SO YOU’RE THINKING ABOUT BUYING PROPERTY
IN CENTRAL OREGON?
Congratulations! We can’t wait to help you! With our unmatched, combined expertise in real estate and land use law (Stephanie) and contracting (Frank), the Marshall & Wood team offers more than most realtors and provides unique services that make us stand out from the crowd.
There are many factors to consider when making an investment in real estate. We’ve prepared this guide for easy reference, as well as a checklist to use throughout the buying process. We understand that it can feel overwhelming! Rest assured we are just a phone call away to answer questions and ease your mind.
FINANCING
With interest rates in flux, if you will be financing your property purchase, current rates will have an impact on what you can afford. We advise all our buyer clients to meet with a mortgage broker prior to looking at potential properties to buy. There are several local agents that we know and trust, and we’re happy to provide a referral.
Not only will a mortgage broker help you determine a realistic price range for your real estate search, they will work with you on various options for different types of loans. Depending on your circumstances, some programs may be available for a zero down loan. A mortgage broker will review your finances, including savings, debts, employment history and credit score. They’ll provide you realistic options and a plan for best positioning yourself to take on a mortgage.
Most importantly, you should receive a pre-approval letter from a lender, which will put you in a much stronger position when it comes time to make an offer.
If you are selling one property to buy another, we will discuss timing issues and can work with you and your selling agent (if you have one) to determine the amount and availability of cash from the sale of your other property for a new purchase. Your mortgage broker can answer questions regarding a potential bridge loan, or you may be able to request a delayed closing and/or occupancy on the new property. Note, however, that if you are purchasing a home for owner-occupancy, a bank will require that you take possession within 60 days of closing.
Here are some additional points to keep in mind on financing;
• If you are selling one residential property to buy another, how long have you owned your existing home? If less than 1 or 2 years, there may be liabilities in the form of capital gains taxes when you sell.
• Consider consulting an accountant regarding potential tax liabilities after a sale. For a primary residence, up to $250,000 of profit may be excluded from tax for a single owner, and up to $500,000 may be excluded for a married couple if both own the property together.
• Discuss with an accountant whether interest on your new mortgage will be tax deductible and how that may impact future tax liabilities. Currently, only interest paid on owner-occupied residences is tax deductible. For a second home or investment property, the interest you pay is not deductible.
• If you are looking to buy an investment property, meeting with an accountant is one of the first things you should do, in addition to meeting with a mortgage broker. Perhaps you wish to invest as a corporation or limited liability company (LLC)? As a real estate attorney, Stephanie can also answer questions on and help with corporate formation
• If you are selling one investment property to buy another, consider a 1031 exchange whereby proceeds may be reinvested within a certain amount of time for tax benefits.
CURRENT PROPERTY USES AND AMENITIES
Now we can talk about what you would like to have in your new property! Once you have determined a price range and what you would be willing to pay, let’s drill down on property features and amenities. Consider the following:
• Are you looking to be close to trails, lakes, rivers or canals, skiing, parks, schools or businesses and shopping?
• Is there a particular neighborhood that you would like to specifically explore?
• Do you want space for gardening, hobby farming or pets, or do you prefer a low-maintenance, small lot?
• Is living in a homeowners’ association (HOA) important to you? Most HOAs charge dues or fees in exchange for services such as snow removal on local streets or front yard maintenance. Before you purchase a home within an HOA, be advised that certain uses and improvements of your property may be regulated by the association. Stephanie is available to review the conditions, covenants and restrictions (CCRs) so that you are aware of any rules that may impact parking, RV storage, painting, fencing or construction of additional buildings, including sheds and accessory dwelling units (ADUs) on your property.
• Are you looking for a stick-built home, or would you be open to considering a manufactured home? Do you prefer new construction or home in an established neighborhood?
• Do you prefer a single-level home, or one with multiple levels? Consider the age and any physical limitations you or future occupants may have before purchasing.
• Is there a separation between the primary bedroom and other bedrooms? This is important to some buyers for privacy and quiet.
• Are you willing to buy a home that needs some TLC, or are you looking for an updated or new, turn-key property?
• Is a garage important to you, and how many parking spaces would you like?
• If you are considering a townhome or condo, where do the walls with adjoining unit(s) connect? While this may impact noise and privacy, oftentimes purchasing a townhome or condo is more affordable than a single-family home. Plus, front-yard maintenance may be included in HOA dues.
• Do you have plans for future development on or other uses of the property? Stephanie is a licensed real estate and land use development attorney and can answer any questions you may have! One of the most common questions we get is whether an ADU can be constructed. We will review applicable zoning regulations and provide a path forward for your vision!
• If you are considering a home that has been remodeled or a property that has been improved with additional structures, we will ensure that the seller has obtained all necessary building and land use permits. Any owner of property may be liable for corrections and fines if structures were not properly permitted. This additional service can save you hassle and delays in the future.
• If there is a septic tank or well on the property, evidence they are properly functioning.
• If it is necessary to cross any other property for access or irrigation lines, we will review documentation to ensure easement rights are in place before your purchase.
• If you are considering purchasing property that requires repair or cosmetic fixes, Frank is a licensed contractor and can help you address many items post- closing. Contact us to discuss the potential scope of services and a plan.
MARKET CONSIDERATIONS
Many buyers jump right to the questions of, “what is the market doing,” and “is now the right time to buy”? These are important questions that we love to answer! We do caution our clients to go through all the considerations outlined in this guide and to make a fully informed decision.
Determining the current market will have an impact on decisions as to timing and price. While we would love to have a crystal ball to see what is ahead in the future, our general advice on when to buy is “when it is right for you.” A change in employment or family, or health reasons, may create more of a pressing need to purchase property, while a desire to own a different type of home (single or two-story, condominium or townhome) a different sized yard (less maintenance, or more room), or a change from urban to rural living (or vice-versa) also inform you as to the “right time.”
We understand and appreciate that every property is as unique as the people that own it. When you are ready to make an offer on a property, we will review other properties that are similar in size, location and amenities, including those that have recently sold and those that are on the market which we will use to inform us in preparing a strong offer on your behalf. A review of general sales trends will be included in a comparative market analysis and reviewed with you.
WE WOULD LOVE TO HELP YOU BUY PROPERTY!
Getting to know our clients is the best part of work! Our goal from start to finish is to provide you accurate, complete information and to work with you to find your dream property.
Reach out to us with any questions you have about this guide, the process for buying a new home, and current market conditions. Give us a call today at (541) 788-1095, or email us at [email protected].
