Appraisals are slower and more expensive than ever. What’s up with that?

Why do you hire a Realtor? Because things change in the market ALL of the time.

It is what keeps it interesting for people like me who like change. Not all change,  ( I do not particularly care for loose change – I gotta jar for that)  but most change keeps things from getting dull and static.

So the latest issues we are having are with appraisals, and/or appraisers.

This is a function of a system in Oregon that makes getting licensed to be an appraiser very time consuming, expensive and difficult. And the regulations put on them by legislation what was passed in the wake of the financial meltdown of the mid 2000s, such as Dodd-Frank, made filling out the paperwork onerous, and put appraisal management companies in as middlemen who take a cut of the appraisers money.

The main hurdle is that appraisers must do an apprenticeship with an existing appraiser. But with the existing system, there is not incentive for an appraiser to take a new person under their wing. It basically just costs them more time, and there is no personal benefit. So at this time, it is my understanding that there are very few appraisers waiting to come into the system. Too much red tape, and not enough profit.

Add that to appraisers retiring, and business being very brisk at the moment, there aren’t enough people for the job. What's Up With Appraisals?

Which leads to 3 big things I am seeing.

1. The average appraisal in our area right now is out almost 4 weeks, and compared to other areas of the state that is actually good. If you are looking in Klamath County, it is closer to 8 weeks

2. Appraisers are cherry picking the easy appraisals, and passing on the more difficult ones. What appears to be happening with the difficult ones then is they fall to the bottom rung of appraisers who are so bad at their job that they can’t get hired unless no one else wants it. So the hardest appraisals are going to the least qualified appraisers.

3. Lenders are offering extra money (charged to buyers generally) to get their appraisal picked up quicker. So they add a Rush charge of a couple hundred bucks. But that just pushes out the buyers who are waiting their turn longer, and to compete they have to pay more money.

Okay, so that was just sort of complaining. What can we do about it is the question. Knowing that it takes 45-60 days to close a house with a loan is one thing. Added patience is needed.

Ordering the appraisal as quickly as possible. This actually hurts potential buyers, because they could pay for an appraisal on a house, then discover that the foundation is bad. I like to have inspections completed before spending the money on the appraisal, but that is getting harder to do in this market.

We as Realtors have been working on this issue with the legislature and the Appraisers board to try to solve if for a couple of year now.

But what we need are consumers who have been hurt by this challenge to complain to their legislators and work on getting a fix. Because as the appraisers keep retiring, this problem is just going to get worse.

 

Pokemon Though Town to Learn The Area

Have you been hearing the fanfare and craze that has been the Pokemon Go game?IMG_2729

I am finding it to be rather amusing. This game is based off of another game by Niantic (which is actually Google)  The other game is called Ingress, and is a location based game that is worldwide. It was the biggest game in the world that no one had ever heard of. It was a combination of geocaching and capture the flag.

One of the things you did when you played Ingress was you found places of art, worship, and places of historical interest and took pictures to submit to Ingress to become “portals”.

This was brilliant on the game makers part, because they got real world locations and pictures geotagged without having to go out and take the pictures themselves.

And it is this platform that they based the Pokemon Go game on.

Now what does this have to do with real estate you might ask?  Not too much. But it is a great way to get to know a new area. Because to play the game, you need to find all of these places of interest.

Even after having living in Ashland for 10 years, and the Rogue Valley for 15, when I started playing Ingress a couple of years ago I found all kinds of parks and statues and churches, etc…. that I didn’t have any idea where they were before, or even that they existed.

And when I travel to new towns, I play the game to get to see the details in the town that otherwise I miss. For instance my wife and I went to the Sundial Bridge in Redding and the botanical park there because we were playing this silly game. But that bridge is really cool, and I am glad I got a chance to see it.

And if you are in the Rogue Valley playing Pokemon Go…I can tell you where every portal in the valley is. So when we are looking at houses to buy…I’ll point them out so you can capture them, or fight imaginary creatures, or whatever it is one does in Pokemon Go.

Rogue World Music

RWMLogoThis is from our Sneak Preview column called the 501c3 Files

By Adam Bogle

Summer, summer, milk of the calves, We brought the summer with us. Yellow summer of the clear bright daisies, We brought the summer with us! This is just one of the lines from the song Thugamar Fein An Samhradh Linn (This is Gaelic, not typos.) that Rogue World Ensemble will be singing May 21st and 22nd right here in the Rogue Valley. Of course it will be sung entirely in Irish Gaelic because that is just how they roll. This concert alone has over seven different cultures represented from Turkish to Swedish to Haitian French. And now Rogue World Music has created a children’s group called the Rogue World Choristers. A natural extension to reach even more of this community!

