To counter this problem, listing agents then list their properties with a buffer, allowing the example of 30% to be reduced to only 10%, thus giving the  seller a more reasonable position to accept or counter.  The obvious problem with this approach is that the property is then listed to high, and will not bring any offers.  If this happens too much, then we add to a problem that is already plaguing the market, too many homes on the market.

So now what…

More inventory drives prices down, lower prices bring out more people that want something for nothing, they write offers that don’t make sense, sellers price their homes outside market value, these homes then sit on the market, thus increasing inventory, thus driving prices down, brining out more people looking to low ball, …  Get the point.

There are too many properties that are priced well, and are excellent homes for whatever your purpose might be.  Simply look at what has sold in the area over the past 3-6 months, and look at the trend for the area.  Then look for the fair offer based on the market value of the property. 

If the housing market is ever going to recover, the inventory levels need to stabilize…And they will.  The so called bottom (another post altogether) will happen, but the real question is are you willing to let THAT home slip away while trying to play the market.  THAT home, you know, the one that is perfect for the family, or that is in the best neighborhood for rent, or the only home in your range that is in that perfect school district.  Your call.

Like the home seen in this entry, give me a call, we’ll go take a look.

Franklin Delano Roosevelt

Pearl Harbor Speech, December 8, 1941

To the Congress of the United States

Yesterday, Dec. 7, 1941 – a date which will live in infamy – the United States of America was suddenly and deliberately attacked by naval and air forces of the Empire of Japan.

The United States was at peace with that nation and, at the solicitation of Japan, was still in conversation with the government and its emperor looking toward the maintenance of peace in the Pacific.

Indeed, one hour after Japanese air squadrons had commenced bombing in Oahu, the Japanese ambassador to the United States and his colleagues delivered to the Secretary of State a formal reply to a recent American message. While this reply stated that it seemed useless to continue the existing diplomatic negotiations, it contained no threat or hint of war or armed attack.

It will be recorded that the distance of Hawaii from Japan makes it obvious that the attack was deliberately planned many days or even weeks ago. During the intervening time, the Japanese government has deliberately sought to deceive the United States by false statements and expressions of hope for continued peace.

The attack yesterday on the Hawaiian islands has caused severe damage to American naval and military forces. Very many American lives have been lost. In addition, American ships have been reported torpedoed on the high seas between San Francisco and Honolulu.

Yesterday, the Japanese government also launched an attack against Malaya.

Last night, Japanese forces attacked Hong Kong.

Last night, Japanese forces attacked Guam.

Last night, Japanese forces attacked the Philippine Islands.

Last night, the Japanese attacked Wake Island.

This morning, the Japanese attacked Midway Island.

Japan has, therefore, undertaken a surprise offensive extending throughout the Pacific area. The facts of yesterday speak for themselves. The people of the United States have already formed their opinions and well understand the implications to the very life and safety of our nation.

As commander in chief of the Army and Navy, I have directed that all measures be taken for our defense.

Always will we remember the character of the onslaught against us.

No matter how long it may take us to overcome this premeditated invasion, the American people in their righteous might will win through to absolute victory.

I believe I interpret the will of the Congress and of the people when I assert that we will not only defend ourselves to the uttermost, but will make very certain that this form of treachery shall never endanger us again.

Hostilities exist. There is no blinking at the fact that our people, our territory and our interests are in grave danger.

With confidence in our armed forces – with the unbounding determination of our people – we will gain the inevitable triumph – so help us God. I ask that the Congress declare that since the unprovoked and dastardly attack by Japan on Sunday, Dec. 7, a state of war has existed between the United States and the Japanese empire.

Picture courtesy of

http://www.nps.gov/usar/photos2/PC-44738.htm
Last Updated: 03-Dec-2001

Image via Wikipedia

I would like to take the opportunity to share some information with you about energy efficiency. One of the best parts about energy efficiency is that you can help protect the environment and save money—all at the same time.

The first step to energy efficiency is conducting a home energy audit. This allows you to assess how much energy your home is using and where you can potentially conserve. Here is a list of things to look for when conducting your own home energy audit, as well as ways you can save energy and money:

• Air Leaks—You can check for air leaks (drafts) along baseboards, edges of flooring, or junctures of the walls and ceilings. Flowing air through electrical outlets, switch plates, window frames, weather-stripping, fireplace dampers, attic hatches and wall or window mounted air conditioners are also good places to check. You can usually seal leaks by caulking or weather-stripping them.

