8 Steps to Buying a House in Washington State

Clever Real Estate

By 

Clever Real Estate

September 16th, 2022
Updated September 16th, 2022

SHARE

8 Steps to Buying a House in Washington

Save for down payment | Find a real estate agent | Get preapproved for a mortgage | Choose your neighborhood | Go house hunting | Make an offer | Inspections and appraisal | Final walkthrough and closing

Buying a house in Washington is an exciting milestone, but the process can take some time. Several factors, like your financial situation, market conditions, and the local economy can affect both how long it takes you to find a home and how much it costs you.

For example, homes in Spokane are hitting the market at $495,000 and selling within 34 days — 23 days faster than the state average! — so you'll need to move quickly if you want to beat out the competition.

The more you know about the home buying process and Washington's current real estate trends, the more prepared you'll be to navigate this complicated process as quickly and smoothly as possible.

No matter where you are in your home buying journey, Clever can connect you with local real estate pros who will help you purchase your Washington dream home!

The best part? When you buy with a Clever real estate agent, you could earn a cash-back refund worth up to 0.5% of the home price. On a qualifying $300,000 purchase, you'd get $1,500. That's real money back in your pocket!

» START: Buy with a top local agent, save thousands with Clever Cash Back

Step 1: Save for a down payment

🔑 Key takeaway:

Your down payment can be less than 20% of the purchase price — $123,252 for the typical home in Washington — but you'll have to purchase mortgage insurance and pay more interest over the life of your loan.

Your down payment is the first part of your home's purchase price that you pay at closing. Your mortgage lender will pay the remaining balance.

Typically, mortgage lenders in Washington want you to contribute 20% of the purchase price as a down payment. That would be $123,252 for a $616,259 home — the typical home value in Washington.

However, you have options to lower your down payment amount.

Government backed loans, like VA and FHA loans, allow you to contribute 0% and 3.5% of your home's purchase price respectively. Even conventional loans allow for down payments as low as 3-5% (though the minimum varies by lender).

Mortgage type
Minimum down payment (%)
Down payment ($)
VA Loan
0%
$0
FHA Loan
3.5%
$21,569
Conventional
3%
$18,488
Based on typical home values from Zillow (August 2022)

But making a down payment of less than 20% comes with some risks.

First, because you're borrowing more money, you'll have a higher monthly payment and pay more in interest over the life of your loan.

Down payment
Monthly payment
Total interest
Total Cost
5%
$3,328
$612,552
$1,228,811
20%
$2,802
$515,833
$1,132,092
Based on home values from Zillow (August 2022) and a 5.51% interest rate for a 30-year loan.

Second, you may have to purchase mortgage insurance.

Conventional loans require private mortgage insurance (PMI) until your loan balance reaches 80% of the purchase price. FHA loans, on the other hand, require a mortgage insurance premium (MIP) for the life of your loans.

Mortgage insurance costs around 1% of your mortgage balance annually. However, rates vary based on your down payment and credit score. Typically, your mortgage insurance payment is added to your mortgage payment each month.

VA loans don't charge mortgage insurance. Instead, you'll pay a VA loan funding fee at closing, which can range from 1.4% to 3.6% of the purchase price.

» READ MORE: Everything you need to know about low-income home loans

Washington down payment assistance programs

There are several down payment assistance (DPA) programs that cater towards Washington state residents. If you are a first-time or low-income buyer, you may be eligible for a grant or second mortgage from one of these programs.

Here are just a few resources you can check out:

WSHFC DPA Program

The Washington State Housing Finance Commission's (WSHFC) Home Advantage DPA program offers a 30-year, 0% interest second mortgage for buyers approved for a Home Advantage first mortgage. The total amount of the loan may be 4% or 5% of the first mortgage amount.

To qualify, the borrower's annual income cannot exceed $160,000, and they must complete a homebuyer education course.

WSHFC Needs-Based Assistance

WSHFC's Needs-Based program offers a 30-year, 1% interest second mortgage to those with a Home Advantage first mortgage. Financial assistance may go up to $10,000, depending on the individual's needs.

To qualify, participants must complete a homebuyer education course and not earn more than the household income limit set for their county.

WSHFC Opportunity DPA Loan Program

The Opportunity DPA Loan Program offers a 30-year, 1% interest second mortgage to those with an Opportunity first mortgage. Borrowers may receive up to $15,000 in financial assistance, which only has to be repaid if the home is sold, transferred, or refinanced.

This program is only available for first-time buyers who are purchasing homes in specific counties. Eligible participants cannot earn more than the household income limit set for their county.

U.S. Department of Housing and Urban Development

HUD’s list of alternative programs in Washington can be found here.

Step 2: Find a great real estate agent in Washington

🔑 Key takeaway:

Interview multiple agents to find one who knows your target neighborhoods, has experience in your price range, and communicates well.

