Blog Stories How to buy a house in Portland Oregon as a first time buyer.

How to buy a house in Portland Oregon as a first time buyer.

By Living Room Realty, May 10, 2023

Written by Sorcha Porter: Tiny Empire Group’s first time buyer and Airbnb specialist.


Despite rising interest rates, the housing market in Portland Oregon remains a strong sellers market. And it’s scaring a lot of first time buyers away for fear of spending time, energy and money to only be met with rejection. However there IS a way to get your offer accepted and get into your first home! What’s more important is it does not require you to be a millionaire or make an offer in cash. It just takes a little education, communication and the right agent to help you achieve your goals.

Our team works with a-lot of first time buyers relocating from Los Angeles and San Francisco, who’ve moved to Portland Oregon specifically with the hope/ goal of owning a home in our much more affordable market. Because of this experience we’ve learned specifically what works and what doesn’t work when it comes to getting your offer accepted as a first time buyer in our highly competitive market and we’ve broken it down into 5 main categories.


1. Get Pre-Approved by a local lender:

In a market where multiple offers are the norm having your ducks in a row is vitally important. Real estate is a relationship heavy industry and big box lenders like Rocket Mortgage, Wells Fargo, Chase Bank etc. have a reputation for falling through. The reason being, many of these big box lenders don’t have continuous points of contact, their business model is volume, not quality, and often mistakes caused by undereducated mortgage brokers from large companies who don’t have the education and support that a smaller local company offers will literally make your deal fall through. Therefore not only getting the approval is important, but so is WHO that approval comes from as local agents with desirable listings will often advise their sellers against offers that have pre-approval from known big box lenders. One of the most common questions / statements I receive from sellers agent’s when I submit an offer is “I’ve not heard of this lender before, have you worked with them?” They want to know that the lender know’s their stuff and can reliably get the buyer across the finish line. In fact I have never had a client who used a big box lender have their offer accepted before. They have always had to switch to a local one. Here’s a couple we love to recommend.

Shannon McAlister : Apply Here

Shannon actually has a really cool podcast called “The Laddercast” on Spotify and Apple that has a ton of helpful info on mortgages, how to prepare, the different kinds that are available and detailed clear info on how they work!

James Adair : Apply Here

James has a great platform for financial planning that comes as a free service to all his clients for the lifetime of your loan.

Mac Densgot : Apply Here

Mac is a new dad and works with Guild. They are one of few lenders who offer the Oregon Backed 0 downpayment loans!

2. Educate yourself on the market and neighborhoods you’re interested in buying in:

A recipe for heartbreak is not knowing the cost of houses in the neighborhood you’re looking in. So many first time buyers come to us with budget’s in the $450-550K range wanting to live in the Alberta Arts district or the Sellwood area and we have break the news to them that houses with the specs they want are literally double to triple their budget. Take the time to search on Zillow, Redfin and other sites by the neighborhood you want to be in and the price you can/ want to pay. See what comes up. And if you’re priced out of that neighborhood don’t fret! Tell your agent what you love about those area’s so they can help direct you to neighborhoods that have similar features and amenities in your price range. For example, Sellwood’s average list price is $1.2 Million, and average sales go for over $200K over list. People love the neighborhood for its walkability, access to the water, shops and restaurants. Well, you can get those same amenities in St. Johns or Cathedral park in a “starter” home for around $500K!

3. Create a clear list of criteria:

Because many first time buyers feel they need to be flexible to find their first home they often overcompensate by saying “We’re really open to anything as long as it’s got 2 bedrooms and 1 bathroom.” When really their needs are more complex or specific than that. I find this to be a result of people not wanting to come off as “difficult” or “overly needy” when it’s OK for you to want specific things in the biggest investment you’ve ever made. In fact as realtors we prefer a specific and detailed buyer over someone who doesn’t have a clear idea of what they want. I advise all my buyers to make a “Wants and NEED’s” list. Outline specifically what you NEED in a home, by that I mean, things that are quality of life necessity’s that you would not want to compromise on. Such as 2 Bedrooms, 1 large enough for a king sized bed, 1 bathrooms, but maybe you have or are expecting a child, so a bathtub is important, or fenced yard, because you’re sick of walking your dog 8000 times a day because you live in an apartment and that’s 90% of the reason for moving! Those are NEEDS. But want’s are things that we would enjoy, they’re the cherry on top of the Sunday. For example Wood burning fireplace is a want, because you love the idea of chopping wood and reading a book in the winter by the fire. Or you need off street parking but it’s a plus if that comes in the form of a garage or carport with extra storage etc. Those things are important and valuable too. A good agent will not think you’re difficult or needy because you can clearly articulate what you want/ need. However it’s frustrating for everyone if you don’t share the things that are of most value to you when they ask for criteria and you then get frustrated with how many options are sent to you that don’t fit your family or lifestyle.

