Check out the face lift of this lovely Alberta Arts Centenarian! 2016 home remodel features new kitchen, artisan tiled bathrooms, plumbing, electrical, windows, mini-splits and roof. Graceful floor plan boasts open concept living, dining and family rooms on main floor, three bedrooms up and deluxe basement guest suite. Fenced backyard for gardening and entertaining. Attached tandem two-car garage. Just blocks to great schools, parks and some damn fine BBQ!
Located in the heart of the Sunnyside/Belmont neighborhood, this lovingly maintained and updated Sweet Sunnyside/Belmont Bungalow is walkable to nearly everything the heart could desire.
Move-in ready
and welcoming with an oversized porch, this home features beautiful hardwood floors, period built-ins, newer wood stove insert, updated kitchen, and newer stainless steel appliances. Energy efficient updates include vinyl windows throughout, high efficiency furnace, and added insulation in 2015.
After four long years, the Portland real estate market is now right for those homeowners who want to buy a house, but need to sell their current home as well. In real estate lingo, they’re called “contingent buyers.” If you’re considering how to sell and buy a house, we’ve outlined four options to help you make the move. We’ve helped many Portlanders sell their current home and move into their dream house.
Why is 2019 a great time for contingent buyers? The Portland real estate market has changed, and we’ve entered a balanced market for the first time in four years. That means buyers have more leverage, including contingent buyers. (We do a deep dive into 2019 buyer trends in our post Is 2019 The Right Time to Buy a House?)
Before we outline your four options, remember that the HouseLovePDX Team provides free consultations and market analysis. Don’t hesitate to give us a call and arrange a time to go over your options in person or over the phone!
Option 1: Shop – Buy – Sell
This is a classic contingent offer:
Shop for your new dream home
Make a “contingent offer” to the seller – the offer is contingent on the sale of your current house
Seller accepts the offer
Sell your current house
Move into your new home
Sellers may be wary of contingent offers because there is more risk compared to a traditional offer. (If for whatever reason you don’t sell your current house, then the deal is off.) Some sellers won’t accept a contingent offer. In the past, sellers had more leverage than buyers in the Portland real estate market, and they tended to reject contingent offers. Happily that’s not the case in the current market.
When you’ve made a contingent offer, it’s crucial to sell your house as soon as possible. You don’t want to be sitting on the market for two or three months. Preparing ahead to sell your house will make your contingent offer as appealing as possible to sellers.
How to Prepare Ahead for a Contingent Offer
Preparing ahead for a contingent offer is similar to preparing to sell your house in general.
Free Consultation and Market Analysis
We provide a free consultation, including a professional marketing analysis of your current property. We’ll establish your house’s price point, and how much you can expect to get in terms of your net proceeds. This will give you a price range when you’re house hunting for a new home.
Recommended home improvement projects
We’ll provide a list of prioritized home improvement projects to help increase the value of your home. Not everyone can – or wants to – invest in home improvement projects. That’s not a problem! What’s important is pricing your house right to sell it after you make a contingent offer on a new home.
Create Marketing Plan and Stage Photography
We will create a marketing plan and stage photography that will show your house in the best light.
When you find your new dream home and make a contingent offer, we show the seller your marketing strategy, pricing strategy and beautiful photos. This assures the seller we’re ready to sell you house, and can provide the confidence needed for a seller to accept your contingent offer.
As soon as the seller accepts your offer, we’re ready to get your house on the market within 24 to 48 hours!
Option 2: Sell – Shop – Buy (Or Plan B)
We call this the “Plan B Option” because you must have a plan B arranged in case you don’t sell your house in time:
Sell your house
Shop for your new home
Either buy your new home or move temporarily into your plan B option
Plan B can be an apartment, or living with your parents or in-laws.
You’re already under contract to sell your current house, so you’re in a great position when shopping for your dream home. However, it’s important to do some research and make sure there is enough real estate inventory to choose from, i.e. other houses for sale within your price range and with the characteristics you’re looking for. You will need to shop for a new home relatively quickly.
The risk in this situation is that if you haven’t closed on your new house in time, you have to move into your plan B temporary housing.
Although it’s crucial to have a doable plan B arranged, so far we’ve always managed to get our clients into new homes before they’ve had to move to their plan B. (Moving back in with your parents seems to be a very motivating factor!)
Option 3: Bridge Loan
A bridge loan provides financing for a downpayment on a new house. That means you don’t need to sell your current home in order to purchase a new one. Like all loans, bridge loans are based on several factors, including your income and credit, and loan-to-value ratio. We can put you in touch with excellent loan officers who can provide detailed information on your unique circumstances. (Erika used a bridge loan to buy her last house, so she can speak from personal experience as well.)
If you qualify for a bridge loan you can:
Shop for your new dream home
Make an offer on a new house, financed with the bridge loan
Move into your new house
Prepare your old house for sale
Sell your old house
The major benefit of this option is you can wait to sell your house until after you’ve moved out. You don’t need to worry about moving into temporary housing and then moving again. If moving twice is something you want to avoid (think: children, pets, home businesses, lots and lots of packing) then a bridge loan may be a great option for you.
