Buyers on the Hook for Thousands

Have you ever heard of FIRPTA?  Probably not.  If you're buying or selling a home in the US, you need to be at least slightly aware of it.  FIRPTA stands for Foreign Investment in Real Property Tax Act.  Have you fallen asleep yet?  This is a topic that I could bore you to tears with and make you want to never read this blog again!  Obviously I have no intention of doing that.  But I want to at least let you know the basics so you don't get taken for a ride.

When someone is a foreign investor (the short answer meaning that they aren't a US citizen) and they are selling property in the USA, they may be subject to FIRPTA.  The bottom line is the federal government wants to make sure that they can still get taxes from that seller, which is next to impossible if they don't live in the US.  This means that escrow may withhold up to 15% of the sales price of the home from the seller for FIRPTA.  Not 15% of the seller's profits, but up to 15% of the sales price.  Wait! Don't lose interest yet, hang on one second.  This means that Ms. Seller, if you are making a $30,000 profit on that home and the government's percentage is $50,000, then to close that transaction, you're going to need to come up with an extra $20,000 to set aside with escrow.  Wowza, now tell me that's going to be no big deal.  

I can see you starting to get blurry eyed and not caring about this already, but wait!  The responsibility of FIRPTA lies with the buyer.  As a buyer, you want to know if the seller falls under FIRPTA so that escrow, the sellers agent and your agent can all do their jobs and make sure that you aren't on the hook for thousands with the federal government.  If you're a buyer, YOU could be responsible for those taxes if the seller doesn't pay the feds!

What do you need to do?  As a buyers or a seller, talk to your agent about FIRPTA at the beginning of a real estate transaction.  This can all be a non-issue as long as the communication happens from the get go.

What Do You Want?

One of the interesting things about real estate is the emotions that can come into play.  One might think that it's a business transaction and it's all about the numbers, but the reality is that emotions often override our intentions to focus on the deal. 

Sometimes both buyers and sellers will lose sight of what the goal is and get distracted by the emotions of it.  It's normal to focus on how we feel, what's making us frustrated or angry, instead of focusing on what it is going to take to solve that item.  It's also common to surround yourself with how you're feeling and not take a moment to consider how the other side is feeling.  It can be helpful in real estate to think about what you want, and then to also think about how that will come across to the other side. 

Every transaction will have emotional ups and downs.  Every transaction will have problems of varying degrees, some big, some small.  The thing to remember is not to sweat the small stuff and to focus on what your actual goal is.   Remember that.  What is your goal?  What do you actually want?   

Don't let emotions sway you away from your goal.  Sometimes we can be our own worse enemies.  We get so focused on the fact that we think someone is being unfair and nit-picking an item, that we lose sight of the details, how much that item is actually going to cost and is the cost worth it.  It doesn't do anyone any good to argue over a small item when that small item could actually prevent the buyer from getting the house they want and the seller from selling their house that they need to sell.

Have you ever heard an adult cry "that's not fair!"  I tend to find that interesting because by adulthood, we should all know that life isn't fair.  With any item, no matter what it is, don't focus on the fairness of it; instead remember "What's my goal and what can I do to achieve that goal?"  If you stick with a goal oriented focus, then any problem can be figured out. 

Portland's Growing in 2017

Everywhere that you turn in real estate news right now, people are talking about their forecasts for 2017.  When you're looking at real estate, you really want to focus on your area specifically, because Portland, Oregon is much different from Port Allen, Louisiana.

Here are some of the basics that we are expecting to see in 2017.  Interest rates are expected to rise.  Some are saying that a 30 fixed will rise to 4.75%.  Nothing crazy, still in the historically low range, but rise non the less.  This may cause some buyers to back out of the game.

Millennials are expected to be a big category of home buyers in 2017.  We have seen a lot more multi-generational home buyers with families looking to buy a home for two or more generations of the family to live in.  Even though this is still a strong trend, Millennials are likely to strike out on their own, especially towards more urban living like Portland.

Tiny homes are becoming more popular.  With shows like "Tiny House, Big Living" and "Tiny House Nation", more people are becoming aware of the benefits of living small.  This is a trend that I expect to continue in 2017 and grow in popularity in Portland.

Inventory for the past few years has been at amazing lows.  Basically anything under $350,000 in the Portland Metro area is still flying off the shelves.  New construction is picking up, which will help with the inventory, but I expect the Portland area to still have a shortage of inventory for a while.  As long as inventory is low and demand is high, home prices have no where to go but up.  When buyers are forced to get into bidding wars and you've got 5 offers in on the same house, people will go much over list price to get the home they want. 

