Finding a Place to Live
There was a time, you will be endlessly reminded, when Portland was considered one of the most affordable metropolitan areas in the country. No more. The steep and (at the time) seemingly inexorable rise in home prices that began in the late 1990s put the dream of home ownership beyond the reach of many Portlanders. Much of this spectacular rise in Portland real estate values was arguably due to newcomers bringing their equity from more expensive markets rather than to the robustness of the local economy. The median income had not (and has not) kept up with the price of housing, so many local workers were, and remain, completely priced out of the real estate market.
A noticeable slowdown in sales and in price appreciation and an increase in unsold inventory began in late 2006. Home prices peaked in mid-2007, and home prices began to decline noticeably in most parts of the metro area by 2008, although not evenly across the region and not to the extent experienced in such epicenters of the nationwide housing bust as Las Vegas, Phoenix, and Florida. By mid-2009, average home prices had declined by close to 20% from their peak, then began to rise, at first anemically, and then with more vigor. By 2014, housing prices in most parts of the metro area had recovered to, and in some places exceeded, their pre-crash levels. Even in the depths of the most recent housing bust, however, Portland real estate was hardly cheap, and in some popular close-in neighborhoods prices barely declined at all. The direction of real estate prices in the Portland area in the future is, of course, anyone’s guess.
Regardless of whether home prices rise or fall, Portland’s real estate is, and is likely to remain, the least expensive among the large metropolitan areas on the West Coast. If you plan to rent, Portland offers a wide range of rental housing types and prices (and landlord incentives in many large suburban complexes). Although the process of finding a place to live can be frustrating and time-consuming, remember that Portland is not, say, Manhattan or San Francisco. Eventually, you will be able to find a dwelling that works for you.
Getting to Know the Neighborhood
You should be able to narrow down your initial neighborhood options by considering factors such as the location of your new job, the availability of transit, your preferred housing type and style, the quality and location of schools, and the size of your housing budget. Once you come up with a short list of neighborhoods, how do you find out more detailed information about them? If you’re looking for housing in the city of Portland, be sure to visit PortlandMaps.com, a free city-run website. Simply type in an address or intersection, and you’ll be able to see detailed information about the size and assessed value of neighborhood housing stock, potential natural hazards in the area, reported crimes in the prior 12 months, airport noise, and a slew of other information; type in an actual address and you’ll get details about the building (number of bedrooms, property taxes, permit history, roof type, and much more). Many of the larger suburban communities offer similar (but usually less comprehensive) online tools.
Another useful online tool is the Street View feature on Google Maps (maps.google.com; after you have entered an address and the location is highlighted with a red marker on the map, click on the marker and then choose Street View), which allows you to virtually explore the street-level landscape (via photos taken from Google’s camera-equipped cars) for almost the entire metropolitan area; Street View is especially useful if you’ve narrowed your search down to a specific address or neighborhood. Note that Street View is not a real-time feature, so the view won’t necessarily reflect current conditions—the screen will display the month and year the image was captured, if you’re curious—but it should give you a decent sense of the look and feel of an area of interest.
Of course, you would be unwise to base your decision solely on maps, statistics, and photos taken by a goofy-looking vehicle. The best thing to do when house or apartment hunting is to visit prospective neighborhoods in person. Have breakfast or lunch at a local eatery and walk around—don’t just circle around in your car. Talk to people in the neighborhood to get some subjective opinions. Find out if the services and conveniences you are accustomed to are available nearby, and pay attention to your comfort level: if you don’t like the “feel” of the neighborhood, or if it just doesn’t seem like a great fit for you, you might want to explore other options.
Also consider the commute. If you plan to drive to work, test drive the route during both morning and evening rush hours to be sure of what you’re getting into. If you have a job in Wilsonville, at the south end of the metro area, it might be unwise to settle in Woodland, Washington, 53 miles to the north, unless you’re a huge fan of podcasts or audiobooks. Many people are able to commute by bus or light rail, but the usefulness of transit depends on where you live, where you need to go, how long the trip takes, and what time of day you want to travel there. If you intend to commute by bike, plan some potential bike routes and do a trial ride from your prospective neighborhood. See the Transportation chapter for more details.
For tips on researching schools, see the Childcare and Education chapter.
Crime And Safety
In addition to proximity to work and/or amenities, “feel” of the neighborhood, and other subjective or individualized factors in choosing a place to live, you may also be concerned about crime. Every major city in the United States has its “good” and “bad” sections, and Portland is no exception. The good news here is that the violent crime rate in Portland is relatively tame by big city standards—the murder rate is substantially lower than the national average, for example. In 2013, the city recorded only 16 homicides, the lowest number since 1971. (The rape rate in Portland is much higher than the national average, but this statistic may reflect a higher reporting rate by victims rather than a greater incidence of rape.) In general, while random violence is not unknown, it is not especially common either—despite the impression the evening news, with its “if it bleeds, it leads” ethos, might convey.
