Buying a house in Oregon is an exciting milestone, but the process can take some time. Several factors, like your financial situation, market conditions, and the local economy can affect both how long it takes you to find a home and how much it costs you.
For example, homes in Albany are hitting the market at $425,000 and selling within 64 days — 21 days faster than the state average! — so you'll need to move quickly if you want to beat out the competition.
However, homes typically stay on the market longer in Brookings, so you'll be able to take your time and potentially find a better deal.
The more you know about the steps to buying a house and Oregon's current real estate trends, the more prepared you'll be to navigate this complicated process as quickly and smoothly as possible.
No matter where you are in your home buying journey, Clever's concierge team can connect you with local real estate pros who will help you purchase your Oregon dream home!
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Step 1: Save for a down payment
Your down payment is the initial portion of your home's purchase price that you pay at closing. Your mortgage lender will pay the remaining balance.
Typically, mortgage lenders in Oregon want you to contribute 20% of the purchase price as a down payment. That would be $100,105 for a $500,527 home — the typical home value in Oregon.
However, you have options to lower your down payment amount.
Government backed loans, like VA and FHA loans, allow you to contribute 0% and 3.5% of your home's purchase price respectively. Even conventional loans allow for down payments as low as 3-5% (though the minimum varies by lender).
Minimum Down Payment (%)
Down Payment ($)
Based on typical home values from Zillow (February 2022)
But making a down payment of less than 20% comes with some risks.
First, because you're borrowing more money, you'll have a higher monthly payment and pay more in interest over the life of your loan.
Based on a $500,527 home, the typical home value in Oregon (Zillow, February 2022) with a 2.97% interest rate for a 30-year loan.
Second, you may have to purchase mortgage insurance.
Conventional loans require private mortgage insurance (PMI) until your loan balance reaches 80% of the purchase price. FHA loans, on the other hand, require a mortgage insurance premium (MIP) for the life of your loans.
Mortgage insurance costs around 1% of your mortgage balance annually. However, rates vary based on your down payment and credit score. Typically, your mortgage insurance payment is added to your mortgage payment each month.
VA loans don't charge mortgage insurance. Instead, you'll pay a VA loan funding fee at closing, which can range from 1.4% to 3.6% of the purchase price.
Oregon down payment assistance programs
Do you need help securing funds for a down payment in Oregon?
The state offers numerous down payment assistance (DPA) programs to help low-income and first-time buyers afford a home. If you're eligible, you could receive a grant or second mortgage to cover closing costs or a down payment.
Here are a couple DPA programs available to Oregon residents:
Portland Housing Bureau DPAL Program
The Portland Housing Bureau can offer DPAL Program participants a 30-year loan for up to $100,000. The loan accrues no interest, has a low APR of just 0.012%, and can be forgivable after 30 years. Depending on the buyer's needs, a minimum of 10% of the loan might be set aside as a grant.
This program is available to first-time homebuyers with a first mortgage from one of the Portland Housing Bureau's approved partners. Annual household income must be at or below 100% of Portland’s area median income, and the property must be within the Portland city limits. Additional fees may apply.
Oregon Housing and Community Services
Through the Oregon Housing and Community Services, first-time homebuyers may be eligible to receive up to $15,000 in financial assistance. This organization works with several agencies and partners, so you can search for programs in your county and check eligibility requirements here.
U.S. Department of Housing and Urban Development
You can find additional DPA resources from HUD here.
Step 2: Get pre-approved for a mortgage
A mortgage pre-approval letter is an offer to lend you up to a certain amount of money to purchase a home. It shows sellers that you are a serious buyer who is financially qualified to make an offer on a home.
Most sellers in Oregon will require pre-approval before showing you their home.
You don't have to decide on one lender right now. In fact, you should compare interest rates and pre-approval amounts from several lenders to make sure you're getting the absolute best terms when you buy your Oregon home.
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Get matched with a lender who can tell you how much house you can afford. To get started, where do you plan on buying?
To get a pre-approved for a mortgage, you'll fill out a mortgage application and provide details about your financial situation. They'll look at the following information to determine your mortgage pre-approval amount:
Lenders need to know that you earn enough to make your mortgage payments each month. Most lenders want your monthly housing costs to be less than 28% of your monthly income.