What will 2017 hold?  Only time will tell.... but for now, it's certainly the time to sell!

South Hillsboro Project - Update!

By now you've probably heard of the South Hillsboro Project.  It's the section of Hillsboro south of TV HWY, between 209th and 229th, that BIG area of farmland.  It's 1400 acres that will soon be everything from apartments, to senior living, condo and townhomes, detached homes, as well as retail, offices, even schools and parks.  South Hillsboro is going to have it all.  I posted a blog article on it about a year ago, check that out here.



Check out the full map and all the details at the City of Hillsboro.

South Hillsboro, otherwise known as SoHi, is going to have 8,000 dwellings!  That's likely to be over 20,000 people!  Fifty-seven percent of the homes will be single family detached homes with lot sizes ranging from 3,500 square feet to 10,000 square feet.  Twenty-two percent will be single family attached homes (condos and townhomes) and 21% will be multi-family homes. They will be putting in three grade schools, a middle school and possibly a high school.  It's going to be a mixed use community, kind of like Orenco Station with commercial and residential together, a focus on high performance homes and access to public transportation.   

They are partnering up with Energy Trust of Oregon for cash incentives, Solar World for solar kits to builders at reduced costs, Oregon Department of Energy for energy tax credits, PGE for Nest Smart Thermostats Pilot Program and electric vehicle ready charging infrastructure and Earth Advantage for technical assistance outreach and training.  Wouldn't it be great if they could get those new glass tile roofs from Tesla! 

A couple of the developers are Newland Communities and Pahlisch Homes, but there are many more.  Before any of the homes can be built, the intersection at Cornelius Pass has to be completed.  This means taking the current intersection that tees at TV Highway and punching it over the railroad tracks and into the new SoHi development.  Once that is completed, they'll be able to start on construction.  Here's the current expectations for the first five years of construction.  Keep in mind that this timeline has evolved more times that we can probably count, but this is what the current plan is.

First 5 Years:	2017	2018	2019	2020	2021	Total
SingleFamilyDetach	226	265	285	202	202	1180
Condo/Townhomes	148	160	164	181	181	834
Apartments	124	123	123	108	108	586
Retails/Office	27,000	26,000	26,000	23,700	23,700	126,400

With 500 residences scheduled the first year, this is going to increase the housing market considerably! 

In order to have this new section of Hillsboro, the city is going to be improving and changing some of the intersections in that area.  In 2017, the intersection at 229th and TV Highway, by the Fred Meyer and Key Bank, will be a cul-de-sac south of the railroad tracks and will no longer go across TV Highway.  The intersection at 209th and TV Highway, which is currently very congested, will get widened in 2019.  They are also planning on widening Cornelius Pass north of TV Highway to Johnson in 2019.  Finally, the intersection at Century and TV Highway will get worked on in 2020. 

The South Hillsboro Project is going to completely change the face of Hillsboro.  Basically they are adding a small town into an already existing one.  It sounds like they are going to have high standards and make this a community that anyone would be proud to live in!  There's even talk of a Street of Dreams in SoHi too.  I can't wait to watch the community grow.  Next time you're driving down TV Highway between 209th & 229th, look at the farmland to the south and you'll see that the dirt work has started!

Interested in more?  Check out my live video:

7 Rules When Shopping For a Home

We all want to be courteous and follow the rules when looking for that perfect home, but sometimes we don't know what's the right and wrong thing to do.  The first thing that people often fumble on is taking off their shoes.  Remember, when you enter a home that's for sale, you are just one of many people that will be touring that home.  That's a lot of foot traffic and to keep that home looking great, take those lovely shoes off!  Here's the exception - if you look around and the carpet has more stains than a frat house, then this rule doesn't apply.  Leave your shoes on and protect your socks!

To open or not to open, that is the question.  Buyers frequently ask me if they can open that closet door, or if they can look into the pantry or kitchen cabinets.  The answer is yes!  As a buyer, it's important to understand the house that you want to buy and that means all the little spaces too.

When deciding to walk into the backyard, look first to see if the grass has any landmines you need to avoid.  Just because you don't have a dog and have a spotless yard, doesn't mean the sellers are in the same situation.  The last thing you want to do is step in doggie doo or even worse, track it back inside the house!

Be careful of what you say.  I often hear clients talking about what they want to pay for a house or other sensitive information in places that might be overheard by a neighbor or even the seller themselves.  It's best to hold off on sensitive conversations until back in the car or at the Realtor's office. 

Leave no trace behind.  You know the old saying when you're in the woods, that you should pack out what you pack in? It's similar for home shopping.  When you enter a seller's home, you don't want to leave any of your personal belongings or trash.  I can't tell you how many times I've seen people almost leave their cell phone behind!

