Fred Jaeger's ~ Central Oregon Real Estate Connection

On October 10th my dog Barney and I hiked to the top of Round Mountain which is directly west about 9 miles from my home in La Pine Oregon.

It's an arduous hike to the top that I had failed reach all summer..

Along the way are beautiful views

Looking East toward La Pine

At the top is a Fire Watch Tower staffed by Forest Service people ...

Shannon Hodgson USFS Lookout.

Mount Bachelor in the Distance

Well we made it.. time to head back down...

More pictures can be seen by clicking here.

See ya next time..

fj

Been paying your mortgage on time, even despite struggling to just to make ends meet? Are you already late on your payments and barely hanging on? If you're wondering where your "Bail-out" is, well here you go!

The Homeowner Affordability and Stability Plan, recently announced by the Obama Administration, may be the very thing that many of us have needed.

There are two separate parts to the plan: a refinancing initiative and a loan modification plan.

The Refinancing Plan allows some homeowners to refinance their loans that are backed by either Fannie Mae or Freddie Mac. Homeowners must owe between 80 and 105% of the property's current value and they cannot have been more than 30 days late on their mortgage payments for the last 12 months.

The Loan Modification Plan helps homeowners that are already late on payments and/or are in danger of going into default. If you have suffered a serious hardship such as an interest rate hike, high mortgage debt-to-income, a sudden decline in income, being upside-down on your loan (owing more than the house is worth,) or can demonstrate reasons why you might be in danger of going into default, you should qualify. (As long as you don't owe more than $729,750.

If you do qualify for the LMP, the government would lower your payment to 31% of your current monthly income. How's that sound? For some of us, this is an absolute Godsend.

Here's how it works: Your monthly payment is lowered to 31% of your monthly income (including taxes and insurance) and then every five years, the interest rate increases 1%, but never exceeds your current interest rate! In other words, you enjoy substantial savings now, when you need it, and don't have to worry about your payment ever increasing beyond what it is now.

The program is designed to help homeowners that did not knowingly purchase homes that they could not afford; rather, it is designed to offer assistance to those who made honest purchases and are now in need of help. Unfortunately, the program offers no help to those who are unemployed or for those who cannot demonstrate any means of making a reasonable payment.

Want another reason to buy a home in 2009? How about an $8000 tax credit? Buyers purchasing homes between January 1, 2009 and November 30, 2009 who make less than $75,000 per year (or $150,000 per couple) and haven't owned a home in the last three years (first-timers) can qualify for the credit. These buyers do have to stay in their home for at least three years or will be required to pay it back.

Got questions? Want to do a little research?

Here's a link to the White House where the plan is discussed in detail:

http://www.whitehouse.gov/blog/09/02/18/Help-for-homeowners/

Here's a link to a summary of the program provided by the US Treasury:

http://www.treas.gov/press/releases/reports/guidelines_summary.pdf

Of course, your current lender should be able to provide you with all the information you need to help determine if you qualify and how to proceed.

If you've been hearing about all the bailout money going to the banks and super corporations like AIG and have been wondering.."Where's my Bailout?", well this might very be the help you've been looking for.

Fred Jaeger is a licensed Oregon Real Estate Broker and an e-PRO Certified Realtor® affiliated with RE/MAX Sunset Realty Sunriver/La Pine. He can be reached directly at 541 598-5449 or fred@fredjaeger.com .

Sometimes we Real Estate people need to be reminded that the process of buying a home may not be a 100% clear to everybody, so that's what we're going to talk about today. The following guide is meant to spell out exactly what you need to do to buy a house from step one, to the final close of escrow, when the keys are in your hands and the house (and the mortgage) is finally yours. Here's the process:

Step One: Decide how much money you can afford to spend each month on your new home. Bear in mind that this is different than what amount of money your lender will approve (we'll get to lenders later.) Before you even consider a purchase price, what you need to do at this stage is to carefully consider your budget and decide what monthly payment you'll be able to afford on your mortgage. While you're at it, factor into that consideration that a new home will typically cost more for a lot of other things as well, like the electricity, gas, possible water and sewer charges, home owner's association fees, and other things that you may not have anticipated, especially if you're currently renting something like an apartment. If you don't take great care with this step, you might be in for a rude awakening once you actually purchase and are faced with a whole new set of bills rolling in that you hadn't expected.

