HOW TO BUY A RESIDENTIAL HOME IN SEATTLE
A RESIDENTIAL HOME IN SEATTLE
A STEP-BY-STEP BUYER GUIDE
I get it—learning how to buy a residential home in Seattle can feel like a complex and even intimidating process, especially in a competitive market. But don’t worry! This guide will break everything down for you, from financial preparation to closing day, so you can navigate the home-buying journey with confidence.
EVERYONE INVOLVED IN THE HOME BUYER PROCESS
When purchasing a home, you’re assembling a team of professionals who will help facilitate the process. Here’s who’s involved:
- Your Real Estate Broker (that’s me!) – Represents your best interests and guides you through every step.
- The Seller’s Real Estate Broker – Works on behalf of the seller.
- A Lender – Provides your mortgage.
- A Title Representative – Ensures the home’s title is clear and ready for transfer.
- An Escrow Officer – Manages the financial logistics of the transaction.
- A Home Inspector – Assesses the property’s condition.
- An Appraiser – Determines the market value of the home.
- You, the Buyer – The key decision-maker in the process.
GETTING YOUR FINANCES READY FOR BUYING A HOME
Before you start browsing listings, it’s essential to prepare your finances. Here’s what you need to know:
Down Payments
- Conventional loans: Typically require at least 5% down.
- FHA loans: Require as little as 3.5% down.
- VA loans: Offer 0% down for eligible veterans.
- Down payment assistance programs: Help first-time buyers with upfront costs.
Private Mortgage Insurance (PMI)
If your down payment is less than 20%, you’ll need to pay PMI, which usually costs 0.5% to 1% of the loan amount annually. The good news? PMI can be removed once you’ve built 20% equity.
COSTS BEYOND THE DOWN PAYMENT
Many buyers focus on the down payment but forget about additional expenses when buying a residential home in Seattle. Here’s what to budget for:
- Lender Fees – About 0.5-1% of the loan amount.
- Home Inspection – Ranges from around $400 to $800.
- Earnest Money – Around 3% of the home’s price (credited toward your down payment).
- Title and Escrow Fees – Around $2,000–$3,000.
- Prepaid Property Taxes & Insurance – Depends on home and area purchased.
In Seattle, closing costs normally total around 2-5% of the purchase price. Here's a link for a mortgage calculator.
BUYER AGENCY AGREEMENT IN WA
As of 2024, Washington State requires all buyers to sign a brokerage agreement with their agent. The timeline for signing varies by agent; I prefer to build trust before asking clients to sign.
This simple 2-page document outlines:
- The agent’s commission.
- The area and timeline for home searches.
- The ability to amend or cancel the agreement if it’s not a good fit.
I encourage buyers to interview multiple agents to find the right one.
THE SEARH FOR BUYING A HOME
Seattle’s market is competitive, so it’s crucial to have a lender pre-approval before house hunting. I also recommend setting your budget lower than your max approval to allow for offer escalations in multiple-offer situations.
Three Key Search Factors:
- Condition/Size – The home’s physical state and layout.
- Price – What you can afford.
- Location – Proximity to work, schools, and amenities.
You’ll often have to compromise on one of these. I tell clients that an 80% house might be the right one!
THE OFFER PROCESS
Once you find the right home, everything is done electronically for convenience. The two main factors in an offer are:
- Offer Price – How much you’re willing to pay.
- Contingencies – Conditions that allow you to exit the contract while keeping your earnest money.
Common contingencies include:
- Inspection Contingency – Back out if major defects are found.
- Financing Contingency – Protection in case your loan falls through.
- Title Contingency – Ensures no issues with the home’s title.
If your offer isn’t initially accepted, the seller may counteroffer, and I’ll negotiate on your behalf to reach a favorable deal.
THE INSPECTION
After an accepted offer, a home inspection is scheduled. Even if a seller provides an inspection report, I recommend getting your own.
- Inspectors examine all home systems and identify issues.
- Buyers can negotiate repairs or credits based on findings.
- Waiving inspections in competitive markets can be risky, but pre-inspections before offering can help mitigate that risk.
THE APPRAISAL: A CRITICAL STEP IN BUYING A HOME
One of the most nerve-wracking parts of buying a home is the appraisal—when an appraiser determines if the home is worth what you're paying. Lenders won’t finance more than the appraised value to protect their investment, which can become an issue in a hot market where bidding wars drive up prices.
If an appraisal comes in low, we have a few options: renegotiate with the seller, split the difference, or bring extra cash to cover the gap. To help avoid this, I always conduct a Comparative Market Analysis (CMA) before making an offer, ensuring we stay within market value and minimize surprises.
CLOSING THE DEAL ON YOUR HOME PURCHASE
At closing, the title and escrow company finalize the transaction. Here’s what happens:
- Title company records ownership transfer at the courthouse.
- Escrow company handles fund transfers between lender and seller.
- Buyers sign final paperwork (in person if using a loan, remotely for cash purchases).
- Once recorded, you receive your keys!
Seattle closings typically take about 3-4 weeks from offer acceptance.
