Sam Densmore
Inhabit Real Estate
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- 1/45 45
Open Sat 1PM-3PM$1,050,000
3 Beds3.1 Baths2,048 SqFt4607 N CAMPBELL AVE, Portland, OR 97217
Single Family Home
Listed by Inhabit Real Estate
- 1/39 39
Open Sat 1PM-3PM$825,000
3 Beds2.1 Baths2,572 SqFt2225 NE 15TH AVE, Portland, OR 97212
Single Family Home
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4 Beds2 Baths1,334 SqFt64761 MCDERMOTT RD, Deer Island, OR 97054
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Active$525,000
2 Beds1 Bath1,005 SqFt1245 SW FREEMAN ST, Portland, OR 97219
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3 Beds3 Baths1,806 SqFt21545 NE LAUREL WOOD LN, Fairview, OR 97024
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RECENTLY SOLD
- 1/36 36
sold
$497,000
1.6%$505,000
3 Beds1 Bath1,679 SqFt3710 SE 68TH AVE, Portland, OR 97206
Single Family Home
Listed by Keller Williams PDX Central
- 1/32 32
sold
$645,000
0.8%$640,000
4 Beds2.1 Baths2,384 SqFt19403 HAZELGROVE DR, Oregon City, OR 97045
Single Family Home
Listed by Premiere Property Group, LLC
- 1/27 27
sold
$719,000
7.5%$665,000
3 Beds2.1 Baths2,236 SqFt103 NE 29TH AVE, Portland, OR 97232
Single Family Home
Listed by Metro Northwest Realty
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Sam Densmore Real Estate Blogs
The Importance of Home Maintenance: Protecting Your Investment and Health
The Importance of Home Maintenance: Protecting Your Investment and Health
The Importance of Home Maintenance: Protecting Your Investment and Health It’s been said that “an ounce of prevention is worth a pound of cure.” When it comes to homeownership, this saying couldn’t be more accurate. While purchasing a home is a major milestone, it's important to understand that maintaining it is just as crucial. Regular upkeep is essential for preserving your investment and ensuring that your home remains a safe and comfortable place to live. Budgeting for Home Maintenance Before diving into the details of maintaining your home, it’s important to understand the financial aspect. Homebuyers often know that there will be ongoing costs associated with repairs and upkeep, but how much should you set aside? As a general guideline, plan to allocate about 1%-4% of your home's purchase price annually for maintenance and repairs. This can vary depending on the age, condition, and size of your home. Knowing what to look out for and taking action before issues arise can save you from costly repairs down the road. Here's a breakdown of areas to focus on to keep your home in top shape, from roof to foundation. Roof: Keep It Clean and Protected Your roof is one of the most important features of your home, protecting it from the elements. Regular roof maintenance is essential for avoiding major damage: Roof Cleaning: Moss, pine needles, and other debris can accumulate on the roof, leading to water damage and deterioration. Have your roof cleaned periodically to keep it in good condition. Gutters and Downspouts: Keep gutters free of debris to ensure water flows away from your home. Clogged gutters can cause water to back up and lead to leaks or damage to the roof. Tree Maintenance: Trim trees and vegetation around your home to prevent branches from falling onto your roof. Overhanging branches can also cause wear on the roof and siding due to constant movement in the wind. Additionally, vegetation touching your home can be a fire hazard. Attic Inspections: Check your attic for signs of moisture intrusion, such as black stains on the ceiling. Moisture can lead to mold, mildew, and wood rot. Roof Intersections and Seals: Inspect roof valleys (where the roof meets walls or chimneys) for damage, and check seals around plumbing and vent pipes. Water & Sewer: Ensure Clean and Safe Water Flow Water damage and plumbing issues can be costly and disruptive, so it’s important to maintain your water systems: Water Heater Maintenance: Flush your water heater annually to remove sediment buildup, which can affect efficiency and longevity. Check for signs of corrosion or moisture around pipes coming in and out of the water heater. Water Filters: Change water filters regularly to ensure clean drinking water. Well Water Testing: If your home is on a well, test the water quality annually. Septic System Maintenance: For homes with septic tanks, ensure they are pumped every few years to avoid blockages or system failure. Avoid putting inappropriate items, like food waste or chemicals, into the septic system, as they can disrupt the natural processes. Exterior: Protect Your Home’s Curb Appeal Your home’s exterior is constantly exposed to the elements, which can cause wear over time: Exterior Paint: Repainting your home’s exterior every 5-10 years is a good rule of thumb. Darker colors tend to fade faster, and the south and west sides of the house are usually more prone to wear. Window and Door Seals: Check the glazing on older windows and the weather stripping around doors. Gaps