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Eugene and Springfield area Real Estate

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What Does Brexit Mean for the U.S. Housing Market?

by Galand Haas

Good Morning!

Over the last few days I have been asked frequently about what effect the economic situation in Europe is going to have on the U.S. housing market.  The gut reaction of the UK leaving the EU is that the stock market here in the U.S. has responded negatively.  This in turn puts pressure on the Fed to continue the current pattern of holding low interest rates and to put any near future rate increases on the back burner.  We may see some immediate reductions in mortgage interest rates as a result, but the sure thing for now is that mortgage rates most likley will not change much until the dust settles in Europe and the economy picks up some momentum here at home.  If other European countries follow the UK, then it could all change.  The reality is that we still have a a economy here at home and with worldwide economic turmoil, mortgage rates may remain low longer than anyone anticipated.

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

1615 Taney St

Price: $299,000    Beds: 4    Baths: 2    ス Baths: 1    Sq Ft: 1913

Brand new home! Great quality construction with plaster finished walls, maple hardwood & porcelain tile floor, hickory cabinets, granite counters, 9 ft ceiling, LED dimming lights, 3 skylights one of which opens. Great room layout with gas fireplace...View Home for Sale >>


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Good Monday Morning!

Today while the inventory of homes is low, I see buyers panic buying at times.  This does not always lead to the buyer getting the best house or even a house that will meet their needs.  If you are in the market for a home, take your time.  This might mean missing out on a few homes, but in the long run your patience will pay off.  Also, know what you are lookng for and think the process out.  Here is a checklist of things to think about when choosing a home.

If you're in the process of buying a house or are getting ready to, you may be overwhelmed by all the possibilities - and all the details. It can be easy to lose sight of some of the things that are important to you when you're seduced by pretty countertops or kids playing out on the street. Making a checklist of those must-haves will help keep you on track.

Is the bedroom count and general floorplan workable? You may be tempted by a house that's nicely staged and has that elegant-yet-warm feel you want. But look beyond the furnishings to make sure what you need is what the house has.

Is there a place for your dogs to hang out? And is there a place for the dog bowls to go? This only seems like a little thing until you're moved in and are constantly tripping over their food. When the dogs are part of your life, you'll want the house to accommodate them, and you.

Is there a place for your kitchen garbage can? See above. This "little thing" will drive you crazy. Is it enough to keep you out of the home? Probably not, but it's worth noting for situations where you can't decide between a couple of homes. It might be the little things that make the difference.

What direction does the house face? Facing west is great when it means you get to watch the sunset every day. It's not so great when it means your electric bill costs as much as your mortgage from May to September because your air conditioning is running 24–7.

Where are the structural walls? If you're planning an extensive renovation, it might be a good idea to bring in an engineer to make sure the walls you want to remove won't bring the house down.

Is there enough pantry space? A poor kitchen layout, and one that isn't easily remedied by a renovation, is a deal killer for many people.

What shape is the floor in? Look carefully. Replacing floors can be a big and expensive undertaking. Even if you have an inspection and the floors are in decent condition, they may not match your style. It'll be up to you to decide if you can live with them.

Where's the nearest Target? If location is important to you and the house you're looking at is over the mountain and through the woods, think hard about what you're willing to compromise. It might be that you start to hate being so far removed from amenities once the shine of a new house has worn off.

Where is the nearest Starbucks? Not a coffee drinker? Doesn't matter. The "Starbucks Effect" means higher home appreciation if you live within proximity.

Is there an HOA? This is important to know if you're looking to paint your home purple and display your collection of flamingos on the lawn.

How are the schools? Even if you don't have kids and never plan to, a good school district is important to home values. Pay special attention to the possibility of being rezoned. This happens quite often in growing areas, and, while you won't always know what's going to happen in the future, impacted schools and districts and chatter about coming changes might give you reason to pause.

What are the acoustics like? If there's a ridiculous echo coming from the upstairs bonus room, think about what that's going to sound like with two young kids playing.