• Insulation—If the insulation levels in your home are less than the recommended minimum, you could be losing heat through the ceiling and walls, which could cost you a lot of money. If you think this is happening, consider having a professional assess the insulation levels in your home to determine if you need additional insulation installed.

• Heating/Cooling Equipment—Inspecting all heating and cooling equipment annually is also a good idea. Replace filters every other month or so, especially when usage is high. I also recommend having a professional check and clean your equipment once a year. And if your appliance is more than 15 years old, it’s probably time to update it with a newer, energy-efficient unit. In the meantime, to reduce your demand on heating, it’s recommended that you keep your thermostat set between 65 and 72 degrees during the winter months. Keep in mind that by simply lowering your thermostat one degree, your furnace will use seven percent less energy overall.

• Lighting—It is estimated that lighting accounts for about 10% of your home energy bill. Lighting that has the Energy Star label uses about 66% less energy than standard lighting. Energy Star compact fluorescent lights (CFL’s) provide the same lighting as standard incandescent bulbs but use less energy and last ten times as long.

· Household Appliances—When purchasing new household appliances read the Energy Guide labels which estimate annual energy use. Many energy-efficient washing machines use up to 40% less water and 60% less energy, which over the process of a year can reduce your power bill by up to $100. Energy-efficient refrigerators use on average 40% less energy and the dishwashers can use up to six less gallons of water per load than washing by hand. Add up the numbers and the savings are significant, both in dollars and energy.

There are a number of things you can do to conserve energy around your home; these are just a few ideas to get you started. For more information about energy conservation, I suggest going to www.energystar.gov

Image via Wikipedia

Did you know that many credit rating files contain inaccuracies that can affect your credit rating? With the threat of identity theft, the possibility of data sneaking in from a file of someone with a name similar to yours, and creditor reporting errors, it’s a good idea to keep an eye on your credit, particularly if you are thinking of making a large purchase, such as a home, in the coming year.

Credit Bureaus.

Most creditors use one of three major credit bureaus: Equifax, Trans Union, and Experian. The only way to get a complete overview of your credit is to request a report from all three, which you can do at www.MyFico.com. Once you receive your reports, check them for clerical inaccuracies, including late or un-credited payments. Review everything very closely and dispute any errors.

Dispute Resolution

You can either complete the dispute form provided with your report or write a letter to the credit bureau. Clearly identify the error and explain why it’s wrong. Be sure to keep a photocopy of the letter and any subsequent documentation for your own records. Credit bureaus must investigate reported errors within thirty days of receiving your letter. Any item that is not verified as accurate will be removed and you will be sent a free, updated copy of your report.

Lenders Review

When lenders review your credit report, they are looking for a pattern of consistent, on-time payment. Too many open accounts, credit cards with high limits, and maxed out cards can all reflect badly on you. Close any opened but unused accounts, and be sure the creditor notes that the account was “closed at the consumer’s request.” Otherwise, lenders might think the creditor closed it for other reasons. A few, well-managed charge cards have the ability to improve your credit rating in the eyes of lenders.

Understanding and minding your credit should be part of your regular financial management. Timely reviews of your credit report are a wise way to ensure that any large, future purchases happen smoothly.

Time to Purchase a home in Portland, Beaverton, Hillsboro, Vancouver, etc…

When you are ready to purchase a home in Portland, Beaverton, Hillsboro, Vancouver, etc…keep these tips in mind.  While there is still money available, the banks are looking to see if you can actually afford a home (go figure).  Get your score up, and make sure you have a good down payment, (4%-20%).

Rates are good and holding steady. We have seen rates come down a little over the last few days. Loans are still being made. In fact, the service levels are some of the best we have seen in a long time. We were able to close a transaction – from start to finish – in 6 working days. Considering that the last day was to have the deeds record, we really did it in five days!

Qualified Home Buyers.

