Cash is King!

imagesIn the past few years I’ve done more all cash transactions than all of the time leading up to the 2007 recession. I use to get a kick about the dooms day, nay sayers stating that we were headed into the next Great Depression. That was never a risk in my opinion. You see, in a depression, people don’t have money. In this last recession, there was plenty on money, it just sat on the sidelines. It was an event in our lives that proved that money really has no benefit to an economy unless its changing hands.

There is a saying that has been around for a very long time; “Cash is King!” But is that true? I guess the answer is, it depends. As it relates to your own finances then it probably is true. I often tell clients that the decision to buy real estate shouldn’t be made because you feel you are paying too much in income tax and you need a tax deduction. That logic really doesn’t work because you are shelling cash-is-king-imgout $10 in payment to save $3 in tax. Frankly, you are better to save the $10 and pay the tax if its only tax benefit you are going after. The reason you buy property is you need a place to lay your head at night, it’s a better investment than renting and it’s part of the American Dream to own your own home.

Alas, that isn’t the topic of this post. Back to the question, is it true that Cash is King when making an offer to purchase a home? I’m sure there are many theories but what I would submit is that in many cases, it is probably not. Certainly the offer of cash makes a real estate transaction much easier than the typical financed transaction. Why is it easier? Thats an easy answer. First, there is no loan to be declined in the 11th hour of the transaction that will cause a sale fail and disappointment for the seller. Second, you don’t have the “lender required repair” event which can add a sales expense to the seller, again risking the sale fail event. Third, it can contribute to the ability to close quickly because you don’t need to wait for appraisals, underwriting, and loan doc creation which can add a month or more to the transaction timeline. Yes there are other benefits as well but these are some of the larger ones.

Is there downside to the seller accepting an all cash offer? One of the difficulties is in validating the cash itself. This is typically done with bank statements or letters from the bank stating the buyer has enough cash on hand to close the transaction. I have never seen anyone lie during this portion of the exercise but since someones finances are not being scrutinized by a third party, i.e. a Mortgage Broker, then I guess its possible to cook the books. The problem with that is they couldn’t complete the transaction and the seller would be damaged by being off the market. Again, it probably doesn’t happen often.

While it can be agreed that there are pros and cons, the real question is what is meant by “Cash is King” and what do we do with that fact if it is one? The problem I’m getting to here is that some interpret that cash gives them the power to set the market.  They are proud of the fact that they have saved this large sum of money (and so they should be) and as a result, they believe they can simply make any offer they want on a property and because its cash, the seller should accept it. There is leverage there but I’ll get to that later. The problem with this thinking, is the buyer doesn’t usually understand that the seller really doesn’t care. You see, at the closing table, the seller doesn’t care if the cashiers check comes with the buyers name on it or from a bank thru the proceeds of a loan. Either way, its all cash to the seller, and that is all they really care about. Its also all they should care about. Check my theory. Walk into a car lot and tell the Sales Manager that you are interested in that vehicle with the $32,000 MSRP price tag that has no manufacturers incentives. Now, offer him $29,000 dollars for it and see what happens. My guess is you are probably not buying that car.

So what is the real problem with the way some people think who believe they are coming to the bargaining table with leverage? The problem is as was mentioned above, that some buyers believe that cash gives them the power to set the market. Well, that simply isn’t the case in most real estate markets and in most real estate transactions. For example, in a sellers market with low inventory, if a home has an asking price of $450,000 and it’s priced competitively, then making an offer of $400,000 cash and thinking that is reasonable is simply erroneous thinking. The question to consider here is why would a logical seller accept a $50,000 discount simply because its all cash? The answer there is they won’t. So why make it? I don’t have a good answer there but please feel free to comment if you do.

So, in a tight real estate market, how can cash prove to be king? Well, its king if you use it to write a strong offer. You see, with all things being equal, if two offers come in at the same price, and one is cash and the other is financed, then yes, the all cash offer makes complete sense to accept first. Yes, it is a much stronger offer than the one that is financed and is probably the offer that the seller will accept first.