Your real estate agent will be your main ally during the home buying process. Besides finding and showing you properties, your agent will help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers like title companies and inspectors to help you buy your home in Washington.

Don't rush into choosing an agent. Instead, take the time to research and interview multiple real estate agents who have experience in the neighborhoods you're interested in. You should pay attention to a realtor's:

  • Years of experience
  • Number of transactions in the last year (the more the better!)
  • Experience in your price range
  • Overall review score
  • Individual reviews and complaints

Top Local Agents Hand-Picked for You!

Clever matches you with multiple agents in your area so you can interview, compare, and choose the best one to help you buy your next home.

Step 3: Get preapproved for a mortgage

🔑 Key takeaway:

Once you're preapproved for a mortgage, it's imperative that your financial situation doesn't change. If your credit drops, it can derail the process and keep you from closing on your house.

Here are some easy ways to ensure your credit doesn't change after you receive your preapproval letter:

  • Avoid opening new credit accounts
  • Don't close any accounts that have been open for a long time
  • Make all of your credit card payments on time

» LEARN MORE: What factors do mortgage lenders consider?

A mortgage preapproval letter is an offer to lend you up to a certain amount of money to purchase a home. It shows sellers that you are a serious buyer who is financially qualified to make an offer on a home.

Most sellers in Washington will require preapproval before showing you their home.

You don't have to decide on one lender right now. In fact, you should compare interest rates and preapproval amounts from several lenders to make sure you're getting the absolute best terms when you buy your Washington home.

Get Pre-approved Today!

Get matched with a lender who can tell you how much house you can afford. To get started, where do you plan on buying?

Step 4: Choose the right location

🔑 Key takeaway:

Search for neighborhoods where:

  • Home prices are within your price range
  • Home values are on the rise
  • The local amenities support your lifestyle

Currently, the typical home value in Washington is $616,259, but don't worry if that doesn't perfectly match your budget. Home prices vary dramatically from city to city and even from neighborhood to neighborhood!

Also, look at past home value trends. This will give you an idea of how much your home's value could go up over the next few years.

To give you an idea of how appreciation could impact what your house is worth in the future, consider these examples from three neighborhoods in Tacoma:

Home value appreciation in Tacoma

Neighborhood
2015
Current
Appreciation
South End
$166,543
$446,734
62.7%
Eastside-ENACT
$166,519
$441,407
62.3%
South Tacoma
$151,868
$433,391
65.0%

Step 5: Start house hunting in Washington

🔑 Key takeaway:

Washington’s housing inventory has shot up since last year, so there will be a lot of options. However, given the increase in listing prices, houses may be pricier than you expect. If you’re running on a tight budget, consult with your agent and review your priorities. Keep an open mind to their suggestions and check out the listings they present you — you might find a great house that may just check most of your boxes.

Searching for homes in Washington is the fun part of the home buying process! You'll get to look at a variety of homes and discover what you really want in a home.

Make a list of everything you want in a home and prioritize them. At the top of the list should be the items that are most important to you. This will help you separate your "must-haves" from your "nice-to-haves."

Your agent can help you understand if your wants are realistic for your budget and favorite neighborhoods or if you need to rethink what you're looking for.

Look at current housing inventory

The timing of your house hunt in Washington can have a big impact on your number of options. For example, in Washington, June has historically seen the most homes for sale. Searching in this season could give you more options and a greater likelihood of finding your dream home.

On the other hand, December gives you the fewest choices in Washington. Historically, there are 61.1% fewer homes for sale than during Washington's peak season.

Housing inventory in Washington by season

Season
New listings per month
Spring
10,921
Summer
12,041
Fall
9,091
Winter
6,263
Based on data from Realtor.com (August 2022)

Step 6: Make an offer

🔑 Key takeaway:

There’s a lot of competition in Washington’s real estate market, as houses are being picked up much faster than usual. If you find a house you like, put in a strong offer quickly, possibly even on the same day of viewing. Talk with your agent and discuss your options for contingencies and concessions — they can help you come up with a competitive figure that’ll increase your chances of snagging the listing.

Once you find a Washington house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.

Currently, in Washington, homes stay on the market for 47 days before going under contract. However, every market goes through seasonal changes. During busier months, homes get snatched up more quickly than others.

Historically, Washington homes sell fastest in June, where the average property is only on the market for 34 days. If your home search falls around this time, you should be prepared to move quickly and potentially make offers on several homes before yours is accepted.

On the other hand, if you buy in January, you have a bit more time to search. Homes typically stay on the market 23 days longer than Washington's annual average.

Average time homes spend on market in Washington

Annual average
47 days
January
68 days
February
55 days
March
39 days
April
33 days
May
32 days
June
32 days
July
37 days
August
39 days
September
44 days
October
47 days
November
54 days
December
64 days
Based on data from Realtor.com (August 2022)

» LEARN MORE: What should an offer include?

