you normally send these to the recycling bin, don’t.  You will need them.
• Bank Statements. You will need copies of a recent bank statement so same deal, don’t send these to the round file.
• Work. I know this seems like an odd one, but you need to have a solid work history with no to few gaps in jobs.  FHA especially wants to see a solid two year work history.
• Pay your rent. You need to have at least one year rental history for most loans and they’ll want proof.  So pay by check so you have proof of payment.

In case you were wondering how to  shoot yourself in the foot during the home buying process and lose a house…

• Quit your job. People naturally get laid off during the home buying process, but for pete’s sake (oh man, I just sounded like my mother…)  please don’t voluntarily quit your job.  A buyer did this to one of my seller clients one time and it delayed the process for three weeks.  You can’t get a loan without a job.  Seriously they stopped doing that a couple of years ago now…Lenders want at least one paycheck from your new job so DON’T QUIT if you want a house.
• Forget to show me the money. Okay it’s weird for people to suddenly dump a large sum of money in their checking account outside normal pay.  If you transfer funds from an investment account just keep the paper trail. Banks don’t want to give buyers loans based on drug money.  Paper trails=happy underwriters.
• Buy things. I can’t tell you how many sad stories I hear about people who bought some new furniture for their “new” house only to find out that financing the furniture changed their debt to income ratio and they no longer qualified for the house.  Seriously…don’t buy anything extra during the home buying process.

Buying a house can be stressful with all of the crazy lending changes.  Having a good mortgage broker and a good Salem Oregon real estate agent (cough, cough…we are talking about me here, you know) working with you can help to minimize the stress in this crazy real estate environment.

Okay I’ve been asked a lot of questions about the home buyer tax credit lately by some of my Salem Oregon clients.  I saw this really great summary video and wanted to share it with you.

This explains the basics of the tax credit. Now some of you have unique situations that I just don’t have answers for. The IRS has their news release, which I don’t find particularly helpful, but you can read that as well.

The most important aspect for those that qualify is to get under contract by April 30, 2010.

I participate on a couple of real estate forums online.  There is an interesting thread on one of them about lessons learned in real estate.  This is a national forum, not just local Salem Oregon folks.

What were consumers regrets when buying a house?  I thought it was an interesting topic and for you first time home buyers out there…here are a few words from your peers on “if I had to do it again…”

• Don’t overestimate your skills or time.
• Only buy what you can afford.  Buy less than what banks say you can afford.
• Don’t be arrogant or rude in negotiations.
• Don’t believe the MLS listings.  Many aren’t correct.
• If you haggle over the last 1%, you’ll lose out to the person who doesn’t.
• Visit the neighborhood at 10pm on a weekend night.
• A good real estate agent is priceless and agents are not all created equal.
• Get inspections on new construction homes.  New doesn’t mean problem free.
• Get everything in writing.
• There is always a better house so be thankful for what you have.
• Don’t get stuck on the small things and lose a house.
• Don’t cheap out on home inspections.
• If a listing agent says your house will sell quickly at list price, run the other way.
• Be cautious of the seller’s disclosure statements.
• Location is everything.

I think it is always interesting to hear what consumers have to say about their real estate experiences.  Trying to prepare Salem Oregon area home buyers for the process can be difficult because some have had such a negative experience in that past, and some are first time home buyers and we agents spend a lot of time educating them about what they need to know.

So for those of you thinking about diving into our local market…here is a brief glimpse into the real estate school of hard knocks.

I’m home sick today here in Salem Oregon and have been wandering around on different forums since my kids have hijacked the television.  As I was reading a thread, my jaw hit the floor.  The topic of the thread was from a seller frustrated that her children’s toys were being played with during showings.  Buyers were clearly not respecting their stuff and allowing the children to play while the parents looked at the house.  Then they’d leave it a mess.   Beside the fact that this is an obviously rude gesture, this isn’t what made my jaw drop.

A poster got on the forum  said

When I look at buying a house I bring my dog with me every time.
He is going to live there also. And gets a vote.
I’m serious, how much my dog likes the house enters into my decision.

Now, I have a dog.  I love my dog, but my dog doesn’t come on showings because the house belongs to someone else.  They may hate dogs.  They may be allergic to dogs.  I have to say I was flabbergasted that someone would bring a dog on a showing for the purpose of having them approve the house.   I’m also stunned that any buyer agent would allow it.   I also think it is rude to bring a dog to someone else’s home when they may not want pets in the house. What if they have really horrible asthma triggered by dogs?

I love my dog, but really…that is over the top.

Is the dog going to select a house because of the good smelling girl dog next door?  Is the dog going to select a house because of the comfy couch that isn’t included in the purchase?  Is the dog going to select the house because no other dogs have marked it as their territory?  I mean what exactly is the dog’s vote based on? Clearly not the cost of the mortgage.

Somehow I’m just waiting too write a new contingency in a Salem Oregon  real estate contract “contract subject to approval of house by Pookie, buyer’s 2 pound Pomeranian.  Contract to be terminated if dog barks twice.”