Singing with The Rogue World Choristers is a beautiful way for children to learn about the world’s folk music traditions while developing their musical skills in a fun and supportive atmosphere. Shaun Garner, the Artistic Director says: “These children come to us, often with no prior training and yet, by the time twelve weeks of rehearsal has ended they are a true choir singing together and understanding the cultures each song represents. It’s incredible to watch.” The children have a lot of fun with the lyrics. One of the lines the kids like from a song from Ghana this term is: “Tu-eh, tu-eh, barima tu-eh tu-eh; Rice cakes for sale! Come buy my rice cakes!” The Choristers have two sessions per year, one in fall the other in spring and there are scholarships available. Singing in a choir is known to improve both cooperation and leadership skills and even lowers stress levels and improves concentration.

The Rogue World Ensemble was founded in 2009 by Megan Danforth with the goal of bringing music back to its community roots. According to the choir members, this choir has a really different feeling from other choirs. It is very inclusive and approachable. Here are some quotes from choir members: “I have been in other choirs where I hardly even spoke to the others in my section. This feels more like hanging out with friends.” “I get goosebumps singing the Eastern European songs that connect me to my heritage.”, “Joining this group helped me find my voice again after twenty years without singing.” Many of the singers talked about feeling connected and grounded being a part of this group. Two members drive to rehearsal once a week from Grants Pass and one from Williams. That’s dedication!

This is the music of the people, by the people and for the people. It is full of simple and beautiful sentiments like “I am sister to the roses, I am sister to the foam, to the egrets, to the roses and the sun…” and “O Pirin Mountain, how beautiful you are…” Some of the harmonies and scales are hauntingly different than what you hear on the radio. They help bring the far away countries a bit closer and that brings us all closer. In this time of great immigration issues it is important for all of us to remember and celebrate the cultures from which we came.

To help foster the authenticity of the songs they sing from different cultures, RWM brings in experts to help with pronunciation and style. Part of the choir experience is to attend workshops to really dig in to another culture. From Eastern European music with Kitka, Ugandan music with Samite, to Appalachian, Cape Breton and Gospel Music. Rogue World Music also helps promote other local world music in the area such as the folk dances held at Paschal Winery with Omada Kosmos and house concerts with the world class music of Kevin Carr and Pat O’Scannell.

The next Rogue World Ensemble concert is called Travelin’ Light and will be held at the Unitarian Fellowship 7PM on Saturday May 21st and again at the Bigham Knoll Ballroom in Jacksonville at 4PM on Sunday May 22nd. For more information visit www.RogueWorldMusic.org. Celebrating community, diversity and the human spirit through world folk music.

Rural Property Specialist

Image titleI must say, I love selling rural property.

Many, many Realtors do not like to do it. Some prefer to just sell new construction, or homes in subdivisions. I was having a conversation with another Realtor lately about that.
She said “I just want to sell East Medford subdivisions, because they are easy. You look at the price per square foot and know if it is a good deal or a bad deal. EASY”.

I guess my thing is I am not into easy. I actually like complicated. I can show my experience and expertise much better. What are the easements? what is the well like? How is the septic?

Plus…I just like to be out in the country. Walking around over 20 acres, finding creeks, keeping an eye out for mushrooms. It really is a lot of fun.

Don’t get me wrong, I like to sell homes in town too. Especially in Ashland. But a lot of that has to do with the commute time. Last week I showed 8 rural pieces of property and drove about 400 miles.  The next day I showed 6 houses in town, and drove 10 miles.

But even so. I still love those rural properties.

Thought Leader Post

I wish I had more time to write more of these Thought Leader blog posts for other sites. I find them fun to do. But don’t always have time to do them. This article was for a company that provides online continuing education for Realtors® across the country. While I take almost all of my continuing education in person, companies like PDH are a valuable asset to Realtors who prefer to take some or all of their continuing education classes online.

Here is a link to the article I wrote for them.

501c 3 Files: Ashland Emergency Food Bank

501c3 Files

Ashland Emergency Food Bank

By Adam Bogle

One could easily argue that the most basic human need is food. Of course we can argue about what constitutes food. I mean, is American cheese really food? And this basic need is where the Ashland Emergency Food Bank (AEFB) comes in.