For most Portlanders, property crime is a bigger concern. In the city, relatively high rates of burglary, auto theft, and larceny, fueled in part by the financial needs of methamphetamine addicts and other drug users, exceed the national average. Property crime rates overall have dropped slightly over the last few years, but certain neighborhoods remain plagued by frequent burglaries and car prowls. You can substantially reduce the likelihood that you will become a victim by taking some common-sense precautions, like locking your home and car—a shocking number of burglaries involve a burglar waltzing into a house through an unlocked door or open window.
The Portland Police Bureau’s website (portlandonline.com/police) offers an online (nonemergency) crime reporting system that saves the citizen time and money. The site also provides a treasure trove of helpful information about crime and crime prevention. In particular, the online CrimeMapper tool (gis.ci.portland.or.us/maps/police/) is an excellent place to research crime rates in a given neighborhood; just type in an address, and you’ll be shown the days, times, and locations of crimes reported in the previous 12 months in the immediate vicinity. (This feature is also available on the PortlandMaps.com site.) Several surrounding communities, including Beaverton (beavertonpolice.org/crime/maps_stats.aspx), have less robust versions of this tool. Police reports from a number of suburban cities, including Gresham, Canby, Troutdale, and Sherwood, appear on the somewhat clunky CrimeReports.com (crimereports.com) site. You can also call the local police or sheriff precinct or department that patrols your neighborhood of interest.
To find out if a registered sex offender lives in the neighborhood, visit the Oregon Sex Offender Inquiry System (sexoffenders.oregon.gov). In Washington, go to the website of the Washington State Sex Offender Information Center (ml.waspc.org).
Renting vs. Buying
In the long run, buying may be cheaper than renting, and you end up with an asset to show for it—but then again, as British economist John Maynard Keynes helpfully pointed out, in the long run we are all dead. Many newcomers buy a house or condo too soon after moving to town, only to discover that the neighborhood, the commute, or the home itself is more than they bargained for or is simply not to their liking. Especially in light of the recent fluctuations in home prices in Portland, it might be wise to rent to allow time to get to know the city before deciding where to put down permanent roots. If you have school-age kids, you might be in a hurry to get them settled into a school—but what do you do if you don’t like the school? What if you come to hate the rain? What if your next-door neighbor’s hobbies include storing rusted-out cars on blocks in the yard? For most homeowners, buying a home is the biggest transaction they’ll ever undertake; it makes sense not to rush into a decision. And many people simply don’t have the financial resources to buy a home or qualify for a mortgage. Of course, if you know where you’ll be working and you know where you want to live, it can be a smart decision to buy a home—especially if you have enough money for a decent down payment.
For number-crunching assistance in deciding whether to rent or buy, try out one of the many online rent vs. buy calculators, such as the comprehensive calculator available at dinkytown.net/java/MortgageRentvsBuy.html.
As in other cities, rents in Portland are subject to the law of supply and demand. During the depths of the last recession, the apartment vacancy rate exceeded 6%—not quite a renter’s market, but a huge improvement over the 3% rate, which was essentially full occupancy—and rents had actually begun to decline after successive years of fairly steep increases. As a result, new construction ground to a halt. Then, as the economy recovered, demand for rental housing began to increase, vacancy rates plummeted, and rents began—you guessed it—to increase. New construction accordingly surged, but in the meantime, as of 2014 the Portland area has the second-tightest rental market in the country, with an overall vacancy rate of 3.5%, and vacancy rates of below 1% in certain popular areas such as close-in Southeast Portland. In short, bargains do not abound in the rental market. Some suburban areas have a higher vacancy rate (and lower rents), and in these areas it may still be possible to find incentives—a free month with a one-year lease, for example—to attract tenants.
Finding a Place
Be prepared to pound some pavement. Start by scanning the online or print classifieds, but don’t forget to go out and visit neighborhoods you’re interested in and look for “For Rent” or “Vacancy” signs. In the current hot rental market, many landlords don’t want or need to advertise; particularly in desirable, apartment-dense neighborhoods like Northwest Portland and Inner Southeast Portland, it is often easy enough to find tenants simply by hanging a sign outside a building for a day or two. Also check for vacancy notices tacked on bulletin boards at neighborhood coffeehouses or grocery stores. In suburban areas, look for signs on main roads, or call a complex’s rental office and ask about upcoming vacancies.
Online and Newspaper Resources
The Internet has changed the way people find real estate, and that goes for rental properties, too. There are plenty of websites, such as Move (move.com), Apartments.com (apartments.com), and) ForRent.com (forrent.com), that list Portland properties for rent. One of the most popular sites, especially for small landlords, is Craigslist (portland.craigslist.org). Hundreds of ads are posted in the “apts/housing” section on a typical day; you can narrow your search based on number of bedrooms, rent amount, and whether cats or dogs are allowed, and you can search listings for specific terms (e.g., neighborhood names, fireplace, garage, etc.), but it still can be pretty overwhelming. Craigslist has a map feature, but it is pretty clunky. The useful HousingMaps mashup site (housingmaps.com) superimposes Craigslist ads that include an address or intersection on a Google map of Portland; this feature can be very useful if you are targeting specific neighborhoods or communities. HousingMaps allows you sort by the same criteria as Craigslist itself. Other potentially useful websites for fining rental housing include Padmapper (padmapper.com) and Lovely (livelovely.com). In addition to the commercial sites, HousingConnections.org (housingconnections.org) lists thousands of affordable, accessible, and special needs housing units in the Portland metropolitan area.
