There’s nothing quite as exciting as buying your first home, whether you’re looking for something to start out with and build equity or your “forever” home. It can also be a stressful process, filled with unknowns and market-specific factors that are constantly changing. While the last couple of years of the Portland housing market has mostly favored sellers, we’re now seeing shifts in the market that allow buyers more time and flexibility to shop.
Still, there’s much to learn and the market is constantly changing. That being said, it doesn’t have to be as daunting as it looks, and with the right education and representation you can approach your home search with confidence. Here are some general tips to get you started:
Financing
It’s a myth that you have to put 20% down to get a conventional mortgage. Lenders can write loans with a down payment as low as 3%, although it likely will result in a higher interest rate and the addition of mortgage insurance. Government-sponsored loans such as FHA and VA also offer low (or no) down payment financing, which can make them attractive options for buyers.
At the early stage of house hunting, it’s wise to speak to one or more local lenders with a solid reputation for customer service. These well-regarded local lenders will take the time to explain everything in detail to you, and walk you through the process. They will look at your credit, income, and reserves and tell you what products or programs fit your circumstances best, and will be an invaluable guide along the way.
When you’re ready to start writing offers, having a pre-approval (which means you’re considered a good risk, pending further vetting) from a lender will be necessary – and will give you confidence that your offer is being taken seriously.
And here’s a fun little fact about financing: it’s common for people to believe that most houses are being sold to cash buyers- who are indeed tougher to compete with- but that’s not so. About 70% of the houses recently sold in the area have done so via conventional mortgages.
How to Search?
Whatever tool you’re using to search right now – whether it be Zillow, Redfin, realtor.com, etc. – will be fine. If it works for you, it works. All of these sites pull info directly from the RMLS (Regional Multiple Listing Service, the Portland-area MLS), which is what real estate agents use. In addition, your agent can set you up on searches that come directly from the RMLS or from a more industry-focused site like RealScout. These sites have the advantage of additional filters that might not be available elsewhere, less chance of outdated information, cleaner layouts, and – importantly – they’re not selling off your data.
Finding an Agent
In this market, a buyer needs a representative who is communicative, knowledgeable about current conditions, has a strong support system, and works fast. While things have slowed down some in recent months, it is still not uncommon for new listings to go active on Wednesday or Thursday and be in contract by Sunday or Monday. If you see a new listing that piques your interest, it is important to get inside that house as soon so you have time to digest it and make a plan. It’s stressful, I know. But that’s the reality of the current market. Your agent needs to be on the clock and on their game all of the time.
Also, it doesn’t cost you anything out of pocket to enlist the services of a buyer’s agent, as their pay is collected from the seller’s proceeds. Some agents may ask you to sign an exclusive agreement to be represented by them for a period of time, but most won’t.
How do you find one though? Referrals work well if you have friends or family who have had good experiences. If you don’t have those referrals available to you, reach out to agents who know the area you’re focusing your search on, interview them to see if your needs mesh with their approach, and ask what resources and tools they have that will allow you to compete. Also, be sure you have a good rapport with this person, as you may be with each other for some time.
Writing That Winning Offer
When it comes time to start making offers, a mix of excitement and anxiety can take over. It starts becoming very real that there is an actual house for which you’re prepared to make a major personal and financial investment. It’s no longer theoretical. Don’t lose sight of that, because it is just as meaningful as it seems.
As it’s your money and your signature on the offer, every decision has to be made by you. Your agent will handle the nuts and bolts of crafting the offer with you in a way that keeps you knowledgeable and comfortable every step of the way. It will come down to a combination of price, terms, outreach, and presentation. Every situation will be different, and every offer should be tailored to not just the house but what the sellers’ priorities are, which often go beyond just getting the highest price. It is your agent’s job to reach out and build rapport with the other side and prove that you are the buyer that the seller wants to sell their home to.
This is merely a summary of some of the aspects involved in buying a house. It is a complicated process but with the right knowledge and an experienced representative by your side, you can approach it with confidence.
All of the advice above is my own, and intended to fit general circumstances. Your circumstances are unique to you, and on top of that, every transaction looks different from the last. No two houses are the same! If you would like to discuss your situation in more detail please reach out.