Who do they help?

The amazing fact is that the people they are helping may well be your neighbor. And you probably don’t even know it.

I personally know the story of a person who was helped by the AEFB awhile ago. You may or may not remember, but a few years ago there was a giant recession that hit the USA. The heart of this started with a crash of the real estate market. There were some people who saw this coming, although I don’t think anyone saw how bad it was going to be. This person I know was a Realtor® who had only been selling homes for a couple of years before the recession hit and was just not prepared for it. 

Did you know that Realtors® for the most part are self employed, and cannot receive unemployment benefits. Even if they go months without selling a house! Even food stamps are difficult to get because the applications aren’t geared toward people who make lump sums.

So when crash came, he used the little money he did have to pay the power bill, and keep the Internet on, and pay for all of the expenses that come with being a Realtor®. Because there would be no digging out if he couldn’t continue to go to work.

It is hard for a prideful person who is seen as a success in the community to admit they need assistance. Fortunately, his understanding wife was happy to undertake the monthly trips to AEFB for some peanut butter, pasta, etc. She said that the experience was always pleasant, and was impressed at how organized they were.

The Ashland Emergency Food Bank helped a lot of people through that recession and they are still at it. Last year, 2015, they served 611 households each month, or about 1500 people. Their customers include the unemployed, chronically ill and disabled, working poor, families, students, seniors and homeless that live regularly in Ashland. They do provide a one-time small bag of food to the traveling homeless, because their mission is that no one should go hungry. However, they reserve the “shopping” for Ashland residents, including the homeless residents.

How do they help?

The Ashland Emergency Food Bank is located in the old KFC building at 560 Clover Lane. They are open Monday-Friday and the first Saturday of the month from 9:30-12:30.  In addition to being a place that those in need can come by and pick up enough rations for 2-3 days of meal, AEFB also distributes food to several local organizations that share their mission, including SOU food pantry, Maslow Project and others.

How Can You Help?

There are a number of ways to help. The easiest is to support the Ashland Food Project green bag drive and leave your green bag out on the 2nd Saturday of every other month. Cereal is always an item that they seem to run short of, so consider adding a box or two to the bag.

AEFB also needs hundreds of volunteers on a regular basis. Their family of volunteers collectively donated 6045 hours of time to daily operations last year.

And monetary donations help with the purchase of perishable foods, and are always welcome.

The Rest of the Story

Now this is the part where everyone who remembers Paul Harvey, gets to know “the rest of the story”. As you know, the real estate market picked back up and my family, who needed that assistance during the crash recovered and picked themselves up as well.

  Yes, I was the Realtor® in need, and because of this experience my family decided to take the term “bank” seriously; not just as a place just to make withdrawals, but also as a place that needs regular deposits made into it. I hope to never have to make another withdrawal from the “bank”, but we will continue to provide food, volunteer time at the bimonthly food drive, and monetary support.

For more info on how you can help, check out their Facebook page, or contact their executive director Pam Marsh at 541-488-9544 weekdays between 9:30 and noon.

Weather In Oregon

I have lived in most areas in the state of Oregon at some point in my life. And one thing that I know is that the weather is very different depending on where you live.

People have a view of Oregon as being gray and rainy.  While that is true for the majority of the population of Oregon, that’s because the majority of Oregon’s population live the in the Willamette Valley.

So I’m going to break the state into a few general areas, and give a couple of stats for the differences in the weather. You will find that I believe the Rogue Valley has the best weather in the state. However, my daughter lives in Eugene, and thinks the weather there is the best. But she cannot stand the sun, or warm weather. So that is true for her.

To me the Willamette Valley is too grey and wet. Bend and east of the Cascades is too cold in the winter. Funny thing is that Central Oregon is considered to be very sunny, but the Rogue Valley has more days of full sunshine. That actually surprise me a little.

Rogue Valley (Ashland, Medford, Central Point).  In town properties. With the radical elevation differences, there are variations if you get into the mountains, but overall the houses are located in the valley.

  1. Average Rainfall per year:  24 Inches

  2. Average Days of Full Sunshine: 113

  3. Average High Temperature July:  85

  4. Average Low Temperature January:  29

Adorable little toddler girl having fun with umbrella in yellow rain boots and umbrella in summer park.