Step Two: Shop for rates, talk to a Lender and get yourself Pre-Qualified for financing before you start to look at houses. If you're not sure where to begin, ask your local Real Estate Professional for recommendations. Having a letter in hand from a lender saying you're qualified and ready to proceed can be a tremendous tool that will strengthen your offer when your ready to buy. It will also take away an enormous amount of stress that you don't need in the first place.

Be careful with the financing. Interest Only, variable (ARM,) or other non-traditional loans often have enticing rates to begin with that might make a home normally out of your reach seem affordable. As has been all over the news lately, these types of loans can be trouble if taken out for the wrong reasons. Generally speaking, if you intend to remain in a home more than just a few years, a fixed rate, long-term loan is preferable. However, talk in depth with your lender about exactly what your plans are over the term of your loan. Know the details of any loan you're getting and the reasons why.

Step Three: Shop for a REALTOR®. Remember, not all Real Estate agents/brokers are REALTORS. Realtors belong to the National Association of Realtors and are bound by a particular Code of Ethics that sets them apart from just any agent. Once you've decided with whom you would like to work, bear in mind that your new Realtor has access to ALL the available properties for sale in the "Multiple Listing Service." What's that?

The Multiple Listing Service is a cooperative arrangement between most Real Estate Brokers to pool information about Real Estate for sale into a common database from which all cooperating members can access. When one company lists a house, that information is shared with all cooperating companies. In most cases any commissions generated by the sale of such a property are then split between the listing agency and the selling agency. It's a win-win arrangement that allows listings to be effectively shared amongst the membership.

In other words (and this is important,) real estate brokers don't just sell their own company's listings, they can sell any within their MLS. This is extremely important for the seller as well. Because information is shared among brokers and a broker is not limited to selling property listed within his/her agency, that broker is capable of doing extensive research via the MLS for his clients. Once you've decided on a Realtor, you can trust he or she will have access to every property available, relieving you from feeling the need to have more than one agent working at once.

By the way, 99% of the time, you don't pay a thing to that Realtor that represents you as a buyer. There are some instances when a buyer owes a commission, but generally speaking that's not the case, so as a buyer, don't worry about paying a Realtor.

Step 4: Go shopping with your Realtor, and find a house.

Step 5: Once you've found the house you want, the next step is to make an offer. We say "offer" because it's just that. A house may be listed at a particular price, but that asking price is not always what is paid in the end. This critical step is one of the reasons you will need a good Realtor to help you along. Just what is said at this stage, when it's said, and to whom and how, may involve important strategic considerations that your Realtor will need to help you with, so be very careful here.

Let's say the house you want is listed at $150,000. After discussing it with your broker, you may decide to offer say, $145,000 but with conditions. What conditions? Anything from inspections, to repairs, to having the property's corners marked, might be included with your offer as a condition. Or, you may decide to make an offer without conditions; it's really up to you.

Once your offer is presented, the seller can accept your offer, reject that offer, or, as is often the case, return to you what is known as a "Counter Offer" stating just what they are willing to accept. Once this "Counter" is presented back to you, the very same options of accepting, rejecting or countering back are now in your hands. Offers and counter-offers can go back and forth indefinitely until both sides come to terms that are satisfactory. We call this stage "Mutual Acceptance."