As of the timing of this blog post, homes is the Portland Oregon metropolitan areas are selling for 99% of asking price in many price points in the area. Given that fact, why would a buyer think a seller would take their offer, discounted 10% simply because its cash?

AVR20229Beaverton is the sixth largest city in Oregon with its population of 89,803 as of the last census completed in 2010. It’s located in Washington County, about 11 miles west of downtown Portland. In 2010 Money Magazine actually named Beaverton as one of the top 100 “best places to live” along with Hillsboro Oregon which sits just to the west.

The Portland Lifestyle Team recently listed this fabulous home located in the Burntwood West Subdivision which sits at the base of Cooper Mountain.AVR20231

4146 square feet with high quality finishes, this fantastic home boast 6 very spacious bedrooms and 4 full Bathrooms. Nestled onto an 8,276SF lot, it backs to a beautiful greenbelt with paved walking trail. The Gourmet Kitchen in this home is large with a huge island that holds  a flat top electric range at one end. Counter tops are both ceramic tile and granite and they sit beautifully atop gorgeous white AVR20307cabinets. The balance of the main floor is made up of a mixture of formal and informal spaces. For entertaining, enjoy the formal Living Room and formal Dining Rooms, both of which seem to have more windows than walls. These windows are covered by beautiful custom curtains that were made especially for these windows. Informal space includes the a warm and inviting Family Room adjacent to the Kitchen. Other rooms on the main are the Den, which could also be a 7th Bedroom if you so desired and one of four full Bathrooms.

Before heading upstairs lets head down to the lower level. The first room you encounter is the Media Room, already wired for sound and projection. Configure this room to your personal needs and enjoy those family movie nights is style! As you turn the corner you enter the secondary living space commonly referred to as In-Law Quarters. Here you will find two very spacious Bedrooms, a large Bonus Room or Living Room area, Dining area and full Kitchen that includes Island, Stove, built-in Microwave, AVR20350 Dishwasher and laminate floor. This is where you will also find a full size washer/dryer hookup! This living area is fully self contained. Another full Bathroom is here as well. There are two separate storage areas, one which houses one of the two forced air gas furnaces and dual hot water heaters. The other storage area is so large that it is really a full Shop inside your home!

Heading to the upper floor you come across 4 of the 6 Bedrooms. The Master Retreat is personal escape purposely designed for relaxation. The ceilings are vaulted and the room is spacious. Enjoy the sitting area where you can read your favorite book while enjoying the tranquil view or simply gaze at the cozy AVR20280gas fireplace. While continuing to wind down and relax from your busy day, you may desire to step thru the archway and into the large jetted tub where once again you may decide to absorb the view or simply watch the fire from the other side of the gas fireplace. Separate shower, dual vanities and large walk-in closet round the magnificent Master Suite out. As already mentioned, the upper floor also houses 3 addition and very large Bedrooms and the last full bath with dual vanities and separate room for the toilet, tub and shower.

There are so many amenities to this home that we simply cannot explain it well enough here.Attachment-1 When we represent our sellers we like to go beyond the the home itself to show you what surrounds it and how your lifestyle will be further enhanced by the location. The lifestyle map to the right points out just some of the many walking trails that surround this property where you can literally walk for miles. The map also points out the location of the nearest grocery stores, restaurants, popular Cooper Mountain Elementary School and Starbucks. If you have a dog, there is an amazing dog park nearby where you can let fido run to his hearts content!

This is truly an amazing property and is priced and an ultra competitive $127 per square foot! You will not find this kind of value, with this type of setting that includes the amenities and quality finishes this home has to offer. This is one you simply need to take the time to see so call us today at 503-718-8900 to arrange for a private showing of this great property!

