Strategic Realty

solutions for real estate

How to Sell a House FAST for Top Dollar

By

If you are looking to sell your home, it’s a safe assumption, that you’re looking to sell it as quickly as possible for as much money as possible. After all, selling a home under the best of circumstances is quite stressful. Selling it and ending up with a price that is well below your original asking price can be downright impossible.

If you are looking for ways to sell your home fast and make as much money as possible while doing it, we have some experience that might help. Strategic Realty and its trusted brokers are experts in selling property in Central Oregon.

Below are some top tips for selling your home fast, and some of the most impactful things you can do might surprise you!

Assessment and Preparation of your Home

There are many things that can affect the value of your home in Central Oregon. Real estate cycles, our seasonal market conditions, the economic trends, supply and demand, and of course even the number of homes currently listed for sale. Assessing and positioning your home for sale is an important step where money can be made. Perform an in-depth analysis of where the market tells you your home fits. As most homeowners can only see the currently available homes on the market, this will usually take a qualified professional with access to deep statistics on past sales.

Focus on the things that you can control like; curb appeal, condition issues, online marketing, and exposure to the buyers in our marketplace. You will want to assess your financial goals, the number of comparable properties for sale and get your home show ready.

Add Value Through Home Improvements

One of the best ways to sell your home fast in Central Oregon for the greatest price is to make desirable renovations to your home that can improve the value by thousands of dollars or more. For example, based on many professional studies, doing a job like a bathroom remodel can increase the value of your home significantly. Updating countertops, windows, trimming the bushes, and getting a fresh paint job can also have a major impact on the final amount your home will sell for.

Before you decide to go through with any type of home improvement with the hope of increasing the value of your home, you should talk with a REALTOR® to learn about how much the improvements you are considering will really impact the final value. After all, you do not want to spend thousands of dollars on a renovation that will end up making your home harder to sell? Make sure that you will get a great return on the new expenses you are adding to your home. Also know that a clean, well-staged, uncluttered home always has better odds of getting a higher price.

Know your Target Buyers Needs

Obviously, the best time to sell is during a seller’s market, because a seller’s market condition is going to push prices up. That is especially true if you are selling a home that offers people a ton of value. No matter the market you will want to think about who your target customer is when you’re selling. For example, if your home has a large number of bedrooms and is in a great public school district, your home may be more valuable to a young family. Or if you have a home with a master bedroom on the first floor, that is in a great location close to shopping, doctors, and entertainment your home could be in more demand from retirees. Think about comparing your home to the new construction homes in the area. How does it compare?

Keep in mind if you have the upgrades that are in high demand it could affect the value of your home. Dark cabinets, ceramic tile floors, laminate countertops, dark or jewel tone paint, will all decrease a home’s value since they tend to be dated and out of style. Upgrades that are in demand are quartz countertops, light-colored custom cabinets, light washed wood-tone floors, and open floor plans that include kitchen, living, and dining rooms as open space.

Price it RIGHT The First Time

Sometimes all it takes to sell your home fast is the right price. Your goal should be to set the right price from the beginning. Setting a price that ‘you believe it’s worth’, rather than what ‘it is actually worth’ may feel like a good idea, but this can end up hurting you in some really important ways. Even if you find a buyer to pay an unusual price, you still have to convince their appraiser that the home is worth it.

First and foremost, if you have to keep reducing the listing price, it will lead to more days on the market which can sometimes lead to buyers asking “what is wrong with this home?”

This delay in a sale could end up looking really bad for the home. Even worse, you could end up reducing the price even lower than something that you would actually be comfortable selling for. Additionally, when buyers see price reductions they may feel like they can make low-ball offers due to the perceived loss in value.

When you are thinking about putting your home on the market, consult with the local Central Oregon REALTOR®, at your home, in order to get the most accurate home value. Many of the online home value tools may give you ‘an idea’ of price, but these values can vary wildly and are often proven to not be accurate. Zillow Home Values in Central Oregon are NOT precise or accurate. The valuations online are based on computer algorithms that can not view the inside of your home, see the condition, or give you the most accurate information. Only a professional who does this every day can give you the most up to date information. Giving you a price without seeing it in person is like a Doctor giving you a diagnosis before they have even seen you.