One thing I didn't mention was the Earnest Money that is usually included with your initial offer. Earnest Money is consideration included with your offer in order to demonstrate to a seller just how serious you are. This money is, in some cases, non-refundable to you and is meant as compensation to the seller in return for taking that home off the market while all the details are settled prior to actually closing the deal. In other words, you need to make double-darned sure you want that house before submitting an offer, otherwise, without good reason, if you back out of the deal before it closes, you could lose that money. Now, don't get worried; if the seller rejects your offer, or presents a counter that isn't acceptable to you, you'll get the earnest back. Your earnest money is refundable in some other cases when a deal fails as well, but exactly when, and when it is not, is something you need to discuss in depth with your Realtor.

Step Six (ESCROW): Escrow is a general term that describes where the deal resides between the time you have a mutually accepted offer, and the time you actually close the deal. When we say a deal is "in escrow" we are saying that we have a deal waiting to close once all the necessary components have been gathered and investigations (or due-diligence has completed.) Once you have a mutually accepted offer, copies of all the paperwork and the actual earnest money is placed "in escrow" with a title company. The Title Company acts as a neutral third-party in all instances and is an essential and important player in the process. The Title Company conducts what is known as a "title search" to research what is necessary to make a clean transfer of the ownership of that property from one party to another. Who knows, there may be liens, lawsuits, or other "encumbrances" tied to that property that may prevent a clean transfer, and often these so-called encumbrances are unknown by either party until the title search is actually conducted.

Step Seven.. "The Signing" (sometimes confused as "The Close"): Once all the title searches are completed, all the paperwork is gathered, financing is finalized, etc., the Title Company usually acts as the facilitator of the signing. At the signing, you will then be, well, signing a lot of paperwork and sometimes presenting money for closing costs. Closing costs vary greatly depending on how your deal was structured and what your lender may or may not require. In Oregon, you may, or may not sign when the opposite party signs. As a matter of fact, you probably won't even see the other party at all. Once each party has signed, the deal has not "closed" necessarily. That comes next.

Step Eight... "The Close": The close refers to the point in time when the actual transfer and recording of Title has occurred; which doesn't necessarily happen at the time, or even the day of the signing. We Realtors are often guilty of referring to the signing as the "the close" but that's an unfortunate practice that can sometimes lead to problems. I made that mistake with one of my very first deals, and have never forgotten the trouble I almost caused my client who expected to move in to his house directly after signing the paperwork. The close can happen the day of signing, but don't ever count on it. Your Realtor, and/or the Title Company will always notify you immediately, once the deal has funded and recorded, marking the time when that home has officially become yours.

Eight steps is only the briefest summary of all that is necessary to put you into a house. The fine details to consider, such as the timing of offers, when they might expire, how long you have, or do not have, to complete inspections and other "due-diligence" items, how to deal with third parties, Title Companies, Escrow Officers, etc., etc are the kinds of things that only your Realtor can fully explain. If you're considering buying a home, talk with your local professional; you'll be glad that you did in the end. Finding a Realtor that works for you is set at step three here, but it may turn out to be the most important step in the process.

Fred Jaeger is a licensed Oregon Real Estate Broker and an e-PRO Certified Realtor® affiliated with RE/MAX Sunset Realty Sunriver/La Pine. He can be reached directly at 541 598-5449 or fred@fredjaeger.com .

Hire a local Real Estate Professional. You'll be glad you did in the end. Your local Real Estate professional is your advocate in every regard whose job is to provide you with all possible information and/or services that will be of benefit throughout the transaction. A lot of footwork is needed during any Real Estate deal, and you will need and appreciate the resources that can be made available to you via your local Broker. These days, especially if you're selling, you need a REALTOR® now more than ever.

Shop for loan rates and Pre-Qualify for financing before you start to look at houses. If you're not sure where to begin, ask your local Real Estate Professional for recommendations. Having a letter in hand from a lender saying you're qualified and ready to proceed can be a tremendous tool that will strengthen your offer when your ready to buy. It will also take away an enormous amount of stress that you don't need in the first place.