The old-fashioned way of finding out about rentals is to pore over newspaper classified ads. Be aware that many landlords and rental property managers use both online and newspaper advertising, and by the time a property appears in print it may already be “stale.” The following publications have the best selection of classified ads, although the number of print ads has declined precipitously in recent years:
- The Oregonian; the Sunday edition of the biggest regional newspaper has the most comprehensive print rental and real estate listings for Portland and the surrounding communities. Rentals are listed by location, i.e., by city quadrant or suburban locale. Classifieds are available online at oregonlive.com. New listings appear daily in both the print and online versions of the classifieds.
- The Portland Tribune has skimpier listings than the Oregonian, but its online classifieds (community-classifieds.com) include listings from more than 20 community papers.
- The Columbian is the daily for Vancouver and Clark County, and is worth a gander if you’re looking for rentals in southwest Washington; visit columbian.com for online classifieds.
- Willamette Week; this free news, arts and entertainment weekly is distributed each Wednesday. The paper often lists rental opportunities not included in the larger publications, but it is most valuable for those in search of short-term rentals, sublets, home share situations, or a roommate. To view ads online, visit wweek.com.
Other Rental Publications
Several companies publish free rental guides. Most list newer apartment complexes or apartments that are maintained by large property management companies. You can pick up rental guides at most grocery or convenience stores, or in some sidewalk vending boxes.
Rental Property Management Companies
Rental property management companies manage multiple properties. These companies often list available properties on their websites, or you can call them to find out about upcoming vacancies. Here are a few of the larger rental property management companies in the Portland area:
- Alliance Properties, 503-350-1200, allianceproperties.net
- American Property Management, 503-284-2147, apmportland.com
- Bluestone & Hockley, 503-222-3800, bluestonehockley.com
- Guardian Real Estate Services, 503-802-3600, gres.com
- Performance Properties, 503-635-0099, ppirentals.com
- Residential Property Management, 503-245-8022, rpmpdx.com
Many landlords refuse to rent to tenants with pets, or at least with certain types of pets. (It’s easier to find a landlord who will accept a cat or small dog than one who is willing to deal with your trio of Great Danes.) The Oregon Humane Society maintains an online list of pet-friendly rentals (oregonhumane.org/services/pet_friendly_rentals.asp); Portland Pooch has an online database of dog-friendly apartments (portlandpooch.com/directory/housing.htm). If your landlord allows pets, you will probably have to pay an additional deposit and/or a non-refundable pet fee based on the kind, number, and size of your animals.
Sublets and Sharing
If you’re having trouble finding a long-term place to live, or if there will be a significant gap between your arrival date and the date you can move into new digs, you may want to consider taking a short-term sublet. Sublets are most often available during the summer, but with luck you can find one at any time of year. Remember, however, that most leases say that a tenant can sublet only with the permission of the landlord. The original tenant generally remains responsible for unpaid rent and damage done to the apartment by the subtenant. If you’re looking for a truly short-term situation, check out the Temporary Lodgings chapter.
If you’re on your own, renting a room in an established group house can be a great way to get acquainted with the city without spending a whole lot on rent. Sometimes a group will get together and find a home, but more often one or two people will rent a house and then seek roommates through advertising or word-of-mouth referrals. The newspapers listed above (particularly Willamette Week) list ads for both sublet and sharing situations, as does Craigslist (portland.craigslist.org). (Craigslist also has a “housing wanted” category, if you’re feeling proactive and lucky.)
While perusing ads for house sharing situations, keep in mind that “420 friendly” (a popular term in Portland listings) means that members of the household indulge in recreational marijuana use (or at least don’t mind those who do). If that’s not your scene, you should probably avoid responding to such ads.
Micro Apartments and Tiny Houses
If the high cost of rental housing has got you down, and you lead a reasonably ascetic existence and don’t suffer from claustrophobia, you might consider a micro apartment (200 to 300 square feet or less, usually sharing a kitchen with other units) or tiny house or accessory dwelling unit (ADU). Several micro apartment buildings, which pack up to 50 or more individual units into a lot big enough for one or two houses, have risen in Portland since 2013. While the rent on a micro apartment is below the average rent for a studio, the per-square-foot cost can be much higher. So-called “tiny houses” or ADUs, which range from 800 square feet or so down to the size of a garden shed, are typically located in the back- or side-yard of an existing home. The attributes of tiny houses (other than size) vary tremendously; some ADUs are beautiful architect-designed structures, some are converted shipping containers, and others are ramshackle firetraps. Before agreeing to move into a tiny house, at a minimum make sure it meets health and safety standards. (Avoid dwellings powered by daisy-chained extension cords, for example.) Obviously, these living situations are not for everyone, but they can work well for the right person.
Checking It Out
You’re on your way to the day’s first rental appointment, you haven’t had breakfast, the old college friends you’re staying with keep quoting Ben Franklin (“Guests, like fish, begin to smell after three days”), your back is aching from a bad night’s sleep on their decade-old futon, and 20 other people are waiting outside the prospective apartment when you drive up. You panic, take a quick glance around, like what you see, and grab an application. Three months later, you wonder how you landed in such a dump.
