Portland Real Estate

What's the difference between a jumbo loan and a conventional loan?

What's the difference between a jumbo loan and a conventional loan?

The major difference between a conventional loan and a jumbo loan is that conventional loans are limited to dollar amount set by Fannie Mae; Jumbo loans are loans of any amount above that limit. See below for more details...

Conventional Loans

Conventional loans are probably the most common type of mortgage loan. Conventional loan qualification is determined based on income, employment history, debt, and credit score. There are also conventional loan limits. In Oregon, it is currently $484,350 in most areas. Generally, conventional loans require at least a 3-5% down payment. Additionally, if your down payment is less than 20%, you will be required to pay private mortgage insurance (PMI) until you reach at least 20% equity. PMI insures the lender in case of default. Once you reach 80% equity, the PMI goes away.

Jumbo Loans

Jumbo loans are very similar to conventional loans but the criteria for qualifying is stricter because they don’t have the loan limits that conventional mortgages do. In Oregon, any loan over $484,350 is considered a “jumbo” loan. Qualification for a jumbo loan uses the same criteria as conventional loans, but usually requires a higher down payment, income, and credit score due to the higher amount of money being loaned.

Have more questions, or want a referral to a good lender? Contact us, and we’ll be happy to help you!

 

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How to choose the right seller's agent

In a previous post, we talked about how to choose the right buyer’s agent by doing your research and assessing important factors like communication style, knowledge, and negotiation skills. In addition to that advice, we’ve compiled additional tips to help you choose the right listing seller’s agent.

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When choosing a seller’s agent, consider the following:

  • The CMA (Comparative Market Analysis): Does the value of your home seem accurate based on current market conditions, and are the comparable properties used to determine value located in the same neighborhood?

Beware of agents that give you a much higher market value than similar comparable properties and that other agents you’re interviewing have given. This could mean they are just telling you what you want to hear to earn your business, and your home won’t actually sell for that amount. Additionally, overpricing when you first list your home for sale can keep your home on the market longer, and still won’t sell for the asking price. 

  • Marketing Strategy: How does the agent plan on marketing your home? Is this in line with your goals? Is there something specific you want in the marketing plan that you’re not seeing? If so, ask if the agent can add it.

Marketing is more important to some than to others. If you have a specific vision for marketing your home to potential buyers (or, conversely, you want very little marketing), make sure you’re on board with the marketing strategy your real estate agents plans to use.

  • Commission Amount, and Split: How much commission will you be charged? What are you getting for this fee? How is the commission split between your agent and the buyer’s agent?

Often times, agents that charge very minimal commissions do very little to represent you. For instance, an agent may only charge 3.5% to a seller, where 2.5% is going to the buyer’s agent commission and they are only taking 1%. Be sure to ask exactly what this agent will be doing for this commission. Often times, these agents will only be facilitating paperwork – not hiring a photographer, doing marketing, or negotiating on your behalf.

Have more questions? Contact us! We're happy to offer expert advice on selling your home.

 

Follow our Facebook events page, or visit our Instagram or Twitter feeds to see the most current open house updates and details.

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How to choose the right buyer's agent

Many first-time home buyers aren’t sure how to choose a real estate agent. The process can seem overwhelming with the thousands of choices available. We’ve gathered together some “insider” tips below to help you choose the right real estate agent.

Do Some Research:

  • Check the agent’s license standing through the state real estate agency. Here is Oregon’s Licensee Lookup.
  • Read reviews from former clients or ask for references.
  • Interview your top 2 or 3 picks.

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Things to Consider:

  • Does the agent’s communication style work well with yours?

Communication is imperative to any good relationship, and your real estate agent is no exception. You want to make sure that your communication styles work well together in order to avoid misunderstandings.

  • Is the agent knowledgeable about the local market (including your specific neighborhood)?

This is imperative. Your real estate agent needs to understand not only the market in your general area, but specifically in the neighborhoods you’re looking to buy. Having knowledge of the homes in specific neighborhoods means that the agent will be better able to negotiate on your behalf, knowing what previous homes in the neighborhood have sold for and how they compare to the home you’re interested in.

  • Does the agent possess good negotiation skills?

Your agent should have knowledge of the specific market that you’re buying in. Your agent should be able to use this knowledge to negotiate skillfully on your behalf. Alternately, you don’t want someone that doesn’t negotiate with respect and fairness, because it could cost you the home of your dreams, or the ideal buyer.

  • Is the agent working alone, or with a team? Who will you be working with directly?

This is one question most people don’t consider. A lot of agents work with a partner or a team of people, and clients can be surprised when the majority of the communication comes from someone other than the agent they interviewed. Sometimes this can be a great thing – more people means more attention to detail, but sometimes it can be a disappointment if you prefer dealing with only one person.

Have more questions, or want expert advice on buying a home? Contact us, and we’ll be happy to help you!

 

Follow our Facebook events page, or visit our Instagram or Twitter feeds to see the most current open house updates and details.

Join us on Tuesdays at 1pm PST for our "Dear Claire" Facebook Live series. Subscribe to our YouTube channel today to help us reach our goal of 100 subscribers.