SmartMoney wrote a brief article the other day called “10 things your real estate broker won’t tell you.”

I just wanted to give my .005 cents worth about that article.

1) “Your open house is really just a networking party for me.”  Is the number one thing that agents won’t tell you about selling your home.  What I find interesting is that a real estate agent is the one saying they don’t work.  So an agent is saying they don’t work, but agents won’t tell you they don’t work?  Not really following the article’s logic there…BUT honestly, they really don’t work here in Salem Oregon all that well.  Real estate agents do them because clients expect them, and yes it is a GREAT way for agents to gain new clients.  For the record, I told you that in May of 2008...Apparently SmartMoney does not consider me a real estate agent.

2) “My fees are negotiable.”  Consumer reports did an entire article about fees and who was most likely to negotiate.  I have a fee-for-service structure, so I am by nature negotiable, but it’s long been known that agents are negotiable.  (Told you that in August 2008)

3) “Think you’ve had no offers? Actually, there’ve been several.” In Oregon it violates the law to not present an offer.  Sometimes agents encourage sellers to not respond to an offer, if another one is potentially coming in, but most agents here locally do indeed present offers.

4) “I’m not obligated to keep my mouth shut for you.” Unfortunately this one has some truth to it.  Agents, even our local Salem Oregon area agents, are not always on top of talking about agency relationships.  Some time ago, I listed a house where the seller interviewed 5 agents.  He told me after he hired me that I was one of two that went over agency relationships with him.  Ouch.

5) “Sometimes I forget whose side I’m on.”  I don’t practice dual agency because I don’t like it.  I’m not a fan of it, and in fact Colorado has banned it.   While they argue that agent’s might not negotiate hard for a good deal because they are paid on commissions, but I don’t know any agent that wants to lose future referral business over $500 in a lower commission offering.

6) “I know zilch about zoning.”  Oregon has some strict zoning laws.  I personally have found our local city zoning folks very helpful when it comes to what a buyer can and can’t do with a property.  I do agree that you should be asking county folks what you can and can’t do and in fact, the contracts state it is the buyer’s responsibility to do any due diligence regarding zoning issues.

7) “I won’t let termites — or pesky inspectors — kill a deal.”  It’s unfortunate that the author of this article presents it like all agents are in cahoots with home inspectors.   I wrote a post called “Why I love my deal killer and you should too” back in July 2008.   There is at least one local company that I am aware of that allows home inspectors to pay to be on their preferred list, but most agents I know recommend inspectors because they think they are good at what they do.

“I sometimes forget I’m not a lawyer.” I have seen, on occasion, a poorly written addendum that needs some clarification, but honestly our Salem Oregon real estate agents for the most part, have average to excellent skills when it comes to paperwork.  I think part of that is that the OREF contract we use is really good.  Kudos to the attorneys for that.  We don’t have to deviate too much. Personally, I don’t think this complaint is all that true here.

9) “My website is a dead end.” Personally, I think this is an odd one.   Either you are hiring a tech savvy agent or you aren’t.  Some prospects quivver when I start talking about property websites and mention the words Zillow or Trulia…when their eyes glaze over that is not the time to mention that my website is on page 1 of Google.  They aren’t going to understand why that is important. You can’t talk tech with a client that doesn’t get tech.  I think the author of the article was running out of things to say…

10) “You can probably do this without me.”  Shhh…I told you what you can do to sell your Salem Oregon home yourself in May 2008.

So maybe I don’t count as a real estate agent? ‘Cause I’m thinking I have talked about at least 5 of these things on my blog in 2008.    Maybe the authors of that SmartMoney article should spend a wee bit more time doing some research before they start generalizing about what real estate brokers tell their clients.

Bottom line folks…work with someone that you feel comfortable with, and if you don’t like them find someone you like better.

Apparently, Aumsville Oregon missed the real estate memo letting them know that the market stinks everywhere.  Really it is supposed to be horrible everywhere per the media.  This small town seems confused because their current inventory is a mere 3.8 months.  Apparently no one sent, or those Aumsvillians?  Aumsvillites?  didn’t read it because 3.85 months of inventory is considered a seller’s market (4-6 months inventory is neutral).   What’s up with that?

Their 2nd quarter sales volume has remained fairly steady through this recession.  If you look at the 2nd quarter data for the decade you can see the nice bump during the bubble time.  Now it looks deceptive, but Aumsville is so small that when a subdivision like Highberger Meadows goes in, it makes a huge difference in the real estate market.  The new construction homes sold fairly well in this quarter.  The prices are great for the size and amenities AND Aumsville qualifies for the USDA loans which is one of the very few 100% financing programs.  Close to Salem, qualifies for 100% financing, has a nice new subdivision…what’s not to like and buyers seems to think so as well.

Unlike the Salem Oregon real estate market, the Aumsville market has been hovering around 6 months of inventory for a while.  This plunge in inventory is a little bit of a surprise, but not totally unexpected.   Not sure it will stay in a seller’s market for the whole year, but probably a neutral market.   If you want to see homes that are currently on the Aumsville real estate market, you can search for homes here.

