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The Strategy Behind Making an Offer

Looking at homes can be a really exciting time, but when it comes to making an offer things can get stressful if you don’t know what you’re doing or are unsure of what the best strategy is. We’ve broken down the strategy of making an offer, and included helpful tips and tricks in understanding the process.

Purchase Offers

Once you find a house that fits everything you’ve been looking for it’s time to make an offer. You will first need to make a purchase offer, or purchase agreement. This is essentially a letter of intent to purchase that property.  It’s a legal document that outlines the price that you’re willing to pay for the home, including how you plan to pay for it.

Most real estate brokers have pre-written templates of purchase offers, that are easy to update with the terms specific to your offer. The laws concerning purchase offers can vary by state, but typically are legally binding after the seller has accepted them. Purchase offers often include an earnest money deposit. This deposit shows the seller that you are serious about purchasing the home or property. In some cases, if the offer falls through the earnest money may not be refundable, but if the offer closes successfully, the earnest money is often credited toward closing costs.

Comparative Market Analysis

One of the best ways to make the strongest offer possible is to know what’s going on in the market around the property that you’re interested in. Ask your real estate broker to order a comparative market analysis, which will evaluate three recent sales of comparable properties in your desired properties’ area. It helps you to know what similar homes in a similar market are selling for, so you don’t over offer on an overpriced home. It helps you understand where the negotiation room is.

Time on Market

It’s important to consider how long a property has been on the market. If it’s been on the market for a long time, it shows that there has been little buyer interest in the property. This might indicate that it is over-priced, and that the owner might be more willing to accept a lower offer. If the home hasn’t been on the market for very long, and there seems to be a ton of interest, you may want to make an offer that is slightly above asking price.

Consider other offers that the owner may be receiving and talk to your real estate broker about what they would recommend. Brokers aren’t allowed to suggest asking prices, but they should give you recommendations and suggestions so that your offer is the strongest one. If you can try to learn about other offers on the property. Other purchase orders only become public record once the seller has accepted them.

The most important part of making an offer is to know everything you can about the seller and the available property. Once you do, you’re most likely to make an offer that they accept. Talk to your real estate broker for advice on individual listings and sellers, to see if they can help you send a winning offer.

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January Real Estate Forecast shows a strong start to the 2017 Central Oregon Real Estate Market

The beginning of 2017 showed a strong start to the year in real estate. January was a highly active month, with a lower number of active listings, and completed sales, but high number of pending sales, expected to finish in February.

Seller’s Market

 The number of active listings decreased in January, going from 402 to 355. Central Oregon is currently experiencing a strong seller’s market, with anticipated low inventory at this time of year. The low number of listings allow for property owners to take advantage of fewer competing properties. We predict that the seller’s market will continue for at least another month, before listings increase in anticipation of spring selling trends.

High Pending Sales

January was an exceptionally strong month for pending listings. In November and December, the number of pending listings were 156 and 145, respectively, which is high. The number of pending listings in January sky rocketed to 185. We expect these pending sales to complete in February, making February sold properties higher than previously anticipated. It shows that now is a great time to buy and that the Central Oregon Real Estate Market is still thriving through the winter months.

Average Completed Sales

Given the inclement weather in early January, a lower number of completed sales is to be expected. Considering the high number of pending sales, the number of sold properties for the month of January was expected to be lower, dropping from 192 sold properties to 130 in January.

Final Analysis

The Central Oregon Real Estate market is expected to see a lot of traffic in the coming warmer months, as the Bend area is still experiencing continued interest. We’re predicting that fewer priced reductions will take place, as the low number of listings encourages more competition per property, and negates the need to price more competitively. With a strong seller’s market, now is the time to get a property listed. Learn about what we can do to help you with buying or selling real estate by visiting dukewarner.com, browsing our Facebook page, or calling us at (541) 382-8262.

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2017 Economic Outlook

Hello Central Oregonians,

Welcome to the new year! December closed out 2016 with a bang. Sales were up, home prices have seen record highs recently, all leading to a powerful seller’s market this winter.

The “Housing Bubble” of past markets is not what our area market is experiencing today.  The steady and strong market recovery over the last several years has resulted in the highest home prices within our market over the past decade.

Property inventories are very low at this time, even considering that, historically, winter months are the time of the year to expect a lower number of available properties.  There continues to be a healthy number of potential buyers looking for “the right property”. This time of year, is an optimal time for sellers to get their property on the market and take advantage of fewer competing properties.

