A solution to those spendy jumbo loans

The conforming loan limit in our area is $417,000.  This means, any loan amount above that, independent of how big your down payment is, qualifies as a jumbo loan.  Jumbo loans are expensive with higher interest rates and fees. 

In the boom years, there were a variety of loan "products" available to circumvent the jumbo limit.  As a general class, the second mortgage was the most popular and easiest tool buyers could use to avoid taking out a jumbo loan.   In the downturn, virtually all loan products disappeared but for the most standard of loans; FHA, VA, conventional and jumbo.  As lenders are gaining back some confidence in the market, they have brought back the "second". 

Here is how it works.   The buyer borrows the $417,000 allowed as a conventional loan, and then takes out a second loan to close the gap to their purchase price.  So it would look something like this:

$750,000 purchase price
-$150,000 down payment
$600,000 financed
-$417,000  conventional loan
$183,000 second loan

Now, the interest rate on the second does tend to be higher than that on the conventional loan,  But it is higher only on that $183,000 balance.  Not the whole $600,000, as would be a jumbo loan. 

For some, the jumbo rates and fees were rather prohibitive, such that folks opted not to move, or to use retirement or other savings.  I expect we'll see many "move up" buyers using these loans to facilitate getting them into their next home. 

Is it advisable?  That is, if the jumbo was a financial strain, maybe a move up is reckless.  Or does the second loan, keeping the overall cost lower, make such a move smarter?

Give me a call if you have questions about what loan programs might work for your particular situation.  I'll glad answer what I can, and refer you on to one of the reputable lenders with whom I work.  503-312-8038.

Recent Portland Housing Market Stats

As you may have heard, we're seeing a bit of a bump in interest rates.  Most buyers aren't particularly bothered by the increase, though affordability of houses is sure to be impacted.  Some buyers are even rushing to buy and lock their interest rate .

Statistically, prices have continued to rise, market times are shorter than previous months, but the volume of sales has slowed a tad, and we've seen a miniscule increase in the number of homes available for purchase.

The median price for the first six months of this year up 14.2% over the same period in 2012 to $257,500.

Closed sales decreased 6.4% compared to May 2013. but still showed an increase of 11.9% over the closed sales in June of 2012.  Pending sales decreased 5.8% compared to May 2013, but showed an 11.9% increase over June 2012.

The number of days a house is on the market  decreased from 85 days in May 2013 to 70 days in June of 2103.  Yes, many houses are selling in their first few days on the market; houses that have it all - condition, price, location and preparation.  But with 70 days being the average, you know plenty of houses are still taking months to sell.

And inventory; measured by how long, at the current rate of sales, it will take to sell all the houses on the market, has bumped ever so slightly from 2.5 months in May 2013 to 2.9 months in June 2013.  Contrast this to June of 2012 with 3.9 months of inventory and June of 2011 with 6 months on inventory.

If you've been thinking of selling, now is a pretty good time.  Rising prices and a shorter market time sound like a seller's dream.

See the full report.

Camp food; at the intersection of yummy and easy

Okay, it is a given that most food tastes better when eaten outdoors.  And eaten next to a lake in the Pacific Northwest with a view of Mt. Hood adds a bit of flavor.  But there is a challenge to the perfect camping food; balancing convenience, durable for either hot car or watery cooler storage, and ease of preparation.

I tend to the side of convenience, perhaps to a fault.  Some of my standbys include bagels, lox and cream cheese, cut fruit, veggies and hummus, cheese and crackers.  I do like this stuff as it is easy for us to eat at different times.  By the time the teenagers get up for breakfast, its about time for my lunch. 

The long and happy hour; pull out some salsa and chips, maybe whip up some guacamole, cheese, crackers, hummus, carrots and olives.  A leisurely graze, grab a beer and wander down by the lake.  This is my favorite non-dinner, dinner.

Perhaps our yummiest camp meal is salmon on a cedar board, over the grill.  yum!  But even that is pretty simple.  We have camped with folks who are very accomplished camp cooks; the gal who does some sort of blackberry pastry thing in a dutch oven in the campfire!  Or folks who labor over a stew all day. 

Okay, I don't want to spend my whole day cooking.  There is a canoe to paddle, trails to hike, Mt. Hood needs to contemplated, conversations to be had, naps to take, dishes to do and beer to drink. 

But maybe I could step it up a bit.  We have a three burner stove, propane grill and of course a campfire. We eat fish, but do cook meat for Emma now and again.

Any suggestions?  What is your favorite camp meal?

Not so secret tips to selling quickly

Even in this robust real estate market, the good houses, those that sell quickly and at a higher price than might be expected, need prep work, care and planning before they hit the market.  Most likely, it took weeks, if not months of prep time getting them ready.  So what kinds of things are sellers doing?   Remember, buyers paying top price have high expectations of the home.  Help buyers see the good parts of your home while allowing them to imagine living in it.  Avoid contentious inspection negotiations by addressing the easy and obvious stuff up front.

