In Portland, houses currently sell about as fast as it’s possible to sell. The median number of days on market for single family homes in the metro area was five in March—only five days from listing to the seller accepting an offer.
The number of homes being listed has been decreasing at the same time, so buyers have fewer choices and they need to make fast decisions.
“The strain is apparent,” says Portland-based Flyhomes Client Advisor Natalie Wilson. “I saw one home that was listed on a Monday with such a short review period that it sold by Wednesday at six o’clock.”
When she thinks about what’s driving the speed, Natalie can’t ignore the pandemic.
“Some sellers just don’t want a lot of access to their homes,” she says.
She knows of one instance where a seller only allowed one day of showings because he didn’t want to risk a longer period of people coming through his home. He was willing to take a lower sale price if it meant going quickly.
An experienced agent in the Portland market, Natalie says the current situation feels extreme to previous periods of competition in the area.
“Because the market is so hot, you sometimes hear buyers asking if there’s a bubble,” she says.“They’re almost hopeful that there is, so it will burst at some point. While nobody can predict the future, the truth is Portland just has a lot of people moving here who love it.”
In fact, Portland is one of ten cities where real estate expert Stefani Berkin told the Today show people will be moving to after the pandemic. Her list was based on quality of life as Americans consider which areas are appealing given that proximity to an office may no longer be a factor.
There are no signs that the local market will slow.
The median sale price for single family homes in the metro area started 2020 at $445,000 and ended the year up 15% at $510,000. So far, 2021 is trending even higher.
“If I saw a bunch of inventory popping up and fewer people moving here,” Natalie says. “I think it would relax significantly. But the truth is, we just went through a year with a pandemic, political upset, fires … I don’t know what it would take to scare people away from Portland. To me, we’ve already weathered big tests and the market has never been hotter.”
Assuming that we’re living in a new normal, the thought of buying a home in Portland may seem daunting. But it can still be done! These three tips will help.
Shop under your maximum price.
Most homes in the area are being priced low to encourage competition. If an agent thinks a home can sell for $500,000, they list it lower in order to attract more buyers and drive up the price.
“When a client tells me their max budget is seven hundred thousand dollars,” Natalie says. “We’re not looking at homes that list at seven hundred. We’re looking at six-fifty.”
This way, there’s room to bid above asking price before the buyer is priced out of the home.
There is an exception: if a home has been listed for more than a week, it might be priced at market value. In that case, it makes sense to try a firm offer at the top of your limit—that generally fares better than a low offer with an escalation attached.
“My clients just got a home because we offered a firm price that was about five percent over list versus others that matched our price but included escalation clauses,” Natalie says. “Because we made a firm offer, we won for fifteen thousand dollars under their max.”
Shopping lower than your max budget is smart for another reason, too. Low appraisals become a risk in a competitive market. Comparative home sales are the best available data, and your agent can use them to give you an idea of the value a home will appraise at before you offer. Then you’ll be prepared to set aside some money to cover the gap if that number is lower than the price you’re willing to pay for the home.
Be prepared to act fast.
Given the speed of the market, it’s no surprise that buyers should get ready to make an offer as soon as they find a home they love.
But how do you actually get ready?
One way is to be pre-underwritten before you start touring homes. Much more concrete than pre-approval or pre-qualification, pre-underwriting gives you an on-paper guarantee of the amount of money a mortgage lender agrees to give you (unless you make major changes, like buying a boat, in the meantime).
The certainty of pre-underwriting means you’re able to be confident in your offer and avoid a financing contingency in your offer. Sellers love offers without contingencies.
Generally, being in touch with a lender early in the homebuying process has other advantages that help you move quickly, too. Knowing all of your options makes it easy to pick one when the time comes.
Your loan officer can run different pricing scenarios for you, for example. If you’re deciding how much money to hold back in case of a low appraisal, for example, they can help you see how your payments will play out if you put down 10% versus 20%.
Lastly, plan to tour a home you’re interested in as soon as possible. Flyhomes has a dedicated team to handle booking, so we can often offer same-day tours. Simply request a tour from our app or website and we’ll make it happen quickly.
Check your mental framework.
There’s a time to visit homes just to get a feel for what you want, to weigh the pros and cons of one home versus another. Now is not that time, if you’re also hoping to buy soon.
Now is the time to be decisive. When you’re serious about buying, think about it as “I’m going to check out this house and if I like it, I’m going to start working with my agent on an offer tonight.”
Waiting two or three days will likely cost you the home.
Buying a home is a big deal, and it’s personal. It can be stressful even when there’s not added time pressure. When there is that added pressure, setting your mind on what you want and being willing to act when you find it will serve you well.
There’s also an important element of trust between you and your agent. You need someone who really understands the local market and who is a savvy communicator. Every listing agent is different, and your agent should be able to adapt to their many styles of working.
The value of your agent creating rapport with the seller’s agent is huge.
“My clients win houses all the time because I start talking with the listing agent right away,” Natalie says. “Building a relationship helps me figure out what the seller’s top priorities are, so we can be strategic and address them in our offer instead of taking a guess and crossing our fingers.”
If you don’t feel like you can fully trust your agent, have a frank conversation about your doubts before you get to the point of making offers. Knowing you can lean on a pro takes a lot of stress off your shoulders. You deserve someone amazing on your side!
When your agent is in touch with the seller’s agent, they can try to find out where you stand and deal with any surprises.
And, very soon, you’ll get that exciting call: the house is yours.