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Buying a House in Washington State: An In-Depth Guide

Looking to buy a home in Washington State? Finding the home of your dreams is possible, but it takes planning and preparation. Understanding some basics about the market in Washington can help you plan for success. Here’s what you need to know.
Looking to buy a home in Washington State? Finding the home of your dreams is possible, but it takes planning and preparation. Understanding some basics about the market in Washington can help you plan for success. Here’s what you need to know.

The state of Washington is a gorgeous, green land of natural wonders and close-knit communities. From its bustling tech center in Seattle and its corresponding art community to the rich culture and history it offers, it’s no wonder that Washington is a favored choice among many would-be home buyers.

For those who want an escape from the craziness of large cities while still being close enough to them to live comfortably, Washington doesn’t come up short of housing options. There is a multitude of opportunities for home buyers throughout the Evergreen State, and enough coffee to propel you through the process.

Finding the right home is a large part of the experience, of course. But finding a home is more than selecting a property and making a purchase. Even though Washington offers a wealth of options for home buyers, there are still a number of complicated issues to consider when choosing a home.

In order to ensure that you’re getting the most for your money, you have to understand timing, the market, taxes, closing costs, and other pertinent information.

This guide can help you find the best home for your budget in Washington. The first step any prospective home buyer should make is to partner with a buyer’s agent in their local market. Doing this can help you benefit from expert advice right from the outset so your home buying journey is as successful as possible.

How to Find a Washington Buyer’s Agent

The first step that any prospective home buyer should take is to partner with an experienced, local real estate agent. An experienced, local agent with in-depth knowledge of the market your considering can help provide guidance and support throughout the process.

What’s more, they can be an advocate for you, especially when it comes to the all-important task of negotiation. When you do find the property of your dreams, it’s important to have someone who knows what you’re looking for but who is objective enough to provide useful and constructive information.

Only then can you get the best deal and find the most success when purchasing your Washington dream home.

The real estate market can vary greatly between cities and, in some cases, even between zip codes. Having an experienced real estate agent at your side who is familiar with the local market can ensure that you have an advocate during the entire process. It’s particularly important to partner with a real estate agent who is good at negotiating and who understands your chosen market inside and out.

Clever can instantly connect you with top-rated buyer's agents in your chosen market. This can help you save money since all Clever Partner Agents work on a flat fee basis.

You should get in touch with a Clever Partner Agent today for a no-obligation consultation.

Learn More: What Does a Real Estate Agent Do for a Buyer?

Washington Housing Market Forecast for 2019 - and Beyond

On average, Washington is a buyer's market right now. The median home value in Washington is $385,400. The median listing price is $399,000 and Washington has experienced a one-year growth of 6.6%. The market also has a one-year forecast of 4.7% growth.

What’s more, the average home spends 83 days on the market, which gives you just enough time to make a decision without having to wait forever to get those keys.

The fact that home values are only expected to rise in Washington offers home buyers two benefits. First, you can grab the opportunity to purchase your home while the market is still below its peak. That helps you get a great deal without having to pay exorbitant fees.

What’s more, the fact that the home values are only expected to rise means you can expect to see a decent appreciation on your home in the coming year.

Best Time of Year to Buy a Home in Washington

Choosing the best time to purchase a home comes down to a combination of inventory, competition, and discounts. It’s important to shop for a home when there are plenty of properties available to choose from but when the competition is relatively low. If this time frame also coincides with the months where you’re most likely to see a discount, all the better.

Highest Number of New Listings

In the Seattle metro area, April, June, and July are the months where you’re most likely to see the highest number of new listings. In April, on average, there are 7,000 new listings with rates of 7,400 in June and 7,200 in July.

While purchasing a new listing isn’t necessarily vital, months with the highest number of new listings also tend to provide the most opportunity to home buyers in the area.

Most Competitive Months

Choosing to buy in the most competitive months isn’t necessarily a deal-breaker. However, it’s important to know which months are most competitive so you can prepare for it in the event that you wind up buying a home during a highly competitive month.

That being said, if you can plan to purchase your home just outside of the most competitive months, you can usually take advantage of both the ability to have access to a wide selection and the less intense competition.

In Seattle, the most competitive months tend to be March, April, and May. In March, about 52.1% of homes sell for above list price. In April you’ll typically see the same percentage, and in May there’s a slight decrease to 50.1%.

This means that you’ll want to avoid these months, if possible since you’ll be facing a large amount of competition and good deals will be harder to find.

Months with the Highest Inventory

June, August, and September tend to have the highest number of homes on the market. In June you’ll see about 14,000 homes on the market, and you’ll see the same in September. In August, that number tends to be a bit higher, around 16,000.

Purchasing when the inventory is high gives you the most opportunity and the greatest selection.

