Jess McDonough's Buyer's Roadmap

HereTogether OR POLICY & ADVOCACY

The housing affordability and homelessness crisis in the PDX Metro region impacts all of us and requires collective action. HereTogether engages 250+ organizations, businesses, and leaders from every corner of the community to solve homelessness by spotlighting best practices, identifying roadblocks, and advocating for results to build a Portland region where everyone has a safe place to call home.

Since 2020, we have partnered with HereTogether and supported the coalition through donation matches and in-kind donations of marketing, photography, and promotional materials.

Learn more at heretogetheror.com

GIVING ACCOUNTABILITY SPOTLIGHT:

Taking Ownership PDX

To address historic and systemic racism within Portland and Portland real estate, Taking Ownership works with an emphasis on enabling Black homeowners to age in place, generate wealth, and simultaneously deter predatory investors and realtors to deflect the gentrification process.

To date, our agents have collectively donated more than $50,000, supporting fixes and renovations of nearly 100 homes for local families. If you want to learn more about Taking Ownership PDX and how to get involved, please visit their website, takingownershippdx.com

Why Work With Me?

I’m not just going to help you find a home— it’s my mission to make sure that it’s the best house for you and your needs. We’re going to find THE home.

As your trusted advisor, we are here for you every step of the way. This frees you up to focus on the one thing that nobody but you can do—pick the house that feels right. We’ve got the rest covered.

Neighbors is a collection of agents who are passionate about our region and its history. We offer the highest quality of service and aim to do real estate right.

How to Buy a House

01

Discuss Goals

We will discuss your goals, timeline, and what you should expect throughout the process. Whether it’s your first home purchase or not, there’s no such thing as a silly question.

02

Get Preapproved

Meet with your lender to get a clear understanding of how much home you can afford, what you need set aside for a down payment, and, perhaps most importantly, your monthly payment. The lender is an important member of your team, so it’s important you have a good one. We’ve got some recommendations for you!

03

Look at Houses

We’ll work to find the perfect home based on your goals and we encourage you to share listings that catch your eye. We’ll provide feedback and context, and help you find the one that checks all the important boxes. We’ll work with listing agents to get any info that might not be available on the public listing and schedule a private tour.

04

Write your Offer

We will work together in order to determine the best offer based on the property, your buying power, competition (if any), and comparable sale data. Money talks, but it’s not the only deciding factor– a well-crafted offer will help you stand out from the competition.

05

Disclosures, inspections, and repairs

This is the chance for us to get in and understand your prospective new house from the inside out. After setting up inspections (for example: whole home, radon test, sewer scope, and buried tank scan) we’ll work to identify and negotiate repairs, credits, or price reductions based on the findings (if our offer allows for them).

06

Appraisal

If you are financing your home, the lender will likely require a physical inspection of the property and an assessment of value by a state-licensed appraiser. You will recieve a copy of this report from your lender. The cost of appraisal is included in your closing costs.

07

Signing

Once you’ve receieved final loan approval of your loan, documents are sent to escrow (the neutral third party) who will schedule your signing of closing paperwork. It’s a tall stack of documents, but just think of it as a couple dozen opportunities to perfect your signature!

08

Funding and Recording

While signing is a symbolic step, it doesn’t mean you own the house yet. On closing day when your lender funds the loan, escrow disburses funds and records the deed. After that’s done, you’re officially a homeowner and it’s time to celebrate!

How to Make a Strong Offer

An offer is about so much more than purchase price. The seller’s agent will also be advising them on which offer provides the most favorable terms and smoothest deal. Here are just a few of the tools we use to make your offer stand out.

Price

In a multiple offer situation, we want to come in strong—but without overpaying! We’ll find this sweet spot together by looking at recent comparable sales and applying that context with your situation and your personal buying power.

Earnest Money

Earnest money is a deposit you make with the escrow company when your offer is accepted. Standard is 1%, but we may recommend going higher in some competitive situations. This money is protected in most cases by several contingencies (right of revocation, inspection, and financing to names a few). It goes toward your “cash to close” at the end of the transaction.

Lender

While the right lender can make your purchase a dream, the wrong one can easily make it a nightmare. Who you choose to finance your home can impact your ability to compete based on that lender’s reputation and the listing agent’s past experiences with them. We generally find it to be a greater challenge to get offers accepted for clients who’ve been pre-approved with large banks or online lenders.

Down Payment

Like most things in life, this would be a lot easier if we all had piles of cash lying around! While your down payment amount actually has very little impact on the seller, buyers with a larger down payment are inherently seen as “stronger” than those with less money down.

