2008 Changes in Oregon Real Estate Practice
It’s a new year Baby, and with it come a handful of modifications to Oregon’s real estate practice.
The 2007 Legislature passed a few items that have impact on homebuyers and sellers, and Oregon’s largest multiple listing service, RMLS, has made some changes, too.
Here’s a summary*:
RMLS Listings Numbers Change: The listing identification number on properties for sale in the multiple listing service has changed. Starting January 1, all new MLS listing numbers start with an ‘8′, as in RMLS# 8000043. This is standard procedure for RMLS, however, it does not ensure that the listing is NEW in 2008. Listings can change brokers, be removed from the market temporarily and relisted, or are merely refreshed with a new number (a practice that is frowned upon). Check with your broker for details for a history of how long a listing has REALLY been active.
Contracts address Measure 49, sort of: The Oregon Real Estate Sale Agreement commonly used by Oregon Realtors, now contains language addressing the recent passage of Measure 49. Like the previous language for Oregon’s Measure 37, the language cautions buyers and sellers to know their rights and the rights of neighboring property owners under the provisions of the new law. Those rights might seem a little murky right now as the courts and counties grapple with land use applications and lawsuits.
Flippers Get Relief: Oregon House Bill 2498 provides an exception to the licensing requirements for general contractors. Previously, if you were in the business of buying properties and fixing them up for re-sale (flipping), you were required to have a contractor’s license. Now, you may work on up to three existing homes and market them for sale per calendar year. Please note that if remodeling requires building permits, the property owner is required to hire a general contractor to perform the work or supervise subcontractors.
Tax Withholding: This change may bite a few investors this year. Oregon House Bill 2592 created a provision for tax compliance withholding at closing for all non-resident owners. So, escrow companies will now be required to withhold a percentage of sales proceeds at closing from out-of-state or foreign owners that do not qualify for an exception.
The withholding amount is the lesser of: 1) 4% of the consideration; 2) 4% of the net proceeds; or 3) 10% of the gain includable in taxable income.
The exceptions include: 1) when the consideration is less than $100,000; 2) if the property is acquired through foreclosure; or 3) if the seller is advised by ‘professionally competent knowledge or advice’ that it is a non-taxable transaction (i.e. tax-deferred (1031) exchange, sale of a principal residence, etc.). Real estate investors, beware…and talk with your tax advisor!
Other changes: Other changes for 2008 on Oregon’s real estate forms include new warning language surrounding legal lot or parcel validation and some minor changes to property disclosure language, but I won’t belabor them here.
*Note: I am not a tax or legal advisor, but have written this to highlight some of the more significant changes to Oregon real estate practice.
(Disturbing) photo by LifeSciences used under Creative Commons license.
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3 comments January 2nd, 2008
