After 8 years in the real estate industry, I have heard it all. As a Realtor, I am often exposed to the most stressed-out version of each of my clients at one point or another throughout the process. And, since everyone’s timeline, financial situation and overall tolerance of risk is so different, I end up helping my clients work through a variety of different questions, fears, obstacles and decisions. These are the moments that can make or break a Realtor’s level of expertise in my opinion, and are a huge part of why I enjoy what I do. 

I get to be a trusted Advisor for my clients during huge moments of their lives. 

But back to the point. One of the most common phrases I have noticed over the years comes from my Buyer clients, when they tell me they “don’t want to waste my time.” So, I wanted to address that phrase in this blog installment.

Most commonly, I hear this phrase when someone is in the early stages of their home search, and they are still figuring out which locations to target and what budget they want to stay within. The other times I have heard this, is after weeks or months of looking at properties, without finding the right one. 

What I find interesting about both of these scenarios, is that it seems as though people have been conditioned to believe that they shouldn’t call their Realtor, until they are ready to make an offer on a home. Or, that there is a finite period of time that they should be finding their home within. Otherwise, they might be wasting my time. 

This couldn’t be further from the truth. 

Having sold nearly 200 homes in my time as a Realtor, I can confidently say that everyone’s timeframe for finding the right property is different. I have had people buy the very first house I showed them, and I have had people take a year or more to find “the one.” Neither instance is right, and neither is wrong. The goal remains the same — finding a property that you connect with and want to purchase!

Sometimes the best way to accomplish this goal, is to see as many homes as possible in person, which can provide super valuable information as to what will or won’t work for you in the property that you purchase. And I LOVE being a part of this process! The better understanding that I have for what your dream home is, or what your goals are for that particular property, the better I can serve you. Being involved in this part of the process also allows me to add my experience and expertise into the mix as well, and hopefully offer some valuable insight that you may not have thought about. 

Either way, the bottom line is that working with you all is an absolute pleasure, and as your trusted real estate advisor, I love being involved in your process for buying or selling a home from start to finish! 

Oh, and it never feels anything close to being a waste of time. 

One of the best things about being a Realtor, is getting to be part of such a momentous occasion in people’s lives. For many, purchasing a home is a goal they have had for many years, prior to actually being in a position to do so. Then, when it actually all comes together, the gratitude my clients express to me for guiding and advising them through the process, is truly humbling. 

On many occasions, I end up becoming great friends with my clients, through the shared adversity, excitement and joy that can come from purchasing a home. When the deal closes, and the stress melts away, the friendship and bond that has been built doesn’t. Being able to work with clients who I genuinely enjoy and care for as people, is what gives me that extra level of passion for what I do. 

Thank you all for always trusting me as your resource for all things Real Estate. I am forever grateful! 

The conversations surrounding Real Estate in the Portland Metro area these days seem to be centered around the idea that the market is cooling off. While the terms “hot” and “cool” are always relative, I thought it would be prudent to share some statistics to help frame this conversation. 

According to the most recent RMLS Market Action Report, new listings and pending sales each decreased by around 4-5% in August. Inventory increased by 10%, and total time on market increased by about 15%. Taken at face value, these stats might lead one to believe that the market is beginning to shift. 

However, when we look at the actual statistics for inventory and time on market, we see that we still only had 1 month’s worth of inventory in August, and the average time on market was 23 days. Inventory has been at or below 1 month for the duration of 2021, and the average time on market YTD is 28 days. So, these key indicators of market activity are still very consistent with what we have been seeing all year in the Portland Market. 

Something we don’t have hard data for, but that I have noticed through my own experiences as a Realtor,  is that there does seem to be a lower number of competing offers when a new listing hits the market. Throughout the Spring and Summer months, it was very common to see 10-15 offers on a new listing during the first weekend on the market. Now, it seems that we are seeing closer to 3-5 offers for a hot new listing. 

Competition being a bit less steep is certainly a welcome sight for Buyers, especially those who have been looking for a home all year. With that said, we are still in a heavily favored Seller’s Market, and Buyers should not mistake the decrease in competition for a shift in overall market conditions. If your hope is to wait for the market to turn, you may be waiting quite a while. 

To add some perspective, one of the hottest real estate markets I have worked in (besides 2020 and 2021) was during the Spring and Summer of 2016. In August of 2016, we had 1.9 months worth of inventory, and the average time on market was 34 days. So, even if our current inventory numbers doubled, and time on market increased by 48%, we would still have market stats consistent with one of the hottest Sellers’ Markets Portland has ever seen.

In short, if you are thinking about Selling, you didn’t miss your window. If that is still a goal, let’s chat, so we can set up a plan and timeline. If you’re thinking about Buying, but hoping to wait for the market to turn, I’d probably advise against waiting. While the market will surely turn eventually, the amount of inventory needed for a balanced market (6 months worth), is not something we will likely see in the Portland Market in the near future. 

