January 21

10 Secrets to Buying a House in Seattle

Buying a home is a stressful process no matter where you are. If you're trying to get into a booming real estate market like the Seattle area, though, the stress level is at another level.

The good news is that you don't have to reinvent the wheel or conquer the task alone. Local experts have been navigating the Seattle housing market for years or decades, and are happy to give you some guidance.

For some insider tips and key things to know about buying a house in Seattle, check out this helpful list.

Things to Know About Buying a House in Seattle

If you go in blind, the Seattle housing market can feel like a circus. To prepare yourself for the journey ahead, read through these tips for buying your next home.

1. Get into the Market ASAP

You may already be aware, but Seattle's real estate prices have been climbing steadily for years. In the past year alone, Seattle home prices increased by an average of 10.9% according to Zillow.

Seattle Home Prices Increase

image courtesy of zillow.com

Even more shockingly, they've risen by 60% since 2012. They are predicted to rise another 11.1% in 2021.

Seattle Home Prices Risen by 60% Since 2012

image courtesy of zillow.com

These increases show no sign of stopping. As a prospective home buyer, this means you want to buy in as quickly as possible. Of course, that doesn't mean that all areas and neighborhoods are growing at the same rate, so don't assume every deal is a great one.

Still, with today’s record low interest rates you can still buy a lot more home for your money than when mortgage rates were higher. 

Even with a low or no down payment mortgage, and taking PMI, you’ll probably save a lot more from buying now, than trying to save up a larger down payment faster than house prices are going up.

Even Warren Buffett admits he isn’t good at timing markets. If it is a good time for you to buy a home, and you plan on keeping it for a while, then go for it. Most end up losing out by trying to time things perfectly.

Over the long run you can probably count on most properties just going up in price. Buying a house in Seattle sooner means you get to benefit from that. Instead of paying more for the same home to the person who just took action and bought it before you.

2. Narrow Down Your Neighborhood

If you try to look at every home in your budget, you'll never be finished. It's important for every home buyer to make a list of their top priorities, and location is usually near the top.

Seattle has a large metro area, and neighborhoods vary greatly in their amenities and atmospheres. Before you start a serious search, make sure all decision-makers are on the same page about your target neighborhoods.

Knowing your ideal neighborhoods early in the process will also help your real estate agent give you guidance. For instance, some neighborhoods have fast turnaround times, so you may need to prepare for a fast decision.

7 of the top Seattle neighborhoods to check out this year include:

  1. Ballard
  2. Southlake Union
  3. Leschi
  4. North Admiral
  5. Montlake
  6. Redmond
  7. Greenwood

5 of the top Seattle suburbs to check out this year are:

  1. Sammamish
  2. Snoqualmie
  3. Redmond
  4. Duvall
  5. Maple Valley

3. Building Year Has a Strong Influence on Price

Seattle's housing market is heavily age-focused. The least expensive homes were built in the mid-1900s (think 1940s and 1950s). As you branch out from that on either side, though, the homes get more expensive.

Many home buyers think that the older a home is, the more affordable it will be. Seattle's real estate market values historical homes tremendously, so a home from the early 1900s could be as expensive as one from the early 2000s.

There's another caution that goes along with this. Don't assume that a home is high-quality just because it's expensive. Those 100+ year old homes can come with plenty of pricey issues. An older home may not be the best choice if you're at the top of your budget, because you may need more money for repairs.

In the same way, not all new homes are high-quality, either. As with any area that experienced a housing boom, Seattle has some new homes that were built in a hurry. That means the construction quality could be compromised.

Property condition can have a significant effect on financing your property and how much it costs. 

A brand new construction home is likely to be more expensive. It may enable you to finance in the improvements and even appliances you want. Yet, you may find you are paying above market value in some cases. This can be especially true with builder model homes and those that include furniture packages.

At the other end of the market you can have run down old homes. They may be much cheaper, but then you may have to come out of pocket with cash to do all of the repairs and improvements you are dreaming of. If there are structural repairs like roofs, plumbing and electrical or it is not really livable right now, many lenders won’t want to loan on it. You will at least need a special rehab loan.

Most Seattle home buyers will find their sweet spot in the middle. Not brand new, or too outdated and in need of repair. This will give you the best value, financing and the ability to add your ideal cosmetic touches as you go. 

Ultimately, the moral is to never buy a home without an inspection.

Some of the top items to inspect include:

  • Foundations
  • Roofs
  • Plumbing
  • Electrical 
  • Pest and mold infestations
  • Major appliances
  • Basements and cellars
  • Septic tanks
  • Gutters
  • Building exteriors

If you are really interested in buying a fixer upper, then talk to your mortgage broker about FHA 203k loans which can include funds for both your home purchase and improvements.

4. Don't Get Your Heart Set on Air Conditioning

If you're new to the Seattle area, you may be surprised to learn that most homes in the area don't have air conditioning. This could seem strange to people coming from a warmer climate, and many of these buyers put air conditioning on their "must have" list.

If you limit your search to air-conditioned homes, you'll pay a pretty penny. It's better to stay open to houses without air conditioning. It may be cheaper to add the A/C later than to find a home that already has it installed. You may even be surprised at the temperate climate and realize you don't need it as much as you thought you did.

If you are worried about energy bills or updating older appliances, you can also ask your mortgage broker about Energy Efficient Mortgages, which can provide additional funds for upgraded appliances, solar and other related improvements. Or you may find local grant programs which offer funds for these things.

5. Choose Your Time of Year Carefully

Planning the time of year for your home search and your move can make a strong difference in your final results. For Seattle (as for most housing markets), the market shifts with the seasons.