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Pros and Cons of Tiny Homes

Pros of living in a tiny home:

  1. Tiny homes are less expensive.

Tiny homes are much less expensive than traditional homes, starting at about $25,000. Of course, this does not account for the cost of land to place your tiny house, which would need to be leased or purchased as well.

  1. Tiny homes use less energy.

Tiny houses are generally about 100-400 square feet. Less space means less energy usage. Additionally, since only 1-2 people can live in a tiny house comfortably, this means modest water, sewer, and garbage waste. This will also bring your utility expenses down.

  1. Tiny homes can be mobile.

Since tiny homes are so small and are usually built with wheels, they are easily transportable. That means if you decide you want to move somewhere else, it’s relatively easy to move your house with you.

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Cons of living in a tiny home:

  1. Zoning laws may restrict where you can place a tiny home.

Depending on your area, there are restrictions to where you can or can’t put a tiny home. Since most tiny houses are considered vehicles rather than residences, it can be tricky to find land to permanently place your tiny home.

  1. Tiny houses have little, if any, storage space.

Since tiny houses are so small there isn’t much storage space. If you’re not used to such a confined space, or are hoping to downsize, you’ll probably have to get rid of many of your belongings or rent a storage unit for them (which can be expensive).

  1. There’s no room for entertaining in your tiny house.

Again, since tiny homes have very little square footage, it’s difficult to have more than 1-2 people in one at the same time. This highly limits your ability to host any indoor gatherings or even host a small dinner.

  1. You can’t finance a tiny home with a mortgage if it’s mobile.

Traditional mortgage financing is not available for tiny homes that are movable because they are considered “recreational vehicles”. This means if you don’t have the cash to purchase one, you’ll likely need to take out a personal loan or an RV loan at a higher interest rate.

One way to own a tiny home without so many restrictions is to have it built on a foundation on land that you own or purchase. There is usually a minimum size requirement for homes built this way (depending on your area) but it may be the best option for those who desire a tiny home and aren’t concerned with mobility. Another upside to this option is that it could also make your tiny house eligible for a traditional home mortgage, or allow it to qualify as an ADU (additional dwelling unit) on your current property.

Still have more questions about tiny homes, or want to know your options for buying one? Contact us

 

Follow our Facebook events page, or visit our Instagram or Twitter feeds to see the most current open house updates and details.

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Real Estate for Retirement

There are several ways to use real estate to your advantage if you’re starting to think about retiring, even if you’re years away. Here are three great options to consider:

1.    Downsize your home.

One of the simplest ways to save for retirement is to downsize from your current home to a smaller one. Doing this will increase your savings, lower your utility bills, and could reduce or eliminate monthly mortgage payments. If you don’t need all of the space in your current house, this is a great option.

2.    Invest in a rental property.

Another way to use real estate for retirement is by investing in a rental property. You’ll receive monthly income from renters and can potentially make a large profit once you decide to sell it. Additionally, if you invest while you’re still working and making an active income, it can serve as a tax shelter and eventually provide passive income after you retire. Rental income is also a good way to reduce debt over the long-term. Of course, this option should only be considered as a long-term investment in order to avoid any short-term tax repercussions or a fluctuating real estate market.  

3.    Rent out extra space.

If you have extra space, especially if it’s an ADU (additional dwelling unit), there are many ways to make additional income for retirement. You can rent it out short-term through sites like Airbnb.com or lease it out to tenants for longer periods of time. This is a great way to increase income and savings.  

If you’d like more information on any of these options, please Contact us! We’re happy to help explain your options. 

 

Follow our Facebook events page, or visit our Instagram or Twitter feeds to see the most current open house updates and details.

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Property Tax Appeals

The statewide average of error on assessed property value is a whopping 11%! This means you may be paying more property taxes than necessary on your home.

Why is there such a high percentage of error? Multnomah, Clackamas, and Washington counties have dedicated staff that search through home listings looking for recently-improved properties in order to raise assessed values and collect more taxes. Typically, they are looking for “assumed remodels.” When they find an assumed remodel, they will look at the final occupancy permit (issued by the contractor once the remodel is complete and the home is move-in ready) for the increased value of the property. Unfortunately, remodeling contractors will often erroneously include costs on the final occupancy permit that are not associated with home value, such as dumpster rentals, porta-potty rentals, or remodeling materials. If you are remodeling your home, make sure to ask the contractor not to include these costs on the occupancy permit.

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When you get your tax bill in November, look over it carefully to make sure the numbers are accurate. Check to see if an increased assessed value is correct and not due to any sort of “maintenance improvement”. For example, new paint or carpet, a roof replacement, or new furnace should not count as added value. What should be included as added value are structural changes like a bedroom addition, a kitchen/bath remodel, or finishing a basement. If you find errors in your assessed value, you have one year to contest it, and can only argue one year’s worth of taxes (unless the increase is 20% over the market value, in which case you can contest the past two years of taxes).