Is the wiring what you need? If you need your home to accommodate all the latest technology, you may have some extensive rewiring to do. Checking it out before you buy will help you feel confident you can achieve your goals.

How's the yard space? Too little, or too much, space can make the day-to-day living less than ideal.

What's the neighborhood makeup? Seeing a lot of young couples on the street? Or maybe it's mainly older couples you're seeing. Spending a little time in your neighborhood you're considering can tell you a lot about who your neighbors could be, and whether you'll fit in.

Are there sex offenders nearby? Unfortunately, checking to make sure the people around you are decent is a reality today. Family Watchdog allows you to enter an address and see if there are any sex offenders in the area.

Did you schedule an inspection? You may be tempted to buy a home as is, especially in a hot market, but if you forgo an inspection, you'll be on the hook for any issues that arise with the home down the line.

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

1471 Barrington Ave

Price: $575,000    Beds: 5    Baths: 3    Sq Ft: 3756

Luxurious and grand! Great room with surround sound speakers, Brazilain cherry hardwood floor & gas fireplace. Huge theater/bonus room prewired for surround sound. Open kitchen with cherry stained cabinets, island, LED under & above cabinets & toe k...
View Home for Sale >>


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This Month in Real Estate June 2016

by Galand Haas

Good Monday Morning!

The good times just keep rolling!  Yes, the home sales market in the Eugene and Springfield area remains hot and at this point in time there is no sign of change.  For those of us who have been involved in the Real Estate world for a number of years, we know that change is on the way.  We just don't know when.  As I told a client last week, in the Eugene and Springfield area you can go to bed one night and the market is hot and wake up the next morning to a cold market.  It sometimes is like somebody just turned off the switch.  This is why I am still advising anyone who is considering the sale of their home to do it now and don't wait until we hit a downturn.  The inventory of homes remains low and there are plenty of buyers out there looking and ready to buy.

Have An Awesome Week!


Video Link: http://eugeneoregonhomesforsale.com/video/This-Month-in-Real-Estate-June-2016

THIS WEEKS HOT HOME LISTING!

2484 Crowther Drive

Price: $310,000    Beds: 3    Baths: 2    Partial Baths: 1    Sq Ft: 1911

This Heitman Custom Home has been beautifully maintained and offers wonderful amenities and details. Some of the features include crown molding, tray and vaulted ceilings, wainscoting, custom cabinets, hardwood and tile floors, granite and abundant ...
View Home for Sale >>


AND HERE'S YOUR MONDAY MORNING COFFEE!!

This Month in Eugene and Springfield Real Estate May 2016

by Galand Haas

Good Monday Morning!

Both locally and nationally, the housing market continues to improve.  Home sales continue to increase and home values are on the rise as well.  Most of this demand is being fueled by mortgage interest rates that are at historic low levels.  Home affordability is what dictates market activity and when home prices dropped significantly during the Great Recession, they met up with extremely low mortgage interest rates.  As the economy began to recover, the housing market has led the way due to lower home values and low financing costs.  The result of the robust housing market is now driving home prices upwards and as home prices increase, affordability diminishes.  This is why for both home buyers and home sellers you want to take advatage of this current market.  In the near future, mortgage rates are going to increase and this is going meet with higher home prices, which will effect home affordability even more.  The result of this will of course will be less demand and we start the cycle all over again. At this time though, buyers should enjoy great mortgage interest rates and take advantage of them.  Sellers should enjoy a market that has strong demand and increased home prices.  

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

 

3759 Westleigh St
Price: $185,000 Beds: 4 Baths: 2 Sq Ft: 1645
Great tandem townhouse! Terrific investment opportunity. Tandem property with garage and yard. Four bedrooms and two bathrooms, potential for two masters (one on main level). Large kitchen, window shelves and vaulted ceilings. Laundry hookup inside....View home for sale>>

 

AND HERE'S YOUR MONDAY MORNING COFFEE!! 