Thanks for reading. Call or text anytime, if you’d like to discuss the market.

This past week I celebrated my 36th birthday, and this time of year is always a time of reflection for me. The way many people feel around New Year’s is how I often feel leading up to my birthday. It gives me a chance to reflect on how far I have come, what I have accomplished and what I am proud of myself for, while also giving me an opportunity to reflect on the areas that I feel I can improve on — how can I continue to be a better person, husband, father, friend and Realtor?

It’s always an energizing time for me, and I am excited to feel the sense of rejuvenation that often comes with this reflection. I am so grateful for all the clients who have trusted me to guide them through the process of buying and/or selling a home, and want each and every one of you to know that I am committed to continuing to grow, and that I am committed to making sure that my efforts, experience and expertise are always improving. 

I wouldn’t be where I am today without my friends, family and clientele, and I feel very thankful and blessed for you all!!

If you know anyone who has bought or sold property in Portland within the last year, you have likely heard stories about needing to “waive the appraisal” to be the winning bid on a home. While this strategy has been in play for a number of years, it now seems to have become a staple of nearly every winning offer in competitive multiple-offer-situations. But, what exactly does it mean to waive the appraisal? 

To understand this concept better, let’s start by looking at the normal process for an appraisal during a real estate transaction. 

When a Buyer finances the purchase of a home, the Lender requires a third-party Appraiser to inspect the property, and provide an opinion of value for the home. In order for the home to qualify for financing, the appraisal has to come in at or above the agreed upon purchase price, and also be free of any conditions or required repairs (more on that later). If the appraisal comes in below the agreed upon purchase price, then the home does not qualify for financing at that price, and the Lender will only provide financing that is based on the appraised value. 

For example, if you are under contract to purchase a property for $600,000 with 10% down, your Loan-to-Value ratio would be 90%, meaning the Lender is financing 90% of the purchase, or in this example, $540,000. If the appraisal came back with an opinion of value of $575,000 for the home, the Lender would then only agree to provide financing for 90% of that amount. In this case, $517,500. 

In this event, neither party (Buyer or Seller) is obligated to move forward with the transaction. However, if both parties would like the transaction to move forward, the appraisal shortfall is then typically negotiated between both Buyer and Seller. Either the Seller lowers the price to the appraised value, the Buyer brings more cash to the table to cover the difference, or they split the difference in some agreed-upon fashion.

In today’s market, however, many Buyers are pre-negotiating a potential appraisal shortfall, and either guaranteeing to make up the entire difference in cash, or, offering to bring a predetermined amount of additional cash to closing — on top of whatever the appraised value is. While this is certainly an aggressive strategy (requiring additional cash reserves on hand), it is also effective, as it makes the offer far more attractive to a Seller, who now has more of an upfront guarantee on what their final selling price will be. 

One of the obvious concerns with this strategy as a Buyer, is that you will overpay for a home, and give up some of the immediate equity that you might expect to have in the property upon purchasing it. While this is certainly a valid concern, in the Portland Market it has become a question, in many cases, of whether you would rather leverage some of your immediate equity, or perhaps not get into a new home at all. As a prospective Buyer, it’s important to make your offer as attractive as possible, when the Seller is selecting from a pool of 10-15 offers, so in most cases at least one of those offers will include this type of term. If you are not willing or able to, I totally get it. But, it may make for an uphill battle in terms of purchasing a home in the current market. 

It’s also important to understand that with prices trending upwards as quickly as they are, the data available for appraisers to use in their valuations is not necessarily completely up-to-date. With the typical escrow period being around 30-days, the most recent data for sold homes that appraisers are able to use, is typically already close to a month old by the time your transaction closes. So, there is some lag time between the value that can be statistically supported by an appraisal, in comparison to what the market will actually bear. As prices continue to rise in Portland, the most relevant data is what is happening in real time, rather than what happened 3-6 months ago, or even last month. So appraisals aren’t always able to keep up with the market. 

Enter: Appraisal gap coverage with cash. 

As a potential Buyer in this market, I feel it is important to understand this concept upfront, because it changes the amount of cash that may be needed to successfully purchase a property. While the vast majority of transactions I have closed with appraisal gap guarantees ended up actually appraising at the agreed-upon purchase price (meaning no additional cash was required from the Buyer), it is important for Buyers to understand that the risk is always there. So, they should feel comfortable with bringing the additional cash to closing, in the event the appraisal does come in low.