How do you contest your home’s assessed value? The best way to appeal your assessed value is by using comparable (similar) properties in your neighborhood that are more representative of your property’s current value. Have this information prepared and outlined before your scheduled hearing because you will only have 10-15 minutes to make your case. Make sure your evidence is strong and to the point! In all cases, the property assessor is assumed correct unless you can prove otherwise. And, of course, reach out to us if you have questions! We have great professionals that can help you contest your property taxes.

 

For more information, check out our "Dear Claire" Facebook Live series.

 Subscribe to our YouTube channel today to help us reach our goal of 100 subscribers.

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Preparing for Tax Season

Tax season is upon us! If you're gathering all your documents together to file your taxes, you're not alone. We've compiled a list of documents you'll need for you or your tax preparer to file this year:

  • Your W-2 or 1099 from your employer.
  • A copy of your property tax bill for 2018.
  • 1099s from all your mortgage holders (lenders). Remember, mortgage interest is deductible for up to $750,000 in mortgage loans. 
  • A copy of your settlement statement for any property bought or sold in 2018. There may be other deductions here!

 

For more information, check out our "Dear Claire" Facebook Live series.

 Subscribe to our YouTube channel today to help us reach our goal of 100 subscribers.

Follow our Facebook events page, or visit our Instagram or Twitter feeds to see the most current open house updates and details.

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Home Ownership: Your First Year

10 Things to Remember During Your First Year of Home Ownership

  1. Hire a locksmith to change your locks.
  2. Switch all utilities (electric, gas, water/sewer, garbage, cable/internet, etc.) into your name as of your move-in date.
  3. Be sure to change your address with the post office and anyone you receive bills from (bank, credit card companies, student loans, etc.). USPS will forward mail to your new address for up to 6 months.
  4. Make note of where all your shut-off valves and electric panel are in your new home.
  5. Change all smoke detector and carbon monoxide detector batteries.

  6. Have your heating, air conditioning, and all major appliances serviced if not done recently. And be sure to change your furnace air filter regularly!
  7. Hire a yard care company, or purchase any yard care tools you may need for each season (including lawn mower, weed-wacker, shovel, etc.).
  8. Check and clean your gutters as needed.
  9. Check and clean your dryer vent regularly.
  10. Winterize your home during cold months by disconnecting and insulating outdoor faucets.

Want more home maintenance tips? Contact us, or check out our YouTube channel series on 5-minute home maintenance throughout the year!

 

Follow our Facebook events page, or visit our Instagram or Twitter feeds to see the most current open house updates and details.

Join us on Tuesdays at 1pm PST for our "Dear Claire" Facebook Live series. Subscribe to our YouTube channel today to help us reach our goal of 100 subscribers.

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Portland Real Estate Market Stats November 2018

According to the latest real estate statistics from RMLS,  the Portland metro area saw a decrease in average home sale price, down to $448,900. Median sale price in the Portland metro area also went down, to $391,400. The number of days homes are on the market increased by 4, now up to 57 days. This indicates that prices are slowly decreasing and inventory is slowly increasing. 

Wondering what this means for you? Contact us

 

Follow our Facebook events page, or visit our Instagram or Twitter feeds to see the most current open house updates and details.

Join us on Tuesdays at 1pm PST for our "Dear Claire" Facebook Live series. Subscribe to our YouTube channel today to help us reach our goal of 100 subscribers.

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Winter Home Maintenance List

Here’s our checklist of home maintenance tips to give you a jump start on Winter and keep your home in tip-top shape. And be sure to check the rules in your city or town to see what homeowners are responsible for during snowy days!

Safety Maintenance:

  • Rake and compost fallen leaves to prevent slips.
  • Check and repair entry stairs and railing.
  • Inspect and replace outdoor lighting.
  • Shovel snow and add salt to walkways as needed*.

*Note: In Portland, the sidewalk in front of your property is considered homeowner responsibility. In other words, if someone were to slip and fall due to unmoved snow, the homeowner would be held responsible, not the city.

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Exterior Home Maintenance:

  • Seal any cracks in walls or foundation.
  • Update or repair weather-stripping.
  • Clean leaves and debris from gutters.
  • Cover and insulate hose bibs.
  • Protect or move outdoor furniture.
  • Remove and clean window screens.
  • Cover air conditioner.
  • Store seasonal yard tools.

Interior Home Maintenance:

  • Protect indoor flooring by adding an interior entry mat to collect outdoor water and debris.
  • Check and replace smoke and carbon monoxide detector batteries.
  • Have your fireplace inspected and cleaned.
  • Check and repair attic insulation if needed.
  • Check and repair caulking around doors and windows.
  • Insulate pipes near windows and doors, or other unheated areas.
  • Reverse ceiling fan to turn clockwise (this pushes heated air down, as opposed to up).
  • Keep the thermostat at 55 degrees or higher when away from your home to prevent pipes from freezing.

 

Want more home maintenance tips? Contact us, or check out our YouTube channel series on 5-minute home maintenance throughout the year!

 

Follow our Facebook events page, or visit our Instagram or Twitter feeds to see the most current open house updates and details.

Join us on Tuesdays at 1pm PST for our "Dear Claire" Facebook Live series. Subscribe to our YouTube channel today to help us reach our goal of 100 subscribers.

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