Video Link: http://eugeneoregonhomesforsale.com/video/This-Month-in-Real-Estate-May-2016

Homeowners Act Now & Take Advantage of This Market

by Galand Haas

Good Monday Morning!

At a recent Real Estate conference that I attended in Seattle, I was talking with some top agents and we were discussing the current national Real Estate market.  It seems that just about every Real Estate market in the country is currently somewhat similar to the one we are experiencing in Eugene and Springfield.  There is a low inventory of homes for sale and high demand. Many of us have been in the business for quite a few years and we all agreed that none of use have experienced a housing market like the one we have today.  We also all agreed that this current market will be short lived.

The reason that I bring this up is that we may not see a market where homesellers have the kind of edge that they have right now for many years.  We may never see this kind of market  again in our life times.  We have jumped out of the recessed housing market and for the most part home values are at or near pre-recession values in Eugene and Springfield.  With high buyer demand, I am seeing many homes sell in a matter of days at or above full price.  When multiple ofers become the rule and not the exception, you know that we have an extremely strong sellers market right now.

If you are thinking about selling your home in the near future, my advice is act quickly.  Take advantage of this market, because it won't be here for long.  Right now is your opportunity to cash in at top market value.  When this market does change it will most likely come without warning.  The inventory of homes for sale will gradually build as buyer demand begins to fade.  With less demand and more homes on the market, prices will soften and then begin a slow decline.  The timing for this is anyones guess, but it is on the horizon.

If you would like to talk about selling your home in this market, call me and I can give you information on your homes current value and go over the many options that you might have.

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

3757 Westleigh St

Price: $185,000    Beds: 4    Baths: 2    Sq Ft: 1645

Great townhouse! Townhouse with garage and yard. Four bedrooms and 2 bathrooms. Large kitchen, window shelves and seating. Fenced patio. Located one block from shops, school, park....
View Home for Sale >>


AND HERE'S YOUR MONDAY MORNING COFFEE!!

How To Compete With and Defeat Other Homebuyers' Offers

by Galand Haas

Good Monday Morning!

Right now the Real Estate market in the Eugene and Springfield area is highly competitive.  Record low mortgage interest rates, a renewed interest in our area from out of state buyers and an extremely low inventory of homes for sale has made our current market very challenging for buyers.  The following is an article from "Realty Times", that gives some advice to anyone attempting to purchase a home during our current competitive home market.

Everyday I hear real estate agents say how baffled they are because their Buyers keep losing the house they want to buy due to a multiple offer situation. I feel empathy for Buyers who have spent several weeks or months searching for the home of their dreams, only to find out there are five other people trying to buy the same property. It can be downright frustrating, not to mention time consuming and the emotional roller coaster ride you must feel like you are constantly on.

If you are lucky enough to not be in a multiple situation and having to compete with other Buyers for the home you want to purchase, these items can still guide you on how to make the offer attractive to the Seller.

So, how do you make an offer on the house and actually beat out your competition and get it accepted?  It can be challenging, but there are some tricks to the trade.  As a listing agent, I receive multiple offers on the majority of homes that I list for sale.  My last listing, I received 31 offers.  Did my seller pick the highest price?  No.  There were other factors that were taken into consideration during the decision process.  As an agent representing the Buyer, I have been in situations where we had to compete with other Buyers and we won and it wasn't because we were the highest bidder.  So, how can you make a successful offer on a home?

GET PRE-APPROVED FROM A REPUTABLE MORTGAGE LENDER

A true pre-approval from a lender means that you have provided to that person all your personal financial information and that lender has given said information to an underwriter for approval with the only remaining criteria being, that the home appraises and title is clear.

Why get pre-approved?  It shows the Seller that you are serious and are prepared to purchase his/her home.  Once your offer is accepted, the home is removed from the market and not available to any other Buyers.  So, if the Seller is going to remove his home from other eligible Buyers, it better be for a good, solid Buyer who can go to the closing table without delays from the mortgage lender.

