Whether you are buying your first home in Oregon or relocating from another state, there are some important laws and customs to be aware of. This article will help familiarize you, so as to help your Oregon purchase go more smoothly and, hopefully, to help avoid confusion.
After your “first contact” with a real estate agent, you should receive an Initial Agency Disclosure Pamphlet, whether that was in person, over the phone, or by email.
Review this carefully, because it describes the duties of each agent involved in the transaction. For instance, the pamphlet describes the duties and responsibilities an agent will have to the buyer if the agent represents only you in the transaction.
Who you're dealing with depends in part on how you met the agent. If you just walked into an open house or called the number on a “For Sale” sign, chances are you are in contact with the seller's agent. Still, Oregon law says that if both the seller and buyer consent in writing, the parties can both be represented by the same real estate agent.
Is this dual agency arrangement a good idea? Not necessarily. It can be awkward to owe duties to two competing parties in a transaction. How is a dual agent supposed to help the seller get the highest price possible and you the lowest, for instance?
It might be beneficial to find a buyer's agent in the area to which you're moving. This agent will be able to help you search for homes, and when the time comes to make an offer, represent you through the entire transaction. There is typically no additional cost to you for retaining a buyer's agent, because the commission will be split between the seller's agent and buyer's agent, and the commission comes out of the purchase price received by the seller.
In Oregon, it's common for both parties to be represented throughout the whole transaction by a real estate agent. As a result, the entire sales process can be conducted without the seller and buyer ever meeting in person.
Buyers and sellers are not even required to meet at the real estate closing (when the transaction is finalized and you get the keys). It is customary for an Oregon closing to occur at a title company's office and for the parties to go in to sign at their own convenience.
An agreement to sell and purchase Oregon real estate must be in writing. Most real estate agents use what's called the “Residential Real Estate Agreement” for every residential home sale. However, the agreement can be custom drafted depending on what you and the seller need or want.
The normal offer and related negotiations go something like this. First, you tell your agent the terms under which you will buy the home (purchase price, escrow amount, inspection contingencies, and so forth). With that information, your agent uses the standard sale agreement form to prepare the initial offer for your signature.
Your agent then forwards the signed offer to the seller's agent, who presents it to the seller. If its terms are acceptable, the seller will sign the offer.
As soon as the sale agreement is signed by both parties, it becomes an enforceable contract. In most cases, a sale agreement can be signed in counterparts. This means that the original signatures will be on different copies of the same agreement.
Most likely, though, there will be subsequent negotiations after the seller receives the original offer from you. In that case, the seller will return the offer to you with a “Seller's Counter Offer No. 1.” The counter offer is just an amendment to the initial offer. You can accept to the counter offer or continue negotiations.
Once the final counter offer is signed by both of you, the agreement becomes binding.
After receiving an offer to purchase a home, Oregon home sellers must give the buyer a property disclosure statement (see ORS 105.464). Within it, the seller must disclose the condition of the property, by answering a series of questions.
The required disclosures include, but are not limited to, such things as the source of domestic water and whether the roof has ever leaked. For more information about the property disclosure statement and how to make sense of it, see Buying an Home? What the Seller Real Estate Disclosures Will Tell You.
Although an Oregon home seller must be honest when completing the property disclosure statement, you'll want to hire a professional property inspector, as well. The inspector will be able to identify issues that might not have been disclosed or that are not easily identified by a non-professional. An inspector is going to inspect only what's visible, so if there is a hidden defect that is not disclosed or found by an inspector, you could end up purchasing the home with that defect.
Although an old legal doctrine called caveat emptor (buyer beware) is not imposed upon Oregon buyers, a seller has to disclose only known material defects. If the seller is not aware of a particular defect—for example, never ventured into the attic to notice the dry rot there—it might be difficult to hold the seller accountable after closing. Having a professional inspection performed will help limit some of that risk (but not all).
After the seller accepts your offer, the sale will likely take around 45 days to close. During that time, you and the seller will need to complete inspections, appraisals, financing, and everything else required to sell the property.
Once that's all done, you will go in to your chosen title office to sign all of the closing documents. This will include promissory notes, trust deeds, and other loan related documents. The seller will go to this office as well, likely on the same day, and will sign a conveyance deed transferring title of the property to your name.
The sale is “closed” once the deed is recorded with the county clerk. That normally takes two to three days after you have signed everything. Once recorded, you will get the keys and home is yours.
Oregon law doesn't require you to retain an attorney to assist with the purchase of your home. However, an attorney can help with difficult questions about the title report, disclosure statement, and with understanding the terms of the sale agreement. Particularly if you are coming from a different state, it might provide peace of mind to have an Oregon real estate attorney looking out for your interests.