👋 Next Steps: Talk to an expert!

If you're weighing your options for buying or selling a house, Clever can help!

Our fully-licensed concierge team is standing by to answer questions and provide free, objective advice on getting the best outcome with your sale or purchase.

Ready to get started?

Give us a call at 1-833-2-CLEVER or enter your info below. Our concierge team will be in touch shortly to help.

Remember, this service is 100% free and there’s never any obligation.

Step 7: Inspections and appraisals

Inspections and appraisals are an opportunity for you to better evaluate the home's condition and value before officially purchasing it. You may have an opportunity after this step to renegotiate the terms of your contract with the seller if something unexpected pops up.

🔑 Key takeaway:

  • Inspections: A licensed professional checks the house for any unseen, unexpected, or potential issues.
  • Appraisals: An appraiser hired by your lender examines the house to determine how much it's worth.

Home inspections in Washington

Having your Washington home inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it.

Your inspector should check out the following parts of the property:

  • Roof
  • Foundation
  • Electrical system
  • HVAC system
  • Plumbing

If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.

Washington-specific inspections

Washington state law requires sellers to complete a disclosure form about their property to interested buyers. However, it's easy for some issues to go undetected by the seller. It's up to the buyer to take extra precautions and conduct additional tests to make sure a home is safe before closing.

In addition to a general home inspection, Washington homebuyers are strongly advised to have these tests done as well:

  • Radon testing: If the seller hasn't checked their property's radon levels within the past year, you should do a test as soon as possible. High levels of radon can lead to serious health concerns over time, so consider ordering a free radon test kit from the Washington State Department of Health.
  • Pest inspection: Termites and other pests often go unnoticed until they cause significant property damage, so homebuyers are encouraged to get a professional pest inspection to thoroughly check a home for signs of infestation.

Appraisals

Appraisals determine the value of the property. If you're using a mortgage to buy your new home, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.

» LEARN: 3 options for buyers after a low appraisal

Step 8: Close on your new home!

🔑 Key takeaway:

Before you close on your new home, you and your agent will do a final walkthrough of the property to ensure that it's still in the expected condition.

On closing day in Washington, you'll meet at your title company to complete some paperwork and settle your closing costs.

You can expect to spend about an hour reviewing and signing legal documents, including:

  • Your final loan application
  • The deed
  • The mortgage promissory note
  • The disclosure statements

Make sure to read each page carefully before signing. All information must be accurate for a clean title transfer.

Once you're finished with your paperwork, you'll pay your closing costs to the title company. The company will distribute the payments to the correct recipients on your behalf.

As a homebuyer, your closing costs can be divided into four main categories:

  • Lender fees: Fees paid to your lender for preparing your loan. Sometimes, appraisal fees, survey fees, and other expenses related to your loan are included in this payment.
  • Title and escrow charges: Fees the title company charges for providing title insurance, conducting the title search, and facilitating the closing.
  • Prepaid costs: Ongoing homeownership costs, such as property taxes and homeowners insurance. Mortgage lenders often require new homeowners to pay for these expenses up front.
  • Other closing costs: Miscellaneous expenses that vary based on your unique situation. Natural disaster certification fees, pest inspection fees, and real estate attorney fees are a few common expenses for buyers.

Buyers in Washington typically pay 3–5% of the purchase price in closing costs. For a $616,300 home — the typical home value in Washington — that's between $18,489 and $30,815!

» LEARN MORE: Closing costs for buyers in Washington

Should you hire a real estate attorney?

In Washington it's required for a real estate attorney to be part of every home sale. While your agent can make recommendations, remember you get to make the final decision. Interview lawyers before hiring them to make sure they have the experience you need.

Frequently asked questions

  1. Save for down payment
  2. Get pre-approved for a mortgage
  3. Choose your preferred Washington neighborhoods
  4. Partner with the right real estate agent in Washington
  5. Go house hunting
  6. Make a strong offer
  7. Inspections and appraisals
  8. Do a final walkthrough and close

Yes! The Washington State Housing Finance Commission offers its House Key Opportunity Program to first-time buyers. Eligible participants can get competitive interest rates if they have an FHA, VA, or USDA loan. Buyers with conventional loans may be eligible for a rate discount if they earn less than 80% of their area's median income.

To qualify, you need to be within the household income and purchase price limits set for your county. If you're accepted, you'll have to complete a homebuyer education course.

» READ: What are the top first-time homebuyer programs?

Related links

Better real estate agents at a better rate

Enter your zip code to see if Clever has a partner agent in your area.

If you don't love your Clever partner agent, you can request to meet with another, or shake hands and go a different direction. We offer this because we're confident you're going to love working with a Clever Partner Agent.