Appraisal Coverage

As part of your typical financing contingency, the home must appraise for (at least) your contract purchase price. If it does not, you could terminate your purchase and be entitled to your earnest money. This is an obvious risk for sellers, and in a competitive offer situation, many buyers will take on this risk for a competitive advantage—essentially agreeing to “make up the difference” for a low appraisal.

We will discuss this complicated topic at length, but for now you should know that a) we can limit how much coverage you offer, and b) there are ways for you to utilize this competitive term without having to make up the difference dollar-for-dollar. To help you understand this, a great lender is key.

Inspection Period/Repair Limits

There are two main options here to help us stand out:

• Shortening our inspection period from the standard 10 business days. We’ll only want to do this if we’re confident we can complete our inspections in a shorter time.

• Adding terms to our offer that restrict what we might ask for in repairs or as closing cost credits in lieu of repairs. This needs to be evaluated on a case-by-case basis.

Rent-back

You may agree for the seller to stay in the home, to “rent back” for a period of up to 60 days. This allows the seller to receive their proceeds while they’re still living in the home, and may save them from having to move twice if they’re buying another home, or just need some time to coordinate an interstate move. You can charge the sellers rent (typically a daily prorate of your mortgage payment), or offer it for free if in a competitive offer situation.

FAQ

HOW MUCH DO I NEED FOR A DOWN PAYMENT?

It depends! There are conventional loan programs for as little as 3% down, and some lenders even have 100% financing. Most conventional mortgages will require private mortgage insurance (PMI) for any mortgage with less than 20% down. Generally speaking, the lower your down payment, the more expensive your loan will be as it can impact your interest rate, mortgage insurance, and lender fees.

WHY WORK WITH A REALTOR?

In the era of real estate listings being available at your fingertips with apps like Redfin and Zillow, it’s reasonable to wonder why you need a buyer’s agent at all. It is our job to help you find the right house, not just any house. We see our role as that of a trusted advisor. From evaluating a home on the first walk-through, to writing a compelling offer, navigating inspections, repair negotiations, appraisal, and finally getting to close, we act as your primary point of contact, your advocate, and your project manager to get you into your dream home as smoothly as possible.

HOW DO BUYERS’ AGENTS GET PAID?

We don’t work for free, but our services likely won’t be a direct expense for you. Sellers who have their home listed in the Multiple Listing Service (MLS) have agreed to pay a buyer’s agent commission. That typically ranges from 2-2.5% of the sales price and is paid out of the seller’s proceeds. You’ll typically see this in a home’s listing details under “BAC” (buyer’s agent commission).

HOW DO I KNOW IF I’M READY?

The first step is getting preapproved (if you plan to finance your purchase). Your lender will likely want to schedule an initial consultation that will answer many questions you likely have about the price range, how much home you can afford, what you should have saved for a down payment and closing costs, and what your monthly payment would look like. Finding a good lender is critical to a smooth home purchase, and we know some great ones that we’re happy to share!

HOW LONG DOES IT TAKE TO BUY A HOUSE?

This is a tough one, and depends on a combination of factors: your financing, the type of home you’re buying, any repairs that might be done in a transaction, etc. That said, from offer acceptance to close is typically 30 days.

‘HOW MUCH HOUSE’ I CAN AFFORD?

There are some basic calculators online, but the very best source of this information is going to come from your lender during the preapproval process.

FIXER-UPPERS: HOW MUCH IS TOO MUCH TO TAKE ON AND FIX OVERSELVES?

At the end of the day, if you’re going to sink more into a property than you’d ever get back, it’s better to just keep looking! We’ll evaluate the price, potential and factor in expenses vs. opportunity. We can also help you understand exactly what you’re signing up for when you elect to remodel a home.

AFTER MY OFFER IS ACCEPTED, AM I OBLIGATED TO GO THROUGH WITH THE PURCHASE?

Yes, and no. You shouldn’t be writing an offer unless you are financially and emotionally prepared to buy. However, sometimes things happen. There are certain contingencies that allow you to terminate while protecting your earnest money. However, if you must pull out, be prepared to lose that earnest money. It is also the seller’s recompense for time lost on the market or any repairs completed during the transaction. This is a very complex issue, so please let me know if you have questions!

NOTES:

Jess McDonough

Principal Broker

(503) 990-5025

jess@jessmcdonough.com

You’ll always have me in your corner.

Buying or selling a home can be a wonderful experience. It can also be incredibly stressful. I like to think of my approach as one part therapist and one part personal coach, shepherding clients through this high-stakes emotional and financial roller coaster.

Choosing to work with me means that you’ll always have someone in your corner, ready to listen and provide steady counsel in challenging situations. I will point out risks, hazards, and resale considerations, help you visualize the awesome potential in some aesthetically underwhelming homes, and guide you in prepping your home to shine its brightest. And, most importantly, I will be your fiercest advocate every step of the way.