Grants Pass  (just 30 miles up I-5 and their motto is “It’s the Climate”)

  1. Average Rainfall per year:  37.5 Inches

  2. Average Days of Full Sunshine: 104

  3. Average High Temperature July:  84

  4. Average Low Temperature January:  31

Portland Metro

  1. Average Rainfall per year:  45 Inches

  2. Average Days of Full Sunshine: 67

  3. Average High Temperature July:  75

  4. Average Low Temperature January:  36

Bend

  1. Average Rainfall per year:  9 Inches  (But also 31 inches of snow which is rare in the other areas)

  2. Average Days of Full Sunshine: 83

  3. Average High Temperature July:  80

  4. Average Low Temperature January:  20

Oregon Coast  (Actually I’m taking this from Florence which is middle of the state. But compares to all of the Oregon Coast)

  1. Average Rainfall per year:  85 Inches

  2. Average Days of Full Sunshine: 68

  3. Average High Temperature July:  72

  4. Average Low Temperature January:  36

Chasing Down the Foreclosure Part 3 – REO

See part 1 for pre-foreclosure

See part 2 for Auctions

REO- (Real Estate Owned-a fancy way to say the bank owns the real estate)

This is actually the easiest and most doable way to buy a house that is foreclosed. 95% of the time if you hear someone said they bought a foreclosure, this is what they meant.  It is a way to get a fairly good deal on a property, but it is still not the steal people envision from the infomercials they have consumed.

There are 2 main types or REO properties. Ones that have been listed with an agent, and ones that have not. I will cover the listed ones first, because it is pretty straight forward. Each bank usually has a local agent that they list their REO properties with. The Realtor gives the bank a price they think will sell the house in 30 days, and put it on the market. This price is generally about 10% under fair market value, and it is listed there to generate that fast sale.  So if you keep your eyes open, this is the best way to get a deal on a foreclosure.

I DO work on this kind of sale. And I highly recommend having an agent who has experience with REO properties to help you. The sale usually if full of headaches. The banks generally don’t want to do any repairs unless they are lender required. And frequently these homes are in bad shape. They have deferred maintenance, and may have sat vacant for years. They may not qualify for FHA or VA loans. So definitely have a good agent help on these purchases

If you would like to be put on a list to receive new listings of REO properties as they come on the market, contact me and I will set up that for you. Or follow this link. Jackson County Foreclosures

The 2nd kind is REO properties that have not yet been listed. My experience is the banks have a set way that they do things, and selling directly without putting them on the open market is not one of them. They will let the property just sit vacant, sometimes for years, until they get around to wanting to get it off the books.

There are many theories of why they are doing this. The so called “shadow inventory”. One popular theory is they are waiting for the value to increase before they put it up for sale. Another is they don’t want to drive the prices of real estate down by flooding the market with too many at one time.

I think there is validity to both of those theories, but my personal theory is just disorganization. There are thousands of these properties across the country. And a paper pusher sitting at a central desk has them all on his plate, along with probably a bunch of other things. And as he weeds his way through the pile, some places just take forever to get to.  And now that the new foreclosure rate has gone down, the banks will probably move these people to other departments.

Is it possible to directly contact the bank, find the asset manager, and make an offer to purchase without the property hitting the open market? Yes, I guess. I just don’t know of anyone who has succeeded at this with the major REO holding companies. Primarily Fannie Mae and Freddy Mac. They are regulated government agencies with policies, procedures and red tape. It is hard enough to work with these asset managers AFTER they have put the house up for sale, let alone before.

 

So there is it. My 3 part series on distressed properties.

That doesn’t cover short sales, or the Oregon program that can help some homeowners keep their home, but lower their principle called Further Development. I can assist with both of those transactions.

 

 

Chasing Down the Foreclosure Part 2 – Auctions

See part 1 for houses that are in default or pre-foreclosures.

See part 3 for REO

Going to Auction. 

You may have heard a story on someone who bought a $400,000 house on the courthouse steps for $80,000. While not impossible, this is highly, highly unlikely.

This is how it usually goes. The notice is filed saying there will be an auction date for 123 Main Street on May 1st. You go to the courthouse steps, and the official who is auctioning the property announces that the auction has been postponed to a yet to be determined date.

But you are determined to buy 123 Main Street, so you make the next, and the next, and the next auction date. So finally it comes up for auction and you are sure to steal it because you are the only one there. www.SouthernOregonHomeValues.com says the property is worth $300,000. The opening bid on the property is $375,000. Where’s the deal?  Essentially the bank that is in first position on the property has a bid in for at least what they are owed. And by default, it usually wins, because if the house had a loan on it for way less, the previous owners would have sold it instead of letting it foreclose, and pocketed the cash.

