In the market for high end foreclosures?  Portland Oregon is offering some amazing deals with Street of Dreams quality construction by builders who cater to the upper end buyer.  Several recent showcase-of-homes tours featured locations on the outskirts of Portland’s metro area, mainly Oregon City.  With a drive that’s under 25 minutes to downtown Portland there are 3 locations that offer huge bang for the buck right now.

Because of changes to our market place there is incredible opportunity.  Take a quick trip back to early 2005.  Remember the Portland real estate market?  It was going gangbusters and builders were scarcely able to build fast enough to keep up iwht public demand.  One obstacle was availability of land to put these new construction projects on the table.  The urban growth boundary keeps tight reign on development so luxury home builders had to move further out in order to capture estate sized lots.

In comes Oregon City and it’s ability to cater to high end clientele.  Luxury home development was much more in demand during fast paced days of 15 – 20% appreciation of homes.  Large lots are incredibly hard to find in prime upscale areas such as Stafford, West Linn and Lake Oswego.  Much better availability in Oregon City.

With estate sizes ranging from about 2.5 acres to over 5, luxury home builders found pricing much easier to work with.  Finishes are immaculate.  Landscaping individually designed into every nook of the lot to the tune of $250,000 or more.  Ornate architecture on every wall.  Mature trees positioned in just the right location to compliment grand homes and sculpted landscape.  Almost every home is entitled to show off some form of water feature.  Many have several coi ponds and cascading waterfalls.

At the time, several investors in these estates were reaping advantages of our economy and loose credit terms, income was abundant.  That was three years ago.  Now it’s a bit different.  While short sales and foreclosures run amuk on entry level pricing there are also several on the luxury home end.  Most of this Portland luxury real estate is selling for less than half the construction costs.  Often even one third.

Looking for a deal?  Check out Hidden lake homes for sale.  There is a foreclosed property which will be offered shortly close to $1.1m, a guesstimate.  Construction cost is somewhere around $2.8m.  It is a foreclosed property and may need a slight amount of attention, around $50k worth.  Investment in a few kitchen appliances will mean big returns down the road when real estate heads in it’s historical upward direction.

There are essentially 3 main estate subdivisions catering to Street of Dreams buyers in the SE area of Portland’s Oregon City.  All are gated communities; Grasle Road, Hidden Lake and Beaver Lake.  Guess which two offer their own small bodies of water?  Pretty tough to compete with over the top finishes and settings of all these locations.  Several homes are offered as short sales and even a few have been foreclosures over the past 6 months.  Opportunity is here!

For more information on these and other Luxury Homes in Portland check out the property search or give a call.  We’re happy to help point home buyers in the right direction.   www.maxwellsinclair.com

Changes to Portland’s real estate market bring out some interesting ideas for those who are looking to take advantage of the foreclosure situation. Sellers are often tempted by alternative avenues proposed by parties operating just under the radar of Oregon’s Real Estate Agency.  Funny how these folks won’t get licensed.

Let’s look at a recent example of a Tigard real estate listing in southwest Portland, a desirable area with convenience to everything.  Searching for hot deals in RMLS brought up this jewel:

Pre-approved Short Sale, can Close in Days!  3500 sq ft on 2 levels, 4 bedroom 2 bath, new windows, wheelchair accessible, etc, etc, etc…Sold AS-IS  $325,000.

Pictures didn’t look too bad.  Sure, it wasn’t pristine and may need a bit of sweat equity but the price was fantastic based upon description and comparable sales in the area.  Location was great, close to everything.  All factors point in the right direction.

So we arrive at the house and it looks a titch worse than in the pictures.  Beautiful kitchen shots had been taken before the owner decided to remove appliances and rip out the cabinets.  Blackberries had actually engulfed one entire side of the house as well as several trees on the property.  Garage doors were falling off and pretty much toast, but that was no biggie compared to all the soffit and window sill dry rot issues.  Oh well, still a good deal, she’s a fixer.  We’ll also have to overlook listing comments about being wheelchair accessible since there were about 4′ elevation differences all over the place and no ramps.  In the sales industry these little details are called “puffing.”  Works for the some people I guess…

People Promoting Win-Win Situations Are Often the Winners

A quick phone call to the listing agent reveals not only is this property a short sale but there’s another party involved who expects to be paid for her amazing negotiating skills.  Essentially what happened is that the seller was contacted by this win-win negotiator just prior to going into foreclosure.  Negotiator paid some of the overdue payments and/or fended off foreclosure proceedings temporarily while property was advertised for sale.  Through her incredible abilities she also convinced the seller to give her an assignable contract for sale of the house.  That contract needed to be bought out in order for any other buyer to proceed.  Cost to buyer was $15,000 (she would then assign her interest to the new buyer).  This buy-out money would not have gone towards the seller’s overdue payments/loan balance and would have essentially cost the buyer $15k more in purchase price.