To avoid this scenario, tour each apartment with a clear idea of what you want. Consider making a checklist of specific things to look for; besides your personal musts and must-nots, here are a few specific questions you might want to keep in mind (or even write down ahead of time) to avoid aggravation later:
- If you’re looking at an apartment, is it on the first floor? If so, does it have burglar bars? Can you open the bars from the inside in an emergency?
- Are the appliances clean and in working order? Do the stove’s burners work? How about the oven? Does the kitchen sink have one or two basins? Is there sufficient counter and shelf space?
- Do the windows open, close, and lock? Do the windows, particularly the bedroom windows, face a busy street or noisy area?
- Are there enough closets or other storage areas? Are the closets big enough to accommodate your belongings? In an apartment building, is there secure storage elsewhere in the building, and is it free? If you have a bike, is there a secure place to store it overnight?
- Do the faucets and shower heads have adequate water pressure?
- Are there enough outlets for all your plug-in electronics and appliances? (In older buildings it is common to have only one or two outlets per room.) Is there a working phone and/or cable jack in the room where you plan to put a modem? If you plan to sign up for cable television, are there cable jacks in the rooms where you would watch TV?
- Does the building have a washer and dryer? If not, is there a laundromat nearby?
- If you have a car, is there off-street parking? Does it cost extra? Is there enough? Where do guests park? If parking is on-street, is parking easy to find? It’s best to check out on-street parking in the evening, when people are home from work.
- Is there convenient access to public transportation and grocery shopping? How late do buses run, and do they run on weekends?
- Do you feel comfortable outside? Will you feel safe here at night?
- If you are looking at a basement apartment, check to see if there are any water stains along the walls.
- Does it smell funny? Someone may have sprayed the apartment for bugs, or there may be a mildew problem.
- If you are responsible for paying for utilities (see “Rental Agreements” below), what is the heat source? Electric space heating can be much more expensive than gas heat. How well-insulated does the house or apartment seem to be? Are the windows single-pane or double-pane?
Finally, make sure you can afford the rent, along with the cost of any utilities you are responsible for. If everything passes muster, be prepared to stake your claim without delay!
Staking a Claim
When you view a unit, come prepared. Bring your checkbook. If you are coming from out of state, or even if you aren’t, you may be required to provide a cashier’s check or money order instead of a check. Have cash on hand in case you cannot get to the bank and need to purchase a money order from a convenience store or check-cashing outlet. Often, the first qualified person to show up with a deposit is the person who gets the apartment. (Make sure you get a receipt for any money you pay.) Know your social security number, and have ready access to your references—both credit and personal—and your bank account information. Employment information is useful; if you have secured a job but haven’t started work, ask your new employer to write a letter on company letterhead verifying your start date and salary.
If you find the unit or house you’ve been looking for, remember that it isn’t just the early bird that gets the worm: it can also be the polite worm, the well-dressed worm, or the worm with the highest bid. It won’t hurt to mention casually that you don’t have a dog, cat, or monkey, and that you don’t smoke or play the drums (assuming these things are true). Feel free to rave about the unit and how great it feels; after all, landlords have feelings too. If there is a garden, mention that you love gardening and have a very green thumb. If you do have a pet, get references from former landlords praising its good behavior. Keep in mind that landlords can request only non-smokers, they can prohibit pets other than service animals, and they can bar you from having overnight guests for more than a certain number of nights per year. (The number of nights should be reasonably high; the intent of the clause is to prevent unauthorized occupants from moving in. If you think you’ll have lots of visitors, watch out for rental agreements containing such a clause, as it may not bode well for your landlord-tenant relationship.)
Almost all landlords or property managers will require a security deposit, usually equal to a month’s rent, which will be refunded to you (less any damages) when you move out. Some landlords charge application or credit check fees ranging from $10 to $40 as a way to discourage frivolous rental applications; the fee is sometimes credited toward your deposit if your application is approved. Consider that most landlords will want your net monthly earnings to be at least three times the monthly rent; if you have no earnings, you’ll probably need to show that you have sufficient liquid assets to be able to pay the rent. Landlords who charge a screening fee must provide written information about what they screen for. Look at the information and decide whether you think you’ll qualify before you pay the fee. If you’re not sure, be honest up front, explain the situation, and ask the landlord or property manager if they think you’ll qualify. If they say no, it might not be worth your money.
Once your rental application is approved, then it’s time to sign a rental agreement.
In Oregon, a rental agreement does not have to be in writing unless it is a lease for a fixed term, but you would be foolish not to get an agreement in writing. Review the rental agreement carefully before you sign it, and make sure that you understand key terms, such as:
- How much is the rent? To whom should it be paid? When is it due? If your rent is late, what are the penalties?
- When can the landlord increase the rent, and by how much? How much notice is required?
- Who pays for utilities such as electricity, gas, and water?
- Is the tenancy for a fixed period, such as six months or a year, or is the rental term indefinite? What is the move-in date?
