Real Estate News & Information • June 15, 2023

Wash. needs 1M new housing units by 2044 to meet demand

by Don Koonce

Washington state needs to keep up the pace of new housing development if it is to meet the needs of its growing population in the next 20 years. According to a new growth management plan released by the Washington State Department of Commerce, the state as a whole will need over 1 million new housing units to meet demand, and King County alone will need 340,000 new units.

These housing figures are based on a recent population projection by the Office of Financial Management, and take into account the relative affordability of the homes that need to be built. Over half of the new homes will need to be affordable for people making less than 50% of area median income (AMI) — about $45,300 for a single person.

Additionally, the state will need to add 91,000 units of emergency housing including shelter beds and permanent supportive housing for those who do not have access to more stable long-term housing options.

In the last decade, Washington has added an average of about 35,000 housing units per year. To meet the upcoming demand, the state will have to increase that to around 55,000 units per year, for the next 20 years. King County will need to add about 17,000 units a year to meet demand in the area.

While more housing is necessary for the state’s growing population, greater access to funding for subsidized rentals and homeownership opportunities is also needed for Washington’s middle- and lower-income residents. Currently, about three in 10 households are cost-burdened, meaning they spend more than 30% of their income on housing.

In King County, the median price for a single-family home or townhouse is around $800,000. To meet the needs of its growing population, the county will need 60,000 shelter beds, 179,000 homes for people making less than 50% of AMI, and 95,000 homes for people making up to 120% of AMI, about $109,000 for a single person.

The population projection suggests that Seattle and Bellevue will both see significant growth in the coming decades. Based on the forecast, Seattle will need 112,000 new housing units and Bellevue will need around 35,000.

While these figures are significant, they are also based only on the “medium” projection for population growth in the state. If growth instead aligns with the highest projections, King County would need to add more than 600,000 housing units by 2044.

State leadership seems focused on how to meet this challenge. The governor’s office has already pushed for municipalities to allow more duplexes, fourplexes and six-plexes in single-family neighborhoods, while many cities are planning for increased moderate-density housing, such as more apartments and condominiums. The state certainly has a bustling future in store; the challenge is planning ahead for it.

Information for this article was pulled from 425Business and the Seattle Times.

Real Estate News & Information • June 13, 2023

Seattle apartments are getting smaller

by Don Koonce

It’s not your imagination—the phenomenon of “shrinkflation” is hitting everywhere, even apartments. A recent report from RentCafe indicates that new apartments are getting smaller across the country, with Seattle leading the way.

In the past 10 years, the average apartment has shrunk by 54 square feet. Seattle tops the list of tiny apartments however, with an average size of just 659 square feet. Part of the reason for this chart-topping shrinkage is that the city is host to a record-number of studio and one-bedroom apartments entering the market. Approximately 82% of new units are studios or one-bedrooms, compared to the national average of 57%.

Even Seattle’s compact studios are getting smaller, with an average square footage of 381 feet — the size of a two-car garage.

Oregon was second in the nation for small apartments, with an average size of 681 square feet, which is 9% smaller than a decade ago.

While apartments are getting smaller, rents in Seattle actually increased last month after five months of decreases. The median rent for a one-bedroom in the city was $1,545, and a two-bedroom was $1,868. That’s a .7% increase from January.

Bellevue saw modest rent increases as well, with a month-over-month increase of .8%, and year-over-year growth of .2%. That put the median rent for one-bedroom apartments at $1,965, and two-bedrooms at $2,183.

Lynnwood had the greatest rent increase in the area, with year-over-year growth of 6.5% thanks to new amenities like the light rail. There, a one-bedroom apartment is going for $1,317, and two-bedrooms are $1,684. Despite Lynnwood’s strong yearly growth, Kirkland currently tops the charts with the highest monthly rent growth of 3.2% in February. That places the median one-bedroom rent at $2,025 and two-bedrooms at $2,204.

With many aspects of the economy and mortgage rates still in flux, it’s hard to predict where rental prices will go from here. But the high demand for housing in our area does point to one likely trend: paying more rent for less space may well be a continuing reality.

This article sourced information from Seattle Met and Connect CRE.

Living • June 8, 2023

6 Natural Cleaning Solutions for Your Home

by Don Koonce

The last thing you want to do when cleaning your home is spread chemicals around; your house won’t be as clean, and it can pose risks for the health of your household. Organic home cleaning products reduce this risk by relying on natural ingredients that can often deliver a deeper cleanse. You can find cleaning solutions like these browsing the aisles at your local grocery store. Here are a few common cleaning methods and how to apply them around your home.

