Thursday, October 25, 2018

Attics; is that living space or what?

I sell a lot of older homes in Portland's close in neighborhoods.  Many of these houses have had various increments of work done over time.  When a house was built, it may have had stairs to an unfinished attic, used for storage or maybe as a sewing room.

Over time, subsequent owners may have added wall board, a few outlets, and maybe gotten some heat up there.  Perhaps another owner added some insulation, and decided it was reasonable to use the space as a bedroom. 

In some cases, someone added a half bath; no big deal, just to avoid going downstairs in the middle of the night.  And then another owner added a shower to that half bath.

While not all of a sudden, it was actually over decades, the unfinished attic became a finished attic with bedroom and bath.  Or is it?

Over the same decades, buyers have gotten pickier about wanting permitted work, municipalities have become more sophisticated about the permitting process and permit records, and insurance companies may have gotten stricter about paying claims in unpermitted spaces.

How is a buyer to know?   In the City of Portland, many permits are on, but not all.  Other jurisdictions also have pretty good portals for checking permits;  Clackamas County , Washington County  It is best though, for the buyer to go to the permit office and ask to see the records.  Checking the usage or property description in municipal databases can also be informative.  Is the house considered a one story with attic?  With finished attic?  What is the ceiling height like in the attic?  Are the stairs crazy steep and narrow? 

Many of our building codes have to do with fire and earthquake safety.  The city isn't just being picky when requiring a decent stairs way.  Can people safely get up or down?  Are there sturdy handrails? Could a fireman, with full gear, get up the stairs and maneuver in the attic?   When the space was "finished' was the proper fire blocking done to prevent the spread of fire? 

Why should a buyer care?  I'd prioritize safety concerns first.  Questionably finished space is probably best not used as sleeping quarters; when we are most vulnerable.  Next, I wouldn't spend money on pretty, fancy finishes in unpermitted space as buyers won't value it to its fullest.  If future building permits come into play, the unofficial finished space may need to be brought into compliance.  And, some buyers may not even consider buying a house with questionable, or unpermitted space.  Perhaps you plan to stay in the house forever, and are only using that upstairs for storage, and the occasional hobby project.  Maybe its okay to leave it as is? 

And then there are appraisals, as completed for the loan process.  While appraisers may not (or may) want to see building permits, they may enlist a set of criteria for considering a room a bedroom, or finished space.  Appraisals do use square footage calculations, so this can matter.  Maybe the buyer and seller agree on a price, even if that attic is funky.  The appraiser may not be willing to include that space in their consideration of value, resulting in a low appraisal.

The City of Portland has a pretty good piece on converting attics and basements to finished space

My advice; if you are considering finishing an attic or basement, do so with building permits from the municipality with jurisdiction.  If you have a semi-finished basement or attic, don't over improve it until you know if it is considered "legitimate" space.  Consider going back,and getting previously finished spaces permitted.  Buyers are getting pickier on this.  Addressing these issues before putting your home on the market will give you time to do the right thing, make decent decisions an be far less stressful

Tuesday, October 23, 2018

Times, they are a changing

Okay then.  iInterest rates are up, inventory is up (highest since February of 2015), the rate of increase in the median sales price is down, the number of pending sales is down, and market time is longer.  Those are all signs of, or contributors to, a slowing market.

Most buyers have more power in the market place than they have in years.  A slowing market, combined with seasonal slowing, leaves sellers who need to sell before the end of the year, in a tight spot.  Sellers currently under contract would do best to stick with that sale, and agree to repairs being negotiated from the home inspection.  It could be hard to go back on the market after a failed sale, and do any better.  I can't say this with enough emphasis.

What IS selling, are houses that have been very well prepared for the market.  While I'm not usually a fan of doing a lot of work before selling, this may be the time to do just that.  Houses that have good mechanicals, are aesthetically pleasing and priced below $400,000, are still in high demand.  Some sellers of these properties are seeing multiple offers, and competitive bidding.