can lead to drafts and increased energy costs. Garage Door Seals: If you notice light peeking through the bottom of the garage door, it’s time to replace the weather stripping. This helps keep pests out and improves energy efficiency. Wooden Structures: Inspect decks, fences, and other wooden outdoor features for signs of decay or discoloration, which could indicate a lack of proper weatherproofing. Interior: Ensuring Comfort and Efficiency Maintaining your home’s interior systems is key to comfort and efficiency: HVAC and Furnace Filters: Change your HVAC and furnace filters monthly to ensure proper airflow and prevent dust buildup, which can affect air quality. Duct Cleaning: If your home has ductwork, have it cleaned periodically to remove dust and allergens. Basement or Crawl Space: Regularly check basement or crawlspace walls, floors, concrete and masonry for signs of water intrusion, cracking, deterioration or heaving. Ensure that water is being directed away from your foundation to avoid costly foundation issues. The True Cost of Neglecting Home Maintenance Avoiding regular maintenance may save you a little money in the short term, but it can lead to significant expenses down the road. Here are some ballpark repair costs to consider for 2024: Appliance Repair: $150 - $300+ HVAC Repair: $450 + Pest Control: $40 - $75 per month; one-time treatments can cost $200 - $500+ Furnace Replacement: $7,000 - $12,000+ (depending on heating/cooling needs) Termite Treatment: $1,500+ Roof Replacement: $10,000 - $30,000+ (cost depends on roof type and repairs needed) Foundation or Crawlspace Repair: $4,500 - $10,000+ Septic Pumping: $500 - $600+ or around $1 per gallon Hot Tips for Saving Money and Time Home Warranty Consider investing in a home warranty—especially if your appliances or systems are older. A home warranty can save you from costly repairs or replacements by covering the repair costs of certain home systems. It’s a common misconception that home warranties are only available during the purchase or sale of a home. In fact, you can purchase a warranty for your home at any time. Learn more about home warranties in this helpful article from Progressive Insurance: Home Warranty 101. Professional Inspections If the thought of inspecting your home yourself seems overwhelming, hiring a home inspector is a great way to get a professional assessment. A home inspection can help identify areas that need immediate attention, as well as those that can be deferred. This will give you a clear plan of action for maintaining your home. By staying proactive with your home’s maintenance, you can protect your investment, avoid costly repairs, and ensure your home remains a safe and comfortable place for years to come. Regular upkeep may require some time and effort, but the rewards are well worth it! Nov 20, 2024 Sam Densmore, All Rights Reserved
MOREThe 1031 Exchange: Defer Capital Gains Taxes On The Sale Of Investment Properties
The 1031 Exchange: Defer Capital Gains Taxes On The Sale Of Investment Properties
The 1031 Exchange might help you defer Capital Gains Taxes on the sale of investment properties. Most folks would prefer to avoid paying taxes if they don’t have to. If you’re considering selling an investment property and buying another one, it might be in your best interest to consider a 1031 exchange. In this blog, I’ll attempt to demystify and explore some basics of the 1031. The 1031 Exchange (also known as the Starker Exchange) allows owners of investment, business, or commercial property to defer all or a portion of capital gains taxes on the boot (taxable net) from the sale and subsequent purchase of like kind investment properties. Though it won’t alleviate the tax burden indefinitely, it will defer the tax until the replacement property is sold and the seller takes constructive receipt (personal possession) of the boot. A 1031 exchange isn’t a literal physical exchange of property; i.e. a duplex for a duplex. In reality, it’s a financial exchange. An investor can exchange one type of property for another by taking the boot from the sale of their investment property and putting it directly into the purchase of a replacement property via a Qualified Intermediary (QI) or exchange agent. For instance, the boot from the sale of a duplex could be reinvested into a warehouse, or a strip mall. A QI or Exchange Agent is fundamental to the 1031 process. They will hold the boot from the sale of a relinquished property, so that the exchanger doesn’t take constructive receipt and end up responsible for the tax bill associated with the boot, then transfer the funds to the seller of the replacement property. There are companies that exist solely to service these kinds of transactions. Most title companies also offer these services. 