- What repairs or cleaning has the landlord agreed to complete before you move in?
- What is the policy on subletting?
- Is a parking spot included? How many? Do they cost extra?
- What is the policy on repairs or maintenance?
- What is the policy on pets, smoking, or overnight guests?
- Is renter’s insurance mandatory?
- If you are renting a house, who is responsible for mowing the lawn and maintaining the landscaping?
- What non-refundable fees are charged (cleaning fee, pet fee, etc.), and what is the policy for return of the security deposit?
Don’t assume that the terms are completely nonnegotiable; many landlords are willing to make reasonable minor changes to their standard rental agreements. Make sure you get a copy of every document relating to your rental agreement, and keep them somewhere safe.
The type of tenancy you have is particularly important. If you have a month-to-month tenancy, either party can end the tenancy with 30 days’ written notice, and a landlord can generally increase the rent at will (again, with 30 days’ notice). If you have a tenancy for a fixed term, you have a lease. Most leases also provide that the rent is fixed for the lease term. If you have a lease, a landlord generally cannot evict you except for cause (such as your unexcused failure to pay rent); at the same time, you may not breach the lease without good cause (such as the landlord’s breach of a material term of the rental agreement), even if you have what you think is a really good reason, like buying a house or moving to Tokyo.
If you must break a lease for reasons you can’t blame on the landlord, you should expect to take a financial hit. You could try to sublet the unit for the remainder of the lease term, but keep in mind that the rental agreement may not allow sublets or your landlord may not approve the proposed subtenant. (Landlords must use the same criteria for sublessors as they do for other tenants.) Failing that, at a minimum you will lose your security deposit. Depending on the amount of rent at stake—the time remaining in the lease multiplied by the amount per month—and whether your lease specifies a fee for breaking the lease, your landlord might not bother to sue. Even if there is no specified fee for breaking a lease, you could, in theory, be sued for the full amount of rent you would pay through the remainder of the lease term (or until someone new moves in); in practice, as long as it’s a reasonably lively rental market, landlords seldom bother chasing down a leasebreaker for only one or two months’ rent. Keep in mind, though, that your next rental application will ask for contact information for your most recent landlord, so you’ll be much better off if you negotiate an amicable deal. (One way to placate a jilted landlord is to recruit a new tenant yourself, to save the landlord the expense of advertising the vacancy.) If you need to leave before your lease expires, you should consult an attorney; the Oregon State Bar’s Lawyer Referral Service (503-684-3763, 800-452-7636, osbar.org/public/ris/ris.html#referral) can provide referrals.
If possible, do a walk-through inspection of the property before you move in (or immediately after you take possession) to document the condition of the place. Get a copy of the inspection for your records.
Landlord-Tenant Rights and Responsibilities
In the landlord-tenant relationship, both sides have rights and responsibilities. Some are obvious—the tenant is generally obliged to pay rent and not trash the place, and the landlord has to keep the building up to code. Some are less universally known: for example, contrary to what some renters (and landlords) believe, a landlord may not enter your apartment whenever he or she wishes, but usually has to give you 24 hours’ notice (except in case of emergency). The following organizations provide a wealth of useful information about landlord-tenant issues:
- The Community Alliance of Tenants, 2710 NE 14th Ave, 503-460-9702, oregoncat.org, maintains a comprehensive database of information for tenants, and renter’s rights information and handouts are available online. If you have a problem with your landlord, visit the website. If you can’t find the information you’re looking for, call the renter’s rights hotline at 503-288-0130.
- Legal Aid Services of Oregon provides a legal information website (oregonlawhelp.org) with a useful section on housing law.
- The Oregon State Bar runs the Tel-Law service (503-620-3000, 800-452-4776), which offers basic recorded messages about legal subjects (including landlord-tenant law); this information is also available online at osbar.org/public/legalinfo/tenant.html.
Get it. The landlord’s insurance generally covers damage to the building, not to your personal possessions. Renter’s insurance provides relatively inexpensive protection against theft, water damage, fire, and in many cases, personal liability. Not only is renter’s insurance a good idea (unless perhaps the total value of your possessions is less than the deductible), but some landlords require it. Most insurance companies that sell homeowner’s insurance also sell renter’s insurance. The Oregon Insurance Division provides useful consumer information about renter’s insurance on its website (insurance.oregon.gov/DCBS/insurance/gethelp/homeowner/Pages/home-rent.aspx), or you can call 503-947-7984 or 888-877-4894 and ask for a free copy of the Division’s Consumer Guide to Homeowner and Tenant Insurance (also available online at oregon.gov/DCBS/insurance/gethelp/Documents/).
For most people, a home purchase is the biggest and most daunting transaction they will ever be involved in. Not only does it involve a pile of money and paperwork, but finding and buying a house, condo, or townhome is a complex and time-consuming process. Fortunately, the resources listed here—and a host of professionals in the area—can help you at every step: calculating your budget, choosing the right home in the right neighborhood, getting a mortgage, protecting your investment with adequate insurance, moving in, and making repairs and improvements. The U.S. Department of Housing and Urban Development has a useful online guide to buying a home at hud.gov/buying/index.cfm.
