Golden Realty Blog

Have you heard that interest rates are now down to an all time low? Well you have now…the current average rate for a 30 yr fixed loan is 4.87%. The reason cited for this ‘slide’ is Europe’s debt crisis which pushes nervous investors to the security of US Treasury’s, which pushes down their yield and influences mortgage interest rates.

“It’s the best time in our generation to buy,” says Mark Zandi, chief economist at Moody’s. “It may be the best time in any generation. Mortgage rates are so low and with homes prices down and lots of inventory, you couldn’t pick a better time to buy.”

Europe’s debt crisis will fade and investors will be looking for other assets which will drive the yield of Treasury bonds up and interest rates along with it.

“I think they won’t last much longer than a month or two at the best,” says Lawrence Yun, chief economist at the National Association of Realtors. “I can see them going up to 5.5 percent by the end of June if not sooner.”

Time for buyers to get it done!

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In this current real estate market many home owners and home sellers are choosing to rent their homes out instead of selling them. Homeowner’s whose homes have decreased in value, would rather wait until the market improves before selling and risk losing their current equity. The idea of having a tenant pay the mortgage until the market rebounds sounds like an ideal solution. Right? Well, for some it is, but for others this may be a nightmare. Which will it be for you?

Here are some questions to consider before making the decision to rent your home or sell:

• Are you prepared to be a landlord?
• If a pipe breaks or the furnace goes out, will you be prepared to deal with repairing the problem immediately?
• Will you be renting the property yourself or hire a Property Management Company to help you? Property management companies on average charge 10% of the monthly rent.
• What will you ask for rent?
• Is it the standard rent for the area and the home amenities?
• Will the rent pay your mortgage, investment property insurance and other expenses that will occur with tenant/landlord relationships?
• Can you afford to pay your mortgage if the tenant does not pay the rent?
• Will the property be maintained and kept up to your standards?
• Are you versed in landlord/tenant laws?

After answering these questions, and you decide that renting the home is not the right choice for you, re-evaluate your timing to sell the home. In theory renting out the home sounds like the perfect solution. But if waiting to sell in the future could cause greater financial loss than selling now, then, what would you do?

Your Home – arguable your family’s most important asset. Did you know your equity is at stake? During the last five Oregon Legislative sessions there have been 10 attempts to impose a new REAL ESTATE TRANSFER TAX in the State of Oregon. This tax is an additional tax that would essentially impose taxes twice on the same piece of property. Think about it. Oregon homeowners already pay high property taxes each year. This Real Estate Transfer Tax would be implemented on a purchase or sale of a home based on a percentage of the sale price (typically between 0.1% – 4%), whether or not there is a profit on the sale. Therefore, when you sell your home there could be multiple layers of taxation on a single taxation. You, as a home owner lose hard earned equity just to pay more taxes.

A real estate transfer tax will hurt Oregon’s economy and YOU, making it harder for people to buy or sell a home, adding thousands of dollars to the cost of housing and forcing home prices and rents higher which will make Oregon less attractive for growth, which means fewer jobs. The affect of such a tax will be detrimental to the overall economy of Oregon and the livability that we Oregonians are so proud of.

But the good news…there is something that YOU can do. The Oregon Association of REALTORS are leading an effort to place a measure on the November ballot that will amend the state constitution that will permanently prohibit the imposition of a real estate transfer tax here in Oregon. We must collect 150,000 signatures of registered Oregon voters, to qualify for the ballot. Click here for more information and resources about this important issue.

If you would like to help protect your equity, jobs and our overall economy, please sign the pledge. Together we can Stop the Double Tax.