Primarily, you need to decide whether inventory or price is your largest obstacle. The summer is the most popular time for moving. If you want to have the largest inventory to choose from, start searching in the late spring and early summer.

If your top priority is striking a deal, though, winter is a better time to buy. The number of people buying homes is lower in the winter, so sellers tend to offer lower prices during this time, specifically between Thanksgiving and New Years.

6. Use Caution Buying a Condo if You're an Animal Enthusiast

As much as we all love our furry friends, they add a level of difficulty to a home search. For many buyers, dogs, in particular, lead them to look for a house with a yard and a solid fence.

If you want to buy in a more urban area, though, most of the inventory will be condos. Many condos can be great homes for pets, with nearby dog parks and easy coordination with dog walkers.

However, be careful to read the fine print. Many condo buildings have policies that limit the number, breed, and size of pets you can have. Make sure you know what the restrictions are before signing on the dotted line.

Buying a condo in Seattle may be the right move for you. It could offer everything you want in lifestyle and price. Yet, there can be some gotchas you need to be alert to.

In addition to pets, condos come with other rules and extra fees. You’ll have condo association dues. There may be multiple levels of dues to immediate and master associations. They may be monthly, quarterly or annually. They can also levy special assessments to cover upgrades or repairs to the building and any shared spaces. Be sure to account for this in your budget. These costs will also be factored into your debt-to-income ratio when applying for a mortgage loan. 

Condo associations may have few or many rules. They may also have rules against renting out your place, overnight guests, and who qualifies to buy your condo if you ever want to sell it. 

Non-warrantable condos are those which don’t meet conventional lenders’ guidelines. They may be more expensive to finance and require a larger down payment too.

7. Be Flexible on Square Footage

Space is one of the largest factors in the cost of your home. Of course, you want enough room to be comfortable for a long time, but looking for too much space can push your budget.

The median price per square foot in Seattle is now over $517. To put that in perspective, the median throughout the US is $148.

Instead of having a set idea of how much square footage in mind, be open to possibilities. Some homes can feel larger and give you more usable space with 1,000 square feet than others do with 1,500 square feet.

Ultimately, the layout has more of an impact on whether a home fits your needs than a magic number of square footage. Take the time to visit homes whether you think they'll be large enough or not. Just be sure to measure your furniture to ensure everything will fit.

8. Decide Whether to Prioritize Home Price or Commute Time

In Seattle, as in most other metro areas, the closer you are to downtown the higher your home price will be. For many people, this translates to a higher home price in exchange for a short commute.

There are few opportunities to snatch up a surprising deal near downtown. Some homebuyers detest a long and frustrating commute. If you're able and willing to pay top dollar for that easy commute (and you're confident you'll stay with the same employer), go for it.

However, if your home's affordability is a higher priority for you, be prepared to sacrifice some time by adding to your commute. Deciding between these two priorities will help you narrow your search.

Don’t just think about your wants in a house today. Chances are you’ll own this property for at least a few years. Your housing needs may change a lot, and sooner than you think. To avoid having to go through the whole process again too soon, give some thought to this. 

Could you end up having kids? What about having adult kids move back home? Parents moving in with you? Needing a bedroom and bathroom which someone can quarantine in if they get sick? 

Chances are you won’t stay at the same job forever either. Even Microsoft has announced its staff can now permanently work from home. So, it may make no sense to make your house choice dependent on one job or having to commute or be near the city center. 

Also consider that the neighborhood or building that is trendiest this week and year probably won’t be the trendiest one next year or in five years. How much of a premium do you really want to pay for that, versus finding a better deal in what may be the next hot place to be in the future?

9. Be Prepared for a Fast Move

Like in many booming housing markets, homes in Seattle can sell extremely quickly. This is truer in some areas than others, but there's always a possibility that you'll fall in love with a home that's selling in 24 hours.

It's a good idea to research your target markets while you're still saving up your down payment or waiting for financing. However, it's important to have all your ducks in a row before you contact a real estate agent and start a serious search.

As a home buyer, there are few things worse than falling in love with a home and finding out you can't buy it because your paperwork and mortgage financing aren't ready. You should prepare yourself financially and emotionally to jump on a great home when it comes along.

That all starts with getting pre-approved for a mortgage loan.

10. Low-Balling May Not Be an Option

A lot of buyers think it's always a good negotiating tactic to start with a much lower offer than you're willing to pay. If you're in a slow real estate market, it might be true. In a booming market like Seattle, though, you'll do more harm than good could end up offending the seller.

When you put in an offer on a home, there's a good chance you'll be battling with several other buyers. In many cases, the seller won't go through the effort of letting you put in a second offer; they'll just choose the highest one.

Even if your offer is the only one currently on the table, a low offer may be enough for a seller to write you off. If it's a seller's market, and they know it, they may feel that it isn't worth their time to negotiate with someone who wants to start so low.

In a buyer’s market almost everything is negotiable in real estate. How much negotiating power you have as a buyer can change a bit over time depending on how competitive the market is. Still, it rarely hurts to ask for a small discount. The worst that can happen is they say no. This applies to the seller, attorneys and title companies, contractors, and insurance agents too.

If you can find out what is really most important to the seller and their Realtor, you can make an offer that meets their needs, while also enabling you to get the terms that are most important for you. 

Did you know that in many cases you can get the seller to pay most of your closing costs too?

How to Start Your Home Search in Seattle

It can be overwhelming to try to learn all the things to know about buying a house, especially in a complex market like Seattle. The tips above can help you arm yourself with the knowledge you need to find that perfect house.

To take the next step of learning about your mortgage options and getting pre-qualified, contact our mortgage experts.


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