House hunting: first offer - check!

Now that I've established that I'm looking to buy a house, let me tell you all about my first foray into the market.

First of all: as soon as I knew I'd be moving back to Portland, I applied with my credit union to be approved for a mortgage. Then I did some emailing with a friend and he recommended his mortgage lender so I also applied with that bank. In both cases I was approved for up to 250k. So, yay.

Of course personal finance 101 tells us not to max ourselves out on housing costs, and I don't intend to borrow that much, but it at least gives me a framework. No surprise: my frame is the very bottom of the real estate market in Portland.

I did start poking at the market a little bit: I loaded the redfin and realtor.com apps on my ipod touch and started doing searches... all the time. As I feared, my price constraints limit me to a ring well outside the close-in parts of Portland, but one of the approachable areas is near houses owned by three different friends, so that's kind of awesome.

The real estate searches I've been running are helpful, even if they make me feel silly. Last Wednesday I saw a listing that really made me sit up and take notice. It was an adorable beautifully-finished house just over a half-mile from my friends' houses. The location was otherwise crappy - extremely close to the highway and a freight train line. However it was just so amazingly cute I couldn't stop looking at it.

Long agonizing story short, I used miles to book a flight to Portland and arranged to see four houses with a randomly-chosen agent. I liked the agent quite well. One of the houses was a nightmare pit that is going to be on the market a LONG time; one had a fussy yard and an icky inside; one had good bones but was going to be a pretty big project. The fourth house, the cute one, was every bit as amazing as I thought.

My agent said they were reviewing offers that night (after a whopping 3 days on the market) and that it didn't hurt anything to offer if I wanted to. It costs nothing and takes ten minutes. She said if I thought I'd regret not making an offer, then I might want to do it. She also said it was going to go higher than the list price.

So after futzing with a calculator a bit, I decided to make an offer for 10k more than the list, with a 10% down payment. We offered 45 days to close and free week to get out of the house after that. The agent and I parted ways, and I went to my friend's house to sit by my emailbox.

About 15 minutes later an email came in; the link in it took me to an electronic version of the offer letter. I had to click to initial 11 times and that was it! (Yes, I did skim it before sending it in.) By 3pm I'd made an offer; by 9:40pm I knew I was their second choice, and by 8:30am I knew I didn't get the house. The winner(s?) had a bigger down payment and had offered the same price as I had, so it's nice to know my guess was decent.

It was disappointing but I'm mostly glad. I've decided it was an A+ house in a D+ location. I think I'll shoot for a B location and a B house and hope I can make that work. But I should probably stop monitoring the real estate sites because I can't fly up for another weekend jaunt! I can do this in earnest starting in five weeks.