Given the seller’s market and a consistent number of property sales in prior months, we expect to see an active beginning to 2017’s real estate market in Central Oregon. Due to increased continual interest in the Bend area, we expect to see fewer price reductions in the coming months as well.

Many ask us if we see a housing bubble happening in the future.  We don’t foresee housing prices dropping in the next couple of years. Housing prices in the area fell to their lowest point in 2010 and have been on the rise since. We expect a slow upward trend in the future.  Over the past year, home values have appreciated each month by slightly more than 1 percent.  All indications show a slower yet steady rise over the next two years.

Keeping track of the current real estate trends in Central Oregon, is our business at Duke Warner Realty. We compile comprehensive market data that is available to home sellers and buyers. We’re constantly analyzing local market trends to better help our prospective clients, buyers and sellers.

We’re already keeping an eye out for the trends of spring, and the coming warmer months. Learn about what we can do to help you with buying or selling real estate by visiting dukewarner.com, browsing our Facebook page, or calling us at 541-382-8262.

Here’s to a wonderful year ahead,

Duke Warner Realty

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Why Pre-approval should be your first step

If you’re starting to house hunt, and have faced the question “Are you pre-approved?” it might be time to consider investigating more.  Being pre-approved can speed up your house hunting search, and can help you secure the home or property of your dreams before someone else does. Here are some benefits of being pre-approved.

Pre-qualified and pre-approved

Understanding the difference between being pre-qualified and pre-approved is important. Pre-approved means that a lender has checked your credit score and verified your documentation, so that you are approved for a specific loan or mortgage amount if you need it. Being pre-approved usually lasts for a 90-day period in most states.  Pre-qualified means that an estimation of how much you can afford to spend on a mortgage from month to month has been done, but it is not final. Your final loan approval happens when you have the property that you’re going to apply the loan to and you have an appraisal done on that property.

Getting pre-approved

Bring proof of your income for the last two years. All loans currently need this proof of income. W-2s are also accepted, in addition to pay stubs. Bring bank statements, investment account statements, etc. to show that you have enough money for a down payment, closing costs, fees, etc.

You also will need to provide proof of employment, or employment verification. Today lenders want to make sure that they are loaning money to someone with stable employment, as it increases the odds of the loan being paid back in full. They may call to verify your employment and check on your salary. Don’t forget the basics: your driver’s license, a social security number and permission for the lender to pull your credit report.

Good credit

Good credit takes time, and it’s necessary to purchase a home with a loan or mortgage. If you’re considering buying a home sometime in the near future, monitor your credit and make sure it’s acceptable to be applying for a loan. Talk to a banker or lender, or financial advisor to see what you can work on to improve your credit in the meantime.

Finally

Be advised to shop around to see who is going to offer you the best mortgage rate and the best interest rate in your state and area. Apply for those rates to get pre-approved. Meet with a lender to discuss your options, find out what you may or may not be able to afford. Getting pre-approved prior to house hunting helps your search, because you know what you can or can’t feasibly afford.

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How to Sell an Inherited House

Inheriting a home can be a blessing or a curse. Sometimes it’s a wonderful gift and sometimes it can be an unfortunate inconvenience. Sometimes inheritors will sell their own properties and move into the home, other times the home will be emptied with an estate sale and then sold. Here are some great resources and information on what to do if you inherit a house or property.

Selling it

If you’ve inherited a home and want to consider selling it, you need to be able to figure out what you can afford to sell the home for. You also need to be able to calculate what selling the home could cost you in taxes. Be sure to report sale proceeds to the IRS. It will be documented as taxable income if you sell an inherited property. Even if you don’t owe any taxes on the home sale, it’s still a good idea to report the event. Be sure to do the research on inheritance tax and estate tax, because it can differ from state to state.

If you want to proceed with selling the home, take time to clear out any personal belongings. This can be time consuming and emotionally hard. While you may want to keep everything, you may not be able to. Hiring an appraiser to look at family heirlooms or jewelry may be a good idea before you decide to sell everything in an estate sale. Be sure to get cherished possessions to heirs, and other family members, as noted in any wills.

Holding a yard sale or an estate sale can be a great way to get rid of things. Selling a home as is, or already furnished, can be a hard sell to complete. Homes show better on the market when they’re empty or staged, but not filled with the previous tenants’ belongings.

Do your research on probate. Most inherited homes have to go through probate before you can sell them. Determine or decide who in the family holds the legal responsibility to handle the transaction of sale.

Other options

Some family members decide to sell properties of their own and move into inherited homes. There are still legal loopholes to close before this can be done. Other family members may have a right to the home as well, so it’s important to follow all loose ends before you start selling property of your own.