Perception is everything.  You may have developed a practical way of living in your home; I keep the garden clogs by the back door, mail on the front stairs and a laundry rack in my bathtub.  No buyer wants to see that. Buyers are buying how they think they'll live in a house, not how you actually do.  I had a client for whom a nice dining room was a MUST in his new house. When asked if he was the kind of person who entertained a lot at home and liked to cook, he responded, " no, but I want to be".  He was buying the house for how he wanted to live.  This is about clutter, its about clean, its about tidy inside and out.

Declutter: Seriously.  You are moving.  It all needs to go soon anyway.  Rent a storage space and box up the majority of your crap, I mean treasures.  Empty closets, drawers and shelves by at least half.  Clear surfaces.  Take out at least half of your chairs, end tables, baskets etc.  Box up your keepsakes, artifacts, collections and photos.  Leave a few nice pictures or pieces of art.  Leave some books on the bookcase, well arranged.  

Life/Safety:  Buyers, inspectors, appraiser, agents and sellers should all be concerned that a house not be a death trap. Install working smoke and carbon monoxide alarms that meet current installation and other codes.  Our sale agreement calls for these, in accordance with state law.  Put them in ahead of time.   

Strap the hot water heater such that in the case of an earthquake, it won't be come a huge pressurized canister (that is kind of what it is right now).  Don't just attach the straps bought at Home Depot.  Actually secure the hot water heater so it won't move in the case of an earthquake.

Make sure there is a decent, sturdy handrail on stairs to the basement, down the front steps to the yard etc.  While you're at it, make sure stairs aren't too slippery, especially in the rain.

Have an electrician tidy up any scary as hell electric stuff. Really, that hot wire dangling from the basement ceiling?  You may know not to touch it, but others may not.  Get your electrician pal to terminate it in a junction box or some such.  Similarly, there should be no open slots in your electric panel in which folks may stick their fingers.  Easy, cheap and well worth the price.

The front of the house matters:  People want to feel enthusiastic and optimistic when they drive up.  Consider taking off the screen door unless it is a really nice LOOKING screen door. Sweep the stoop, consider pressure washing the stoop/drive/walk.  Weed, mow, trim.  Nice plants in pots help, but don't be too cliché.  Brush away cob webs.  If your front door isn't used by your family regularly, be sure to brush away spider webs on a daily basis.  Ask your realtor to place the lock box in an easy to find and easy to open location.  In the summer water regularly, in the winter, rake, or shovel or whatever you have to do.  Ask your realtor or a friend to point out small things that catch their eye as you are so used to seeing your house, you won't notice those little things.

Professional Photos:  There are many different ways to market different properties. I do believe, no matter the property, that good, professional photographs are a must.  I know, you fancy yourself good with a camera, but folks who do this everyday, and have for years, are better.  Photos you can provide could include before and after pictures, pictures of the yard in bloom if you are marketing in winter and pictures of work done behind now closed up walls.

Paperwork:  Did you have the oil tank decommissioned way back when?  Round up that paperwork as it is good as gold.  Without it, the buyers of your home may well test the soil again, and DEQ has only gotten more strict on detection and action levels. While you are at it, round up the manuals for your appliances, furnace and such.  Receipts for any major work done are good too; sewer replacement, water line etc.  Buyers love seeing an organized seller. It makes them feel the home has been well cared for over the years.  It has, hasn't it?

Behind the scenes: Make sure any crawl space and attic accesses work, so folks can take a peek, and so inspectors can actually get in.  Any bare dirt should be covered with 6 mil black plastic to act as a vapor barrier.  The attic and crawl space should be vented. The bathroom fan should be connected via a duct to a roof vent, not venting hot moist air into the attic. Make sure the electric panel us accessible, not blocked behind a bunch of boxes an what not (for safety reasons it should always be accessible so the power can be quickly shut off in an emergency).  Buyers and agents will notice theses things when they look at your house. No vapor barrier yet?  They'll think of years of ground moisture seeping up into your home.  No reasonable attic access?  They'll imagine no one has looked up there in years - lord only knows what is going on up there (mold? pigeons? slow roof leaks?).

Change the furnace filter, wash windows, clean out under sinks

I am not a proponent of remodeling your house just to sell, unless you are actually flipping the house.  But there can be a place for fresh paint, new carpet and carpentry to repair dry rot and other issues.  No, you probably don't have to paint the whole house, but painting the entry way (high traffic and high visibility area) could sure go a long way.

On the flip side, it is fine for the garage and/or basement to have lots of boxes and show signs of moving.  Buyers are reassured to see this.

So yes, you may well be able to draw multiple offers on your house after a few short days on the market.  But you'll have to work for it.  And your agent?  Your agent will be working well ahead of putting your house on the market to position the house optimally for this market.  Each house has its own unique set of pre-market needs and conditions.  Let me know if you want to get started on your house's to do list.