Now a good time to invest in real estate

Realtors say it's both a buyers’ and a sellers’ market

By Jim Hart

The Sandy Post, Nov 25, 2008, Updated Oct 30, 2009

Jim Hart / Sandy Post

New Sandy homeowner Dave Brache couldn’t be happier with the deal he got with the help of Pacific Pioneer Broker Connie Knittel. Brache — along with his wife, Ruth, and daughter Brittany — moved into the brand new home, sealing the deal at $110,000 less than the home was appraised when it was built.

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The doom and gloom that the national media say are plaguing the financial, housing and auto industries do not seem to have a home in eastern Clackamas County.

Local real estate brokers are successfully helping their clients avoid foreclosure by refinancing and assisting them to make decisions that won’t cause future problems.

Paula Siverly, a mortgage broker with Vancouver Mortgage (a branch of Seattle Financial Group), says Sandy area financial institutions have been making “wise decisions” when they approve loans. Siverly, who is president of the Sandy Area Chamber of Commerce Board of Directors, says the homeowners most at risk are those with adjustable rate mortgages.

They might have started a loan with an interest rate and payment they could afford, Siverly says, but two years later — when they intended to refinance to a lower rate — they hadn’t gained much equity, didn’t have proof of income and their intended bank loans were no longer available.

Connie Knittel, a real estate broker with Pacific Pioneer Real Estate in Sandy, says she has avoided foreclosure for all of her clients. She often uses credit sources that don’t require much money down and occasionally has to pursue a short sale, which could leave the seller without any equity and the lending institution with some loss.

Short sales

Fortunately for lending institutions, only about 10 percent of the current listings on the Multiple Listing Service are short sales, a deal where the seller (bank) accepts less than the property has been appraised.

Dave and Ruth Brache, who moved from South Carolina to Sandy, recently were able to take advantage of a short sale, although after they had negotiated an offer they had to wait a couple of months while the sale closed in escrow and the bank sought better offers.

“This home (in Sandy) is brand spanking new,” Dave Brache said. “It had sat idle, owned by a speculator, for a year. The bank had agreed with the seller to allow the sale to be less than it had been appraised, and we took a risk (while it was in escrow) that someone else would offer more, and we’d lose it.”

But the Braches were fortunate, and the bank sold the home to them for $110,000 less than it had been appraised at the end of construction in 2006.

Even though some of the “tools” Knittel has had at her fingertips are no longer available, she still has several ways to help people regain control of their finances and either stay in their homes or move up.

And the fact that home prices in the Sandy area have been turned back at least five years makes it easier to obtain financing.

Knittel also pointed to the $7,500 tax credit that first-time home buyers can get until next July. And “first time” only means that a person hasn’t purchased a home in the past three years.

Real estate investing is one of the most tangible means of investing that is available, she said, calling it “security” for a family.

Sellers are taking more time to sell, she said, which makes a better environment for long-term financial arrangements.

“It is a better market for (Realtors),” she said. “It’s not so frenzied, and we can guide our clients into the right home. Realtors are working harder and smarter.”

Alea Keating, a broker at the John L. Scott real estate office in Sandy, says she doesn’t have any foreclosures or short sales on her desk.

Instead, she does everything in her power to work with her clients and lenders to avoid that situation.

“If we can refinance or work something out with the (lender),” she said, “that’s the easiest thing for people because they don’t have to move.”

Keating said all of the company’s clients who have been in trouble, seeking to get out from under their large payments by giving up their equity, have been assisted — and none has been foreclosed.

She says it is easy to get into that bad situation, especially when a family doesn’t have much equity.

“People can easily get in over their heads,” she said. “They may have lost their job or had a balloon payment come due or an interest rate changed, but most have had support from family members.”

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