Lenders also consider your other debts, including credit cards, student loans, auto loans, and personal loans. They use this information to calculate your debt to income ratio (DTI) — or your total debt (including future mortgage) divided by your total income.
While some lenders will approve mortgages for buyers with DTI as high as 43%, it's best to keep your DTI under 36%.
Because of this, you might consider paying off some of your other debts before applying for a mortgage in Oregon.
Mortgage lenders in Oregon want to see that you have enough cash in the bank to cover your down payment and closing costs without completely draining your cash reserves.
While this requirement varies by lender, most want you to keep at least enough to cover two mortgage payments including insurance and taxes.
Step 3: Choose the right location
A house's neighborhood can be just as important as its layout and features. In general, you should consider the following factors when deciding which neighborhood is best for you:
What's your home buying budget?
Once you know your budget (a pre-approval letter will tell you the most you can expect to borrow), you can narrow your search to neighborhoods where homes are selling within your price range.
Also, look at past home value trends. This will give you an idea of how much your home's value could go up over the next few years. You want to choose a neighborhood that's in your budget, but could also lead to a big return when you decide to sell.
To give you an idea of how appreciation could impact what your house is worth in the future, consider these examples from three neighborhoods in Portland:
Home value appreciation in Portland
Once you have a list of neighborhoods with homes in your budget, you should evaluate how well each one meets your personal needs and preferences. To finalize your list of target areas, consider factors like:
- School districts
- Your daily commute
- Crime rates
- Restaurants and amenities
- Transportation options
Step 4: Find a great real estate agent in Oregon
Your real estate agent will be your main ally during the home buying process. Besides finding and showing you properties, your agent should be an expert on buying a home in Oregon.
They'll help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers like title companies and inspectors to help you buy your home in Oregon.
Don't rush into choosing an agent. Instead, take the time to research and interview multiple real estate agents who have experience in the neighborhoods you're interested in. you should pay attention to a realtor's:
- Years of experience
- Number of transactions in the last year (the more the better!)
- Experience in your price range
- Overall review score
- Individual reviews and complaints
Ask each of them questions about your target neighborhoods, how they prefer to communicate, and their strategy for helping you find and close on your new home. You should feel comfortable with the agent's knowledge, experience, and process before committing to an agent.
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Step 5: Start house hunting in Oregon
Searching for homes in Oregon is the fun part of the home buying process! You'll get to look at a variety of homes and discover what you really want in a home.
Prioritize your needs vs. wants when buying a home in Oregon
Make a list of everything you want in a home and prioritize them. At the top of the list should be the items that are most important to you. This will help you separate your "must-haves" from your "nice-to-haves."
Your agent can help you understand if your wants are realistic for your budget and favorite neighborhoods or if you need to rethink what you're looking for.
Look at current housing inventory
The timing of your house hunt in Oregon can have a big impact on your number of options. For example, in Oregon, June has historically seen the most homes for sale. Searching in this season could give you more options and a greater likelihood of finding your dream home.
On the other hand, January gives you the fewest choices in Oregon. Historically, there are 40.3%) fewer homes for sale than during Oregon's peak season.
Housing inventory in Oregon by season
New Listings per Month
Based on January 2022 data from Realtor.com
Step 6: Make an offer
Once you find a Oregon house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.
Currently, in Oregon, homes stay on the market for 59 days before going under contract. However, every market goes through seasonal changes. During busier months, homes get snatched up more quickly than others.
Historically, Oregon homes sell fastest in June, where the average property is only on the market for 44. If your home search falls around this time, you should be prepared to move quickly and potentially make offers on several homes before yours is accepted.
On the other hand, if you buy in January, you have a bit more time to search. Homes typically stay on the market 21 days longer than Oregon's annual average.
Average time homes spend on market in Oregon
Based on January 2022 data from Realtor.com
What should your offer include?
Your real estate agent can help you decide which of these common options you should include in your offer:
- Seller concessions: You'll have to pay for most of your closing costs out of pocket when you buy a home, but you may be able to ask the seller to cover some of those costs for you. This option may allow you to offer a higher purchase price and essentially include your closing costs in your mortgage.
