So, you’re relocating to Portland Oregon.  That’s awesome!  About 3/4 of Portlanders were either born here or relocated.  The other 1/4 were not sure about… just joking.  Attraction to this area can be attributed to several factors including entertainment, culture and cost of housing.  Believe it or not we’re ranked in the top 5 relocation destinations for the nation!

This blog focuses on Portland real estate and as luck would have it so will this article.  Surprise, surprise.  Coming from out of town has it’s difficulties so much research often takes place long distance before finding a suitable neighborhood to buy a home.  Here are 6 big tools to help with neighborhood research:

School ratings.  Whether or not you have kids is not the point.  Schools are one of the easiest ways to determine whether neighborhoods are going to be a good match.  There’s a fantastic website (www.greatschools.net) that rates schools on a scale of 1-10, 10 being the best.  Elementary schools pull from a small radius.  RMLS lists elementary schools as a required field.  Even the laziest agent has to fill in this information before a home listing goes public, therefore, house searches can be centered around specific schools.  While a home’s elementary school rating is not everything, it is a reflection of community.  Better school rating, nicer neighborhood.  Check it out if you’re familiar with a particular school location in the country and see for yourself, this is a national tool.

Very few neighborhoods in Portland actually feed into “10″ rated elementary schools.  Bethany, Cedar Mill and Laurelhurst are the only ones, last time I checked anyway.  Lake Oswego/West Linn ranks top in Oregon too, but it’s a suburb-type city.  Some of Beaverton’s schools are rated well too.  It’s amazing that within only a few blocks school ratings can vary significantly, so do the neighborhoods.

Food Shopping – QFC, Whole Foods, New Seasons, and other high-end grocery storesare an indication of neighborhood quality.  Also, check out Starbucks.  They put alot of research into store locations and won’t plant one in a sketchy area.  Stores mentioned above can only thrive in certain areas, areas of higher income mainly.  Money isn’t everything.  Check out crime stats, income levels and other census information at www.portlandmaps.com but look at grocery shopping more than just shopping.

Pictures – Every Realtor is now required to upload at least one front shot of the listed house within a few days of input into RMLS.  Searching Portland homes for sale from a distance has it’s hurdles, especially when not familiar with the city or surrounding locations.  Want to know what a neighborhood really looks like?  www.maps.google.comwill put you right in front of the house you’re looking at online.  It’a a tour right from your desk.  Pan around, look at surrounding homes, see how many cars are parked on the neighbor’s lawn, how many washing machines are on their porch?  www.earth.google.comhas similar aerial shots.  Many times, there’s waaay more to the story than what RMLS pictures stratigically leave out.  How close is the subject property to commercial buildings, apartments or a freeway?  Value is affected by such.  This is a great tool!

Visit the website for Portland relocation, Portland neighborhood information, and Portland homes for sale throughout the metro area.  www.maxwellsinclair.com

OK, have to comment on recent influx of hype regarding how fantastic lease options are.  Since investments in Portland real estate have chased the national numbers we knew that there’d be new schemes making headlines and sure enough, The Oregonian newspaper picked up on it.  Interesting that this subject comes up more prominently while house sales are slow.  Maybe there’s a reason?

A quick overview of lease options

Agreement is made between buyer/tenant and seller/landlord.  Buyer may come in with zero down or thousands to “purchase the option.”  Seller is essentially renting his home for a premium in rental payments and contributing this premium amount towards buyer’s down payment.  At the end of the lease term, say 12 months, buyer has an option of purchasing the house for a preset amount.  Should buyer choose to not exercise his option he forfeits down payment and/or rent premiums.  While contracts can vary significantly, this is the overall premise.  Buyer is purchasing the Option to Purchase, it’s not free!

Why do a lease option?  From a prudent financial or conservative buyer standpoint… beats me.  From a seller/landlord standpoint, go for it.  These definitely benefit the seller in our current market.  A few years back this scenario may have benefited the buyer… maybe.  Though, in a hot real estate market why would a seller jeopardize an immediate sale by taking a risk on lease options?  He probably wouldn’t and that’s why these deals weren’t around in 2005 – 2006.

Immediate gratification

Many Portland home buyers choosing this avenue are doing it for one reason.  Financial issues.  Most likely that financial issue means not qualifying for the purchase, waiting for another house to sell, or bad credit.  Here’s a stretch; The best reason for obligating yourself to a lease option is that a particular house is so incredibly perfect that nothing like it will ever be available in the future, it’s one in a million.  Not leveraging yourself further would be catastrophic!  Now, how many buyers fall into this category?

The sales pitch

1. Get into a house while cleaning up your credit.  Lease options do get you into a house, at significant cost.  If you’re cleaning up credit could this money be applied towards the credit problems, accelerating a good credit rating?  What if mortgage rates go up before credit is repaired and buyer still doesn’t qualify?  Lease option money is out the window.

2. Get into a new house while waiting for your old house to sell.  Lease option again gets you into a new house.  One of the risky things about Portland’s current real estate market is that selling a house is not a quick process.  Putting the cart in front of the house is part of the reason we’re in this housing predicament.  Buying before unloading the old property means double mortgage payments.  If you really have to move into a new place, rent (with no option).  Payments will be lower than those with a lease option.  Plus, if the market does slide another 10% in 2009 then that option price originally set is not going to be very attractive!

