New Escrow Withholding Policy

Taking effect at the beginning of this year, escrow is now responsible for making sure you are paying your income taxes. What this means to you is that if you sell a house, depending on how you fill out the proper forms, escrow can hold up to 4% of your proceeds.

There are three forms that apply to this, the first being a preliminary form to determine exempt status. This statement can mean the seller is to get all the profits, or fill out more forms.

If the seller does not meet exempt status then they move on to form WE-40. This form includes some other possible exemptions like a sales price of under $100,000, an individual resident of Oregon, or sale of a residence with under $250,000 in taxable gain per owner.

Still not exempt? Last is form 40-CW which determines how much escrow needs to hold onto. Failure to complete the forms will mean automatic withholding of either 4% of the sales price or all the net proceeds, whichever is less. Escrow is not allowed to advise when filling out these forms so it is suggested to see your tax professional.

Apparently there has been an issue with people selling their houses and moving out of state and then never filing their Oregon state taxes. All of this, of course, is a pain but all in an effort to make sure Oregon gets the money it needs for our basic services.

http://www.oregon.gov/DOR/PERTAX/nonresident_withholding.shtml

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December Market Report

December Residential Highlights
The year 2007 ended with a continued decrease in the number of transactions, but sales prices carried on with a slow, but steady rise. The number of closed sales was down 29.4% and pending sales also declined 32.5% when comparing December 2007 with December 2006. New listings also dropped for the third straight month, down 3.1%. At the month’s rate of sales, the 12,786 active residential listings would last approximately 8.5 months. Month-over-month, the average sale price increased 8.3% when comparing the month of December 2007 with that of December 2006 and median sale price increased 1.1%.

2007 Summary
Comparing market activity in 2007 with that of 2006, the Portland metro area saw an 8.1% increase in new listings. However, pending sales decreased 15.7% and closed sales dropped 13.1%. Portland had its third highest total sales volume in residential real estate, at $9.7 billion, a 6.7% decrease from the $10.4 billion in 2006. The average sale price increased 6.3% ($342,900 v. $322,600) and the median sale price appreciated 7.2% ($290,000 v. $270,500).

Fourth Quarter Summary
Comparing the fourth quarter of 2007 with that of 2006, new listings declined 43.7% (5,924 v. 10,525). Closed sales and pending sales also dropped 24.5% (5,298 v. 7,021) and 26.9% (4,766 v. 6,522), respectively.

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My House Is Worth What?

I participated in an episode of "My House Is Worth What" earlier this summer. You can see the fruits of my labor this Sunday, January 20th at noon or Saturday, January 26th at 7pm. It was a lot of fun to do and I hope you all can catch it, or Tivo it! For local listings here is the program guide for HGTV.

http://www.hgtv.com/hgtv/program_guide/

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Here Comes WES!

Construction was originally scheduled to begin in July 2007. There has been a 6 month delay in the start of the project but TriMet said Tuesday that it would not delay the scheduled opening of the commuter rail.

The Westside Express Service, or WES as it will be called by commuters, is a $117.3 million 14.7-mile commuter rail that will run between the cities of Beaverton and Wilsonville.

This project has been in the works for 11 years and as we finally wound down to go time Haggen Food & Pharmacy started to speak out about improving the design of the station that would sit next to them. They had, had concerns about traffic, parking and pedestrian safety and rallied the neighborhood for support.

Five months later they succeed in getting a new design proposal drawn up by TriMet. Not only was it approved but the Tualatin Development Commission assigned $491,322 to make even more improvements on the station. Improvements like a clock tower, rail platform and shelter that are consistent with the architecture of downtown.

While it is still thought that the deadline of a Sept. 12, 2008 grand opening can still be met, it still might get pushed back because the mayor of each of the cities will attending a national conference.

http://tigardtimes.com/news/story.php?story_id=119992441787360700

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Reality and Real Estate

Does the popularity of reality home improvement and real estate shows affect our job as a realtor? Many people are addicted to the reality shows on HGTV, a do-it-yourself home improvement network. Shows like "House Hunters", "My House is Worth What" (BOTH OF WHICH WE HAVE BEEN FEATURED ON check local listings for air dates and times) and "Designed to Sell"are getting viewers feeling like they know all about the real estate business before they even discuss their housing needs with you.