Many people move to Portland intending to buy a home, but find that the cost of real estate is just too high. Newcomers can avoid sticker shock by thoroughly researching home prices and neighborhoods before they arrive, and by keeping an open mind about the types of housing and the locations they are willing to consider. For instance, maybe you have your heart set on a big Craftsman-style house in the Irvington neighborhood, but you could live with a mid-century ranch in Milwaukie that’s in your price range. Or perhaps that condo in the Pearl is way too expensive, but there’s a townhome in Hillsboro that you can afford (and hey, you’ll be working out in Washington County anyway). It’s important to determine your priorities ahead of time, but be flexible (and realistic) when possible.
Homes in Portland come in many forms, from traditional single-family detached houses, usually with a yard of some kind, to various multiple ownership situations, primarily condos and townhomes. To a surprising extent, Portland has traditionally been a city of single-family houses, at least outside of downtown and its immediate environs. While infill development and duplex-ization over the years has made the generalization less true than it was, it is still easy to find houses in close-in neighborhoods (although they are no longer cheap by any measure). Condominiums are relatively new to Portland, and first became popular in Washington County and other outlying areas. More recently, a boom in high-end condo tower and “loft” construction in places like the Pearl District, the South Waterfront, and some of the main Eastside arterials, combined with the scramble to convert apartments to condos when real estate prices skyrocketed in the early and mid-2000s, means that condos are much more common than they used to be. When you buy a condominium, you are buying a unit within a larger complex; the complex is jointly owned and maintained, but the unit is yours to use, sell, or (usually) rent. (Keep in mind that monthly condo fees can be substantial.) In a townhome, another widespread form of multiple ownership, you own your unit and the land under it but you share one or more walls with adjacent attached units. Many townhomes have small back yards, while condos at most tend to offer decks or small patios.
Co-operative apartments are not common in Portland, but the area is home to an increasing number of cohousing projects. In these projects, which are sometimes called “intentional communities,” each household owns its own unit but shares communal space such as a “common house.” Cohousing residents often prepare and eat meals together and share gardening and other general maintenance responsibilities. Currently, there are five existing or developing cohousing projects in Portland. For more information about cohousing or for a list of locations, contact the Cohousing Association of the United States (cohousing.org) or the Northwest Intentional Communities Association (nica.ic.org).
When scouting for a home, be aware of the wide range of potential pitfalls. Not only will you have expenses for ongoing maintenance or necessary repairs (some of which a home inspection should uncover), but there may be issues specific to the property you’re interested in. Many older homes feature disused underground storage tanks, which can be expensive to decommission. Some properties lie within conservation zones where regulations limit the owner’s ability to build a deck or addition, for example. Other homes may have historic designations that affect remodeling options. Many homes in Southwest Portland and the outer Eastside neighborhoods are on unimproved streets, and the property owner is responsible for making (and paying for) repairs from the property line to the centerline of the public right-of-way. While a good real estate broker can help identify some of these issues, they should be on your personal radar screen before you get your heart set on a particular home.
Property taxes are another expense to consider. Oregon’s unique property tax system makes it impossible to estimate property taxes based on market value alone; Washington’s system is a bit more straightforward, but you should always check with your county assessor to find out the current property taxes on a specific property. (See Money Matters for information about property taxes.) Certain neighborhoods are tax abatement areas in which homebuyers, builders, or rehabbers pay reduced property taxes for a period of 10 years. Your real estate broker should be able to tell you which neighborhoods currently qualify. And speaking of taxes and other expenses…
Getting Your Financial House in Order
Assuming you aren’t fortunate enough to be able to buy a house outright, you’ll need to arrange a mortgage loan. It’s a good idea to get pre-approved before looking for houses in earnest. Some sellers will not seriously consider an offer from a buyer who is not pre-approved, and the pre-approval process gives you a good idea of how much you can reasonably afford to spend on a house.
When you’re ready to get pre-approved, go prepared with relevant financial documents and check your credit report in advance to make sure it is accurate. You can get one free copy of your credit report each year from each of the three major credit bureaus; visit annualcreditreport.com or call 877-322-8228. You are also entitled to a free credit report if you have been denied credit based on the contents of your credit report within the 30 days before your request. The national credit bureaus are:
- Equifax, 800-685-1111, equifax.com
- Experian, 888-397-3742, experian.com
- TransUnion, 800-888-4213, transunion.com
You might also want to check your FICO® score, the number that most lenders use to determine how creditworthy you are, and thus what interest rate you can get on your loan. The FICO score is available from Fair Isaac, the score’s creators and overlords, at myfico.com. You may also be offered the chance to buy your score when you obtain a credit report. If the idea of having to pay to look at your own information—information that someone else is already profiting from—sticks in your craw, consider signing up for a credit monitoring service with a free 30-day trial period; you can usually get your credit score when you sign up. (Just remember to cancel before the free trial ends.)