3. Get into a new house while building landlord/rental history.  This was a new one to me but recently had to hear the pitch from a mortgage broker on why lease options were a viable avenue.  Theory is that lending guidelines have tightened and banks are requiring that keeping an old home as a rental requires it’s track history to be 6 months long before rental income can be counted.  Again, if you really have to move into a new place, rent first.  You’ll be money ahead on a monthly basis and in 12 months you may not even want the house you’re lease optioning!

Opportunities to buy a house in Beaverton, Lake Oswego or anywhere around Portland’s metro areas have never been greater but think twice about doing it via a lease option.  For more information on Portland real estate visit our website.   www.maxwellsinclair.com

Numerous buyers for properties that are a bargain

It’s interesting.  Listen to the local and national news coverage and you’d swear that the sky has fallen in the Portland real estate market.  Just this week I ran into 3 examples of properties where home my buyers saw value.  Two listed homes were short sales and already had offers on them within days of input into RMLS.  The third went into a sale pending status before they could even look at the house but RMLS had not yet been updated.  My clients were bummed.

This situation is not uncommon in today’s market.  Countless buyers are sitting on the fence waiting for that great bargain to come along.  Once it does, several of them jump on the opportunity and force a multiple offer situation.  Is our market really that bad?

Portland’s housing market is experiencing a significant adjustment

Home prices have slid in all areas.  Higher end locations like Lake Oswego, West Linn and Forest Heights are seeing adjustments back towards pricing seen in 2005.  Many of the homes in these areas are listed in the $600k price range.  A quick look at tax records will show assessor’s values over $750k.  Not that too buyers should be concerned with what the county thinks but rather note that home prices are adjusting from market peaks.  Looking at tax statements is one key way of evaluating home prices.

Prices have decreased 10% this year alone.  Recently I evaluated a Lake Oswego home for sale.  Sellers purchase the home in 2001 and were looking to relocate.  Taking a broader look at appreciation rates showed a tradational 6% overall increase (comparison of purchase price in 2001 to today’s potential sale price).  Buying in Lake Oswego proved to be a decent investment overall.

Unrealistic sellers need to lower price in order to compete

A huge factor in what’s driving down Portland real estate prices is the shear amount of short sale and foreclosed upon properties.  Banks actually taking homes back through foreclosure are very few, relatively speaking.  Owners who have the fore site to see their financial position may find it beneficial to do what’s known as Deed in Lieu of Foreclosure (give their house directly back to the bank).  This allows banks to unload homes quickly through the Portland MLS.

Whatever method is used to obtain the property doesn’t really matter.  Point is that bank owned real estate will be marketed at an aggressive price.  Benefit is to the buyer.  Buyers purchase properties at very attractive prices and are able to close within a standard 30 day period.  Short sale properties very often take 3 months to actually close, if they ever do.  Bank owned (foreclosures) and short sales are competing against the average seller, driving down their market value.  Sellers have to step up to the plate and lower their price to stay competitive!

Search all Portland Real Estate for sale 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!

Lake Oswego offers several different neighborhoods to choose from when searching homes for sale.  Prestigious as the area is downtown still maintains a small town feel.  Walking the First Addition neighborhood and surrounding shops is warm and inviting.  Homes in this area range from early 1900′s Tudor style to 2008 constructed townhomes. Prices will remain well above Portland’s average though fall below Dunthorpe’s high-end price tags.  With land at a premium in First Addition it stands to reason that other areas within the city will have something to offer a bit further away.

Lake Grove an up and coming area neighborhood in Lake Oswego. A lot of Lake Oswego’s closer in areas have undergone development over the last 10 years. Being one of the most desirable areas to live in the Portland metro area, large remodel projects are common. Lake Grove is southeast of city center and still allows in-fill type construction. Newer homes perched within the confines of generally 1960′s models.

Not uncommon for lots to be fetching nearly $300 by the time infrastructure is in place. Ranging on the higher side of Portland’s average size they’re often 7500 square feet. It’ll be rather difficult to secure a newly completed home under $600k. For this price you’ll be looking at approximately 2400 ft. of living space. Many of these homes are designed on one level. Catering to a broad range of occupant situations they’re ideal for buyers who are done with stairs.

Feeding into top performing schools further drives attraction to the Lake Grove community. Prices have a fairly broad range from $300 to slightly under $1m. Close enough to I-5 convenience and Lake Oswego’s First Addition/downtown areas. Bridgeport Village, on of Portland’s newest shopping districts, is within a 5 minute drive. Several restaurants are also available.

Lake Grove is part of unincorporated Lake Oswego. Sewer hookup is often not available and therefore each individual homeowner is on a separate septic system. Water is supplied from the city. With city water comes privileges of using swim easements on the lake. Certain lots also have boating easements as well. Boat easements run with the land and are not transferable. This allows launching of boats on the lake that would not be permitted otherwise. Verification of home address will be required for use of several public swim beaches.

Just north of the River Grove area, Lake Grove is starting to show it’s desireability. As we work through these economic slow times currently development will continue and most likely prove to be a good investment. Buying Lake Oswego houses in any time in the remainder of 2008 should prove to be an overall great housing investment.  Continuation of sliding home prices will stop.  With this area of Portland’s upper end neighborhoods and top performing schools it’s unlikely to be getting much more affordable than the present.

Search our site for Portland MLS homes for sale at www.MaxwellSinclair.com.

Questions about Lake Oswego homes for sale or neighborhoods?  Just ask.  We’re happy to help!