- Repair credits: If the home is in need of repair, you could ask for credits instead of having the seller make and pay for the repairs. The seller avoids the hassle of waiting for contractors to complete the job, and you get to oversee the repairs in the future to make sure they meet your expectations.
- Inspection contingencies: Most purchase agreements have inspection contingencies that allow you to change your offer (or back out all together) if the inspection turns up major problems. If you have a high degree of certainty about the house's condition (like if the seller can show you a recent inspection report), you can forgo this contingency to give the seller a higher sense of confidence.
- Letter to the seller: Many sellers have a personal attachment to the home. They've lived there for years and want to know the next owner will take care of the property. Writing a letter to the seller can show them how you picture your life in the house and appeal to their sentimental side.
Step 7: Inspections and appraisals
Inspections and appraisals are an opportunity for you to better evaluate the home's condition and value before officially purchasing it. You may have an opportunity after this step to renegotiate the terms of your contract with the seller if something unexpected pops up.
Home inspections in Oregon
Having your Oregon home inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it.
Your inspector should check out the following parts of the property:
- Electrical system
- HVAC system
If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.
Oregon has strict disclosure laws for sellers, but some issues with a property may go unnoticed before closing. It's strongly recommended for buyers to do their due diligence and complete specialized tests to ensure that a home is safe.
In addition to a general home inspection, homebuyers should consider getting the following tests completed as well:
Radon testing: Elevated radon levels can pose health risks over long periods of time. If the seller hasn't checked for radon in over a year, then it’s a good idea to do a radon test as soon as possible. Depending on where the property is located in Oregon, you may be eligible to receive a free radon test kit from the Oregon Health Authority. Learn more about ordering a test kit here.
Indoor air quality testing: An indoor air quality test will ensure that a home is clean and free from any airborne health hazards. Getting this done before you move in is strongly recommended so that you can avoid any irritants or allergens that might be affecting the home's air quality.
Appraisals determine the value of the property. If you're using a mortgage to buy your new home, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.
Step 8: Close on your new home!
Once you finish your inspections and your lender approves your financing, you'll be ready for closing! Closing is the process of finalizing your mortgage and transferring ownership of the property.
On closing day in Oregon, you'll meet at the title company to complete some paperwork and settle your closing costs.
Be prepared to spend about an hour reading and signing several legal documents, including:
- Your final loan application
- The deed
- The mortgage promissory note
- The disclosure statements
Take your time to carefully review each page to ensure that all of the information is correct. If something doesn't look right to you, it could interfere with the title transfer or your loan application. Ask your escrow agent if you have any questions.
After getting through the paperwork, you'll need to pay the closing costs. As a homebuyer, you can generally divide your closing costs into four distinct categories:
- Lender fees: Fees paid to your mortgage lender for originating and underwriting your loan. These fees can also cover additional costs connected to your loan, like appraisal and survey expenses.
- Title and escrow charges: Fees that your title company charges for facilitating the closing, conducting the title search, and providing the required documentation. Buyers and sellers often split these charges.
- Prepaid costs: Ongoing costs of homeownership that are paid in advance. Most mortgage lenders require buyers to pay for certain recurring expenses up front, such as property taxes and homeowners insurance.
- Other closing costs: Miscellaneous expenses that differ for each buyer. Some common expenses might include natural disaster certification fees, pest inspection fees, or real estate attorney fees.
Buyers in Oregon typically pay 3-5% of the purchase price in closing costs. For a $500,500 home — the typical home value in Oregon — that's between $15,015 and $25,025!
Frequently asked questions
- Save for down payment
- Get pre-approved for a mortgage
- Choose your preferred Oregon neighborhoods
- Partner with the right real estate agent in Oregon
- Go house hunting
- Make a strong offer
- Inspections and appraisals
- Do a final walkthrough and close
Yes! The Oregon Bond Residential Loan Program offers a Rate Advantage program and a Cash Advantage program. They both provide competitive interest rates, but only the Cash Advantage program offers a down payment assistance loan of up to 3% of the home purchase price.
First-time buyers are eligible for both programs. Income and purchase price limits apply and vary by county.