 

 

Looking for your perfect starter home? Or are you looking to downsize? I think we have a great listing to fit your lifestyle. 173 SE 44th Way in Hillsboro is an excellent house, with modern finishes and a comfortable ambiance.Front

Located in a quiet neighborhood in Hillsboro, this location gives you the comforts of living in the suburbs and convenience of being in close proximity to the major freeways. The property is near Highway 26 making trips to downtown Portland smooth and easy.  Hillsboro also is home to Intel and Nike as well as many other large corporations. The Streets of Tanasbourne are nearby if you want to go on a quick shopping excursion. The area also has with many grocery stores, Target, banks and restaurants to enjoy.

Community features to the property include a wonderful children’s play structure perfect for little ones to run around on. It is also located in a quiet neighborhood with excellent schools close by .

Kitchen 2 This house features a one car garage and large driveway perfect for guest parking. Inside you’ll find an open concept layout that flows  very nicely. The family room features a warm fireplace perfect for entertaining or watching your favorite late night TV shows. The kitchen is a few steps away making it perfect for entertaining. Stainless steel appliances, wood countertops, and classic white cupboards make this kitchen feel pleasant and contemporary. A large dining room is found right off of the kitchen, great for weekday meals and intimate dinner parties.

Upstairs amenities include a large loft with plenty of space, 2 spacious bedrooms and a large bathroom. A vaulted master suite with on suite bathroom is an ideal retreat. The master bedroom also has a big walk in closet great for storage. Outside the house you’ll find a sizeable patio appropriate for  potted plants and small gardening.Play Structure

Thinking this home fits your lifestyle? Ready to take a private home tour? Please give us a call today at The Portland Lifestyle Team! We would be happy to help make this property yours!

If you are looking for the best of both Worlds in the Portland area, Hillsboro is the spot for you. Hillsboro is Beaverton’s next-door neighborDSC_4917. It boasts wineries, farms, and easy highway access. As Oregon’s 5th largest city, with a population of 95,327, the city is no small town. Yet, the area gives you the appeal of country living. Intel made their home in Hillsboro, and the city is close to Nike Inc. In five minutes you can drive onto Highway 26 and go right into downtown Portland for shopping and gourmet cuisine. Many wineries find their home in Hillsboro such as Abbey Creek and Oak Knoll. These attractions add to Hillsboro’s beautiful scenery. A number of Farms and Famer’s Markets also outline the area. The famous Little People Big World Farm, located in Hillsboro, has cars lined up around the corner for their annual Halloween Pumpkin Patch. Hillsboro is filled with large parks and a great school system for children. Interested in calling Hillsboro your home? Is this matching up with your Lifestyle? We have the perfect house that will knock your socks off.

DSC_4935This Spectacular house is located in the very desirable Jackson School neighborhood in Hillsboro. Stationed in a quiet cul-de-sac, this location makes for safe play and peaceful evenings. With navy blue shutters and an adorable front porch this is a dream house for those looking for something cozy and inviting. Inside you’ll find a great floor plan that is very accessible. The kitchen has been updated with stainless steel appliances, subway tile, and slab granite counter tops. New paint throughout the house and baseboard trim gives it appealing character. Upstairs are three spacious bedrooms along with a Master Suite with an on suite bathroom. A large utility room is also upstairs along with another well sized bathroom. Outside you’ll find a large retreat. A great patio makes for excellent outdoor entertaining, and a fenced yard makes the property gives you security. This house is spacious, warm and in an ideal area.  It is a modern dwelling in an area where you can stretch out and grow.

One of the things the Portland Lifestyle Team provides with all of their listings is a unique “Lifestyle Map”. It’s important that the potential buyer of this property understands what is going on around their dream home and its thru providing this map that we are able to meet that need.DSC_4956

I’m sure your asking yourself, this sounds ideal but how much is this going to cost me? You’re in luck, this house is a steal. In a great neighborhood, on a quiet cul-de-sac, with lots of space and easy freeway access this home is priced at $279,900. For that price you are getting all the great amenities of an updated house, complete with a large backyard and in a picture perfect area. Are you ready to take a look at this house?  Want to take a private tour? Call us at 503-547-7437 we would be happy to make this house your home.