This phenomenon has had an affect on consumers expectations and concept of their own competency on the subject. This puts agents in the position of defending or refuting the clients preconceived notions. But different agents take different approaches to these t.v. shows.

Editing can create a air of simplicity. With the exception of a few shows, it tends to look rather easy. In a half hour show you can find the house of your dreams, make your home the best in your neighborhood or sell your listing for more than it's worth. Some of the work and pain can be lost in translation.

Shows like "Trading Spaces" on TLC make it seem like decorating is cheap and easy. There always seems to be a great find in another room in the house that makes the perfect decoration. Making your own furniture seems to be a reasonable idea while redecorating to save money and time. Just find a carpenter friend who wants to help you out for a whole weekend for free.

Some take the approach of bonding over episodes both agent and client have seen. What you have to do is validate what the client already thinks, you cannot let the show look like it knows more than you. Don't tell them how wrong they are for believing these shows. If you need your client to see another viewpoint, give examples of how their situation differs from the one on t.v., making them the exception.

Realtors can also choose to use these reality realty shows to their advantage. Shows like "Designed to Sell" get people realizing that the condition of your house truly matters to buyers. You know the type, the sellers who think people should just look past all their clutter to see the potential. Then when they become the buyer they are nit picking the place apart. "Designed to Sell" can help people step away from the situation and get examples of what people really think when touring a home.

This type of programming can be helpful and harmful but it's the approach you choose to take that will define how it affects you.

Realtor Magazine - January 2008 - Page 22

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New Home Sales

The sale of new homes took a nose dive in November from October, down to the lowest level in 12 years! It is just another example of how different the housing market is from a few years ago, when the housing boom was crazy. Economists did expect the drop in sales but they were predicting a drop closer to 1.8 percent, not the 9 percent that we did see.

Of course we are in the West, the only area of the country where sales still rose. It was only by 4 percent but in the South sales fell 6.4 percent, 19.3 percent in the Northeast and 27.6 percent in the Midwest. This only makes sense since the West was the last to see the housing boom of 2001-2005 so we did not have as far to fall. We are also in the fortunate position of having people still continuing to move here.

Naturally, with the housing slump, foreclosures are at record highs and still going up. Another thing that is not going our way but not nearly as bad as the rest of the country. With the home prices currently dropping, some recent buyers balances are actually higher than their new current value. People also were agreeing to variable rates that lead to impossible payments when rates didn't stay low. So those who planned on refinancing when payments started to rise cannot find relief since their house is no longer worth enough and loan requirements have been tightened.

While completely necessary to buckle down on loan applications, this should have been done long ago to PREVENT these problems. Now the number of homes on the market is ridiculous and certainly not helped by the extremely strict credit restrictions. These symptoms can certainly be seen here in Oregon but comparatively, we are living the high life.

All you Pacific Northwest real estate agents still may want to go into this year cautiously, but you can also stay positive knowing it could be worse.

http://news.yahoo.com/s/ap/20071228/ap_on_bi_go_ec_fi/economy_35

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Tigard Future Traffic

The City Council on Dec. 18 declared its intention to form a local improvement district in the Tigard Triangle to upgrade streets and infrastructure. There was a meeting of the minds and it was decided that an LID would be best for facilitating traffic decisions for the future.

The Tigard Triangle is the Pacific Highway, Highway 217 and 72nd Ave where a 2002 Tigard Transportation System Plan figured out will host the majority of future traffic problems. The LID area will be outlined by Dartmouth Street to Baylor Avenue from 68th Avenue to 69th/70th avenues.

Included in this improvement plan will be sidewalks, ramps, curbs, signing and striping to support a proposed traffic signal at the intersection of 68th and Dartmouth Street. There will also be some streets that could be upgraded to full city street standards, including sewer, storm drainage, curbs, gutters, sidewalks and street trees, and placing utilities underground.

Total for all this should be between $2.3 million and $2.5 million. The resolution also lays out the proposed method of assessing property owners in the district, which is tentative and may be altered by the city at the time of final assessment.

http://tigardtimes.com/news/story.php?story_id=119878971122341700

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