Friday, December 28, 2012

A Tale of Two Scopes


It is on the short list of items for prospective buyers to have inspected in addition to the general home inspection performed during the purchasing process. Think of it as a colonoscopy for a house, but should sewer scope results be given enough weight to become a deal breaker?  The biggest concern of all is the grey area surrounding the health of a sewer, and who should be responsible for the repair if something is “broken”. 

The technology for a sewer scope has been around for many years, and the cost to inspect has now come down to around $100, making it readily available.  As a result, more and more sales are requesting them, but here is the problem; if the home you are inspecting hasn’t sold in ten years, it is likely it has never had a sewer scope performed, and the owner has never had a problem with the sewer.  No one has looked into the sewer before until now and when the sewer tech puts his head 100 feet into the darkness of the septic trenches, will it be considered broken or will it be considered usable? After all, it has been function just fine for the family of 5, happily flushing and showering for the last 10 Thanksgiving Day family reunion feasts!

Case Study 2012:
The same home in West Portland Park is given a sewer scope by two different buyers, each with their own realtor and two different sellers within 6 months’ time.  The scope was also done by two different sewer tech companies.  Here is where the perception can change based on the two companies and how they approached the inspection. 

The first company is an environmental specialty service company.  Upon the inspection that took place in spring, they deem the sewer unfit and in the need of a $3,000 repair, of which they were happy to provide their services for the "necessary" repair. The buyer negotiates the $3,000 in credit from then seller and intended to call the company to fix the repair in the next year after moving in.  Within 6 months the buyer, turned homeowner is relocated for work, and is forced to sell the home not having completed this repair.

The second company is an inspection only company, and hired by the next buyer in the Fall of the same year. The inspector sees the "necessary" repair area, and gives the sewer a passing grade. 

The only history we have on the sewer is that it was fully functioning for two previous sellers, and two scopes; one pass and one fail.  Both realtors of the buyers and sellers were different, so there were no agendas that were the same.  The home was the same, and the timeframe similar. The following question arises: Should an inspector with a conflict of interest such as profiting from work to be performed, be given power to affect the sale of a home with a sewer scope? 

I see this time and time again.  Fail, fail, fail, flush, flush flush.  It might be good to know that a sewer is near the end of its life or that you may be responsible for a portion of the sewer that affects others on shared party lines.  There are many good reasons to have a scope done, but what we do with that knowledge, and considering the source of the information are the real issues we should focus on before hammering a seller, or killing a transaction that may otherwise have been the perfect home for a buyer. 

In this case study, the sales weren't damaged by the report findings, but it's a perfect scenario to show how the conflict of interest by the service company's inspection can sway the transaction today, in contrast to ten years ago. Adverse effects may or may not have happened for another 10 years, but it cost one seller $3,000 in this case, and who knows how many others perhaps unnecessarily.

For recommendations on legitimate sewer scope companies, feel free to call or e-mail.

Steve Roesch
Principal Broker
PDX Home Group
503-318-6351
Steve@PDXHomeGroup.com

Thursday, December 20, 2012

The Month in Review for Portland Real Estate

We have endured  a tough market and are looking forward to what 2013 has in store for this crucial piece of the American Dream...

November Highlights
The Portland real estate market continues to show growth in pending and closed sales. Comparing this November to November 2011, there were 1,730 pending sales, a 2.7% improvement over the 1,685 offers accepted in the same month last year. The 1,733 sales were 13.9% higher than the November 2011 sales of 1,521. At 1,675, new listings fell 17.3% from 2,026 of last November. The low inventory shows no signs of abating: the 7,216 active residential listings would be exhausted in 4.2 months at the November rate of sales. Normal seasonal variations have appeared, with all activity categories showing declines from October to November.


Year-To-Date Trends
In the first 11 months of 2012, there were 30,964 new listings, 22,726 accepted offers, and 21,546 closed sales. Compared to the same period last year, new listings are down by 4.2% from the 2011 listingcount of 32,315; but pending sales are up 17.1% from 19,411 last year; and closed sales are up 19.9% from 17,968. Prices also continue to move upward. The average sale price so far in 2012 is $273,800, 3.9% higher than the average price of $263,400 in the same period last year, while the 2012 year-to-date median of $233,900 is 5.4% higher than the median of $221,900 last year. Total market time has dropped 21.5% from 143 days last year to 112 days for the first 11 months of 2012. 











All content courtesy of Regional Multiple Listing Service


Wednesday, December 5, 2012

You could fry an egg on Portland's real estate market


There has been quite a bit of buzz about Portland's residential real estate market heating up. I can tell you first hand that the amount of buyers we are representing compared to available homes has had quite an impact on the urgency required during the home buying process. 
Proof you say? The Portland metro area now ranks number 5 nationally for housing vacancy rates. Upon compiling an On Numbers analysis, the Portland Business Journal reported that out of the 930,446 homes in the Portland area, 872,423 are occupied, totaling nearly 94 percent. San Jose is the nations leader with  a 5% vacancy rate.
Housing Inventory in Portland
RMLS - Oct. 2012 Reporting Period
According to the Regional Multiple Listing Service, "new listing held steady at 2,414, less than one percent off the pace of this time last year and 1.5% under listing activity. The spike in sales and flat listing activity has created a new low in months of inventory this year. The 7,981 active residential listings would be exhausted in just 3.8 months at the current rate of sales."
If you are a homeowner looking to sell, now is a great time to determine your home's value and put your home on the market. 
If you are a home buyer, here are some surefire ways to prevent frustration:
  1. GET PRE-APPROVED! I cannot stress this enough. In today's climate you have to show that you have the ability to obtain financing before most sellers will even consider your offer.
  2. Don't hesitate to move quickly when you find a home you love. Recently, homes are receiving offers within just a couple of hours of entering the market...that is if they have the chance to hit the market.
  3. Your Realtor is the eyes and ears of the Portland real estate market. Make sure you are being represented by a full-time agent who has networking capabilities and a heightened sense of urgency. If you do not, you will find yourself missing out on the right opportunity. Treat this like it is one of the biggest moves a person can make - because it is!

Steve Roesch, Principal Broker
PDX  Home Group
Keller Williams Realty Professionals
503-318-6351
Steve@PDXHomeGroup.com