1031 Exchange - Only Like Kind Properties Allowed For the purposes of the 1031 exchange, like kind property is defined as any kind of property used for investment or business purposes. It, “must be held for a productive use in a trade or business or for investment “ Note that, when an investor purchases a property for exchange, the investor’s intent is crucial. They are required to hold the property for purposes of renting, investing, or business. Property that does not qualify for like kind exchanges: Personal residences Property held primarily for sale; think remodels or flips for profit Stocks, Bonds, Notes; or other securities Interests in partnerships Personal property; cars, boats, appliances, guitars etc. The 1031 Exchange Process There is a process that must be adhered to when taking part in a 1031 exchange. This is the order of events and rules pertaining to a 1031 exchange. The exchanger consults with their tax professional as to whether or not the property is a likely candidate for 1031 The exchanger signs a listing contract with a real estate broker to sell their property. The listing agreement or an addendum to it, must state the seller’s intention to participate in a 1031 exchange. The exchanger contacts a QI also known as an exchange agent, to consult and prepare 1031 documents The 1031 exchange documents must be signed by the exchanger prior to the sale of the investment property Once the property to be relinquished is sold it is deeded to the buyer. The proceeds of the sale go to the QI/exchange company to hold. Both sellers and buyers must agree to assign the contract to the QI. The closing date of the relinquished property begins the exchange period. The exchanger then has 45 days to identify another property. From the closing date of the relinquished property, the exchanger has 180 Days to close on replacement property. There are three rules to be aware of when engaging in the search for a 1031 exchange replacement property. 3 Property Rule - The exchanger may identify up to three properties as replacements, regardless of their value. 200% Rule - The exchanger may combine any number of properties as long as their market value isn’t more than twice that of the relinquished property 95% Rule - Rarely used, this rule makes it allowable for the buyer to identify properties that add up to more than 200% of the relinquished property’s value (i.e. 4 or more properties), but they must purchase at least 95% of the properties they identify. The replacement property cannot have been a personal residence Be aware of the Mortgage Boot rule: When an exchanger owes less debt on the replacement property than the relinquished property, the difference will be taxed as income. When making an offer on a replacement property, the buyer should include notice that the property being purchased is part of a 1031. Once the new property is in contract, contact the QI will prepare the final set of exchange documents. As part of the closing process, the QI will transfer the funds to the seller, and then transfer the deed directly to the exchanger. Reverse 1031 Exchange A reverse exchange happens when an exchanger would like to acquire replacement property prior to the closing of the relinquished property. The IRS won’t allow a taxpayer to hold title to a replacement property and a relinquished property at the same time To circumvent the IRS rule preventing the exchanger from holding both titles, the exchange company utilizes an EAT (Exchange Accommodation TitleHolder). An EAT is an LLC created by the exchange company to temporarily take title to the replacement property. The exchanger will need funds (i.e. down payment/closing/realtor/mortgage) to buy before the sale of the relinquished property The date that the EAT begins starts the 1031 exchange timeline. The exchanger then has 45 days to identify the relinquished property they’d like to sell. The exchanger has 180 days to complete the sale of the property to be relinquished and acquire the replacement property from the EAT. The reverse 1031 exchange requires more planning than a forward 1031. It’s a good idea to contact the QI before beginning the process. 1031 Vacation /2nd Home Typically, 1031 exchanges apply to rentals, raw land, and commercial buildings. However, if Safe Harbor guidelines are followed, vacation homes can be exchanged as long as they follow the 1031 guidelines and Revenue Procedure 2008-16 If a property qualifies for Safe Harbor, the IRS won’t challenge whether it’s a vacation home or an investment property. To qualify a vacation home for Safe Harbor protections, the exchanger must: Have owned the property for two consecutive years Rented the property out at fair market value for at least 14 days in a year The exchangers personal use in each year of the two year period is limited to 14 days in a year or 10% of the days the property was rented, whichever is greater. I.e. 10% * 200 days rented = 20 days of personal use 1031 Time Keeps On Ticking, Ticking, Ticking… Into The Future The 1031 exchange presents unique challenges in the form of a gauntlet of deadlines to be run by the exchanger. It can be challenging to find appropriate replacement