News in our industry has been centered on borrowers’ qualification standards, in particular, debt-to-income ratios and paperwork requirements. We are all aware that stated income loans are a thing of the past. However, both Fannie and Freddie have allowed us to use limited documentation for many of our better qualified borrowers. Looks like that is changing. Both agencies have announced elimination of reduced/minimal documentation and verbal verification of employment. Standard documentation will apply come the middle of December. This shouldn’t have much of an impact for most of us. Many lenders have already moved in this direction and many loan originators (myself included) have already been requesting full documentation of income and assets.

So, what if your are not qualified now?

The reduction in debt-to-income ratios will cause more concern, however. Freddie is implementing a maximum of 45% debt-to-income ratio (there is no word from Fannie or FHA as of this writing). Combined with more stringent documentation requirements, we can see that some borrowers won’t be able to qualify for a loan that, just a month or two ago, they would have easily qualified. Not to be repetitive but we are back to the old days…again. I remember working with many clients over a three or six month period – even longer in some cases – to get them to be in a position to qualify for a loan. Helping clients make a budget, figuring out ways for them to pay off debts – and the right debts, trying to help them save money….these are things we all used to do. Personally, I enjoy assisting people in managing their personal finances.

Author:

Glenn McDermid

Sr. Loan Consultant Equity Home Mortgage

Off: (503) 617-4548

Fax: (503) 617-4722

glennmcdermid@equityhome.com

Did you know that February and March are historically the busiest months for home sales? If you’re considering putting your house on the market this spring, here are some steps you can take now to ensure a successful sale:

Clean Up!

Thoroughly clean your entire house, or hire someone to do it for you (I can refer someone to you). Pay particular attention to your bathrooms and kitchen. A new shower curtain and towels are a smart idea. Scrub your tubs, toilets, and sinks to make them sparkle. Your stove, oven, refrigerator, microwave, and other appliances must be spotless. If the appliances are considerably behind the times, think about putting in new appliances for the sale, and make them a negotiable item in the listing contract. That way if you get a lower price, you have new

appliances for your next home.

Open Up!

Open rooms appear larger, so storing or getting rid of clutter and excess furniture is wise. Closet space can sell a home, too. Organized closets, bookshelves, and drawers are very appealing to buyers.

Freshen Up!

A fresh coat of a neutral-colored paint not only gives your house a clean feeling, but potential buyers can more easily picture their own furnishings working with the surroundings. Stay away from “loud colors” and white, as white will make the home feel too clinical.

Straighten Up!

Don’t underestimate curb appeal. Your yard may be the determining factor in whether buyers make an appointment to see the inside of your home. Keep flowerbeds weeded and pruned, walkways and decks swept and clean, and grass mowed.

Cozy Up!

Once inside, buyers want to feel cozy and at home. You can help them with this by staging your house. Light fireplaces, especially if the weather is still cool. A freshly brewed pot of coffee or baking bread give off an inviting aroma. Staging consultants cost very little and can make a HUGE impact on the way your home is presented to a buyer (Once again…I can refer someone to you).

Lighten Up!

Lighting is very important to setting the mood in your home. Bright, well-lit houses feel more spacious and cheerful. Open all curtains and drapes during the day. If the view isn’t appealing, cover it with sheer window treatments that let light through. Turn on all lamps, even during the day. Hallways, closets, and stairways need to be brightly lit as well.

When your home is on the market, it can be shown any time of day. Be sure to keep it clean and organized. A little effort now can pay off big in the long run.

4 Bedroom, 3 bath, 3067 sq ft. New & refinished wood floors, new runner & upgraded carpet. New electrical & gorgeous lighting, both inside & out. New Formal Living silk window treatments. New appliances, New custom cabinets, Kohler sink & faucet, Calcutta Oro Marble countertops with Ogee edge & Ann Sacks backsplash in kitchen. Remodeled 1st floor bath with custom cabinets, Ann Sacks tile, granite sink, and limestone slab. 9′ ceilings, and designer finishes throughout.