So, how do you know how much cash over the appraisal to offer, or whether it makes sense to include this in an offer at all? Well, I can’t give away all the secrets, but whenever my clients are planning to submit an offer, the first thing I do is research the recently closed comparable homes in the neighborhood to get a sense for the value I feel an appraisal would come in at. From there, we strategize on the offer amount, appraisal gap coverage amount to offer and overall terms. This is also where we ensure that the verbiage used to address how an appraisal shortfall will be handled is specific, and doesn’t leave the Buyer on the hook for any of those potential conditions or repairs that may be required by the Appraiser. 

If you’re thinking of buying a home, or have questions about covering a shortfall on an appraisal, please feel free to call or email me anytime! I love discussing Real Estate, and look forward to catching up with you all soon.

As a prospective home buyer, navigating the roller coaster of emotions that is the Portland real estate market these days can be exhausting. It’s easy to get down on yourself after falling in love with a home and writing an amazing offer, only to find out that 17 other people also wrote amazing offers, and yours just wasn’t quite amazing enough. 

When that happens 5-6 times, it starts feeling like maybe you’ll never find a home.

My clients who recently closed on a home though, are a perfect example of how a thick skin and positive attitude can play a vital role in helping to accomplish the goal of buying a home in this market. 

With a max budget of $400k, the options available for my clients were already very slim. Not to mention, everything selling in this price point would have at least 10 offers within a day or two of hitting the market. 

We looked at properties every week for a few months, and nearly every week we submitted an offer on a home. Time and time again, I would have to deliver the bad news that someone else had written an offer higher than ours, or someone else had put more money down, or someone else waived inspections. 

Each time, the Buyers shook it off, and said “ok, thanks for your work, Kevin. On to the next.” 

We must have written 8-10 offers on homes they didn’t get. And each time, they responded with the same positivity and good natured attitude. Until finally, with a little bit of magic, they had their offer accepted! 

They closed today, and I couldn’t be happier to see such positive people realize their goal in such a challenging and competitive environment. Where many people might give up or lose hope, they stayed positive and persisted, until it paid off. Huge congratulations to you!!

Congratulations to my clients, D&Y, for purchasing their 4th property in 2 years! I truly enjoy being a part of helping my clients build up a real estate portfolio, and helping them utilize real estate as part of their wealth building strategy. It’s something that I believe in personally, so it’s great to connect with friends and clients who feel the same way.

The Portland Real Estate Market has strongly favored Sellers for the greater part of 7 years now, and this has largely been driven by a shortage of supply, coupled with low mortgage interest rates. There are many motivated Buyers, looking to lock in a home purchase at a great rate, but just not enough supply to meet the demand, which has caused the high level of competition we are seeing for Buyers. 

But why is that? What is causing this seemingly never-ending cycle of low inventory in our region? Below are my thoughts on some of the main contributing factors.  

1. Lack of New Construction:

According to Portland Alliance, despite historic economic expansion, our region has produced the fewest housing units over any 10-year period since World War II. 

With the number of new households in the area exceeding the number of new homes being built, we have a situation where demand for housing cannot be met at current building rates. In order to balance the market, there needs to be a larger supply of new construction to keep up with the growth in our region. 

This is a particularly complex issue, which dates back to the Recession in 2008-2012. Residential new construction hit all time lows during that time period, and it simply hasn’t ever fully recovered. 

Additionally, the cost to build is significantly higher now, and I am sure many of us are aware that the price of lumber has skyrocketed during the pandemic — nearly quadrupling in price.

2. Hesitation to Enter the Market

Another issue that contributes to the lack of inventory, is a hesitancy from current homeowners to trade-up or downsize in the current market climate. I have spoken with a number of clients in the last year, and discussed the pros and cons of making a move in this market. There are many people who would love to take advantage of this opportunity to sell their current home, but the prospect of then entering the market as a buyer, is not all that appealing. 

Buying and selling a home in the same market will always favor one side of this coin, but in the current climate, it so strongly favors sellers, that it intimidates some from even attempting to make the transition. 

3. Duration of Homeownership

Another interesting factor contributing to the lack of housing supply, is that people are staying in their homes for longer periods of time. According to the US Census Bureau, the average tenure for homeownership in the United States is just over 8 years. In comparison, the average tenure was only 4 years between 2000-2007. 

We can certainly speculate as to why this might be, but there doesn’t seem to be any overwhelmingly compelling evidence that points to exactly why people are staying put longer. 

In any event, the solution to the lack of housing inventory is massively complex, and it will likely be a slow moving process to reach a point where there is enough housing supply in our region to meet the demand.

In the meantime, there are definitely still ways to make a transition in this market (see my previous blog post), and there are also ways to be strategic with your offer structure to help ensure you win in multiple offer scenarios. As always, I am more than happy to set up a time to meet, and discuss market conditions in further detail, so you can see how all of these moving parts affect your own personal sutuiaton.