property, or, in the case of a reverse 1031, sell the property to be relinquished to satisfy the timelines necessities. A lot of curveballs can come when inspections and appraisals enter the timeline. Negotiations can drag on. Repairs can drag on. In short, once in contract, sales can become complicated or fail for a myriad of reasons. Be sure to perform sufficient due diligence and have your criteria as clear as possible when performing property searches to identify potential replacement properties in time. Assemble a team of qualified professionals (tax pros, attorneys, realtors, exchange agents, title companies, appraisers, home inspectors ) to help you alleviate these pain points and guide you through a successful 1031 exchange. As always, I’m glad to be your resource and advocate in all of your real estate needs in Oregon and Washington. Please subscribe to this blog & have a great week! Sam Densmore/Realtor/Inhabit Real Estate /September 23, 2024 All Rights Reserved
MOREHome Inspections and Residential Sale Agreement Negotiations - What to expect during the Inspection Contingency Period
Home Inspections and Residential Sale Agreement Negotiations - What to expect during the Inspection Contingency Period
Home Inspections and Residential Sale Agreement Negotiations - What to expect during the Inspection Contingency Period In this blog I’ll provide a basic overview of what happens during the home inspection contingency period and some of my thoughts about negotiating the terms of repair addendums. Buyer Beware When it comes to real estate, Oregon is a buyer beware state. Due diligence is required of the buyer. Buyers agents can and do assist in the due diligence process, but ultimately the responsibility falls to the buyer. A typical buyer isn’t an expert on real estate and home repairs. Consequently, most buyers here will hire home inspectors to learn about the home they are considering purchasing. The buyer’s agent will be valuable in determining which issues are worth taking issue with and pursuing negotiations appropriately with the seller’s agent. Pre Offer Negotiations Mindset Keep in mind that the initial offer is the first opportunity for the buyer to attempt to negotiate with consideration to the seller’s asking price, motivations, seller's disclosures and any readily apparent issues they might have noticed about the property during a showing or open house. For instance, if there’s visible evidence of lifted or missing shingles on the roof, or a huge puddle of water on the kitchen floor from a leak in the ceiling, or cracked sidewalks, the buyer may not want to offer full price. Credits towards repairs or price reductions can be requested in the initial offer. Of course, the buyer may not get their offer accepted, but it's quite difficult to negotiate on those obvious issues after making an offer that doesn’t address them upfront. Issues that come up in discovery, such as mold in the attic, or an old underground leaking oil tank, or dry rot in the posts of the foundation, are usually worthy of an attempt at negotiation. Sellers Disclosures When a buyer makes an offer on a home they will typically have received the Seller’s Disclosures document, read it, initialed it and included it with their submitted offer. The seller’s disclosures provide information about material defects known to the seller. One exception to this scenario is when a property is held in trust and the sellers have insufficient knowledge of the property because they haven’t inhabited it, and are therefore not required to provide sellers disclosures. Home Inspection Contingency Period, General Home Inspection, Specialized Inspections, Contractor Inspections & Bids If the buyer desires a home inspection to be performed, part of the sale agreement will outline the scope of the inspections and determine an Inspection Contingency Period. If inspections are agreed upon between the buyer and seller, the sale will be contingent upon the completion of the inspections. The inspections are performed within an agreed upon time period, typically ten days from offer acceptance, but the terms of the inspection itself and that timeframe can be adjusted. All negotiations based on inspections must be completed and changes to the contract agreed to before the end of the inspection contingency period for the transaction to continue. Let’s get into what kinds of inspections typically take place. 