 

 

The city of Lake Oswego Oregon sits just 9 miles south of Oregon’s largest city, Portland Oregon. LO as its often referred to, covers a little more than 11 square  miles and touches 3 different Oregon Counties: Clackamas, Multnomah and Washington. In 2012 the population of this mostly quiet little suburb totaled 37,243. Hmm, really not that small. Points you might find interesting here are Oswego Lake, The Marylhurst Art Gym and Mary S. Young State Recreation Area.  Believe it or not its also the home of  the Northwest Nanny Institute, so if you have the goal of becoming a professional Nanny, well this is the place you want to be and Lake Oswego real estate is what you want to see!

The Portland Lifestyle Team placed another home on the market today and it’s located right here is this popular city! Located at 1228 Hallinan Circle, this gorgeous remodeled home was built in 1968 and is AVR401701932 square feet in size. The home has 3 spacious Bedrooms and 2 full baths and sits on over 1/3 acre, adjacent to Freepons Park which is a fabulous location to take a peaceful evening stroll. The AVR40239Kitchen of this home has been completely remodeled with cherry cabinets, granite counters, glass tile backsplash, stainless appliances, gas cooking, hardwood floors and a very cool “farmers” sink. A second eating area sits at one end providing that comfortable, Breakfast Nook experience. Sitting next to this designer Kitchen is the bright, light filled Living Room, Dining Room combination. Expansive hardwood floors give what is really the entire main level that feel of quality. Picture yourself relaxing in this area of the home, enjoying the gas fireplace while you gaze out the picture window into the “park-like” backyard.

This home is a functional tri-level which is basically a half flight up and a half flight down from the large, hardwood Entry. The upper section is where you find those 3 spacious Bedrooms and large full bath boasting a lengthy tile counter which holds 2 separate sinks.

A half flight down from the main level is a huge 12 X 24 Family Room that is outfitted with a warm gas fireplace, laminate flooring and a sliding door taking you to a covered patio area, wired for that small hot tub that you can run down and pick up AVR40262from Costco. Additional features of this lower level is the “Spa” Bathroom with tile floor, granite counter, jetted tub with beautiful tile surround. And don’t for a moment believe you will be cold as you exit the tub because there will be warm towel awaiting you which was prepared on the heated towel rack attached to the wall. I’m telling you, you are going to love it! Right outside this magnificent spa Bathroom is a large Utility Room that gives you enough space to wash, iron and hang clothes, leaving room to spare. Image 1-16-14 at 12.17 PM

The back yard is AMAZING! You will enjoy your warm summer Bar-B-Ques on the expansive deck that overlooks this wonderful backyard. There is so much room here you won’t know what to do with yourself. Do you want a large vegetable garden? Well there is more than enough room here for it. Maybe you want to sit by your very own fire pit while you soak in a starry night, well thats here also!

One of the things the Portland Lifestyle Team provides with all of their listings is a unique “Lifestyle Map”. It’s important that the potential buyer of this property understands what is going on around their dream home and its thru providing this map that we are able to meet that need.

So now you are wondering, “how much?” Well sit down and get prepared! This fantastic property, located in sought after Lake Oswego Oregon is being offered at $425,000! Give us a call at 503-718-8900 to schedule a private showing! We would love to demonstrate our Red Carpet Service and make your next home purchase one you will never forget!

 

When the real estate market tanked beginning in 2007,  many homeowners found themselves underwater with their mortgages. The first wave was the infamous “bad loans” that were typically adjustable rate mortgages which started very low but quickly adjusted up making payments a huge burden for many homeowners. Confronted with high mortgageScreen Shot 2014-01-15 at 9.17.50 PM payments and declining home values, many people were caught in stressful situations wondering how they would continue to make their mortgage obligations. The second wave hit in 2010, the result of the downturn in the economy and resulting job losses. It can be difficult to make your house payment when you have lost your job.