 

CHOOSE AN EXPERIENCED REALTOR TO WORK WITH

This is a large purchase, and I know that sometimes you can get pressured to use your cousin or friend who has their real estate license, because we are all the same, right?  No way!  I always remember the saying...the heart surgeon who graduated at the top of his class is the same as the one that just made it by the the skin of his teeth.  Which one would you pick to do your surgery if they cost the same?  Knowledge from an good Realtor can save you money and help you get the house that you really want.  

DON'T LOWBALL THE SELLER

Before you submit your offer, your agent should have pulled comparables (sold properties in the same area), discussed average days on market for your area and provided you with an estimated sales price of the home that you are about to put an offer on.  If everything comes back acceptable, meaning the house is priced in line with recent sales and there are no signs of delayed maintenance, then it comes down to what you offer.  If the house is priced accordingly and in good repair, offering 25% below asking price to see what the Seller is going to do, is probably going to insult the Seller.  Your result may be a flat out rejection with no counter offer.  What Buyers don't think about,  while you are trying to see how low the Seller will go, you leave the door open for other Buyers to kick you out of the deal.  Now, that doesn't mean you have to pay full price, but the numbers don't lie. That house will sell between the historical sales shown to you.  The Seller and their agent know this.  Unless, you are in a market that is starting to decline, you may get lucky.

PUT A HIGHER AMOUNT DOWN FOR ESCROW

Depending upon where you live, escrow may be called earnest money.  Earnest money is a good faith deposit that basically tells the Seller you are serious about purchasing their home.  The higher the amount, the more skin you, the Buyer, has in the game.  Remember, the Seller is looking for a sure thing.  They want to close with the first Buyer, not the third.  Putting more money down as escrow tells the Seller you are less likely to default or risk losing your money.

Earnest money is credited to you at the closing table.  You do not lose that money if you close.

HAVE YOUR LENDER CALL THE LISTING AGENT

The lender that calls the listing agent, who represents the Seller, and explains that the Buyer is a solid Buyer, credit has been pulled and jobs have been verified, just helped the Buyer move to the front of the line.  Having the lender contact the listing agent does two things.  First, it introduces the lender to the agent, who in turn meets with the Seller.  Second, that agent will and advise the Seller which offers he/she thinks will close.  In addition, competency from a mortgage lender is reassuring and allows the Seller to make an informed decision.  There have been several times in my career that the Seller has not accepted an offer due to the questionable loan approval the Buyer presented and the fact we could not reach the mortgage lender to verify. 

BE FLEXIBLE WITH THE CLOSING DATE

When making an offer on a house, there are factors to consider about the Seller,  many that may not be disclosed before the offer is written.  If the Seller needs time to find another place to live or is moving across country, being flexible with the closing date may mean more to the Seller than having a higher dollar offer.  I often call the listing agent before sending over the offer and explain that if the Seller needs more time to exit, the Buyers are flexible with the closing date.  This puts less pressure on the Seller during the moving process, which may be what they need.

SHORTEN YOUR INSPECTION PERIOD

There are several times in the contract where the transaction can go sour for the Seller and one major hurdle that Seller must get past is the home inspection.  By shortening your time frame for the inspection process, this limits the window of opportunity for you to withdraw from the transaction.  You may even write into your offer, that you are looking for major defects only in the home and anything less, you are willing to accept up to a certain dollar amount.  This will reassure the Seller that you are not going to walk or ask them to repair a laundry list of small items.

MEET THE SELLERS

This can be a good idea and sometimes not.  If you really want the house, when you go to view it, ask if the Sellers can be there.  Even if it’s just for a few seconds before you really view the house.  Putting a level of humanity into a transaction can go a long way.  Isn’t that true for a lot of different circumstances?   The last home I bought, I met the Sellers and not only bought the home, but probably got a better deal because I was able to compliment them on all the work that they had done.  I did not give away the fact that I was in love with the house and probably would have paid full price.  I just acknowledged what a good job they had done.  Being kind and grateful can go a long way, and perhaps save you a few dollars too.

