By Bonnie Roseman, April 3, 2023
Empowerment in a Frenzied Market
If you find the current Portland real estate market overwhelming, you’re not alone. The good news is, new spring listings are popping up every day! Just not as many homes are available as there are buyers for them. Inventory is low and that creates a lot of organic competition, especially for the “best” properties. Homes that have been freshly remodeled, have a lot of style, and/or are in prime locations command attention, premium prices and aggressive terms. Many buyers feel priced-out after being out-bid in multiple-offer situations. Avoid Buyer’s Burn-out!
Fortunately, we’ve been at this a long time, and have assisted clients through every possible market on the spectrum.
Tips for nabbing your next home using creative shopping strategies:
- I am not kidding about this- visit homes with ugly pictures! Beyond all the clutter and poor lighting you may find your treasure, hidden in plain sight and overlooked by most.
- Consider properties that are showing a bit of wear and take on the project yourself to make it really shine. Sweat equity is real, but be honest with yourself. What resources will you have available to spruce up your new place. Is watching a how-to YouTube enough to help you handle the fixes, or will you need to hire experts? Skip wonky staircases, wacky floor plans and locations near freeways, bus stops, and busy streets. Buy smart!
- Look at homes priced well below your budget to give you room to fight and be the winning bidder!
- Shop slightly above your current price range. Consider properties that have been on the market a while (translation: homes that are likely over-priced).
- Explore less expensive locations.
- Re-evaluate your priorities and consider smaller homes and yards, homes without recent updates, etc.
How we can help!
There are a few things we are doing behind the scenes for our buyer clients to help get them to the finish line. We scour Coming-Soon listings on the regular. We hustle to get our buyers into homes as soon as they hit the market. Pro tip: It’s not unheard of to persuade a seller to accept a compelling offer on day one on the market, thus avoiding a bidding war. We review old and expired listings and contact off-market homeowners who might consider selling. We leave no stone unturned to help you find your next home!
What can you do?
Get organized and prepare yourself. Consider your financing options and make a decision early in your journey. Where you will obtain your new mortgage? Your lender is your partner, just like your Realtor, in the homebuying process, so make sure you choose trusted advisors! Submit all of the needed documents and ask your lender to run your file through underwriting. Keep in touch with them and make sure you are crunching numbers using current interest rates and realistic estimates for property taxes and homeowner’s insurance. Don’t fall in love with a home only to discover the cash you need to close the deal, or to carry the monthly payments, are beyond your comfort level –OUCH!
If you have the good fortune to be paying with cash, make sure you have proof of funds at the ready!
Financial readiness means your documentation is ready to go!
- If you are a cash buyer, or have a large down payment, have proof that the funds required for your purchase are in a checking or savings account in your own name. Believe it or not, mutual funds, ETFs, gifts and the like are NOT considered cash!
- Engage a lender early, then obtain an up to date mortgage pre-approval letter that reflects the current interest rate and the property tax amount for each specific property you are considering. Your lender will also help you crunch the numbers so you know you are comfortable with the amount of cash you will need to close your purchase and cover the monthly carrying costs. If you love your lender- wonderful! If you don’t have one picked out yet, have no fear, we can connect you with a personal referral to a top notch local pro.
On your mark
Drive, bike or walk by exciting new listings the first day on the market. Let your Realtor know right away when a place shows possibility and make yourself available ASAP to get inside. After all that hurrying, be prepared to wait patiently. Many of the most desirable properties will have due dates for offers a while out and you will need to bide your time.
Understand pricing
Be prepared for newly-listed homes to sell for significantly more than the asking price, sometimes by a wide margin. If the listing has been on the market for 10-20 days it will probably go for right around asking price, and if it has been sitting for more than a month without a recent price reduction, a bigger discount may be in the cards.
You can stay up-to-date with current market conditions with the weekly Portland report from Altos Research.