It is important to know that the appraiser is completely independent from lenders, buyers, sellers, and Real Estate Agents, and that the guidelines to which they adhere are dictated by the Uniform Standards of Professional Appraisal Practice (USPAP) and Fannie Mae. In most states, the mortgage lenders must also disclose the purpose of the appraisal, as each transaction carries its own set of rules.
In essence, these important guidelines help appraisers put a fair market value on homes based on comparable sales in the same area, and the home must be bracketed in size and value.
For example, there is no set dollar figure associated with a great view, pool, spa, bathroom upgrades, etc. If a homeowner installs a custom pool that cost them $30,000, but the local marketplace supports the value of a pool at $15,000, then that item will be bracketed as [$15,000] on the appraisal.
Upgrades can usually be expressed at a higher percentage of their value in newer homes because the only way to obtain those upgrades was to put more money into the cost of building the home. On the other hand, the upgrading or remodeling of an older home is rarely reflected in full in the final appraisal. This is because typically 25-40% of the project involves demolition and the fixing of issues that aren’t uncovered until the project has already begun, such as plumbing or wiring that may need updating.
Ultimately, the value of the upgrades must be supported by comparable examples within the same marketplace. These comparisons must be drawn from current market activity within the last six months. This is a safeguard to prevent appraisers from attaching too high a value to the home in question, and opening up the appraisal for review. This guideline further states that appraisers can only base their opinion on the value of homes that have actually closed escrow.

Jobs Report

So, this morning, the jobs report was released…..and it was stinker.  In fact, it was the worst report in 14 years.  To "add salt to the wound", the numbers for August & September were revised downwards by large amounts.

In total, nearly 1.2 million jobs have been lost since the beginning of the year.  So, while the unemployment figure has jumped to 6.5%, there is another part of this picture that is often ignored……the “under-employment figure”.  In other words, many people have not lost their jobs………they just aren’t working a 40 hour week, let alone any overtime.  Not good at all, but hopefully this means that "the bottom" is near.

The Challenge Ahead

Image by Getty Images via Daylife

The challenge ahead for the Fed is that there isn’t too much stimulus left to throw at this problem.  Injecting capital into the system is the Fed’s primary tool and they have used it quite a bit lately.  Typically, the jobs report that we saw today would indicate that the Fed will be cutting rates again in the near future to stimulate the economy.  The problem is that the Fed Funds Rate is already at 1%, so there isn’t much more room to cut.   So unless something changes soon, the stock market will probably continue to slide, which should be a positive for bonds (and interest rates).  

Author:

Matthew Camp

Senior Loan Officer

National City Mortgage

I love these guys.

NEWS FLASH: PORTLAND WASTING MONEY

Hundreds of thousands of dollars are wasted every year in the greater North West by home owners trying to do simple household projects themselves.

Cause No Harm…

I came across a home in Hillsboro where the home owner tried to remove bathtub caulk with a propane torch; a home in Beaverton where a lady tried to remodel her kitchen, and cut out one of the main supports for the home; and a home in Portland where, remodels were done using caulk instead of screws ( The light fell down as we were showing the property). The video above shows what happened when a hot water heaters two safety devices were disabled, and yes this one was confirmed.

Cheap is not always cheap

I see it all the time in Portland, Hillsboro, Beaverton, Aloha, Vancouver (shall I keep going) homeowners.  For what ever reason, possibly to save a penny, lack of experience, or simply not taking the time to read up on the project, people cause more harm than good by attempting a “Do-it-Yourself Project”.

Don’t get me wrong, as I’ve said in other posts, I am one of the most frugal people (cheap) you will come across. However in being cheap I have also learned that plenty of research needs to be done before you dive in and start even the simplest of projects, and there are those times that you should probably call someone.  (See below for a few good resources or call anytime, I’ve a book full of them).

Oh C%@P!!!

One of the most expensive occurrences of this lesson for me happened when I lived on a sailboat in Pearl Harbor.  To be legal for the Coasties, I needed to add a light to the top of my mast.  The previous owner had been clipping a large flashlight to the top and had gotten away with it.  I knew better, or at least I thought I did, so I climbed up to the top of the mast and put in a light.  I came across one small problem, no power.  Simple right…just drill through the roof of the boat into the mast and run the power through the hole.

Long story short, I spent a couple thousand dollars to repair the main beam of the boat after the mast dropped due to being weakened by the hole I drilled.  Not a good day.

So Next time you decide to do a project, make sure you do a little research, who knows you might even find a way to do it cheaper than you thought.