It may be most convenient to get your pre-approval through a local bank, but shop around before you sign for your loan. While many banks offer competitive interest rates, mortgage brokers can often match or beat their best offers. Make sure you ask about closing costs, loan origination fees, and points when comparing interest rates. Of course, virtually no lender’s loans are unique. Even in today’s post-bubble environment of more stringent mortgage requirements, most lenders offer a variety of fixed-rate and adjustable-rate mortgage products and participate in government-insured VA and FHA loan programs, both of which allow for low down payments and have flexible qualifying guidelines.
If you need assistance with mortgage costs, several unique local resources are available. The Portland Housing Center (3233 NE Sandy Boulevard, 503-282-7744, portlandhousingcenter.org) provides homebuyer education and offers financial assistance to eligible buyers (generally, first-time buyers with below-median incomes). Proud Ground (5288 N Interstate Ave, 503-493-0293, proudground.org), formerly the Portland Community Land Trust, helps first-time homebuyers whose incomes are below the local median and who can’t quite afford a house buy homes below the market rate.
The following sites might be useful in researching interest rates and loan programs:
- Bankrate, bankrate.com, allows you to compare mortgage and home equity loan interest rates, and offers several online mortgage and housing calculators.
- Freddie Mac, freddiemac.com, offers information on current mortgage averages.
- Interest.com, interest.com, includes advice for first-time home buyers, suggestions for finding the lowest interest rate, and current interest rate comparisons.
In addition, many real estate-focused sites such as Zillow (see “Househunting Resources” below) provide information on mortgages and lenders.
Working With a Real Estate Agent
When an agent who has listed a home shows it to you, he or she is representing the seller, not you. If you want an agent who will act on your behalf, you will need to hire a buyer’s agent. There is no substitute for the advice of a knowledgeable local real estate agent, and there usually is no downside to working with one when you’re buying a home. (The buyer’s broker’s commission almost always comes out of the selling broker’s commission; the exception is if you buy a property that is for sale by owner and the owner refuses to pay a commission to your agent.)
Probably the best way to find an agent is through a referral from a friend or co-worker. Failing that, you might consider agents who seem to have a lot of listings in your neighborhood of choice. Most agencies claim to serve the entire Portland area, but individual agents often specialize (or purport to specialize) in certain neighborhoods or in certain kinds of homes, and are not shy about advertising their specialties in community newspapers and on bus benches. While neighborhood knowledge is important, it’s also important that your agent be someone you trust, who knows the market, and who listens to you. A good agent will interview you in detail about your needs and interests—not just your preferred price range, but every detail of your lifestyle. Are you planning to have any (or more) children? Do you need space in a basement to set up a media room, a model railroad, or an evil genius lair? Do you want to plant a garden, or would you prefer a small yard that requires little maintenance? Are you planning to commute by bike? The more information you can provide, the easier it will be for your agent to find a home that’s a good match.
In addition to the standard places for classified advertising listed in the “Renting” section above—newspapers, Craigslist, and the like—a wide range of online resources target prospective homebuyers. Most agents will send lists of properties to you by email as soon as they come on the market. In addition, or even before you decide to use an agent, you might find the following websites to be useful househunting resources:
- Zillow, zillow.com, purports to be able to give a market value for any house (based on recent sales in the neighborhood and the characteristics of the specific property) that is generally within 20% of the real market value. While the market values should be taken with a large grain of salt—a 20% margin of error on a $300,000 house represents $60,000, after all—the data on comparable sales in the target neighborhood are invaluable.
- Trulia, trulia.com, like Zillow, provides estimated market values for specific properties. It is useful to compare prices on both sites, as estimated values for the same property can differ significantly.
- RMLS, rmls.com, is the multiple listing service for the Portland area. The site includes a searchable database of most homes for sale; you can search by price, ZIP code, number of bedrooms, etc., but many search options—such as the list of “green” and energy efficient features—are only available to RMLS members (generally real estate brokers). Many real estate brokerages provide similar search functionality on their own websites.
- If you prefer to buy a home without an agent—or at least to buy from an unrepresented seller—check out sites that specialize in for sale by owner listings, including HomesbyOwner.com (homesbyowner.com/portland_or/), FSBO.com (fsbo.com), and Owners.com (owners.com).
Purchase Agreements and Closing
A purchase agreement is a legally binding contract between the buyer and seller that states the price and all terms of the sale. Although most Oregon brokers start with a standard form, the purchase agreement is the most negotiable and variable document produced in the homebuying process. The purchase agreement is also the place where you, the buyer, can attach contingencies that protect you from being legally bound by the purchase agreement if, for example, the house you are buying does not pass its mechanical and structural inspection, the seller is unable to give you possession by a certain date, or you cannot obtain mortgage financing. Neither Oregon nor Washington regulates purchase agreements, but both states require sellers to provide certain property disclosures and a lead-paint disclosure.
Typically, once both parties have signed the purchase agreement, you will hire an independent home inspector or engineer to examine the foundation and overall structure, the HVAC and plumbing systems, and the roof. Also request that the inspector check for mold, particularly if the roof has been replaced recently or if there are signs of water damage in the basement. Your lender will appraise the house, but only to determine if it’s worth enough to secure the loan.