Offer Terms- Price is not the only thing that matters to home sellers. Sometimes having the best terms can keep you in the running, or at least get you the opportunity to modify your offer without it being rejected out of hand, even if your offer isn’t the highest bid. Consider including terms that give the seller confidence in choosing you as their buyer.
When we work with our buyer clients, we discuss many creative ways to strengthen an offer. Two of the key items that can often make a difference are:
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Repairs
When it comes to repairs, sellers want to know that they will not be nickel-and-dimed during the inspection process. While most buyers are not in a position to make totally as-is offers, it IS possible to limit the risk to the seller without leaving yourself wide open. One strategy is to commit to accepting responsibility for needed repairs that fall below a certain threshold. This way the seller knows you will only attempt to negotiate if something big comes up.
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Appraisals
As prices increase, it can become very challenging for appraisers to find past home sales (AKA “comps”) that keep up with current values. This does not mean the value is not there, but rather that the data is not keeping up with rapid increases in market values. When a home appraises for less than the contract price, this is known as an “appraisal gap” because lenders base financing on the appraised value, not the purchase price.
Sellers want to know that you will close the transaction, even if there is an appraisal gap. You can solve this by adding cash to your down payment. Another approach is to keep your loan amount and down payment as planned, but preparing yourself for an adjustment in the Loan-to-Value ratio. This may have a small impact on your monthly payments in some cases. In others, it may have no impact on you at all!
Here’s an example:
If you are paying $100,000 for a home, putting down $8,000 and borrowing $92,000 (92% Loan-to-Value), but your appraisal comes in at $95,000, you could still borrow $92,000 – it would just be underwritten at a higher Loan-to-Value because the LtV is based on the appraised value.
100,000 sales price x 92% = $92,000 loan amount. 
95,000 appraised value x 96.8% loan-to-value = $92,000 loan amount
The down payment is $8,000 either way!
Ready, Set, Go!
We pride ourselves on assisting clients to be selective in their home purchase decisions and writing offers with a high chance of acceptance in order to avoid a roller coaster ride. When you or your peeps are ready to buy – or even just thinking about buying in the future – it is always in your best interest to prepare ahead of time, with a solid team in place for when it’s time to make the leap. Drop us a line us at portland@realtor.com to get on our dance card! Thank you for trusting us. Your new home awaits and we WILL get you to the finish line!
Bonnie Roseman
Principal Broker | Earth Advantage | ADU Specialist | OR
She/Her
Hello, we’re so glad you’re here! Trish Sunderland, my assistant broker, and I are ready to answer all of your real estate questions and help you make a move when the time is right. We're looking forward to speaking with you soon! - Bonnie
Since 1991, she's been delighted to assist clients in navigating the ever changing housing market: whether selling a first home or the family home, looking for a starter pad or a forever habitat, downsizing, resizing or buying and selling investment property.
Having a symbiotic connection with your real estate agent is key and will help ensure a great experience. Bonnie enjoys consulting with potential clients to discover their wishes and goals, confirming the right client-agent match.
Smooth transactions are the target; however, there can be unexpected bumps getting to the closing table. Bonnie excels at finding creative solutions to any mishegoss that pops up and she takes pride in an extremely low sale fail rate.
A little more about Bonnie: born in Philly, raised in Berkeley, mom to an incredible young woman; her home is filled with both furry and scaly creatures, the daily driver is all electric, equality is the only pathway; she's embraced veganism for the earth, the animals and her health.
Like credentials? Sweet, here you go:
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- At Home with Diversity Certificate
- Earth Advantage Broker + ADU Specialist
- Senior Real Estate Specialist SRES)
- Certified Residential Specialist (CRS)
- Five Star Professional Award (9 years)
- Homelight Top Producer and Top Buyers' Agent
- Nexdoor Neighborhood Favorite
- Member of the National Association of Gay and Lesbian Real Estate Professionals (NAGLREP)
- T: 503-515-5973
- bonnie@livingroomre.com
