Portland’s real estate market is not bad. Buyers of investment properties need to take advantage.  Want a competitive edge?  Better be on top of the new listings.  Most websites offer automatic email functions.  These can often be set to send immediately as new property listings become available but some only send once per day.  Only looking once per day may not cut it when competing for hot properties around Portland Oregon neighborhoods.

How can buyers have first shot at the good deals?  Reality is that 99.9% of real estate transactions happen through Realtors.  Hook up with a good one.  Agents working with investment property buyers need to stay on top of new listings and do market research immediately as houses become available.

What’s a good deal for investors?  Take a look at Portland’s west side for example.  Beaverton homes and Hillsboro neighborhoods often offer better cash flow than those found elsewhere.  When looking at the home purchase consider what sort of expenses are attached directly to PITI (principle, interest, taxes and insurance) and what neighborhood rents are.  Entry level homes offer much more bang for the buck than higher end, rental wise.  Rents on a 1200′ 3 bedroom 2 bath detached Beaverton home are running around $1100/mo at the moment.  Figure a good price for such a property might be $175k.  Compare that with cash flow on a $350k home where rents may be $1600/mo.  You do the math.

Competitive nature of investors.  Being first to the table with an offer is key.  It’s almost better to shoot first then aim in this market, you’ll have opportunity to bail out later.  I’m referring to red hot bank dumped properties here and not average run-of-the-mill real estate.  Hot properties like ones priced at $90 sq. ft. vs. the neighboring ones selling around $150.  These will be bank-owned foreclosures in Portland and surrounding areas, and they’re marketed through agents just the same as any other property.  I’ve seen several in the last few months around Beaverton and Hillsboro, they do exist.  Jump on them the same day they hit the market.

Sitting on the fence. At any given time there are a ton of buyers who say “wow, that was a good deal.  I’d have bought that one… if I’d known about it.”  The only reason buyers don’t know about it is because they (and their Realtor) are not paying attention.  Countless would-be investors sit on the fence analyzing a particular property while another savvy investor snatches it up.  That way the little kid mentality can kick in; That guy wants it, now I really want it.  Not all properties listed in RMLS are still available, some are awaiting bank paperwork before listing a property as “pending” in the system.  Dilly dallying doesn’t pay!

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.

Looking to score on awesome foreclosures or short sales in Portland Oregon?  Watch out for that middle-man fee!

Recently I had the pleasure of dealing with an interesting situation.  This involved a pre-foreclosure property for sale in Beaverton.  Although it was listed in the RMLS there were additional buyer “fees” involved I found out about after talking with the listing agent.  Although additional “negotiation service fees”, or whatever you want to call them, are not too uncommon these days it is something to watch for and I’d be interested in hearing other’s opinions regarding ethics of such.

My example came when a buyer was searching houses for sale in Portland Oregon.  He came across what looked to be a fantastic deal but was disclosed as a short sale (bank would have to approve sale price and deal with a lack of loan payoff).  I found out from the listing agent that there was middle party involved with the seller who, apparently, had a contract for purchase (option to buy at a undisclosed price).  This middle party wanted $15k to buy out the option and had no intention of actually acquiring the house.  Purchase by my buyer could not move forward without getting this party out of the picture.

Justification for paying the $15k was “negotiation work done with the bank.”  There was work done with the bank, yes, and they had come to an agreement with lien holders.  OK, great.  Was it $15k worth of work or just someone trying to make a quick buck off of a real estate transaction?  Remember, this middle party had no intention of actually aquiring the property.

Here’s a rundown; Buyer writes the offer, seller approves, middle party approves, then it goes to the bank.  Bank asks for a HUD 1 sheet (balance sheet more or less).  Bank now sees that $15k of the purchase price is going to a middle party and essentially not only are they dealing with selling short of what’s owed on the loan but an additional $15k shortage.  The bank has to potentially choose between selling short, foreclosure, counter offering, or relisting the property hoping for a better offer.  What’s the most cost effective route?