6 Natural Cleaning Solutions for Your Home

1. Clean with Lemons

When life gives you lemons…clean! And then once your home is sparkling clean, make lemonade with the leftovers. Lemons are not only delicious in food and drinks, but their chemical makeup is tailor-made for cleaning your home. Mixing lemon juice and baking soda makes a powerful cleaning solution that can tackle most cleaning chores normally performed with a sponge. When combined with soap, baking soda, and water, lemons can also be an effective degreaser. Find a recipe online and get to cleaning naturally!

7 Tips for Cleaning Your Appliances

2. Use Vinegar to Clean Your Home

Beyond its culinary uses, vinegar is a fantastic cleaning aid for homeowners. Most people know it can clean, deodorize, and eliminate stains, but did you know it can eliminate small pockets of mold growth, too? Homemade cleaning recipes involving vinegar call for an equal-parts distillation with water. Once you’ve created your mix, go to town on the various surfaces throughout your home—bathroom sink, toilet, stovetop, countertops, etc.—and watch the cleaning magic take place. Test your mixture before application to make sure it doesn’t damage your surfaces.

How to Prevent and Deal with Mold

3. Clean with Baking Soda

No kitchen cabinet is complete without a box of baking soda. Run half a cup of baking soda through your drains with hot water periodically to keep them from clogging. Add a few dashes on your sponge to supercharge your scrubbing efforts and save some elbow grease. Let it sit on greasy kitchen pans and pots for a few minutes before doing the dishes and watch the food gunk disappear. It can even polish metal, clean your shower, and absorb unwanted odors throughout your home. It truly is the natural cleaning solution with 1,001 uses.

5 Pet-Friendly House Cleaning Tips

A closeup shot of a man’s arms cleaning his home. He sprays a bottle of cleaning solution on his kitchen countertop and scrubs the surface as the sunlight pours in through the window. He wears yellow rubber gloves and a navy polo shirt.

Image Source: Getty Images – Image Credit: PeopleImages

4. Clean with Salt at Home

Salt is a staple of home life, but it can do more than garnish your meals. Indoors, it can help you with everything from removing coffee and wine stains to quickly cleaning up food spills in the kitchen. Simply sprinkle salt on the areas where food has spilled, let it sit for five minutes, and clean the mess away like magic. Another handy homeowner tip: mix 1 teaspoon of salt with a few drops of water to form a paste that can be used to remove rings left by glasses, mugs, and cups on wood.

5 Ways to Create a Sustainable Kitchen

5. How to Clean with Olive Oil

You’ve drizzled it on your salads and cooked with it, but did you know you can use olive oil to clean your home, too? By combining olive oil, vegetable oil, and a teaspoon of salt, you can quickly whip up a natural, tough-acting cleaning solution that will clean up the most resistant food spills in the kitchen and beyond. It can even polish wood furniture with a recipe of two parts olive oil and vinegar to one part lemon juice. Finally, you can clean your stainless-steel appliances with a little olive oil and a microfiber cloth.

13 Appliance Tips & Hacks for Household Chores

6. Cleaning with Coffee Grounds

They’re not just part of your morning routine; coffee grounds can be one of the most helpful cleaning solutions. Coffee grounds are naturally coarse, making them an effective cleaning agent for wiping away grease and grime without scratching the material underneath. Combine a few scoops of coffee with warm water to clear debris from your pots, pans, and grill grates. Add a little soap to the mixture to get those pots and pans sparkling clean.

7 Tips for Sustainable Living at Home

For more home cleaning tips, plus info on remodeling, home security, and more, visit the Living category of our blog:

Windermere Blog – Living

Featured Image Source: Getty Images – Image Credit: LaylaBird

Living • June 6, 2023

How to Create a Balcony Garden

by Don Koonce

Gardens come in all shapes and sizes. For those who don’t have a flourishing backyard with acres of greenery, you’ve got to make do with the space you have to satisfy your inner green thumb. Creating a balcony garden can bring life to your terrace and give you some healthy options to add into your cooking. By plotting out the space, researching which plants will thrive on your balcony, and gathering the right materials, you’ll set yourself up for gardening success.

How to Create a Balcony Garden

First, consider your space. The amount of sunlight your balcony gets will determine what you’re able to grow and how quickly your garden will grow. Crops like tomatoes and strawberries need lots of sun to grow up healthy, while others like peas and herbs can still thrive in less sunlight. If your balcony is sunlight-deprived, you may need to invest in a grow light to give your plants the light they need.