Some may choose to rent the home out and use it as a small source of income. Either way, it’s your choice. If you’re going to sell the home, it will be beneficial to invest in a real estate agent. They may know how to hook you up with a great estate sale business, and all the steps you’ll need to complete tax-wise. In addition to being a great resource in the actual sale of the property, your real estate agent can help make the process much easier.

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December Real Estate Forecast shows a strong finish to an extremely active year in the Central Oregon Real Estate Market

2016 was a great year for real estate in Central Oregon, and December closed out the year with a strong finish. Sales were up in December, despite lots of inclement weather and snow, inventory dipped expectedly, and a consistent number of pending sales are expected to complete in 2017. Let’s take a deeper look.

Monthly Number of Sales and Price Reductions

The monthly number of sales stayed at a consistent high in the market. The number of price reductions in the month of December were fewer than the month before, as the number had nearly stabilized in November. Price reductions typically happen when properties sit on the market too long, with little to no interest, and it typically means that the property hasn’t been priced correctly. With fewer price reductions in December, we can expect to see more sales moving into early 2017.

Inventory low

Inventory has dipped to an annual low, which is to be expected in the month of December and is typical during the holiday season. The inventory seen this month was lower than the previous four months.

The real estate market becomes more of a seller’s market during the winter months, with fewer listings available.  Property owners should take advantage of this time, with little competition for potential buyers. Duke Warner has months of inventory for every price point under $525,000 in Bend being less than two months.

Consistent Pending Sales

Pending sales stayed at a high number for the month of December, which is surprising considering the winter weather December brought.

Final Analysis

All of this proves that we can expect an active beginning to 2017, that will carry on into the coming winter months.

Sales are expected to remain at slightly above average numbers. Due to the interest in the Central Oregon Real Estate Market, we can expect that fewer price reductions will take place.

The seller’s market will continue into the new year, with fewer properties listed. The time to get a property listed is now, with the expectation of significant activity and lots of serious buyers early in 2017.

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Pros and Cons of Open Houses

Pros and Cons of Open Houses

Selling your home? Considering holding an open house to spark interest? Open houses have long been a point of contention between seller and real estate agents. Some sellers insist upon them, refuse to have them or are undecided about them. Real estate agents are the same: some love them, hate them or don’t have an opinion either way. Learn about some of the pros and cons of hosting an open house, and decide if it’s a great option for you or not.

Pros

There are both negative and positive results to holding an open house. By holding an open house you may be able to attract buyers who are dragging their feet on the start of their house hunt. Some buyers may not be sure as to how to get the ball rolling on a house hunt, and an open house is a great way to get some potential buyers in the door. An open house sign on the side of the street may attract someone who has not yet begun the steps to start house hunting. They allow potential buyers not to feel pressured.

Open houses give great additional exposure to a home. Often open houses are advertised with street signs, newspaper ads, ads online and more. They may also be beneficial to your realtor, as it gives them a chance to connect with other potential buyers.

Cons

Open houses are not necessary to sell a home. The percentage of homes that sell as a result of an open house can actually be quite low. More potential buyers schedule private showings of properties that they’re seriously interested in. Most buyers want to be taken through the home by an agent, and learn about the property. Most open house crowds are less serious.

In order for a potential buyer to be viewing homes with an agent, they must be pre-approved for a certain level of mortgage. The potential buyers that you’re going to attract with an open house could contain a majority of visitors that aren’t even pre-approved. Having people walking through your home, that can’t afford to buy it, is a waste of your time. You would be upset with a realtor that kept showing your home to potential buyers that couldn’t afford to purchase it. Hosting an open house can sometimes be the equivalent of this.

Final takeaway

Deciding to hold an open house for your home is a choice you must make. Consult your real estate agent and get their thoughts on it. Some think that open houses are old fashioned, and in today’s market where the seller has technology at their fingertips, they’ll probably do most of their research online.

 

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Why Hire a Listing Agent?

Why Hire a Listing Agent?

If you’re getting ready to sell your home or property, you may be thinking why do I need a listing agent? With technology these days, you can probably list the property yourself and save yourself the cost of a real estate agent, right? Here are some reasons why hiring a professional real estate agent could benefit you in the long run.

Experience

Local real estate agents have experience selling. While this may not be the first home you’ve sold, a real estate agent has sold hundreds. They know the market you’re selling in, and know what listing prices to recommend, who to market to, etc. A great real estate agent will help you negotiate on a great price, not simply delivering the offer to the buyer.

