Top 10 Costliest Mistakes for Home Buyers in Portland
The constant allure of new homes for sale in the Portland, Oregon real estate market lures potential home buyers and gets them to start dreaming. But before you start making offers, read our list of home buyers’ most common mistakes, with or without a real estate agent.
10. Waiting too long to buy a home
The U.S. real estate market has never failed to increase in value over a ten year period. Of course, there are significant ups and downs and while it is important to know the best time of the year to buy a home, and it is important to stay up with the current real estate market before buying, if you wait too long to pull the trigger you will lose out. Want to stay on top of Portland real estate market news? Subscribe to our local real estate news blast (we only ask for your email and our reports only go out every three weeks).
9. Not looking outside Portland city limits.
Yes, there’s only one Portland, Oregon. Life in Portland offers amenities that can’t be found in the suburbs — or can they? Neighboring cities like St. John’s, Cornelius, and McMinnville are comparable to Portland, with historic downtowns, highly rated parks, shops, restaurants, and proximity to transportation and employment. Thanks to their greater affordability, these suburban hotspots are growing faster than Portland. Right now, the RMLS places the median price for a Portland home at $549,900. Homes in Milwaukie — a stone’s throw away from hip Southeast Portland — are going for $492,000, according to Redfin. And smart buyers can scoop up a McMinnville home for $494,000, on average. Check out our full list of affordable Portland suburbs here.
8. Falling for home buyer scams.
Talk about losing money on a home purchase—you could lose all of it by wiring it to the wrong person. Scammers are getting smarter these days, so it’s always important to double-verify each step in the transaction. Read more about the latest real estate scams.
7. Not shopping around for a mortgage.
Yes, it is overwhelming to pour through the hundreds of mortgage deals available to the average Portland home buyer, which is why simply going through your corporate (Wells Fargo, Citi, Chase) bank can seem like a welcome shortcut. But if shopping around for a mortgage can save thousands of dollars over the time you live in the home, isn’t it worth it? Luckily, you don’t have to search blindly for the perfect lender—contact us for a list of local mortgage providers that our buyers’ agent recommends to clients daily. Also, check out the latest grants and money-saving loan programs for first-time home buyers in Portland.
6. Moving too fast.
Yes, the Portland real estate market can move fast sometimes, but when home buyers make decisions too quickly, they lose. A home is a major investment — maybe the biggest investment you’ll make in your life. Because closing costs can add up to thousands of dollars, selling the home again in a few months is a sure way to lose money, even if the real estate market is improving. Take the time to consider whether your offer is truly within your budget, and try to view the home with an objective, unemotional eye. Overlooking major flaws in a “bargain” home is a sure way to lose money on renovations down the road.
Budget creep is fairly normal for new homeowners, especially with how the market is lately. However, buying a home outside your price range can lead to financial problems and leave you in a worse situation than you would have been before buying the home. Being “house strapped” in a home that you can barely afford not only puts you in an unfortunate situation. Not only can you end up being “house poor,” when you budget too much money toward purchasing your home, you can find yourself unable to pay the general upkeep costs of your home, or unable to make upgrades when it’s time to expand or update your home.
Being aware of your actual budget and being loyal to said budget are important parts of buying a new home. Remember, it’s better to set a lower budget than you can afford rather than get stuck with a budget that drains your finances and complicates owning a home. It’s also a good idea to leave a portion of your budget for home emergencies, just in case something goes wrong down the road.
5. Not figuring in the hidden costs of home ownership.
Attention, renters — what you currently pay in rent is not what you can put directly into a mortgage. Homeownership comes with other costs, including maintenance, homeowners insurance, and property taxes. Consider utility costs as well: They might vary greatly from what you currently pay. Fortunately, homes sold in Portland must have a Home Energy Score report, which will give an accurate idea of what energy costs will be with the home.
4. Not starting early enough to improve your credit score.
According to Consumer Reports, a credit score going up or down by just a few points can change the mortgage rate you get by half a percent or more. That translates to tens of thousands of dollars more over the loan’s lifetime. Even if buying a home is just a distant idea, check your credit report now and dispute any errors you find. For a list of simple steps to improve or build your credit, head over to Experian.
3. Skipping the home inspection.
The home inspection is an important part of the real estate transaction; unfortunately, some buyers think they should waive it to get in on a “good deal” on a home. This is a little bit like skipping the test drive on a car so that you can buy it before someone else does. Yes, sellers must fill out a disclosure form, but even the seller may not be aware of many issues with the home. The lender’s home appraisal may sound similar to an inspection, but it is not a full, in-depth inspection of all the home’s systems and structural components. Often, appraisers walk through the home in less than 30 minutes, while a good home inspection can take four hours or more. Read more about the difference.
2. Buying a for-sale-by-owner (FSBO) home without a real estate agent.
When a friend or family member sells a home, it may be tempting for both parties to forgo the real estate agent commission and make the transaction without representation on either side. Buyer, be aware! A home is not like other things that can be bought and sold — real estate assets require a professional to make sure that everything is done legally and to avoid disputes down the road. Contact one of our agents to get a lower commission rate when both parties are represented off-market.
1. Not using a local expert real estate agent in a traditional home purchase.
You knew this was coming. But even though we personally would like you to give us a call at 503-773-0000 today, the statement is true. Use an expert buyers’ agent’s local knowledge to guide your home search across the Portland metro area, then help you weigh the options before you make an offer. A trusted buyers agent can help you avoid all the money-losing pitfalls on this list and more. They can make a difference in your purchase selection and in your negotiations with the seller. Finally, a good real estate agent will be there for you even after the sale closes.
Ready to talk with a top 1% buyers agent in Portland with over 20 years of local experience? Give us a call today or chat with the bot on this site. We’d love to connect!