Tough spot for the bank.  They’re up against this situation more often than the general public realizes.  Ethics conversations between people in our real estate industry are strong in regards to involvement of middle parties.  Ulimately, as long as the buyer gets a good price for the house he shouldn’t care.  It’s the seller/bank side that has to deal with distribution of sale proceeds.  Many feel that it’s part of the listing Realtor’s job to deal directly and negotiate with banks, no middle party involvement.  Points are made that middle parties are taking advantage of an already bad situation involving home sellers near foreclosure.

What do you think?

For tips on dealing with Portland foreclosures and Portland short sales visit our site at www.maxwellsinclair.com.

Most home buyers have the same goal; Get a great price on a good property!  So one of the popular ideas is that you’ve got to get your hands on a foreclosure list.  Buy it from direct from the bank and save tons of money over retail.  Sounds like a super plan but are you willing to do the work?

Searching the MLS

Truth is that searching homes for sale in Portland, Beaverton, Lake Oswego or other areas is done pretty much one way, online.  Portland’s MLS system (RMLS, regional multiple listing service) is the source for 99.9% of properties advertised for sale.  Whether it’s John L Scott, Prudential, RE/Max or whoever all listings are input into RMLS.  From there the information is just redistributed to everyone’s website.  Foreclosures (bank owned properties) are typically no different.

Banks work with local Realtors to get their properties sold at fair market value as soon as possible.  Dumping them to a handful of cash buyers on courthouse step doesn’t do much for the sale price.  List them in a MLS and these properties will get a million times more exposure, bumping up the sale price.  If you’re searching online properties for sale you’re already getting the vast majority of foreclosure listings.  This may not be overly apparent because buyer’s generally don’t know who the seller is.

Portland foreclosure lists

Yep, they’re all trying to sell you something of public record.  Foreclosures are out there but today more than ever and a few of such are purchased by full-time investors for cash on the courthouse steps.  You’ve got to be there with certified funds (10% minimum in cashier’s checks) to even participate.  Seller’s (banks) won’t wait for the lucky bidder to secure conventional financing and close weeks later.  Good luck easily finding a published list outside of what’s already in the MLS.

Notice of Default lists

NOD (notice of default) lists are the only thing I know of distributed for free.  These are public notices of people who are at least 3 months behind on mortgage payments.  Lists are distributed by the title company and are the first step to potential foreclosure.  Cash buyers, Realtors, and property solutions people promoting “win-win” garbage all prey on these homeowners.  It’s a full time job for people choosing this route (trying to capture a potential easy buck) and what they’re promoting is to “save the homeowner from foreclosure.”  Some chasers are legitimate (Realtors for the most part), others not.  I’ll argue in depth about the scammers out there if you want to listen…

Short-Sale Listings

In reality these days the majority of properties go through short-sale negotiations (bank agrees to work with a seller and take a loss rather than go through the more expensive foreclosure process, losing even more $$).  Properties are listed in the MLS and you’re already seeing them within the set search parameters if they exist.  Bank representatives generally don’t give the properties away as urban myth would have you believe.  By far the majority of foreclosure and short-sales sell through Realtors on RMLS.

Summary

Late night TV is great for promoting a bunch of trash.  But if you’re willing to make it a full-time job… you may get lucky eventually.  There are easier ways of accomplishing the same goal and getting a good deal.  Contact a good Realtor in Portland!  Keep in mind too that foreclosures generally come with cosmetic or bigger issues, especially in our target price range.

I’m wrapping up my 6^th yr in real estate and figured out long ago that this avenue was a giant headache… and I love doing rehab!  Out of the thousands of people I’ve talked with about real estate I’ve met 2 folks who’ve actually purchased foreclosures on the courthouse steps and know that the one guy was barely breaking even after all was said and done.

Investigate Beaverton, Hillsboro, Tigard, Lake Oswego and Portland neighborhood information at www.MaxwellSinclair.com , we’re happy to help!