Understand The Local Market Trends

One of the most important things you should keep in mind when you are preparing to put your home on the market for sale is the location and the neighborhood. Your home’s competition will ultimately determine its value. Currently we are seeing more inventory and slower pace of sales driven by higher interest rates. If new construction homes are available in your local market, then they are driving the competition. Even if your home is just a few years old, it still has to offer better value than what buyers will will see in the new construction homes.

One of the top things you can do to sell your home fast for the most money is to talk with a local REALTOR® and pick their brain. Setup a meeting in your home and discuss not only the current market conditions but also the condition of your home and possible improvements you can make. Give us a call today and setup an appointment. We can help you create a plan to set you up for success!

What Does Under Contract Mean in the Real Estate World?

By

With so many popular terms in the real estate industry how is the consumer supposed to know what they all mean? Mortgage, appraisal, earnest money, due diligence, the list is truly endless. One of the more popular terms you will hear REALTORS® and lenders use is the term “under contract”. But what does that really mean?

There are many times where a buyer will look at real estate listings and find one that really grabs their attention. It has everything they have been looking for, but it is listed as either “Pending” or “Under Contract”. Buyers who have no idea what those terms mean usually find themselves feeling a bit uncertain. Many ask “is it sold?” “can I still buy it?”, and unfortunately the answer is not exactly transparent. To fully understand this we have to deep-dive into the strategies of negotiating a real estate transaction. Our guide below will help you understand what this all means and show you how we can help you through these situations.

Under Contract Listings Explained

The common understanding of “under contract” would leave most assuming that the home is sold and no longer available. In the real estate world it truly means something very different.

A house that is listed as “pending” or “under contract” in real estate terms indicates that the seller has found a buyer for the house, and that that buyer and seller have come to an agreement on some of the terms for the buyer to purchase the home.

An obvious question might be, if an agreement has already been made between buyers and sellers, why are houses listed as under contract still available for viewing to prospective customers?

This is because, despite the fact these properties are under contract, there is still a possibility that the deal may fall through, thereby giving another interested buyer an opportunity to seal the deal.

Under contract refers to a status in which the seller of the property has an agreement with a potential buyer, but the house is technically still advertised on the market because the agreement isn’t finalized yet. There are still contingencies that will need to be met before the property can be considered sold.

Contingencies

That brings us to the wonderful world of contingencies. Contingencies are certain conditions that have to be met or completed/agreed upon before a real estate transaction can be closed. Below is a list of the most common contingencies you will find in a standard residential sales agreement:

Sales Contingencies – this contingencies states that the offer to buy a home will only close if the buyer is able to sell their currently property. These are quite common in the real estate industry and sometimes can include the sale of multiple properties in order to purchase one.

Financial Contingencies – these are measures taken to prove to the seller that a buyer is able to purchase the property and has been approved for the mortgage needed to acquire the property.

Inspection Contingencies – this is a time period determined by the offer to purchase for the buyer to have the home and property inspected by a professional home inspector. This is also a time for a buyer to negotiate repairs that may be needed on the home.

Appraisal Contingencies – this is the agreement between the buyer and the seller that the home will be appraised, and that the value determined by the appraisal must be the purchase price or higher. If the appraisal comes back below the value of the purchase price in the sales agreement a new price may need to be negotiated or the transaction may need to be canceled.

Contingent VS Pending VS Under Contract VS In Escrow

Essentially these all mean the same thing. These titles are usually determined by the Multiple Listing Service (MLS).

We can assure you that “contingent” and “pending,” do in fact mean the same things as under contract. 

In the past, a “contingent” listing used to specifically mean that the buyer still had to sell their home (or homes) in order to close the deal. Nowadays, though, it is no longer limited to only this kind of contingency (sales contingency) and can imply other forms too. You may also see a term “Contingent Bumpable”. In our MLS system the “Contingent Bumpable” means the seller is still accepting offers and that their current offer can be “bumped” out under certain circumstances.

At any rate, a house listed as “under contract”, “contingent”, or “pending”, indicates that the house has a potential buyer with an agreement in place.

Under Contract Summary

Closing a transaction in the real estate world requires a few more steps than just writing an offer and closing the deal. To just name a few, there is the listing period, showings, negotiating, accepting an offer, clearing all the contingencies and then finally closing escrow.

Houses listed as pending or under contract have only made it through the initial offer being accepted and there is still a lot of work to be done. Houses in this phase of the process can still fall through and it happens often.

