Property Buying & Selling in Washington

Property Buying & Selling in Washington

The Washington real estate market offers unique opportunities, but navigating the process requires an in-depth understanding of market dynamics, legal documentation, and due diligence. Due diligence involves reviewing public property records, such as deeds, titles, and liens, to verify ownership, uncover encumbrances, and ensure a clear transfer of rights.

Understanding the Real Estate Market in Washington

Market conditions in the Evergreen State can vary significantly between urban centers such as Seattle and rural areas. However, property markets can generally be categorized as a seller’s market or a buyer’s market.

A seller’s market typically witnesses strong competition and quick sales due to limited inventory and heightened demand from potential buyers. On the other hand, in a buyer’s market, purchasers have more negotiation power and time for thorough property research as supply is high and demand is low.

Regardless, an in-depth understanding of market conditions is required to choose the right strategies and make the right decisions, such as setting a proper listing price to aid a quick sale or waiving certain contingencies.

Buying a Property in Washington

Buying a property in Washington typically follows these steps:

• Evaluate Your Finances and Explore Loan Options: The home-buying process usually starts with reviewing finances. The buyer needs to determine how much they can afford to spend on housing and put toward a down payment. Down payments typically range from 3% to 30% of the home’s price. First-time buyers can explore programs through the Washington State Housing Finance Commission, such as the Home Advantage loan, to help with down payments.

• Get Pre-Approved for a Mortgage: In competitive areas like Seattle, Bellevue, and Vancouver, a pre-approval letter is often required before a seller will accept an offer. Lenders will review your debt-to-income ratio and credit history. Hence, it is important to confirm your credit report before submitting an offer.

• Choose a Licensed Real Estate Agent: Buyers often hire experienced real estate agents to handle negotiations and guide them through the closing process. Also, agents can have access to properties that are yet to be listed officially.

• Select the Right Location: Geographic and environmental conditions play a major role in Washington’s real estate decisions. Buyers typically check for hazards such as floodplains, seismic zones, and landslide risks before settling on their choice location.

• Initiate the Search and Research Records: Buyers begin checking properties at this stage and also use county parcel viewers to review property tax history, assessed values, and lot boundaries. Permits for renovations and additions are also verified.

• Make an Offer on the Property: Upon finding the right property, an offer is made on the NWMLS Form 21 (Purchase and Sale Agreement). Buyers also review the seller’s Form 17 disclosure, as this legally required document lists known defects in the property. While some buyers waive contingencies to compete in fast markets, keeping inspection and financing contingencies in place is recommended.

• Schedule a Home inspection and Appraisal: Inspections in Washington usually focus on regional concerns such as radon, sewer line integrity, moisture problems, and pest damage. The lender will arrange for an independent appraisal to determine market value. If the appraised value is lower than your offer, price negotiation can commence, or the buyer can cover the shortfall with additional cash.

• Closing: Washington is an escrow state; hence, a neutral escrow company (not an attorney) will manage funds and documents. Before closing, the buyer will receive a preliminary title report showing any easements or liens that affect ownership. Once all documents are signed and funds are transferred, the deed is recorded with the county auditor, and ownership officially transfers to the buyer.

Selling a Property in Washington

Selling a Washington property usually involves these steps:

• Preparation and Listing: Before putting a home on the market, many sellers in Washington choose to complete a pre-sale inspection to uncover any issues that might later surface during the buyer’s inspection. This allows time for repairs or disclosure. To price the home accurately, sellers typically rely on a comparative market analysis, especially since homes in the current market may sit longer than in prior years.

• Mandatory Disclosures (Form 17): Most residential sellers in Washington are required under RCW 64.06 to complete and deliver the Seller Disclosure Statement, known as Form 17. This form must be provided to the buyer within five business days after mutual acceptance of the purchase agreement.

Once received, the buyer generally has three business days to cancel the contract for any reason and receive a full refund of their earnest money. The disclosure form covers known issues with title, utilities, structure, and environmental conditions. Sellers are only responsible for disclosing defects they are actually aware of at the time of signing.

• Reviewing Offers and Negotiating: When a buyer submits an offer, it is typically written on NWMLS Form 21, which outlines the terms of sale. Most offers include contingencies for inspections, financing approval, and title review. In areas with high demand, such as Seattle or Bellevue, sellers often set a deadline to collect and review multiple offers at once.

• Escrow and Closing Process: Washington follows an escrow-based closing system, meaning a neutral escrow officer manages all funds and transaction documents. Sellers are usually responsible for purchasing the owner’s title insurance policy to guarantee a clear title for the buyer. In addition, sellers must pay the real estate excise tax (REET), which is levied by both the state and local governments. The transaction officially closes when the deed is recorded by the county auditor, after which the sale proceeds are released to the seller.

Buying and Selling at the Same Time in Washington

Buying and selling a home at the same time involves careful coordination, as it comes with timing challenges. If the closing times for the sale and purchase transactions are not properly aligned, the individual involved can end up without a home or forced to carry two mortgages. Therefore, since the buyer needs equity from the current home to buy the new home, it becomes important to time both transactions properly.

Common strategies used in this scenario include the following:

• Sale Contingency: Making your new purchase offer contingent on the successful sale of your current home. This is less attractive to sellers in competitive markets.

• Leaseback Agreement: Negotiating to rent your old home from the buyers for a short period after closing, giving you time to move into your new home.

• Bridge Financing: Taking a short-term loan to cover the down payment on the new home before your old home sells.

Records to Review Before Buying or Selling

The following records should be reviewed when buying or selling a property in Washington:

• For Buyers: Preliminary title report, property tax records, plat/survey maps, permit history (for renovations), and the seller’s disclosure statement

• For Sellers: Your current deed, mortgage statement, and a preliminary title report to identify any liens or issues that need resolution before listing

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