Be careful with the financing. Interest-Only, variable (ARM,) or other non-traditional loans often have enticing rates to begin with that might make a home normally out of your reach seem affordable. As has been all over the news lately, these types of loans can be trouble if taken out for the wrong reasons. Generally speaking, if you intend to remain in a home more than just a few years, a fixed rate, long term loan is preferable. Conversely, if you intend to be selling within a couple years anyway, (and hopefully at a profit) it doesn't make sense to spend more cash than is necessary every month on a fixed rate loan (generally.. however, rates are crazy low right now, even on fixed 30s.) Talk in depth with your lender about exactly what your plans are over the term of your loan. Know the details of any loan you're getting and the reasons why.

Long term loans shorter than 30 years will pay off your home much faster, but be careful. Instead of locking yourself down into a 15 year loan (for example) in lieu of the traditional 30, get a thirty year loan and double up your payment, or at least make a practice of paying extra money each month toward the loan "principle." (Do the math.. it's amazing.) By using the extra-to-principle method, you will always have the optional safety valve, during hard-times, of simply paying the actual amount due on the your loan (and not the accelerated amount) when or if cash ever becomes hard to come by. If you lock yourself down to say, a fifteen-year loan, that monthly amount due is set.

Don't buy more house than you can afford. Most of the time, with good credit, the majority of buyers can be approved for more loan, and consequently more house, than they can really afford. Don't let anyone push you past your financial limits. The combination of excitement, loan approval, outside pressure and sheer good old-fashioned impulse, is often a classic formula for financial disaster.

Don't buy less house than you can afford, or worse nothing at all. I know that sounds like a contradiction of the above but it doesn't make sense to buy less house than you can afford or no real estate at all. Keeping in mind what I said about not buying too much house, try to reach just a little. As long as you can afford it, in the long term, as with all investments, generally the more you invest, the greater will be your corresponding return.

Buy what feels right. Don't get talked into buying a house that feels wrong for any reason. If it's a significant-other doing the pressing, sit down and have an honest talk about your feelings. Even if you can't quite put your finger on why you feel ambivalent, unless you're 100% certain about a potential purchase, don't do it.

Do your homework. In most cases, a home inspection for structural, electrical, and plumbing issues is good advice before closing, but that's not all you should check out. What about Insects and Dry Rot? Asbestos, Lead Paint etc? These things are not part of a normal inspection, so don't just assume that they are. What about the lot lines? Are you certain that the fence you had been looking at is a good indicator of the property line? Does the property have Home Owner's Association dues? Has the escrow company given you a clean title report? Have you checked the local neighborhood Covenants (CC and R's?) Perhaps your beloved horse or other pet simply isn't allowed in the neighborhood. Check out all of these things well in advance.

When selling, get a Comparative Market Analysis (CMA) from a local Real Estate professional who knows the neighborhood in order to get your house priced properly from the very start. Over or under pricing your home can cost you time and/or money that you don't want to lose.

Try to have fun. Think positively. Buying or selling Real Estate can be among the most stressful exercises in life. Most of the time, however, given the right circumstances, it can also be a lot of fun. Let your Real Estate Professional carry as much of the burden as possible (not you) and try to remember that when and if things go a little sideways, that it is that very awkward moment (or more) that will make the happy times to come all the more satisfying. Almost every Real Estate deal, is in the end, a sweet and unparalleled happy Champagne-popping experience.

Once it's over that is! See you next time!

Fred Jaeger is a licensed Oregon Real Estate Broker and an e-PRO Certified REALTOR® affiliated with RE/MAX Sunset Realty Sunriver/La Pine. He can be reached directly at 541 598-5449 or fred@fredjaeger.com .

The last few weeks of financial turmoil have reminded me of school and an econ class I took once upon a time. I can remember trying to wrap my head around how the Federal Reserve decides to lend money to the banks and at what rates of interest, and how those kinds of decisions theoretically translate into this-or-that kind of "multiplier effect" or not, supply curves here, demand curves there, yadda-yadda, blah-badee-blah. I've got to be honest, after a while it all seems like voodoo to me, the way things are done. How money literally gets simply printed and pumped into the system, or stuck onto the national credit card is where you've lost me. I don't get it. I didn't get it 20 years ago, when I should have been paying more attention, and I especially don't get it now. I sure hope somebody does because it's affecting all of us now, not just Wall Street.