If you find your perfect home and it is listed as pending don’t give up. Contact your broker and see if there is a chance to put in a backup offer on the property. You never know what might happen!

All Eyes on Central Oregon Statistics

By

I had the distinct pleasure of attending a one-hour continuing education class this past week on Valuation Process and Adjustment Methodologies. It may sound a little dry, but when the market is shifting, as is the case now, we all turn to metrics and statistics to make sense of it. The class was hosted by Deschutes Title and presented by Donnie Montagner. The former name is that of Central Oregon’s last locally owned title company..and the latter name should be familiar to anyone who watches the Central Oregon real estate market closely. Donnie Montagner heads up Beacon Appraisal services, and his “Beacon Report” is often cited as an independent gold standard in reporting the local market trends.

The class was well-attended by real estate brokers and appraisers alike. We quickly went over some cost, income, and sales approach strategies and then dove into the deeper weeds of paired analysis, ratio studies, binomial regressions and the like. Appraisers have the challenge of turning what brokers do as an informed guess into a distinct science. As one appraiser mentioned in the audience, “Houses come in red, yellow, brown and blue…but banks want us to turn it into black-and-white…and they don’t like gray.” (I should have gotten his name, because I’ll probably use his words throughout the rest of my career.)

Throughout the class, one theme that kept reemerging was the market’s rapid change. A fact that Donnie reflected on with a sense of glee. When what you do for a living is mostly measuring a trend, it is somewhat exciting when it switches direction. Many of the real estate brokers’ questions centered around what could be divined from the appraisers’ data, and the appraisers’ answers reminded the brokers that we are all working with the same data. And in the appraisers’ case, they are more interested in what happened than what’s coming.

The market is changing, and that is exactly what interest rate hikes were supposed to accomplish. Now how much the market has changed is just now coming into focus, and where it will go next is anyone’s guess. Many real estate brokers talk as if the world is shifting under their feet, and sometimes that itself can have an effect on consumers’ confidence. But we all must remember that real estate brokers were building their companies over the last two years to handle the onslaught of transactions that no one predicted coming out of the COVID-19 response. Any return to a more normal market is going to create a some slack in those systems, and may feel like a more dramatic shift than it really is.

I’ll borrow some of Donnie’s data to illustrate the point. One of the sentiments you hear from brokers recently is how rising interest rates have decimated the number of real estate buyers in the local market. Below are monthly sales numbers for the Bend single-family house market from Donnie’s Beacon Report. I’ve overlayed the average weekly rates for a 30-year mortgage.

Did you spot the decimation? Neither did I.

Do I believe the market is changing? Absolutely. But the magnitude does match up with the mourning. Not to say that a market can’t turn quickly. We certainly saw that in 2008, and I’m not convinced that it can’t happen again. We continue to watch everything very closely. If you have any questions about the market, statistics, or how your home value might be affected, please don’t hesitate to reach out.

Proposed New Changes to Short Term Rentals in Bend

By

Bend’s City Council has asked staff to draft some new rules regarding short-term rental (STR) licensing.

The new rules would expand the current 250-ft buffer between STR’s to 500 ft. That’s pretty significant as you can tell from the GIS Departments map of eligibility here.

An important thing to remember about this map is that it doesn’t take into consideration neighborhoods where short-term rentals may be prohibited by CC&Rs. When you see a neighborhood on this map that doesn’t contain at least one place where an STR would be stopped by the current 250 ft. radius, that is a good indicator of a neighborhood where the CC&Rs prevent short-term rentals. Notable examples are neighborhoods like Broken Top, Awbrey Glen, and Northwest Crossing.

The crazy thing about these new rules is that they are mostly being proposed (as was the original STR buffer restrictions) to protect the River West neighborhood where 31% of the current STR licenses exist. As was the case back before the City passed the STR licensing program, the River West neighborhood has the option of organizing their own HOA and passing their own rules regarding short-term rentals in their neighborhood. Why we keep getting these city-wide rules to protect one small pocket of residents is beyond me.

Another provision of the new guidelines will be that a landlord can keep their STR license, preventing other homeowners within 500 ft of getting a license, and then put their property into long-term rental.

If you have any questions about Bend STR licensing, type I vs type II, transferability or property values, please don’t hesitate to give us a call.