Making an offer on a home and getting it accepted can entail other elements of the purchase agreement and not just the money.  However, if you still find that you are consistently getting out bid for a home, consider my last alternative....

RAISE YOUR OFFER AMOUNT-ODD NUMBERS

I am not an advocate for recommending Buyers to overpay for a home.  However, there may be times where a home is priced below market in anticipation of getting multiple offers and having the market dictate the outcome.  As an agent that has represented quite a few Sellers, I have done this many times and it works.  So, let me tell you the secret of making an offer on a house during a multiple offer situation.  After comparables are given to you and you know that the home is priced below market, come in close to market value with an odd numbered offer.  Meaning, most people think in terms of even numbers, right?  So, instead of writing an offer at $255,500 for instance, write the offer amount at $257,660.   I have seen Buyers win the offer by $50.  Overpaying for a home, if you are getting a mortgage may mean not passing an appraisal.  This is where hiring that experienced agent truly pays off in really knowing the market values of your desired area.

Understanding that there are steps to making an offer, or a framework, will guide you through the process.  Having good communication with your Realtor is a must and don't be afraid to ask questions.  This is your time and your money.

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

3381 Arlington Ave

Price: $485,000    Beds: 3    Baths: 2    ス Baths: 1    Sq Ft: 2247

Exquisite single level home in beautiful Hawthorne Estates. Custom built home in like new condition. Top-of-the-line upgrades such as Brazilian cherry & granite, high ceilings, recessed lights, gas fireplace, wide halls & grand entry door. Escape to...
View Home for Sale >>


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Mortgage Loan Mistakes Than Can Cost You Real Money

by Galand Haas

Good Morning!

With mortgage loans remaining at historic low levels and the brisk housing market, I find many home buyers making huge mortgage loan mistakes.  Here is a recent article from "Realty Times", that just might help you if you are in the market for a mortgage loan.

For most buyers, the mortgage is the largest monthly expense they will have. Yet most borrowers will do little to no preparation, negotiation, or shopping to get the best deal. And they end up paying much more for their loans than they need to. You? You're smarter than that, or you wouldn't be reading this article. Here are five of the biggest mistakes that can cost you real money.

1. Believing advertised rates are what you'll pay

Unless you have perfect or near-perfect credit, most advertised rates are out of your league. To get boasting rights on a rate that good, you have to pay part of a point (one percent of the loan amount), or more to get the best rates.

Your lender will go over your credit with a fine-tooth comb to find anything to raise the rate. That includes qualifying you at the beginning of the transaction, and then running your credit again a day or two before you're supposed to close on the home and loan. If there's been any change in your debt-to-income ratio, goodbye low mortgage rate.

2. Not comparing lenders

Just like everyone knows two or three real estate agents or more, everyone knows a loan officer or a mortgage broker. A loan officer works for a bank or savings and loan and can only offer you loan packages that the bank has put together. A mortgage broker prequalifies you just like a loan officer, and shops your deal around to various lenders.

Whether you talk to a loan officer or a mortgage broker, you're going to have to share personal financial information in order to get a realistic rate. Reputable brokers will show you what certain banks and credit unions quoted and you can pick the loan you like best.

If you'd rather do your own shopping, consider talking to a local bank, a national bank, a credit union, and a savings and loan, but remember, unless you give them personal information and permission to run your credit, it's just talk.

3. Not paying attention to terms

Advertised rates even for those with perfect credit aren't what you will actually pay. The true cost of the loan is the APR or annual percentage rate, which includes fees from the lender.

Understanding loan terms is harder than shopping for a new mattress. There are so many ways lenders can inch up the fees. A loan origination fee is also called a processing fee. It pays the loan officer or mortgage broker, so this fee can vary widely. You may pay one lender more for an appraisal than another might charge you.

