Buying a home in Oregon: A how-to
How to buy a house in Oregon
Decide where to live in Oregon
Before thinking about how to buy a house in Oregon, you’ll need to think about a more important question: Where should you live in Oregon? Determining your location isn’t just about the price tag attached to a new home. You’ll want to run the numbers of the total cost of living in different parts of the state to get a sense of how much of your monthly budget will go toward transportation, food, utilities and other essentials.
Finding the right place can feel overwhelming — after all, there are loads of picturesque places to consider here, whether you prefer ocean views, deep forests or big cities. So start with Bankrate’s list of the best metro areas in Oregon.
You’ll need a realistic idea of how much you want to spend on a home, too. Home prices vary widely across the state. In Salem, for example, the median selling price is $437,000, according to data from Redfin. Drive 130 miles southeast to Bend, though, and it’s a different story: The median home price there is a much higher $755,500.
Tips for buying a house in Oregon
Like nearly everywhere else in the U.S., housing prices in Oregon have increased throughout the pandemic. Statewide, the median sale price is $527,600. While that’s higher than the national median, you can still afford a home in Oregon without having to cross into jumbo/non-conforming loan territory. Across the Beaver State, the conforming loan limit is $647,200 for a conventional loan in 2022. If you’re looking for an FHA loan, the limit is lower and varies from county to county.
Things to know about buying a house in Oregon
- Property taxes: Beyond just purchasing the home itself, you’ll also need to determine how much you will pay in property taxes each year. Oregon’s property tax rates vary by county. For example, the most recent data from the Oregon Department of Revenue shows that homeowners in Multnomah County, where Portland is, pay $22.05 per $1,000 of assessed value. Meanwhile homeowners in coastal Curry County pay just $8.41 per $1,000 of assessed value. Overall, Oregon ranks 17th for most-friendly property tax rates in the country, according to data from the Tax Foundation.
- Dual agency: Oregon allows one real estate agent to represent both parties (buyer and seller) in a transaction, which is commonly called dual agency. So, be aware that your agent is legally allowed to also represent the owner of the home you want to buy. If that’s the case, though, the agent is required to disclose that information with you.
- Seller’s disclosure: Oregon home sellers are required to share a disclosure statement that outlines all known defects with the property, which covers everything from the septic system to past roofing repairs. Be sure to pay close attention to this statement to understand any problems you might be inheriting.
- Closing costs: You’ll need to budget to cover the closing costs on any new home. In Oregon, data from ClosingCorp shows that these expenses added up to an average of $4,327, or 0.9 percent of the sale price. Every transaction is different, though, so your closing costs may be higher or lower.
- Attorneys: Homebuyers are not legally required to hire a real estate attorney in Oregon. However, you should still consider hiring a legal expert to help you through the process. Buying a home involves a lot of complicated paperwork, deadlines and money; having an attorney looking out for your best interests is always a good thing.
- Climate and weather considerations: While Oregon is full of natural wonder, the Pacific Northwest in general is famous for its rain. The state also presents risks of natural disasters; something to consider when budgeting for homeowners insurance to protect your new place. For example, regions along the Pacific Coast have heightened risk of flooding, and some areas of Oregon are prone to wildfires. Rising sea levels and climate change have added to the danger. As you consider places to buy, be sure to consult this map of wildfire risks across the state.
How much house can I afford in Oregon?
Looking at real estate anywhere raises the question: Are you really ready to buy a house? If your credit is in good shape, you have some money saved to contribute to a down payment and you are confident that you will be staying put for the foreseeable future, a home is one of the wisest investments you can make.
To figure out how much you can afford to spend, start by looking at how much you make. Most financial experts recommend spending no more than 28 percent of your monthly income on your housing expenses. So, if you earn $5,000 each month, you should plan to spend no more than $1,400 each month on your mortgage payment. Use Bankrate’s home affordability calculator to get a sense of how much you will need to put down on a home to hit your magic 28-percent marker.
Saving for a down payment in Oregon
The down payment can be the most daunting piece of buying a home. However, you don’t have to do it on your own. You may be able to qualify for down payment assistance, and if this will be your introduction to homeownership, there are a number of programs for first-time homebuyers in Oregon. There are other ways to find assistance, too, especially if you qualify as a low- or moderate-income buyer.