As a result of this tidal wave sized shift, many homeowners had no alternative but to look for a way to get out of their home. With foreclosure staring them in the eye, the only real option they had if they didn’t want to wreak havoc on their long term financial status, was to attempt a Short Sale of their property.

With the execution of a short sale, a restructure of mortgage debt or even foreclosure, comes something known as debt forgiveness.  Basically in a short sale, the banks is agreeing to settle for less than what is owed when a home closes escrow. From an IRS point of view, debt forgiveness of this nature is also viewed as income to the seller. After all, the bank is writing off the debt and the seller is no longer responsible, as long as the bank does not take recourse against them. The size of these shortfalls in some cases were huge. One short sale I facilitated in 2010 saw the bank forgiving over $200,000. Without the Mortgage Forgiveness Debt Relief Act, that $200,000 was taxable income which if you had lost your job, became an obligation many had no ability to pay. The original act was to last 3 years and expire in 2009. As we all certainly remember, the economic chaos continued for quit some time and as home values continued to decrease nationwide, more and more people found themselves caught in this destructive tornado. To ease the nations pain, Congress decided to extend the expiration of the Act 3 more times.

So here is the rub. The last extension was to January 1st 2014. As of this moment, the Debt Forgiveness Act has not been extended for a 4th time, so debt forgiveness from the point of view of the IRS, is no longer. What does that mean to a homeowner closing the sale of their home tomorrow where the bank may be agreeing to accept $50,000 less than what is owed? What it matter of fact means is when they file their 2014 retun next year, they will then have a $50,000 gain to account for in their income taxes. Many of todays sellers may not understand that and find themselves in a difficult predicament when they get to that moment.

Will the Act get extended for a 4th time? Today that is an unknown. The topic is being discussed in Washington but the energy is not what it once was. That may be because we are now seeing home values go up in many areas of the country.  Home appreciation in Portland Oregon as an example has been 12.7% over the past 12 months, according to S&P/Case Shiller. If you are in this situation today, hopefully your Realtor is encouraging you to check with your Accountant to see what impacts you should expect.

 

 

Oregon is becoming a hotspot for those looking to settle down and was the number 1 destination for people moving between states last year. According to a CNN Money article “More than 61% of all interstate moves made in Oregon were for people coming to live in the state.” Oregon even surpassed Washington D.C. to take the top spot. The major reason for the shift isn’t necessarily about jobs or weather but about the Portland Lifestyle. Oregon and Portland in particular, offer a laid back, environmentally friendly, active way of life. Our state offers great scenery, affordable public transportation, an emphasis on living green as well as delicious restaurants and a vibrant nightlife. Portland is becoming the city for millennials wanting to be a part of the “Portlandia” vibe (yes, it’s also where young people go to retire!) and baby boomers looking to slow down.  A booming wine industry, tons of recreational activities and beautiful scenic areas add to the appeal of Portland and the Portland Lifestyle. The lower cost of Portland real estate and living in Portland vs. Los Angles or San Francisco is also an advantage to living in the area. “The median price for a single-family home in Portland, for example, is $265,000 according to RMLS. In San Francisco, it’s $881,000 and in Los Angeles, $481,000 according to Zillow” CNN Money.

What does this mean for the housing industry? Well first, it is attracting more potential buyers to the Portland area. This means it is a great market for sellers because of a multitude of buyers combined with a lower supply. While this does mean there is more competition for buyers this also tells us now is the right time to buy. With more people settling down here now, the numbers are only going to increase as time goes on. Whether you are looking to list your home or are a first time buyer who wants to become a home owner, please give us a call or shoot us an email here at the Portland Lifestyle Team. If you are out of state and wanting to look for a home in Portland, we would be happy to give you more information on housing in the area. We are happy to assist you finding YOUR Portland Lifestyle!

