If you are relocating from another state to Oregon and plan to buy a house, there are some things you should know. Being familiar with the homepurchasing customs and practices in Oregon will help the purchase process go more smoothly and, hopefully, help avoid confusion.
After “first contact” with a real estate agent, you should receive an “Initial Agency Disclosure Pamphlet.” “First contact” occurs when the agent has sufficient information about you to provide a copy of the pamphlet to you. Sufficient contact can occur by meeting in person, talking over the phone, or even communicating by email. If you don’t receive the pamphlet from the agent, be sure to ask for a copy.
Review this pamphlet carefully, because it describes the duties of each agent involved in the transaction. For instance, the pamphlet includes an explanation of the duties and responsibilities an agent will have to the buyer if the agent represents only you in the transaction.
Likewise, if the agent represents both you and the seller, the pamphlet explains the agent’s duties and responsibilities to each party. A “buyer’s agent” represents only the buyer, a “seller’s agent” represents only the seller, and a “disclosed limited agent” represents both parties.
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. If, on the other hand, you contacted an agent with the idea that he or she show you homes and assist you with the buying process, there’s a better chance it’s a buyer’s agent.
While buyer’s agents and seller’s agents are common in all states, not all states allow disclosed limited agents (also sometimes called “dual agents”). In Oregon, however, if both the seller and buyer consent in writing, the parties can both be represented by the same real estate agent. Is this a good idea? Not necessarily. It can be awkward to owe duties to two competing parties in a transaction. For instance, what does the agent do if the seller does not want the agent to disclose to the agent’s other client, the buyer, that the sprinkler system does not work? Before you agree to be represented by a disclosed limited agent, be sure you understand the agent’s duties to both you and the seller.
You are free to choose your own real estate agent, and are not required to use the same real estate agent the seller is using. For people coming from out of state, it may be beneficial to find a buyer’s agent in the area to which you are 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 is common for both parties to be represented throughout the whole transaction by a real estate agent. As a result, the entire sale process can be conducted without the seller and buyer ever meeting in person. Buyers and sellers are not even required to meet at closing. In Oregon, it is customary for closing to occur at a title company’s office and for the parties to go in to sign at their own convenience.
In Oregon, an agreement to sell and purchase real estate must be in writing. If the agreement is not in writing, it cannot be enforced in court. The sale agreement in Oregon is often called “Residential Real Estate Agreement.” There is a form agreement that most real estate agents use 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 will 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 will use the standard sale agreement form to prepare the initial offer for your signature.
Your agent will then forward the signed offer to the seller’s agent, who will present it to the seller. If the terms of the offer are acceptable, the seller will sign the offer. At the time the sale agreement is signed by both parties, it will be enforceable. 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, the agreement becomes binding.
After receiving an offer to purchase a home, Oregon home sellers must give the buyer a property disclosure statement. The property disclosure statement requires the seller to disclose the condition of the property to the buyer 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 Oregon Home: What Does the Seller's Disclosure Form Tell Me?.
Although an Oregon home seller must be honest when completing the property disclosure statement, homebuyers will want to hire a professional property inspector, as well. The inspector will be able to identify issues that may not have been disclosed or that are not easily identified by a non-professional. An inspector is going to inspect only what is visible, so if there is a hidden defect that is not disclosed or found by an inspector, you may end up purchasing the home with that defect.
Although the 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 may 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 everything is done, you will go in to sign all of the closing documents. This will include promissory notes, trust deeds, and other loan related documents. The seller will do so as well, 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.
In Oregon, unlike in some states, there is no legal requirement that you 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 sale agreement. And since you are coming from a different state, it might provide some peace of mind to have an Oregon real estate attorney looking out for your best interests.