Get preapproved for a mortgage
Getting preapproved is one of the most important steps to take as you gear up to buy a home in Oregon, or anywhere. It’s easy — some lenders will issue automated preapprovals online in just 15 minutes — and it lets sellers know that your offer is the real deal.
Additionally, you may want to compare companies that can make your offer stand out even more. You don’t have to have a million bucks in the bank to make a very desirable cash offer. Companies like Knock, Opendoor and Ribbon, for example, will work with buyers to essentially back their offer with all the money to close the deal. In a hyper-competitive market, which many cities in Oregon are, it’s a way for regular buyers to go toe-to-toe with investors and others with the resources to make cash offers.
Find the best lender in Oregon
You’re buying a house in Oregon, but you don’t necessarily need to find a lender with an office in the state. In fact, some of the best mortgage lenders are all-online operations; you can contact a representative for help, but the vast majority of the work takes place on a website or an app.
Find the best local real estate agent in Oregon
Once you have financing in place, it’s time to link up with a real estate agent. While you don’t have to have a professional agent on your side to buy a house in Oregon, it’s a very helpful piece of the puzzle. Realtors have a better sense of the local market than you can find by simply searching online, and they can help match you with properties that meet your needs and budget. Remember that you’re the boss, so treat finding an agent like you’re hiring someone to work for you — which you are! — and ask each candidate these essential questions.
Start house hunting and make an offer
With a preapproval in hand and a knowledgeable agent at your side, you’re ready to start looking at real estate. Go into the process with a clear idea of what you’re looking for in a house, and think about where you might be willing to compromise. For example, do you absolutely need a finished basement, or could you invest in that project in a few years? Would you be willing to park on the street if a home doesn’t have a garage?
Once you find a home, you’ll need to put together a competitive offer. “Competitive” can look different depending on the city: For example, in Portland, the average home sells in just six days, and for 5 percent more than the asking price, according to Redfin. In Salem, though, homes tend to sit on the market for much longer — 35 days, on average. Your real estate agent can help you understand how quickly you need to act and whether you’ll be competing against a large number of other buyers.
Get a home inspection and appraisal
If your offer is accepted, you may be ready to celebrate — but there’s still work to do. Make sure you get a home inspection to have a professional identify any issues that might prevent you from wanting to move forward with the deal. If the inspection report uncovers any problems, you may be able to use them as a bargaining chip in the hopes of getting some concessions. If you’re financing the purchase with a mortgage, you’ll also be required to get an appraisal to verify that the property is worth the price you’ve agreed to pay. If the appraisal comes in low, be prepared to come up with the cash to cover the difference.
Take your final walk-through and close on your Oregon home
Plenty can still change between a home inspection and your closing day, so make sure to schedule a final walk-through of the property just before you officially hand over the money to make it yours. You’ll want to verify that the seller has removed all their belongings, nothing has been damaged in the interim and the home is as you expect it. Then, head to your closing with a certified or a cashier’s check for the final tab, which will be in your closing disclosure. Sign your name on a lot of paperwork, and then pat yourself on the back: You did it. You’re officially a homeowner in Oregon.
FAQs
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Yes. Oregon ranks eighth in the nation for inbound migration — meaning that a lot of people are moving here. As the population continues to grow, property values in Oregon are projected to increase. A study from Renofi estimates that the average property in Oregon will be worth more than $631,000 by 2030.
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If you’re buying a house in Oregon, be ready for a competition. Homes typically spend just 12 days on the market here, according to data from Redfin, and about 50 percent of homes on the market sell for more than their list price.
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To get a sense of the typical monthly mortgage payment in Oregon, let’s use the median home price of $527,600 as an example. If you assume a 20 percent down payment of $105,520 and a 30-year mortgage with a 5.5 percent interest rate, Bankrate’s mortgage calculator shows that the monthly payment for principal and interest would be $2,396. Keep in mind, though, that a number of factors will impact your monthly payments. With a bigger down payment, a smaller purchase price and/or a lower interest rate, your monthly payments could be much lower.
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There is a lot of work involved in closing on a house in Oregon, as there is anywhere else in the country. The national average time to close on a new home is 50 days, according to data from ICE Mortgage Technology. If you are looking for a faster timeline, make sure you ask every lender you’re comparing about how fast they can close your loan. Some digital lenders advertise closing timelines closer to 30 days, and some will even guarantee to hit your closing deadline with money back if they fail to do so.