Merry Christmas!

From,

The Portland Lifestyle Team

IMG_2685Portland Oregon has a population of more than 600,000 people with total households exceeding 250,000. Its a city with a homeownership rate exceeding 64% which brings us to approximately number 42 of the top 75 cities in the Untied States. And its an active real estate market also. So far in 2013, the greater Portland area has transacted more than 1830 residential homes and condominium units which is about 16% higher than we saw in 2011. Things are getting better, but that isn’t really what this blog post is about.

Yes, Portland is a beautiful and livable city and ranks high as a sought after place to live. However we have our issues as well, just as any city does. For instance, our unemployment rate is currently running around 6.5%, about .5% below the national average. After all, the TV show Portlandia which runs on the Independent Film Channel calls Portland the city where young people come to retire. What goes hand in hand with higher unemployment levels, under employment, the high cost of food, utilities, gas, rent and other contributing factors is hunger. People on fixed incomes have to make choices and in typical situations having a roof over your head and gas in the car can many times come before putting food on the table. IMG_2691Thus the need for emergency food that the Oregon Food Bank distributes annually with over 1 million food boxes throughout Oregon and Southwest Washington. These boxes feed over 270,000 people, of which 92,000 are children. What is further staggering is that food box distribution has grown by 41% since the beginning of the great recession of 2008!

The Portland Lifestyle Team went into the Christmas season this year looking for a way to give back to our community. Realtors in Portland Oregon have largely been know for giving back. Giving back can come in many forms and while it is easy at times to simply write a check, sometimes giving back with your time can be even more valuable and rewarding. Today the whole team took their afternoon, away from what is really a pretty busy real estate market, and we refocused our time and attention to packing food boxes at the Oregon Food Bank facility in Beaverton Oregon. In the Food Banks own words, volunteers are critical to the OFB’s mission to eliminate hunger and its root causes. IMG_2703The time spent was amazing and fulfilling. The 3 hour shift went by as if it were minutes and collectively as a larger team, we packaged over 16,000 pounds of food which accounted for almost 14,000 meals for hungry families. Not a bad job for 3 hours! And, not that we need to be competitive, but these numbers were about 40% higher than the morning shift today!

So as we navigate the remainder of this holiday season, remember that while many of us are pushing our way thru the mall, looking for that perfect present that Uncle Frank really doesn’t need, that there are hungry people out there. In the words of the immortal Forrest Gump, “Thats all I have to say about that”.

The Portland real estate market has slowed a bit but is still much stronger than it was in 2012. The number of homes sold dropped 16.8% from October (2,189 sold) to November (1,821 sold) this year. That being said, it was the best November for closed sales since 2006!

Pending sales were down as well (-14% from October) and the number of new listings dropped (-22.1% from October). The good news here is that both of these figures were up when compared to November of 2012.

The number of active listings fell to 6,751 leaving us an inventory of approximately 3.7 months. As a reminder, the inventory number is calculated by taking the current number of homes on the market times the current rate of sales. Assuming no new homes come on the market, we would run out of inventory in 3.7 months.

Year to date the number of sold and closed homes has increased 15.4%, with a total of 24,872 homes sold through November of 2013.

The average sales price for the year stands at $310,800 which is 13.5% higher than the same time period in 2012! Almost all parts of the Portland-metro area have double-digit gains in average sales price. Here is a breakdown of some of them:

MLS AREA           Price Change

N PDX                          + 15%

SE PDX                        + 16.2%

Gresham                      + 13.9%

Lake Oswego               + 12.7%

Beaverton                    + 17.8%

Wilsonville                  + 11.3%

 

The Portland Lifestyle Team is a cutting edge real estate company in the greater Portland area real estate market. Our 5-star customer service is provided through our systems, quality and professionalism.