Another pitfall is they will actually auction off the 2nd note on a property. So lets say someone has a property with a $250,000 first and an $80,000 second on it. They may auction what you think is the property, but it is actually just the $80,000 second. So you think you bought the house for $80,000 just to find out that in order to get the house, you have to clear the first too. So you either sink another $250,000 into the house, or hope that somehow you can get the borrower to pay the note that you now own. 

So let’s say now that 123 Main is your dream house, and they are auctioning it for $275,000 and you think it is worth $300,000. So you go ahead an make the bid. This is a whole new set of pitfalls. First, you need cash. 2nd, you get the house as-is with no inspections. So if the foundation is no good, too bad. 3rd, you don’t get a title report and title insurance. So there might be other judgements or the title may not be clean and someone could possibly lay claim to ownership.

To me, buying a house on the courthouse steps is Graduate level investor stuff. The risks are huge, and the investor really needs to be able to afford to be wrong every once in awhile. I cannot recommend to anyone who doesn’t do that kind of investing full time to get involved.

Like on Part 1, I don’t specialize in this kind of property sale. It involves a lot of leg work on a lot of properties that never make it to the courthouse steps, or aren’t a good deal when they do. I would not have time to take care of my clients in the market for houses that were actually for sale, or my clients who are wanting to sell their houses. If I stood to gain $100,000 a year from it, it could be worth the full time job. But not for a small percentage (no compensation is actually offered on the courthouse steps) that my client would pay me for assistance, and the risk involved, it is not worthwhile.

 

 

Chasing Down the Foreclosure Part 1- PreForeclosure

See part 2 for Auctions

See part 3 for REO

 

I have written versions of this blog post as emails to a number of people over the years, but thought it might be time to put the general theory in a post that all of those curious could read.

I am not sure where the notion that one can pick up a house that is in foreclosure for a fraction of the value of the property came from. I think it is probably a combination of some urban myth story and television informercials on how to get rich in real estate. The secret to the how to get rich is real estate is to sell the book on how to get rich in real estate.

Is it possible to buy a house that is in pre-foreclosure?Home

Pre-foreclosure basically is a fancy way to say that the owner of the house has not made some mortgage payments, and has been given notice that they are in default.

So the person who “owns” this house is still the homeowner. And that is who you would have to purchase it from. And it is possible that they owe more money on the mortgage than the property is worth. So not only do they have to agree to sell it to you, they have to convince the bank to take less for the payoff than they are owed (short sale).

So is it possible? Technically yes. But first you have to find the owner. So if the house is vacant, then there is the work of chasing them down. Then you have to have that conversation with them that says “I know you haven’t been paying your bills, can I buy your house? And oh, by the way Mr. Seller. The bank is going to ask for a ton of paperwork on you, your finances and why you aren’t paying the bill. Plus, there is a chance you will have to pay taxes on the amount of debt that was forgiven.”

If the seller is still living in the house, they might be there without paying their mortgage. And to move, they would suddenly have to start paying rent somewhere else. So there is little incentive to leave until the bank forces them to.

So it pretty much takes a perfect lining up of the stars to find a house one wants that is in pre-foreclosure, find a seller that is willing to sell and go through the work that entails for them, and convince the bank that they are better off with that deal than going through with the foreclosure.

And after all of that, the amount you save might be 15-20% at the most.

Because in a short sale, the banks have an independent Realtor or Appraiser go look at the property and give them an opinion of value. They look at that opinion of value, and see if they would be better off accepting the offer before them, or if they would net more if they foreclosed and sold it as an REO. In my experience, that figure ends up being at the very most 80% of the opinion of value. But usually closer to 10-15%.  So a house that if put on the open market would be valued at $300,000, you might be able to pick it up for $250,000. It’s still a good deal…but not a steal. But you wouldn’t be able to buy it for $150,000.
And that doesn’t take into account if there are other liens on the property, back taxes or judgements.

I do not specialize in chasing down pre-foreclosures and trying to make the stars all align. The amount of time and effort compared to the probability of success would make me go broke. I wouldn’t have time to take care of my clients who were looking at houses that were actually for sale, or selling homes for my clients who wanted to sell.

It can be done, but generally by someone who is an investor or flipper. This is their job, for themselves. And that potential $50,000 gain goes a fair way into being an annual income. Success twice a year is a good investment. For $100,000 it might be worth it. But for $7,000 it isn’t.