Here's the question that people are usually embarrassed to ask.  Can I use the restroom?  The answer is yes!  No one expects you to hold it all day while you tour home after home.  However, check to make sure it works first.  There's nothing worse than using the restroom, only to find out that the water has been turned off or the plumbing is broken.

Last, but not least, be careful where you walk inside and out of a home.  If that deck doesn't look like the most stable piece of craftsmanship ever, then be careful walking out on to it.  It's not your home, so you don't know where the tricky spots are; you want to watch out for the rickety handrail or the steps to the basement that look like they might not hold the weight of a fly. 

Shopping for a home can be endlessly entertaining.  Knowing how to avoid the basic mishaps will keep you having fun and protect the seller's home at the same time!

Think Twice Before You DIY

I love watching the DIY Network, for the uninformed that's Do It Yourself.  I could watch it for hours and get a few neat ideas of things to DIY, but most of all I like laughing at all the ridiculous things that people do.  I'm not an electrician, nor am I a plumber, so I'll never try to replumb my bathroom or rewire my kitchen.  It's important to know one's limitations, mainly because I don't want to fry myself or flood my house.  I also happen to know many good contractors who can professionally do these things for me!

Before you DIY, consider this helpful TRICK.  Time.  Resale.  Insurance.  Cash.  Knowledge.  Do you have the time to do the project right?  Think this one through realistically.  However long you think this project is going to take, double it.  DIY projects can be a pain in the-you-know-what and they always take longer than you expect. 

If you do it yourself, is it going to effect the resale of your house later on?  When you go to sell your home, do you think the buyer's inspector is going to call out any of those DIY projects as not being done correctly?  Or what happens if you do an addition that needs permits and you don't know it at the time, so you fail to get the permit?  That is probably going to cost you when it comes time to sell. 

Insurance is one you may not think about, but what happens if you accidently flood your house while doing plumbing fixes or hurt yourself while trying to use a saw?  You laugh now at the ridiculous nature of this, but it could happen!

Cash in the bank is not only necessary, but you're also going to need more than you think.  Unexpected things come up in any project, just ask a contractor.  If you're trying something for the first time, you're more likely to have unexpected things come up because it's all new to you.  If you are going to take on a project yourself, allow for extra money in your budget to cover for the unexpected.

Last but not least, do you have the knowledge to actually do this project?  I'm not a cabinet maker nor am I the best mathematician on the planet.  I know enough to know that accuracy in measuring is paramount and you know what I would never DIY?  Kitchen cabinets.  I'd leave that to the professionals. 

DIY can be an excellent way to save money.  But make sure to evaluate the TRICKiness part of your project before you get started!  If you do decide to take on that bathroom make over, think about donating that old bathroom vanity to Habitat for Humanity.  It's a tax write off, you don't have to pay to trash it and it could help someone in need. 

Now for a good laugh, check out these DIY fails of DIY gone wrong, oh so wrong!

Style Matters - What's hot in 2016

One of my favorite things about my job is getting to see all sorts of homes, with every type of floor plan and decorating style.  It's fun to observe what works and doesn't work.  There are the obvious no-no's that we all could point out - like don't paint rooms in hideous colors or have so much furniture in a room, that you practically have to walk through it sideways.  However, focusing on positive ideas to freshen up your home are fun thoughts indeed!

Caught in the center of attention lately are three things: eccentric lighting features, barn doors and the mix of combining earthy materials like wood, metal and stone.   All you have to do is go to this year's Street of Dreams in Tumwater at Pete's Mountain and you will see these themes all over each of the five spectacular homes.   I was in awe at all the unique lighting features throughout the five mansions.  It was almost like they couldn't stand the thought of having a simple ceiling light.

 

Each of the homes used track style barn doors in various innovative ways.  We've seen these becoming more popular and often used as closet or pantry doors, but now they are edging into every room of the home.  They are the primary doors of bedrooms, or right at the top of a grand staircase separating off the den, looking both stunning and functional.  If you've been thinking about changing out a bedroom door, why not think about a barn door? 

 

Last, but not least, I've always been a fan of mixing different types of styles or materials.  There's something about having stone and wood together, making each one better than they would have been by themselves.  Anytime you can bring the warmth of wood and combine it with the crisp lines of metal or take the jagged edges of stone and tie them in with big strong beams, the result is lovely! 

 

If you want more ideas, head on out to the Street of Dreams.  The name very much implies where your mind will go.  You'll be dreaming of all the unique ways to dress up your home!