Old McSalem had a farm

E-I-E-I-O

and on that farm he had some hens

E-I-E-I-O

with a cluck, cluck here and a cluck, cluck there

here a cluck, there a cluck, everywhere a cluck, cluck.

Old McSalem had a farm

E-I-E-I-O

I wrote a post not too long ago about the chicken ban that Salem Oregon has in place for homes.  There has been a push to allow chickens to exist within the city limits allowing people to have fresh eggs.  After much debate and banter about it, the city councilors passed a motion to start the process to change the city codes.

And, yes, there are restrictions.

• No roosters, so don’t expect to see Foghorn Leghorn in your neighbor’s backyard.  He’s still banned in city limits.
• 3 hens.  No large broods of chickens in city limits.  You should only hear cluck, cluck, cluck from your neighbor’s yard not cluck, cluck, cluck, cluck, cluck, cluck, cluck…well you get the idea.
• The hen house needs to be at least 20 feet from the property line.
• Home owners need to have at least 10,000 sq feet to their lot.  That’s .23 acres.  Not a lot of lots here in city limits that are that large.

Honestly, there will be so few folks that have the lot requirement that I just don’t see that many hens being inside our city limits.  If you are looking to purchase real estate in the city limits of Salem Oregon, don’t get freaked out by this news.  If you really hate hens, there are many subdivisions to choose from where poultry is not allowed regardless.

BUT what I really want to know is who is going to be the first person to end up in small claims court.  See in my neighborhood there are a few lots that would meet that criteria AND there are many “outdoor” cats that roam my area.  I can just see the song now…

Old McSalem had a city

E-I-E-I-O

and in that city they allowed some hens

E-I-E-I-O

with a cluck, cluck here and a meow, meow there

here a cluck, there a meow, everywhere a cluck, meow.

Old McKitty ate a hen

E-I-E-I-O

I blogged about something sweet the other day, so it only makes sense to talk about something not so sweet today.  Okay, not really, but I needed some kind of tie in there…

Anyone that wants to look at living outside city limits or on acreage property in the Salem Oregon area is going to be looking at having a septic system of one kind or another.

If you are wanting to purchase a home and have never had a septic system before there are some basics that you should know during a real estate transaction.

• Get the tank pumped and inspected.  You should never purchase a home without having the tank and the drainfield inspected.  It costs a lot of money to have a new drain field put in so know what you are getting into. You don’t want to buy a house, wonder why your toilet backs up and your ground is squishy, only to find that you have a failed septic system.
• Go down to the county and pull the septic records.  If you are in Marion county, outside city limits, there is just a simple form to fill out and you may have to pay a few dollars.  Sometimes you find out interesting things that make you go hmmm…  you don’t want to go hmmm when you are looking to buy a house.  Permits are required for a reason.
• If you are looking to build a house on your dream lot, and it requires septic get a site evaluation aka “perc test” done to make sure the land can support a septic.  There are different types of septic systems depending on the soil.  If you can’t get a standard septic system installed you need to know that upfront.
• Just because you want to build a 5 bedroom home doesn’t mean that the land can support a 5 bedroom home.  Make sure the septic system can support the size house you want to build.

The Department of Environmental Quality (DEQ) gets to oversee all septic systems.  They have a nice little blub about signs of a failed septic system as well as some do’s and don’ts  on their site.

Signs of septic system failure

• Pools of water or soggy spots, foul odors, and/or dark gray or black soils in the area of your drainfield.
• Water that surfaces over the drainfield during heavy rain or when doing laundry.
• Sewage backs up into the lowest drains in the house.
• Gurgling of drains, slow drainage (check for clogs first).
• Soggy soil overlying the drain field.

So remember that during a Salem Oregon real estate sale, it is the buyers job to do their own due diligence…you know, to get the scoop on the poop, for the piece of property they want to buy.

About a year ago I was showing a Salem Oregon buyer a  home.  As I was showing this house to a client, I flipped open the panel box to see what kind of it was.  This is my standard MO in older homes.   Federal Pacific…right there on the tag.  The seller happened to be there as I was telling my buyer about the CPSC “non-recall” of Federal Pacific breakers.

“Why didn’t my agent tell me about that?” asked the seller.

I had no answer for that.

One of the things that home buyers rely on local Salem Oregon home inspectors for, is to know these things.  I still think it is a good idea for buyers to get a handle on some of the larger concerns that exist with regard to home defects.  I have created a small little ol’ list of things that I am aware of regarding past or current concerns regarding products used in real estate.  I would love to tell you that this list is inclusive, but I am sure I am missing something.  So, feel free to add in the comments any defects that you are aware of for home products.

Cadet Wall Heaters

Federal Pacific Circuit Breakers

Chinese Drywall (under investigation)

Coleman Furnace for manufactured homes

Knob and Tube Wiring

Class Action Settlements, lawsuits, investigations

Masonite Siding

LP Siding

Dryvit EIFS

ChoiceDeck composite decking (current lawsuit)