Is this a good time to buy?   Should buyers wait until spring?  Those are tricky questions.   While I don't think home prices will go up so much as to price current buyers out of the market, rising interest rates could lead to less buying power. 

Just as I don't think a college education is for everyone, home ownership doesn't always make sense.   For now, buyers should plan to stay in a house at least three years, and a five year plan would be better.  For sellers, if you're planning on moving in the next year or two, you might consider selling now, and renting until you move on.  We know the market we have now.

If you've got questions about your particular neighborhood, property or situation, I'd be glad to talk with you.

Wednesday, October 3, 2018

Convenience vs. customized service

I've been doing a lot of thinking about this.  Call me old fashioned, but there are certain services which I'd rather be provided by the same person or team, in the interest of consistency and a personalized experience.

In the age of convenience, "get it now" seems to carry the day.  And sometimes you can have both; the convenience and speed of a drive through coffee place, combined with the ability to make your personalized order; the half sweetened mocha, no whip cream etc.  Zoom Care (and other clinics) offer speedy service, available at a variety of hours.  But you won't always have the same provider, and the cost may be higher.

In health care, I want to see see the same provider who has been treating me.  The exception would be for urgent or super routine care, where the issue is clear and easy; stitches, flu shot, other immunizations, strep throat.  This is a pretty clear case for me, where personal service is important.  And sometimes it may take me longer to get an appointment with a specific provider; the wait being a price I am willing to pay.

Similarly, most veterinary care for my pets, needs to be with the same vet.  In a rush, I once dropped my cat at the vet as she seemed to be in pain and was crying out when touched.  She is the most good natured cat ever, so this was alarming.  Because of my schedule and timing, I was not with her when she was examined, and she was examined by a vet  not familiar with her demeanor.  He was a good vet, mind you.  Talking with him later he said she seemed fine. When asked if she had vocalized during the exam, he said yes, but no more than any other cat might.  But here's the thing.  She would normally purr and snuggle during an exam.  You know, the kind of cat where the vet has trouble listening through the stethoscope for all the purring.  Had her regular vet been available, or had I been there, it would have been clear the cat was in pain.

Aside from health care, where else is the customized experience important?  Certainly for some, myself included, hairstylists might also fall in this category.  For Don, the buzz cut of his quickly disappearing hair can probably be done by most any stylist.  So is it personal care?

I suppose, if one had a vintage, finicky car,  the same mechanic would be important.  Or an old, quirky house; you'd probably want the same contractor working there and knowing the idiosyncrasies.  So, if we all lived in tract homes and drove recent model, mass produced cars, would service be easier, cheaper and still high quality?

What about professional services;  Lawyers, accountants, financial planners, and yes, real estate agents?  Certainly the more specialized the need, the more specialized the service should be.  And the need may not just be personal, it could also be location based.  So I don't just need an attorney who knows me, I need them to know the local laws AND me.  I need a property manager familiar with Portland's tenant protection rules, not just Oregon statutes.

Hotels are an interesting example.  They endeavor to provide customized options to an everchanging client base, at a reasonable or at least predictable cost. But hotels tend to provide choices, by which we can have a customized stay. Some hotels provide both foam and feather pillows, control over HVAC and/or openable windows, coffee set up in the room or at breakfast, room service or a dining room, valet parking or self-parking.  So here, the hotel doesn't know me, nor my preferences (and they don't need to), but tries, within reason to provide choices such that I can customize my stay.

Where are you willing to potentially compromise a customized experience vs convenience?  For me, I don't need the same car mechanic, do want the same providers for most all personal and veterinary care.  I'm fine being served by different folks at the pet supply store I frequent, and certainly don't need or expect customized service at the grocery store.  Though I don't use a dog walker, I think I'd want the same one.    And for professional services, yeah, I want personalized.

An aside about convenience and artificial intelligence.  Auto-fill in online stuff, is that a bonus or a pain?  On your phone, do you have auto-correction and "predictive" set to on? Do you let a program store passwords and credit card info?