If all goes well, eventually you’ll close. Closings traditionally take place in the conference room of a title company, where you’ll be asked to sign the tallest pile of papers you’ve ever seen. How do you avoid problems? First, schedule your closing at least six weeks from the date your purchase agreement was signed, then keep in contact with your lender to see if additional information is required. The week you close, your lender should send you a copy of the completed Settlement Statement, or HUD-1 form. (If the lender doesn’t send it, ask for one. You have the legal right to see this form one business day before closing.) Compare the Settlement Statement to the good faith estimate of closing costs your loan officer gave you when you applied for the loan. The actual closing costs should not differ dramatically from the estimated costs. If they do, you may be getting scammed, although some costs, such as insurance premiums and the loan origination fee, can only be nailed down after your loan is approved because they are based on the amount of your loan and the final value of the property. It’s a good idea to read the closing documents in advance; there won’t be time at closing, and if any clauses cause you pause you’ll have time to ask your lender about them or check with an attorney. Finally, make sure you bring the necessary papers—identification, proof of homeowner insurance, etc.—and a cashier’s check to pay the balance of your down payment and unpaid closing costs.
Your lender will require you to buy homeowner insurance to protect its investment (your home). Be sure the policy you choose adequately covers the house, its contents, and all outbuildings. A basic homeowner policy usually also includes liability insurance to protect you if someone is injured on your property, and living expense coverage that will pay for you to live elsewhere while the home is repaired or rebuilt. You may also want to purchase earthquake coverage, which most homeowner policies do not include. If your prospective home is in a floodplain, you’ll need to purchase flood insurance from the National Flood Insurance Program (888-379-9531, floodsmart.gov).
You’ll also need title insurance, which protects the lender in case your legal title to the property is faulty. (It doesn’t protect you, though, so you may want to buy an owner’s title policy. In Portland, it is usually customary for the seller to pay the premium on a buyer’s title policy.) If you are putting down less than 20% as a down payment, you may also need mortgage insurance, which is required by many lenders as well as the FHA to cover them in case you default on the loan.
For advice on homeowner insurance from the Oregon Insurance Division, call 503-947-7984 or 888-877-4894 and ask for a free copy of the Division’s Consumer Guide to Homeowner and Tenant Insurance (also available online at oregon.gov//DCBS/insurance/gethelp/Documents/).
Working With Contractors
If you intend to remodel or significantly alter the home you buy, you might want to enlist the services of an architect or structural engineer, who can give you a general sense of what options might be available for a particular house before you commit to a purchase. Once you buy a house, you’ll face the problems of finding a reputable contractor, getting the work done in a timely and competent fashion, and paying for the remodel.
Accomplishing all these tasks can be a daunting proposition. It is not unheard-of for contractors to abscond with homeowners’ money, and since Oregon currently requires most residential contractors to have only $15,000 in bond coverage, you could end up holding the bag—the empty bag that your money used to be in before you paid it to your contractor.
To help avoid this unpleasant scenario, the Oregon Attorney General and the Oregon Construction Contractors Board (CCB) suggest you take the following steps when dealing with any contractor:
- Check out the contractor in advance. It’s always best to get recommendations from friends and family members who have had a good experience. Even a good recommendation, however, is no substitute for research. All contractors must be licensed, bonded, and insured. Check the contractor’s license and history of complaints at the CCB’s consumer website, hirealicensedcontractor.com, or call 503-378-4621. (In Washington, contact the state Department of Labor and Industries, 800-647-0982, secure.lni.wa.gov/verify/.) The Oregon Attorney General warns, “A devious contractor may tell you that he or she is licensed or may give you a false or outdated CCB number, so make sure to check on your own.” Also check with the state Department of Justice or a nominally independent source such as the Better Business Bureau or Angie’s List (888-888-LIST, angieslist.com). (See “Consumer Protection” in Helpful Services for more suggestions.) If the contractor provides references, check them.
- Get multiple written estimates. The Attorney General suggests getting at least three estimates. Make sure the bids are in writing. Don’t automatically choose the lowest bid; make sure you compare the materials specified and the scope of the work, and be suspicious of unrealistically low bids.
- Get a written contract. Once you’ve selected a contractor, put your agreement in writing. Make sure the contract states what work is to be done, when it is to be done, and how much it will cost, and that sufficient details are included: “build addition, $80,000” won’t cut it. Try to limit how much you have to pay upfront; you may be able to negotiate payments over the course of a long project once the contractor has completed certain phases. Don’t sign the contract unless you understand it completely, and make sure all changes are in writing.
Even if you follow these steps scrupulously, you might still get scammed—there are no guarantees—but you’ll substantially reduce your vulnerability.
Building Your Own Home
If you dream of building your own home, you’ll face a scarcity of large buildable lots within the urban growth boundary. In Oregon, you cannot simply buy a five-acre farm field in the exurbs and plunk down a house. The Portland area has a relative abundance of infill lots, although many of these lots are quite small or narrow and/or located on steep slopes. Keep in mind that building a huge house on a small city lot may not endear you to your new neighbors. You could also investigate doing a teardown of an existing, presumably dilapidated, house. If you must build a giant house on acreage, your best options are the rural exception zones outside the urban growth boundary in Oregon, or outer Clark County in Washington; in either case, be prepared for a long commute if you work in Portland.