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Dave Sutton, Windermere Portland

Making people outrageously happy with their home sale or purchase

By Dave Sutton, Windermere, Portland | Broker in Portland, OR
  • Buying More Affordable than Renting in 98 of 100 largest US Metro areas

    Posted Under: Home Buying in Portland, Financing in Portland, Rental Basics in Portland  |  March 24, 2012 3:10 PM  |  1,186 views  |  No comments
    You read it right.  Accordng to Trulia's Rent vs. Buy index, buying is now more affordable than renting in 98 of the nation'largest metropolitan areas - even New York, LA and Boston.

    Read the whole story here and let me show you how that's true in Portland, OR.
  • FHA Loan Limits Drop 10/31 - Unless Congress Acts

    Posted Under: Home Buying in Oregon, Financing in Oregon  |  September 16, 2011 4:26 PM  |  1,719 views  |  1 comment
    FHA loans are about half of the home loans made today. The current FHA loan limits have been in place since February of 2008, when Congress set them as part of the Emergency Stimulus Act.  Housing conditions have not improved enough to warrant letting the limits drop. The FHA loan limits for Oregon counties, and how they will change, are in my blog post here
  • If Now is Not the Time to Buy a Home, When Is?

    Posted Under: Market Conditions, Home Buying, Financing  |  August 19, 2011 12:14 PM  |  1,717 views  |  No comments
    In 2006, monthly payments to buy the median priced home in Portland (with 20% down) were $1,733 

     
    Today, the payment would be just a smidgeon over HALF of that - $879.  Why is that?  There are two factors: 1) the median price of a Portland home is now $220,000, down from $342.700 in 2006, and 2) mortgage rates have dropped dramatically as well (4.537% APR as I write, down from 6.650% APR in 2006).

    I remember when 6.5% was considered a pretty good mortgage rate.  For a year by year chart of how payments drop as rates and prices go down, read my full blog post here
  • Home Prices to Rise 10% in 12 months? Where? Says Who?

    Posted Under: General Area in Oregon, Market Conditions in Oregon, Home Buying in Oregon  |  August 10, 2011 2:52 PM  |  1,821 views  |  No comments
    "Seattle and Portland's prices are expected to stay flat through next March and then record double-digit gains of just over 10% each over the following 12 months."

    That's from David Stiff, chief economist for Fiserv, which provides information management and analyses data for the financial services industry.

    Read more in my blog here
  • How Many Mortgage Applications Actually get Denied?

    Posted Under: Home Buying in Oregon, Financing in Oregon  |  June 24, 2011 5:12 PM  |  1,909 views  |  No comments
    The Wall Street Journal recently took a look at the denial rate of the 10 largest mortgage lenders. 

    It may surprise you, and it's not enough that anyone renting should be scared away from buying.

    The answers, along with a link to the Wall Street Journal, and some good information for helping people make the rent/buy decision are here
  • Work with the Agent On Site for a New Home Purchase? Three Reasons Why Not.

    Posted Under: Home Buying, Financing, How To...  |  May 30, 2011 11:44 AM  |  1,757 views  |  No comments

    You've seen the ads for this great new home development  promising a discounted mortgage rate and $25,000 in free upgrades.  "Gee, honey, this looks like a terrific and really easy way to buy a home.   Let's go today"

    What could possibly be wrong with that?

    1)   Most important is that the agent who will greet you and sell you that home, represents the seller (in this case the builder or developer).  Anyone buying real estate should be represented by an agent who is contractually bound to the buyer, not the seller.

    If the District Attorney charges you with a crime, you wouldn't want someone from the DA's office representing you. You'd hire an attorney to be on your side. Same idea with real estate agents, only to continue the analogy the DA's office would pay for your attorney.

    That's the way it generally works in real estate. The seller pays the seller's agent a commission (say, 6%), and that agent is contractually bound to split that commission (almost always) 50/50 with the buyer's agent. No cost to the buyer to have professional assistance and representation because the seller pays.

    2) The builder may indeed be able to offer what appears to be a "below market" mortgage rate.  There are two reasons why you should talk with a local mortgage broker or a bank mortgage officer.  

    First, they may be able to match or beat what the builder presents as a "below market" rate. 

    Second, if it is truly below market, then the seller is probably paying the bank an up-front fee to lower the rate.  Nothing wrong with that and sometimes individual sellers do the same.  It's called "buying down the rate".  The issue here is that the builder is not in business to lose money, so the money to buy down the rate has to come from somewhere, and it's most likely an inflated purchase price for the home.

    3) "$25,000 in free upgrades" Remember who sets the price of the home in the first place, the builder.   So if the home price is really at fair market value, where would the cost of the “free upgrades" come from?  Or could it be an inflated price?  Could the $25,000 already be in the purchase price of the home?

    Don't even look at the model home without your Realtor! Your best protection against any of these is always a local Realtor serving as your buyer's agent. If the very first time you go to see the models (and they will require you to register) you go with your Realtor, the builder will pay that Realtor's commission to represent you, just like any other home sale.  If you register first without a Realtor, they will not and you are stuck with the DA's attorney on your side of the table.

  • What is a "Short Sale? What is an "REO"?

    Posted Under: Home Buying, Home Selling, Foreclosure  |  May 8, 2011 4:45 PM  |  1,820 views  |  No comments

     A Short Sale is the result of two things:  1) the seller is unable to continue making the mortgage payments, and 2) the home will sell for less than the amount due on the mortgage(s) (so the sale proceeds will be "short" of paying the mortgage).   When a home is listed for short sale, the lender has the right to approve the terms of the sale, since they will be losing the difference between the amount owed on the mortgage and the net proceeds of the sale.   

    That is only important to a buyer because lenders typically take several weeks, and several months is not unusual, to respond.  Six months is my longest personal short sale experience.   Their response is not always "What a generous offer.  We accept".  They may reject an offer outright or may make a counter offer.  If they do make a counter, it is generally non-negotiable, so the buyer can take it or leave it. So it’s possible to make an offer, sit in limbo for six months and then find out you’re back to square one. 

    A short sale differs from a bank owned sale (known as an REO - an acronym for the entry on the bank's financial statements - Real Estate Owned).  An REO means the lender has completed the foreclosure process and now owns the home outright. Those proceed mostly like any other sale, and mostly in a timely fashion. 
     
    Many people think they can buy foreclosures at substantial discounts from what a market price would dictate.  That is not true. Bank owned homes may sell for, or above "market" price.  Depending on the market they may also sell for as much as a five per cent discount, but not generally more, if that.  
     
    Stories you hear of substantial discounts usually neglect to include that the condition of the home is substantially worse than similar sized homes on the market, so they are not really "comparable" homes.  Cash buyers can usually buy at 5-10% below list price (bank-owned or private), because a seller values the fact that a buyer’s loan approval (or complications with) will not cancel the sale. 

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