One lender may charge more for pulling your credit than another. It's all in your good faith estimate, which you don't get until you've applied for the loan.


All terms are negotiable, so don't be afraid to ask what a particular fee is for and can it be reduced or eliminated.

4. Waiting for a better rate

It's great to have bragging rights on a low rate, but you don't want to lose the home of your dreams over a quarter of a point in interest.

There's a big picture here you could be missing. No matter what your interest rate is, you're going to pay thousands of dollars in interest up front before you make any serious gain in equity. If you go all the way to the end of your loan's term, you'll pay so much interest that you could have bought the same home two or three times.

Instead of focusing on the percentage rate, work on how quickly you can build equity. Make one extra payment a year. Pay $25, $100, or $500 extra per month and you'll more than offset the rate you're paying.

Down the road, if rates drop through the floor, you can refinance, but even that's not an ideal solution. You'll pay loan origination fees, title search fees, appraisal fees and so on -- enough to equal the closing costs you paid the first time around.

And don't forget, you'll start the amortization schedule all over again -- with most of your payments going to interest instead of principal.

5. Choosing the wrong type of loan

Many families were hurt post-9/11 when lenders opened the spigots and gave a loan to almost anyone who could sign the paperwork. Suckers bought homes that were too expensive using balloon loans with low teaser rates.

The type of loan you choose should depend on current market conditions and how long you plan to stay in your home, not how much home you want to buy.

Current market conditions favor fixed rates, because rates are rising from all-time lows. Yes, they cost more than hybrid loans or adjustable rate loans, but the base amount is fixed and doesn't change. Only your taxes and hazard insurance will cost you more over the years.

If you get an adjustable rate mortgage, you are at the mercy of market conditions. While there's a cap on how high your interest rate can go, it's still a risk.

If you plan to stay in your home five years or more, get a fixed-rate mortgage. If you plan to sell your home sooner, you're taking a risk. It takes most borrowers five years just to earn back their original closing costs in equity.

Once you've narrowed your choice of lenders, ask them on the same day to give you a quote. If you wait even one day, rates may have changed, so you're no longer comparing apples to apples.

If you need a good lender, contact me.  I have a list of great local lenders that I can provide you with.

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!


184 75th St

Price: $295,000    Beds: 3    Baths: 2    Sq Ft: 1800

Delightful New Home w/ RV Parking! Located in Thurston with some mountain views. One level home offers laminate wood flrs, granite counters, vaulted/high ceilings. Spacious Great Rm layout w/ slider in dining area & gas fireplace in living rm. Stain...View Home for Sale >>


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This Month in Eugene-Springfield Real Estate April 2016

by Galand Haas

Good Monday Morning!

Nationally, home sales  dipped in March of this year slightly. Could this be the beginning of a down turn in the national housing market? Economic numbers for the first quarter did not look great and this could be having some effect on home sales. Most likely we will not be seeing any huge swings in regards to home sales nationally unless there is a sharp increase in mortgage interest rates. For now, I would think that the overall market may flatten out some, but  remain strong. 

One of the largest problems effecting the housing market in many areas is lack of inventory of homes for sale.  This is especailly true with homes in the price ranges that attract first time home buyers. Locally, in the Eugene and Springfield area, we are seeing very low inventories of homes in the lower and middle price ranges.  Buyers are struggling to find homes and many times when they do, there are multiple offers.  It is a great time to be a home seller as homes are selling quickly and prices are beginng to escalate.

Have An Awesome Week!

Video Link: http://eugeneoregonhomesforsale.com/video/This-Month-in-Real-Estate-April-2016

THIS WEEKS HOT HOME LISTING!