4. Decide on and Discuss offer terms with your agent in ADVANCE.

There’s a number of things you can offer in addition to price that can help put you OVER the competition in a bidding war. Here’s some examples; Inspection terms that are straight forward. Such as “Inspection for informational purposes only.” Meaning, we want an inspection because we want to make sure the house isn’t falling off it’s foundation, or that there’s no leaking oil tanks buried in the back yard but we’re not going to ask the seller to pay for or make any repairs before closing. Rent backs/ free rent backs, meaning renting the sellers house back to them after you close so they can have more time to move. Escalation clauses, meaning you are offering $450K but you’re saying, if anyone else offers more and you come back to us with that offer we will beat it by $5K (or whatever $ amount you decide on). It’s important to discuss these things in advance with your agent so they can help guide you to put the best offer forward that you’re able to make! I advise people that if you LOVE it, come in with your BEST offer. In a sellers market playing games of “well maybe we can offer a little lower” doesn’t work. As it’s almost guaranteed there’s a number of other offers better than yours in the mix.

5. Look at the listings other people have overlooked.

You know how I got my last home for $40K under market value at the height of the pandemic buying frenzy, and got the seller to pay all of my closing costs? I bought the house everyone else had overlooked. My house is a gorgeous craftsman with original hardwood floors and moldings, a big bay window, expansive porch and a large mature yard in popular Lents neighborhood. But it wasn’t presented well. Online the photos were dark, and difficult to see, they were taken on a smart phone without proper cropping and because of this the house had been sitting on the market for more than 3 months many people overlooked it. It was also painted Denver Bronco’s colors, which for those of you who don’t know meant bright blue and orange walls with bright orange ceilings throughout the main floor. I knew painting was no big deal, and that the new roof was worth way more than people were giving it credit for so I jumped on it. It cost us maybe $400 in paint supplies and light fixture changes to transform the space into what we wanted. But because we were willing to look past the cosmetic issues I got a house with a new roof, in a popular neighborhood for $40K off and saved more than 10K in cash up front. The shiniest house, with the amazing pictures is going to be appealing to everyone. But if you can look past aesthetics often you can snag an amazing home on excellent terms.

In summary the keys to successfully buying a home as a first time buyer in Portland Oregon are to Prepare your financials with pre-approvals, educate yourself on the market, create a clear list of criteria and communicate it to your agent, consider leverage and terms that you can use in addition to price that will make your offer competitive, and don’t knock the houses that have been sitting for a while! They can be secret gems!

And if you’re looking for a real estate agent/ team that can help guide you through the process as a first time buyer in the Portland area please feel free to reach out! We’d love to help you!


Living Room Realty

Read More
  • T: 503-719-5588
  • welcome@livingroomre.com

You might also enjoy

Just Listed! Your South Tabor Story Starts Here!

Bonnie Roseman

5955 SE Kelly St. Portland, OR 97206 Tucked into a rare city cul-de-sac, you’ll enjoy the...

Just Listed | Generous Eliot Townhome | $425,000

Sean Patrick O'Feery

Generous Eliot Townhome $425,000 2668 NE 6th Pl Delightful end unit townhome with garage, yard and...

Maximizing Your Property’s Potential: Should You Sell or Rent Out Your Home?

Will Sing

Deciding whether to sell your house or rent it out is a significant decision, especially when...

Making Your New House a Home: The Power of Curtains

Sophie Ragsdale

So, you’ve closed on your new home. Exciting! Now the work of making it your own...