1. General Home Inspection - this is exactly what it sounds like. A certified home inspector is employed to examine the home from top to bottom, in a general manner. They will provide a report that outlines the general condition of the home. In this report, they may suggest that additional specialized contractors or inspectors be brought in to further investigate potential issues that the home inspector isn’t qualified to make assertions about. Examples might be along the lines of - “roof shows wear and tear and appears to be at the end of its life. Black spots found in the attic that appear to be mold growth. Recommend examination by a licensed roofing contractor and mold remediation specialist” or “Portland maps shows the existence of an underground storage tank with no record of decommissioning, recommend examination by a qualified environmental inspector to locate the tank and determine its current status..” The cost of a home inspection will depend on the individual inspector's pricing model and is frequently determined by the size and location of the home, how many buildings are on the property, etc. It’s common for the buyer's agent to recommend and book the inspector's services. However, a home buyer is perfectly free to shop home inspectors themselves and arrange the details of the appointment. Home inspectors will usually ask if the buyer is available to attend the inspection and the subsequent briefing on their findings. They will usually provide both printed and digital versions of the inspection for the buyers and their agent to review. A general home inspection can usually be set up within 48 hours of an accepted offer, but that will depend on how busy the market is. 2. Specialized Inspections - these are inspections that may fall out of the scope of the general home inspections. Examples might include a sewer scope, radon testing, underground storage tank location; including cesspool, septic or oil tank location, soil contamination tests, infrared camera inspections, drone footage, etc. Some of these inspections fall under the category of “Invasive Inspections” and must be agreed to by the seller explicitly. An example of an invasive inspection might be having a toilet removed to provide access for a sewer scope because a sewer cleanout can’t be located. Again, the costs to the buyer for these services will vary and either the buyer's agent or the buyer can make the arrangements for the inspections. The buyer will own the inspection reports provided by these specialists as well. Note that in Oregon, most sellers are obliged to have out of service oil tanks decommissioned and provide proof of the decommissioning to the buyers. For more info on oil tanks for buyers and sellers, from the State Of Oregon, visit this link Oregon DEQ 3. Contractor Inspections and Estimates: Specialized contractors may be brought in to assess the scope of and provide cost estimates of repairs when the general home inspector finds potential issues. Plumbers, Roofers, Mold Remediation Specialists, Structural Engineers, Electricians, Flooring or HVAC Contractors, etc. might be involved. Many contractors offer free estimates, but not all of them. Some will require a fee if they are aware that the estimate is desired as part of a real estate transaction. The buyer or the buyer's agent can make arrangements with the contractors. If there are fees involved, the buyer should expect to pay them. Post Inspections - Negotiating A Sale Agreement Based On The Findings Of Home Inspections and Contractors Estimates If the inspection report was particularly intense, the buyer may request that the inspection contingency period be extended to allow more time for additional inspections or contractor bids. Once the inspections are physically completed, and before the inspection contingency period ends, the buyer has the option to attempt to renegotiate the terms of the sale agreement based on what they discovered during inspections they’ve had performed. The buyer will submit a repair addendum or addendums to the contract, to the seller, requesting their desired changes to the agreement. For instance, let's say a roof is found to be in need of repair because there are leaks into the attic. A solution could be that the sellers agree to have the repairs completed to the buyers satisfaction before closing. Sounds good, but this option could have ramifications for the buyer and seller. What if the buyer and seller disagree on which company to hire to have the repairs taken care of? What if a roofer can’t be scheduled before the closing date? Adjustments to the closing date or a price reduction may be in order. Or, perhaps the seller would provide closing credits, allowing the buyer to divert those budgeted liquid funds to the roof repairs after closing. If the buyer and seller can't agree as to how these issues will be addressed by the end of the inspection contingency period, they may elect to terminate the contract with no penalties, having their earnest money deposit returned in full. Once the inspection contingency period is over, if the buyer decides to go forward, and all of the inspections and negotiations have taken place, the transaction will continue towards closing. If you’re thinking of buying or selling a home, I hope this information is helpful in your process. As always, my door is always open to talk about real estate. Please subscribe to this blog & have a great week! Sam Densmore/Realtor/Inhabit Real Estate /September 6, 2024
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