28135 Spencer Creek Rd

Price: $1,250,000    Beds: 4    Baths: 4    Partial Baths: 2    Sq Ft: 6143

Just minutes from town! This gated country estate is spectacular with an exquisite manor featuring grand staircase, 4 bedroom suites, office, theater room, gourmet kitchen and more. Great shop for RV and storage, creek, waterfall pool, ponds for fis...
View Home for Sale >>


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Eugene-Springfield Homes Sales Continue to Climb

by Galand Haas

Good Monday Morning!

It is Spring in the Eugene and Springfield area and this time of year typically brings higher interest by buyers looking to purchase a home. This year is certainly no exception as home sales in the Eugene and Springfield area continue to climb. In fact at this time I believe that there may be more buyers out there in certain price ranges than there are homes for sale. We are currently seeing multiple offers on many homes and this is especially true in price ranges under $300,000.  Our overall inventory of homes for sale is quite low and buyers are scurrying to make offers as soon as many homes hit the market.

For home buyers wishing to purchase a home right now, this can be a challenge and having a top buyers agent who firmly understands the market can make all the difference in the world with regards to being successful in finding a home. Also, a word of caution to home buyers is that there are bidding wars taking place, so be cautious not to over-pay for a home. Again a professional buyers agent can help you here.

For home sellers, if you are going to sell this year, don't hesitate another day in getting your home on the market. Your chances for a quick sale at top market value are better now than at any time I have seen in years. There are lots of home buyers out there looking and struggling to find a home to buy.

This is a true sellers market and one thing that has always been true is that strong markets like the current Eugene-Springfield real estate market one don't last forever. 

If you are thinking about selling and want an easy and accurate look at your homes aproximate market value, don't trust Zillow.  Go to www.forhomesellers-nonSmartZip.com.  At this site, you just enter in a few details about your home and it will generate an in depth market report on your home. You might be pleasantly surprised as to how much the value of your home has increased!

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

1058 E 19th Ave

Price: $472,000    Beds: 5    Baths: 3    Sq Ft: 3034

Tudor-style home in sought after University of Oregon neighborhood! Living room with wood-burning fireplace. Formal dining with built-ins adjacent to kitchen. Five bedrooms with huge master suite on main level. Plus a sunroom. Wheelchair access. Pri...
View Home For Sale >>


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Thinking of Flipping a House in Eugene? Here's What to Know

by Galand Haas

Good Morning!

Last week, I wrote about the challenges with "flipper" properties. This week I am expanding on that with this informative article about "flipping" homes from Realty Times.

Turn on HGTV or any number of other channels almost anytime during the day or night and you're bound to find at least a couple of shows about flipping houses. Some provide a cautionary tale about overextending yourself financially or making other rookie flipping mistakes, but the vast majority end up with a profit of $30,000, $60,000, or $100,000+ in profit for a couple of months (or a couple of days, in the case of one new flipping show).

Enticing, right? If you're getting ready to plunk down cash to flip a house here in the Eugene real estate market, here are a few things you need to think about.

1. Make sure you've got the money

Sounds obvious, but…do you really know the financial stakes involved? According to Investopedia, "The first expense is the property acquisition cost. While low/no money down financing claims abound, finding these deals from a legitimate vendor is easier said than done. Also, if you're financing the acquisition, that means you're paying interest." Investopedia continues, "Every dollar spent on interest adds to the amount you will need to earn on the sale just to break even."

If you're planning to pay cash, you won't have to worry about interest, but you will have carrying costs including utilities, property taxes, and HOA fees where applicable.

Here are a few other options for buying property to flip, courtesy of Auction.com: "If you don't have enough cash to purchase a home, the next cheapest source is a home equity line of Credit (HELOC). These are low-interest, variable-rate lines of credit that are secured by either your primary residence or an investment property. Typically, the HELOC rate is set about 1–2% above the prime rate. You need to put the HELOC in place before you bid on any homes; then you can bid on the home as a ‘cash deal,' rather than as a ‘financing deal.' Many investors use hard money loans or other conventional mortgages to finance their flips. Because of the higher interest rates and points paid at closing, both will reduce your net profit considerably, and are not recommended for flips unless absolutely necessary." Well said.