Months with the Most Discounts

It probably goes without saying that getting a home at a discounted price is beneficial for home buyers. Because it’s important to save every dollar you can, choosing to buy in the months where homes historically have the most discounts associated with them can help you save funds.

July, August, and September typically see the greatest number of homes with discounts in the Seattle area. In July, about 10.8% of homes are discounted, in September that number is around 11.7%, and in August it’s about 12.1%.

Overall Consensus

Given the above data, August tends to be the best time to buy a home in the Seattle metro area. This month is only moderately competitive, but it has the highest inventory rates and is the month in which you’ll be most likely to see discounted homes.

Learn More: When Is the Best Time to Buy a House?

Calculate Your Property Taxes in Washington

Taxes are calculated based on the assessed value of your property, which includes both the land itself and any buildings that are on it. The assessed value is typically calculated by a tax assessor every five years. Once the valuation of your property is complete, the new tax rate will be in play, and you’ll be expected to pay accordingly.

Property taxes are then calculated in one of two ways. Either your area will use a mill levy or it will use the assessed property value.

Mill Levy

The mill levy uses the measure of a mill, which is 1/10 of a cent. That means for every $1,000 of assessed property value, $1 is equivalent to one mill.

The tax levies for each individual jurisdiction are independently calculated. Once all the independent calculations are done, the levies are combined in order to determine the regional mill rate, or the number of mills your area will be charged.

If the assessed property value is used, the mill levy is multiplied by the assessed value of your property. In most areas, the assessed value is defined by the reasonable market value for your home.

In Washington specifically, the effective real estate tax rate is 1.03%. Annual taxes on a $194,000 home would total $1,996. The state median home value is $286,800, and the annual taxes you would expect to see on a home valued at the state median would be $2,958.

However, taxes can vary widely from region to region. In Seattle, for example, the average tax rate is 1.025%, and annual property taxes on a $364,000 home would be $3,731.

In Spokane, the average tax rate is 1.91%, so the annual property taxes on a home of the same value would be $4,335.

This disparity can be even greater, though. In Puyallup, the average tax rate is 1.237%, so the annual property taxes paid on a $364,000 home would be $4,503. In Bellingham, though, that rate is only 0.876%, lending to a property tax rate of just $3,189.

Given the variability of these rates, it’s important to speak with your real estate agent about the property taxes you can expect to pay on your new home. Doing so will help you avoid any surprises down the road.

Learn More: How to Calculate Property Taxes

How Much Are Closing Costs for Home Buyers in Washington?

It can seem like all you do is pay fees when you purchase a home, but closing costs are a necessary part of the process. It’s critical to have at least a basic understanding of what closing costs are, what you can expect to pay, and the types of closing costs that exist.

Typically, there are two different kinds of closing costs that buyers need to be aware of. There are non-recurring and recurring closing costs.

Non-recurring closing costs include things like endorsements, escrow fees, transfer taxes, home protection plans, real estate agent commission, lender fees, and notary and wire fees.

Recurring closing costs include things like fire insurance premiums, property taxes, mortgage and mutual insurance premiums, and other types of insurance premiums.

In general, buyers can expect to pay 3% of the sale price of their home in closing costs. Given that the median home value in Washington is $364,000, that means that you can expect to pay $10,920 in closing cost on average.

In Washington, you’ll also have to pay transfer taxes and fees. Transfer fees on Washington properties tend to be taxed at a rate of 1.1% of the purchase price for homes that sell at $399,999 and under. If you buy a home at $400,000 or higher, your rate for transfer taxes will be 1.45%.

Given the median sale price in Washington, transfer taxes are typically around $4,004.

However, fees and taxes vary on a state, regional, and even local level, so it's important to consult with your real estate agent and allow them to guide you through the entire process to make sure you haven't missed anything.

Learn More: Who Pays Closing Costs on a House?

Clever Will Help Pay Your Closing Costs!

Closing costs are an unfortunate part of the home buying process, but you don’t have to be stuck with all of them. Fortunately, there are rebates available in most states — including Washington.

Clever's Home Buyer Rebate Program is an additional cost-saving opportunity for home buyers. Clever buyers who spend $150,000 or more get a $1,000 rebate to help with closing costs. Fill out the online form to learn more and connect with the top-rated Clever Partner Agent in your area for a no-obligation consultation today.

Working with Clever can help you save on realtor fees, closing costs, and so much more.

Learn More: How to Get a Home Buyer Rebate

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Reuven Shechter

Reuven Shechter is the Outreach Coordinator at Clever Real Estate, the free online service that connects you with top real estate agents to help save on commission. He spreads the word about Clever, disseminating studies to journalists and developing relationships with media outlets. Reuven is passionate about investing in real estate and creating lasting success for families. His writing has been featured in Max Real Estate Exposure, Leverage Marketing, and more.

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