How-to guide by Clackamas Federal Credit Union

A housing shortage will be affecting many areas in Oregon, including communities in Clackamas County. While home prices have risen lately, they continue to be more affordable in comparison to previous years.

This, coupled with low interest rates and low choices of available homes on the market, has created a sense of urgency among the home buying public.

The sense of urgency felt by homebuyers is fueling multiple offer scenarios — meaning you’re not the only buyer bidding on a house. The disappointment of losing your dream home can be heartbreaking.

You have executed the proper home buying steps: Diligently submitted all the paperwork for a strong offer, obtained a pre-approval letter from your mortgage broker and steadfastly viewed all the price-appropriate homes in your neighborhood — only to find that the perfect choice now belongs to someone else. 

To make matters worse, your offer was at or maybe even above asking price. So what happened? 

Buying a house in a competitive market is just like any kind of competition. You must prepare. While interest rates are low, obtaining a loan is any easier. Historically slower to catch on to market trends, financial institutions are still rightfully wary from the housing bubble days.The prerequisite pre-approval letter is no longer applicable.

You must beat out the competition with an approval letter from your bank or credit union. An approval letter goes a big step above a pre-approval letter and means that you have taken the necessary steps to ensure you can afford the home.

This assurance can be comforting to the seller who is taking a risk on you. Simply coming to an agreement within the offer does not mean it’s a done deal. Buyers still have many outs, including loan approval. If you apply for the loan within the agreed upon timeframe and don’t approve, the seller is forced to put the house back on the market and you regain your earnest money back.

Prove to the seller you are serious and trustworthy by completing this worrisome step before submitting an offer. Include a copy of the approval letter with your offer, in addition to highlighting that you have gone through this extra step in your personal letter to the sellers. Now you are possibly one step closer in beating out the competition and winning your dream home.

Benjamin Thompson is a mortgage loan originator with Clackamas Federal Credit Union.

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