2. Buy in the best location you can

"Expert house flippers can't stress this enough," said MoneyCrashers. "Find a home in a desirable neighborhood, or in a city where people want to live." And keep in mind the convenience factor—for the potential buyers, certainly, but also for you. "You will work on this house daily in the weeks and months to come. Do you really want to work all day, and then drive an hour to get home? Don't invest in a house too far away from where you live; you will spend more money on gas, and it will take longer to fix up the house."

3. Work with a realtor...or become one

Tying to maximize profit by selling a flip yourself rarely works out well if you don't know what you're doing. If you think trying to figure out if the wall you want to take down is load bearing is complicated, just try to figure out disclosures and conditions without going to real estate school. The money you spend on a Realtor commission can be well worth it for the ability to concentrate on other things and know the sale is in good hands.

Beyond getting the home sold, good real estate agents can be helpful in other important ways when it comes to flipping. "They can help you find great deals, get you comps, help you connect with lenders or contractors, and a lot more," said BiggerPockets. "Don't settle for an average agent though—find a great investor friendly agent."

4. Check the comps. And check them again...

In Oregon, of course, home sales are public record so coming up with a list of comparable properties (comps) sounds easy. The sold price of homes is readily available. But you need to be very certain that your comparables are really comparable to each other. There are lots of factors to consider, beyond even square footage, outside appearance, and number of bedrooms. Speaking of comps…you can't make a smart decision on buying, fixing up, and flipping a house if you aren't aware of the prices in the neighborhood. And that might be easier said than done. In states like Texas, Montana, and Idaho (and 5 other states), home sales are not reported and are not public record like they are in states like California. In short, do your research so you know what you're up against. 

5. Make smart updates

Knowing where to spend your money is key to a successful flip. You don't want to leave key areas untouched but you also don't want to over-improve for the neighborhood. "Home improvements that increase the value of a home might include upgrading kitchen appliances, repainting the home's exteriors, installing additional closet storage space, upgrading the deck, and adding green energy technologies," said MoneyCrashers. "On the other hand, avoid home improvements that won't increase the selling price, like installing a pool, installing a whirlpool bath, or adding a sunroom to the house."

This is another good reason to use a Realtor who is a local expert: they'll be knowledgeable about specific updates that are important in the Eugene-Springfield Oregon real estate market.

6. Use good products

Scrimping on construction costs may seem like a good idea if it means your financial commitment is lower, but low-end materials might not get the home sold or fetch the sales price you want.

7. Work with good people

Everyone you work with has the ability to make your flip a success or derail it. Partner with those you can trust, and don't forget to make sure they're qualified for their role. A bargain basement subcontractor that does a shoddy job on your floors can end up costing you thousands when you have to have it redone by a professional.

On the flip side, "The real money in house flipping comes from sweat equity, said Investopedia. "If you're handy with a hammer, enjoy laying carpet, can hang drywall, roof a house and install a kitchen sink, you've got the skills to flip a house. On the other hand, if you've got to pay a professional to do all of this work, the odds of making a profit on your investment will be dramatically reduced."

In the Eugene and Springfield housing market, finding "flipper" homes that will have a good potential of becoming a succesful project for you is tough. Using the right Real Estate professional to help you find a good "flipper" property is a must. If you are interested in flipping homes, contact me.  I have had 26 years of experience with finding clients investment properties that give them a good return.

Have An Awesome Week!

 

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1058 E 19th Ave Eugene Home Listings - Galand Haas Real Estate1058 E 19th Ave

Price: $472,000    Beds: 5    Baths: 3    Sq Ft: 3034

Tudor-style home in sought after University of Oregon neighborhood! Living room with wood-burning fireplace. Formal dining with built-ins adjacent to kitchen. Five bedrooms with huge master suite on main level. Plus a sunroom. Wheelchair access. Pri...
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