5 Tips for Buying a House in the Competitive Portland Market
Updated: Aug 24, 2021
If you’re looking to buy a home in Portland, you probably already know that the market is booming right now, with much higher buyer demand than there are listings to satisfy. Finding the right home can be tricky enough, but not having your offers accepted time after time can be disheartening in what is supposed to be an exciting and fun time in life. Here are five useful tips we use to make our clients win the home they want.
1. Hire a realtor that knows what they’re doing.
The first thing you’re going to need is an experienced realtor that really knows the market and who will guide you through the process from beginning to end. We don’t mean the normal market process; we are talking about all the bumps in the road you should expect in a very competitive market. What makes a Broker “experienced”? It’s not how many years they’ve been licensed. If an agent just tells you how many years they’ve been in the business before they tell you how many deals they have done year to date, make sure you ask them for that number.
The National Association of Realtors reports that an average agent does 12 transactions per year. If your agent has done less than that, they are below average. With thousands of agents out there, find yourself an above-average agent! The number of transactions an agent does is important because it shows they have a recent track record of success for their clients and because they are more active in the current market, they will be better able to guide you on the current market pulse. Questions to ask agents you are considering working with: What do you do to make my offer more competitive? How will you help the property appraise if I offer more than the listing price? How many offers do your clients have to make before they are successful (shouldn’t be more than three on average)?
2. Know what you’re looking for.
After you have found an experienced agent to guide you through what to expect, it’s time to focus on what you want. Most buyers have thought about the specific town or even neighborhood they would like to live in, but there are several other factors that you will want to consider. For the last year or two, home offices were the most important thing buyers were looking for. Now that we are just about through this terrible pandemic, workers are finding themselves back in the office. At Timber & Rose Realty Group we have a list of questions that our clients have access to in our home buying guide that helps them realize what kind of features they may need based on their lifestyle.
You want to identify no more than three things in a home that are really important to you. Most things can be changed, updated, or remodeled in a home, but once you identify the three things you will know you are not settling for any home that comes a long no matter how fast-paced and competitive the market becomes. Why not five things? In our experience, for every feature more than three “must-haves” in a home and it becomes more difficult to find homes that match your needs. Don’t forget that your partner will have their three needs as well. When buyers get too picky about the house they want to buy (not the right colors, not updated enough, not the right appliances, etc.) a fast-moving market leaves them behind and they end up paying much more for a house several months later that still needs a bunch of work done.
3. Have less contingencies.
What is a contingency? It’s any stipulation that a buyer puts in the offer to the seller. There are three contingencies that are very common in a buyer’s offer. Those are the inspection contingencies (a buyer wants the house inspected before they agree to purchase), a financing contingency (a buyer wants to be able to get a loan before agreeing to purchase), and the appraisal contingency (a buyer wants the home to appraise for what they offered before agreeing to purchase).
At Timber & Rose Realty Group we have no problem helping our clients win against multiple offers with these three contingencies. Other contingencies that buyers often ask for, and can be a barrier to winning, include asking the sellers to pay for the buyer’s closing costs, a buyer needing to sell their home first in order to afford the home they’re making an offer on, or asking for fixes that are not necessary for the buyers to live safely in the home.
4. Get pre-approved before looking at homes.
Before you do anything, make sure you have your pre-approval letter from a lender. This is an important first step that will tell you how much home you can afford and allow you to move quickly in a fast-moving market. Many times, we will meet buyers at open houses who have not been pre-approved and don’t really know if they can afford the homes they are touring. When you get pre-approved there are many factors that the lender takes into account, so the quick mortgage calculators on websites like Zillow or Redfin are about as accurate as the home values on those sites are…not very.
Getting a pre-approval letter is the best way to make sure that when you find the home you want to buy, you don’t miss the opportunity to make an offer on it. In a very competitive buying market, the buyers with a pre-approval letter will be more likely to win than those without one as it shows the sellers that the buyer is more likely to stick with the offer since they already know they can afford the home. In fact, a pre-approval letter from a lender is so common it really is now a prerequisite to making an offer.
5. Know that it may take several offers.
I’ve heard brokers describe buying a home in this market as a “bumpy ride” for buyers, but that isn’t a good description for the experience buyers get with Timber & Rose Realty Group. It may feel like a roller-coaster with the emotional ups and downs, but like a roller coaster, it should never be bumpy. The difference is that there are natural emotions involved when buying a home, but there shouldn’t be unforeseen challenges or surprises that add to your stress level. Know that it may take a few offers before you win a home.
Buyers that work with Timber & Rose Realty Group have never had to make more than four offers…and that was only one client. Most clients only have to make one offer, many have to make two offers, sometimes three is necessary. We are very open about these numbers because we’re proud of them. We have clients that come to us after making six or more unsuccessful offers; even one person who had made 20 offers. It’s totally normal in a competitive market to make more than one offer but with the right broker guiding you through the process with proven systems for getting your offer accepted it should only a take few offers. That’s why tip number one is so important.
For more tips on how to be competitive in the Portland metro area real estate market and everything else you need to know to be ready to buy a home, attend our FREE monthly home buying class Portland Home Buying Guide: Online Edition.