New Commercial Escalation Clauses in Leases

By

In real estate, we often deal with two different types of “escalation clauses.” The one that most people are familiar with after the crazy residential market of the last few years, is the clause in a residential real estate offer that modifies the sales price on the offer based on other offers the sellers might receive. That’s not the one I’m talking about here.

The second type of escalation clause are the ones we often see in commercial leases. The purpose of this type of clause is to effectively modify the lease rate annually to compensate for inflation that might devalue the value of the lease to the landlord. Prior to this last year or so, they were pretty straight forward little clauses. Often times, a tenant would offer the landlord an escalation clause that stated the lease rate should increase by 2.5% annually. The landlord always wanted 3% annually. And, depending on the motivation on both sides of the transaction, a compromise would be reached.

Sometimes these escalators were carried over into the lease renewals, and sometimes the lease renewal would be based on something completely different…I’ll write about those later.

Today, landlords with multi-year leases are realizing that 2.5% or even 3% escalators weren’t enough to protect them from the rapid rise of inflation. We jumped 4.7% in 2021 and are already on track for over 9% in 2022. In response, we’re seeing landlords starting to include much more comprehensive escalation clauses, often times linked to things like the Consumer Price Index (CPI). For tenants, this can cause an uncomfortable risk in their new lease. Linking their payment directly to the CPI, can mean that their lease payment could surge in a single year. Tenants are often responsibly for property maintenance, repairs, insurances, etc through what is called triple-nets and Common Area Maintenance fees (CAMs). Of course these costs are also impacted by inflation. The result is a lot of risk on the tenant side of the negotiation.

Recently, we just ran the above calculations for a client that was looking at a CPI-based escalator in a 20-year commercial lease. For comparison purposes, and to use some real historic data, we used the example of a tenant signing a lease in 1980 for $3,000 per month. We then compared that lease rate under the CPI-escalator and a more traditional 3% escalator. As you can see, although the annual inflation over those 20 years was only a bit over 4%, the final year of lease payments were 27% higher in the CPI-based model.

Why Rental Property is a Great Inflation Hedge

By

In these days of increased inflation (I almost said hyperinflation, but thought I should check the definition on that…apparently that’s inflation above 50%…good reality check) many folks are trying their best to hold on to what they have. Cash is a poor reserve of wealth when dollars are buying less and less, and some of our knee-jerk ideas like buying gold just don’t hold up to scrutiny. (It worked in the 1970’s….not since.)

For savvy investors few inflationary hedges are better than income real estate, and there are a few reasons for that. The first, when talking about residential real estate, is that rents have historically kept up with inflation. That’s important because when you’re valuing duplexes, triplexes, quadplexes, and apartments, what they are worth in any market is based on what they rent for. Unlike single-family homes, these products are sold on a gross-rent multiplier or cap rate. When rents go up, value goes up.

To illustrate inflation vs rent, allow me to borrow the excellent graph from Nuveen with all credit and gratitude given.

https://www.nuveen.com/en-us/insights/real-estate/re-as-an-inflation-hedge

One of the reasons that real estate tracks so well with inflation is that the competition for real estate product is new real estate product. And construction costs of new real estate product are directly and severely impacted by inflation. On top of those increased material and labor costs, new real estate product relies heavily on bank financing which also increases steeply in inflationary times. All of this combines to prevent demand from being quickly satiated with new supply.

Footnote: So it makes sense to buy income real estate in today’s market (obviously not every deal is a winner), but what if you’re one of our clients who bought income real estate ten years ago? The appreciation of those properties has been significant, and, in the case of single-family homes, eye-watering. You were probably just considering selling those assets 6 months ago, when inflation started to give you a reason to hold on. The answer is…it’s time to reevaluate the portfolio. Not all income properties are the same, and it’s important to know which you want to be holding in this market. Ask us, and we’ll be happy to help.

let us help

No matter what you’re trying to accomplish with real estate, we’re here to help. Let’s start with a real estate conversation. Let us know how I can help.

We help you find your dream home

Office Location

We're conveniently located near the center of Bend, Oregon, in downtown. Stop by our full service brokerage and let us help take some of the mystery about of the buying and selling process.

New Office Location
325 NW Vermont St., #107
Bend, OR 97703

See Location

Follow Us