What a great win-win situation!  Wait… I only count one winner, where’s the second?  Nothing like having a third party negotiator step in and take advantage of an already bad situation.  There are several of these “professional negotiators” out there now.  In fact, many are weaseled into RMLS listings.  The buyer is expected to pay for professional negotiation services of which they are not even receiving representation.

Another Avenue for Sellers in Trouble

One of the best solutions for sellers is to contact a reputable real estate broker well before foreclosure.  It’s their job to negotiate with banks, advertise, secure the best price and generally represent the client’s best interest.  No special win-win third party negotiators need to be paid!!!  Note that not all brokers deal with short sales and some that do have a special team (complete with weasel fees).  Hiring the right real estate broker will benefit sellers, banks and property buyers in the long run.

If you’re looking to buy Portland real estate, you can’t do better than to do it through us here at www.maxwellsinclair.com.

Short sales listings will inevitably be part of almost every Portland real estate search result.  In fact, Portland’s RMLS (Regional Multiple Listing Service) has actually added ”bank owned” and “auction” fields for agents to use during listing input.  While getting a great deal on the purchase is in front of most people’s minds, actually closing one of these dynamite short sale houses becomes a little testing on the nerves.

Banks seem to throw logic out the window on occasion… of course these are also the organizations who loaned money to anyone that could fog a mirror a few years back.  Did you know mortgage brokers actually referred to some loan programs as “the liars loan?”  Ya, that didn’t have disaster written all over it.  Good news for buyers though due to all this foreclosure/short-sale turmoil.  Portland prices have dropped significantly, back to early 2005 or even 2004 in many cases!

Foreclosure and short sale prices lead the market with aggressive pricing.  It’s very difficult for average resale sellers to compete with someone who’s dumping a house next door due to financial difficulties.  Your neighbor owes more against the house than what current market will bear and is losing his shorts.  Hence, the term “short sale.”  Actually a better definition might be; A mortgage in excess of what’ll be netted out from the house sale, banks have to agree to take this loss.

A common selling situation:

Market analysis is done.  Looks like the property should sell for $500k based upon recent sales within the last 6 months.  Property is listed but no offers come in after 1 month so price drops $20k.  Still no offers, another month passes.  Price drops again, now list is $460k.  This pattern continues for several months until we get to the point at which the $500k property is now $380k.  Wow, what a deal!  Unfortunately, it’s now considered a short sale because seller still owes $450k against the property and doesn’t have any money to pay the shortage.  Multiple offers come in.  Best offer is $385k.

Listing agent goes back to the bank and asks for the rep’s blessing, approving such a sale.  Rep orders the BPO (broker price opinion)/Appraisal.  Appraiser looks at comps and the offer, comes up with a value of $425k.  Bank says NO SALE at $380k.  So, how do we get the place sold?

Ammunition to use against (il)logical banks

Here’s the compelling argument that can be used to leverage a lower sale price:  Show the bank RMLS history.  Your buyer’s agent can produce such.  Fact is that the property was listed for a higher price and didn’t sell.  Market value is determined by buyers, not appraisers, not sellers or real estate brokers.  Although a market analysis was done showing what theoretically a home is worth the bottom line is that buyers are not willing to pay such.  Real value is at $380k in the buyer’s eyes.

Bank representative must make a choice.  Go with the bird in hand, request a higher amount (forcing more market time/counter offer), or foreclose.  In a declining market which avenue is most cost effective for the bank?  You’d be amazed how many banks will accept this logic, some won’t.  But hey, “He who has the gold…”

Visit the site for information on Portland Real Estate and advice on investing in real estate.  Search Portland Oregon homes for sale at www.maxwellsinclair.com