Can anybody out there explain to me what exactly a "derivative" is? I've looked it up but it doesn't help. It looked like something more akin to calculus rather than finance or economics. But what do I know? Actually, never mind, I'm not sure I have the energy. 700 BILLION DOLLARS (actually 840) more placed on the national debt?? I am completely lost.

One of the reasons I really like dogs is because they don't carry wallets, or wear watches. Residing within a seemingly blissful and carefree "eternal-now," our canine companions can certainly teach all of us about focusing on that which is truly important and rejecting that which is not.

My Dog Barney doesn't even have to worry about haircuts because his constant shedding (that he doesn't worry about either) keeps his coat perfectly coifed, and looking shinny and clean all the time, without, I might add, the need of a daily shower. And unlike his master, however, whose head begins to resemble a dirty old mop if he's even attempted to skip a day, my best friend lets neither that problem, nor a whole lot of other so called "issues" even enter his consciousness...like money, or even worse these days, money tied up in Real Estate.

Dogs don't carry wallets or even have any concept of time outside of dinnertime, but unfortunately we do. After all, like I tell Barney every day when I walk out the door, "I've got to go out and bring home the dog food Buddy." He doesn't; have to bring home the dog food, or anything else, that-is, with me around anyway. As much as I admire those who are able to separate material needs from their consciousness, it's not the best survival strategy in the long run for us normal humans, unless you're already swimming in it, or have a best pal or loved one that's willing to take care of you.

That must be the answer. In order for me to attain a higher level of consciousness and bring my Real Estate career to a higher plateau, I'm apparently going to have to find me a Sugar Momma. Last month I was soliciting for a job, this month I'm skipping the nonsense altogether. That way, I can focus on Real Estate and serve my client's that much more effectively without the mental clutter of having to deal with my own issues. Yep, that'll work.

But alright-already, I'll get serious and get back to Real Estate. After all, these are serious times with life-changing challenges facing our entire country these days. Over the last several weeks I've had to help my clients deal with the kinds of decisions that will make huge differences in their lives. Should we sell now? Can we wait? If we sell now, how should we price it in order to compete in an extremely competitive market? What if we have to sell for less than we owe the bank? Should we simply walk away from our property?

These are serious questions that are difficult enough to deal with alone. However, combined with an explosively volatile stock market and the threat of the collapse of our entire financial system buzzing in the background, the whole package doesn't make anyone feel any better. Our entire financial system is globally intertwined and that which affects one element will seemingly reverberate to the other, and on and on. "Globalism" is such a new concept that my Office 2000 flags that word as a misspell, but it's real and, like it or not, we're now faced with an economy that is not only affected by international influences, it is apparently dependant upon the good financial health of the world. I admittedly don't get much of this, but it seems to me that those who are concerned about a country like China "calling in there loans" should stop worrying; after all, as the primary consumer of their goods, a collapse of our economy would seemingly trigger the downfall of their own.

So what do dogs that carry neither wallets nor watches have to do with Real Estate? Nothing I suppose, other than perhaps to serve as a reminder to all of us that we're not always going to have all the answers and that's not always so bad. Sometimes we just have to let it go, take a deep breath and trust that it's all going to work out. I mean what else are you going to do sometimes? Personally, I'm still carrying my wallet and can tell you what time it is, but I'm going to do my best not to sweat a dwindling stock portfolio, listings that aren't selling, or the lack of a Sugar Momma in my life. Barney and I are determined to carry on. That's at least a start.

Fred Jaeger is a licensed Oregon Real Estate Broker and an e-PRO Certified Realtor® affiliated with RE/MAX Sunset Realty Sunriver/La Pine. He can be reached directly at 541 598-5449 or fred@fredjaeger.com .