Agents also can act as a filter for showings and visits. Your agent isn’t going to show your house, unless they’re sure they’ve found a great buyer for it. Typically, your agent will show the house to prospective buyers that have already been vetted or pre-approved by the firm they represent. In short, they’re showing your property to people who they know are interested and who they know can afford it. When you list a property yourself, the calls you get for showings won’t be verified and you could wind up wasting time showing the property to a lot of uninterested buyers, or buyers that aren’t serious about committing to a new property.

Market Knowledge

Agents know what you should list your property at, because they’re working closely with the real estate market in your area. They can find comparable sales for pricing references. Local real estate agents also know where it’s best to market your property. Your agent won’t tell you what you should list your property at, but they can help guide you to a price that increases your changes of selling.

Your real estate agent is there to ensure you have as easy a sale as possible. They’ll help with paperwork, questions and more. Purchase agreements can run over 10 pages, without including federal or state disclosures.

Take Away

There are a lot of questions that come with buying or selling a home. One of the greatest benefits of having a listing agent is that you can call them and ask questions anytime. Even after you’ve closed your home, if you get an invoice about property tax assessments that you don’t understand, you can call them and straighten it out. Lots of questions can pop up after the excitement of closing on a house, and a real estate agent will still be there to answer them.

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November real estate forecast shows drop in new listings and stabilization of home pricing

The real estate market has slowed down slightly for the holiday season, from an eventful fall market. It continues to be a seller’s market in the Central Oregon Real Estate Market. Moving into the new year the market promises to be a great time to list a property.

Fewer listings and inventory

Typical for the holiday season, fewer new listings are coming onto the market in Central Oregon. With fewer listings on the market, November still saw more properties go into pending. With more pending listings than new listings coming on to the market, there were lower property inventory numbers.

Novembers inventory was lower than the previous three months. Even with a lower inventory, more homes sold in November than in October, representing great activity in the Central Oregon Real Estate Market.

Price reductions

The number of price reductions has dropped dramatically from previous months, with pricing stabilizing in November.

Seller’s Market

With a limited number of listings, it’s a perfect time to sell. Getting your property on the market at this time would be advantageous. Fewer listings could help to highlight your property. This trend is expected to continue through the new year.

Property owners that are thinking of selling should take advantage of the low inventory of property competing for available buyer’s.

Final Analysis

We can expect the trend of the seller’s market to continue. Fewer listings provides for a better market for the seller’s with fewer properties to choose from and consider.

The beginning of the new year is a great time to get a property listed. We can expect the trend of the seller’s market to continue, with continued high buyer demand for properties.  Listings that hit the market early in 2017 should have significant activity of serious buyers’ wanting to make a purchase.

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How long should you own a starter home?

How long should you own a starter home?

Starter homes are great for first time home buyers. While they can tend to come in lower socio-economic areas or require a bit of a fixer upper, they can be a great investment and a great way to enter the housing market.

The case against Starter Homes

A lot of people invest in smaller homes as their starter homes, like townhomes or condos. While this can seem like a great idea at the time, you should really only invest in property if you plan on staying there for at least 5 years.

Typically, when first time home owners buy their first home, they have a renting mindset. They are used to yearlong leases, and may have a harder time grasping the concept of longevity in a house. After about three years most people tend to start looking for larger properties.

Staying in a house for at least five years, can help you see more of a return on your investment. Moving after three years of owning a home can tend to lose you money, unless you’re planning to keep the property as a rental property.

Consider closing costs. Every time you buy and sell a home you have to pay closing costs. While these costs may be small compared to the overall price of a home, it’s still money that you lose every time a housing transaction is made.

They way most mortgages are structured, you pay more interest in the first five years. So spending only five years in a home can be a waste of your resources. After five years, you usually have made enough progress on the principal amount due, to justify paying a mortgage rather than just rent.

The case for Starter Homes

People tend to invest in as much house they can afford, which generally isn’t much. It’s usually in the upper end of what your finances allow, which stretches you thin. If you consider buying in the lower range, and not spending as much money a month on your mortgage, you have the chance to pay off a bigger chunk of your principal amount owed.

Purchasing a starter home is completely up to you and what your finances allow, but consider whether you truly consider your home a starter home or whether it’s an investment that you want to make and commit to for years to come. Consider what you can afford and what you’d like your monthly payments to be, what you want to be financially responsible for. If you want more flexibility and may not want to stay in the home for a long time, buy on the lower end of your budget. It gives you the chance to pay off the home faster, giving you more leverage when you hit the housing market the next time.