However, from a financial point of view, you will need to be able to pay two mortgages until your sell your old house. Not everyone has to make double mortgage payments, but you need to be able to afford it for the time it takes to sell your old house. Additionally, the selling price of your old house isn’t set in stone, so there’s some financial uncertainty.
In a best case scenario, you sell your current house quickly and avoid paying double mortgage. On the other hand, you may not be able to sell your house for six months, ten months or more, depending on the market. In our free consultation and market analysis, we talk to prospective clients about what they can realistically expect. If you are considering a bridge loan, you want to be confident that your property will sell quickly.
We understand that no one wants to pay two mortgages, so we will work with you to get your house sold quickly.
Option 4: Sell – Rent – Buy
This is a great option for people who want total financial security and don’t mind moving twice. If you want to make sure you have the money in the bank from your house sale, and you want plenty of time to shop around for your dream home, then this is a great option for you.
This option is straightforward:
Sell your current house
Move into temporary housing
Shop for your new dream home
Buy your new house
Kari went this route when she made her last move. This option gave her time to shop for the right house. There was no rush to buy a new house quickly.
There are pros and cons to each of these options. We’re happy to discuss your specific circumstances in detail. There’s no reason to wait – it’s time to move into the right house for you and your family! Call us for a free consultation at 971-322-6612 or email us at karianderika@livingroomre.com.
We’ve broken down buyer trends for 2019 to help you decide whether or not it’s a good time to for you to buy a house. From questions about interest rates to concerns about another recession, we cut through the noise and outline a practical approach to decide whether or not it’s the right time for you to buy a home.
2019: An Equal Market for Buyers and Sellers
In Portland we saw a 2.4 increase in home prices from 2017 to 2018. While to many, this felt like a big slowdown in the market after five years of astronomical growth, these rates still show an increase in value on top of the huge growth experienced in previous years. What this means for 2019 is a balanced leverage market for buyers and sellers. As realtors, we’re happy to have a balanced market for the first time in years.
How Do Interest Rates Affect Mortgages?
At the end of December the Federal Reserve raised interest rates for the fourth time in 2018. The Feds are currently in a “wait and see” stance on interest rates, and as of January 10, 2019 say they plan to hold off on interest rate hikes until at least May. Today’s mortgage interest rate for a 30 year fixed mortgage is 4.75%. This is good news for buyers this year because although interest rates have increased from the historical lows of 2016, they are still very low and are likely to stay that way through April.
It’s important to know that Fed hikes in interest rates do not always cause mortgage rates to increase at the same rate. The fed hike at the end of December caused the ten year treasury yield to tumble, which is what mortgage rates follow. One of our amazing loan officers, Jen Bell, reported that this actually caused an improvement in loan rates. She locked a jumbo loan at 4.5% with no points.
What About a Recession?
Some buyers are scared to get into the market right now. They wonder if it’s a risky market where property prices could go down because of a recession. Oregon historically has had a recession about every nine years, which means we are overdue at this point. Having said that, there are many analysts who think that Portland’s population growth will continue on an upward trend and as a result, real estate values will also continue to follow that trend.
The 2008 financial crisis can provide a blueprint for decision making in 2019. For people who bought at the height of the market in 2007 or early 2008, it took five years to recover the value of their homes and start seeing an increase in the value of their property by early 2013.
We understand buyers’ desires to plan for a worst case scenario, so here’s why it still can make sense to purchase a primary residence now.
Is 2019 a Good Time to Jump Into the Market?
In 2019 we recommend buyers plan to remain in their new homes for at least four years. Ask yourself these questions to help determine if 2019 is the right time for you to buy a home:
Financially, will I be able to afford to pay a mortgage for four years?
Is my income stable enough to pay the mortgage for four years in a worst-case scenario recession where my property losses value?
Are there any changes on the horizon in the next four years – retirement, a new job or a reason I will need to move?
Am I going to be both a buyer and seller – selling my current home and buying a new, better home for myself and my family?
If you can afford to pay your mortgage and you are not planning on moving for four years, then there’s absolutely no reason to delay in buying a house in the current market.
A delay in purchasing is just a delay in building equity in your house. Although there are many emotional and lifestyle reasons to buy a new home, financially the end goal is building equity in your home. Eventually you can leverage that equity to build an accessory dwelling unit (ADU), finance college education or even purchase an additional investment property. If you are currently renting, then you are paying money for a roof over your head without building equity in your own property.
If you are considering both buying and selling in 2019, again there’s no reason to delay. When you are buying and selling in the same market, you may have more leverage as a buyer and less leverage as a seller, or vice versa, depending on the market. Either way, your leverage will balance out (remember 2019 is shaping up to be an equal market for buyers and sellers). If your goal is to secure a home that is going to be better for you and your family for the next four years, then now is the time to make that move.
On the other hand, if there is uncertainty on your horizon – a job opportunity elsewhere or other life changes that could impact your income – then it’s probably not a good time for you to purchase a new home.
If you have questions about buying or selling your home, please reach out to us! We are happy to discuss your financial situation and goals in depth. Reach us at 503-349-5449 or karianderika@livingroomre.com.