How to Plant an Herb Garden

What are your goals for your balcony garden? Are you looking to build out your collection of natural herbs or do you want to turn your terrace into your own personal exotic oasis? Whether your motives are culinary or aesthetic, planning out your garden will help you maximize space. Hanging and stack planters allow you to create a vertical garden, which helps save space. Climbing plants like honeysuckle, ivy, ferns, and different varieties of vines are perfectly suited for this kind of garden design. Before hanging any planting pots, hooks, trellises, shelves, or any kind of gardening equipment, check your governing Homeowners Association (HOA) policies to make sure your plans are within the rules.

A young woman replants plants on her balcony garden.

Image Source: Getty Images – Image Credit: AleksandarNakic

Keep Your Plants Healthy

With any garden, your main concern is keeping your plants healthy. This means giving them plenty of water, treating your soil with care, and keeping up with seasonal demands depending on your local climate. If you’re looking to save money on your balcony gardening project, don’t focus your frugal efforts on soil. Soil is the lifeblood of your garden, so it’s important to give it a fresh, nutrient-rich mixture. Once you’ve selected your plants, research their needs to see which potting mix you need to pick up at your local gardening or hardware store. Depending on the chemical makeup of the potting soil, you may not need to fertilize your plants right away.

With a balcony garden, it’s also important to keep your neighbors happy. Put saucers underneath your pots to prevent excess water from dripping onto the neighbors beneath you. This will also cut down on wasted water, one of the main principles of sustainable gardening. Self-watering pots are helpful, especially if you’re not always around to water your plants. They prevent overwatering by metering the amount of water your plants receive, only feeding them when necessary.

You also need to consider how much weight you’re adding to your balcony. Yes, terra cotta pots have that quintessential Tuscan gardening look, but a dozen ceramic pots filled with water-soaked plants might bear more weight on your terrace than it’s prepared for. Look at more lightweight potting alternatives and different soil mixtures than can lighten the load on your balcony.

For more information on making the most out of your garden, read our blog post on urban farming:

A Quick Guide to Urban Farming

Featured Image Source: Getty Images – Image Credit: ibnjaafar

Sellers • June 2, 2023

Selling Your Home: The Final Walkthrough

by Don Koonce

Congratulations, you’ve found a buyer! But before you celebrate, there’s an important part of the closing process you need to pass: the final walkthrough. The final walkthrough isn’t a full-fledged home inspection, but if the buyer finds issues during the process it could complicate things. Your seller duties are still in play here, so be sure to communicate with your agent regarding best practices during these final stages. Let’s take a look at the final walkthrough and how to make sure you pass it with flying colors.

8 Tips for First-Time Home Sellers

What happens during the final walkthrough?

As the name suggests, the walkthrough takes place during the closing process. This is not the time for discussing negotiating terms or buyer contingencies, since those details have already been ironed out at this point. The final walkthrough is a chance for the buyer to make sure they’re getting the house they’re paying for. They’ll examine the property with their real estate agent to verify that the terms of the deal are legit. For example, they’ll make sure that you’ve made the negotiated repairs, that you’re handing the property off to them in its agreed-upon condition, and that no new issues have popped up since it was formally inspected. If the buyer finds issues during their walkthrough, it could delay the closing process and/or hurt your net proceeds from the sale. Worst case scenario, complications discovered during the walkthrough could lead to a buyer backing out of the deal.

What Happens When a Buyer Backs Out of a Real Estate Transaction?

Image Source: Getty Images – Image Credit: FG Trade

Final Walkthrough Checklist

The final walkthrough will take place near closing day. You’ll have time to empty the house and make sure everything about its condition aligns with what’s spelled out in the purchase agreement. No matter how careful you try to be during the moving process, sometimes a wall or trim can get scuffed or scratched when trying to get the couch the last few feet out the door. Accidents happen. Just be sure to repair any damage before you’re fully moved out.

Keep a record of the work you’ve done to make sure your house is being sold as described in the real estate contract. Hold on to all paperwork that shows evidence of the repairs you and the buyer agreed on to verify they have been completed. You and your listing agent will iron out the details regarding which items you intend to take with you, but in general, appliances and other items that are fixed in place stay with the home. If there is something specific that you want to take with you to your new home, that will be a point of negotiation.

Make sure everything is clean and working properly before the buyer conducts their walkthrough. Check your appliances, HVAC, and other home systems including the thermostat, the home security system, and any smart home tech products. For a full moving checklist and a timeline of all tasks leading up to your moving day, visit our Step-By-Step Guide to the Moving Process. This list is also available as an interactive web page and downloadable PDF here:

Moving Checklist and Schedule

Featured Image Source: Getty Images – Image Credit: VioletaStoimenova

SOLD • May 26, 2023

SOLD: Lovable Seward Park bungalow

by Don Koonce

4220 50th Avenue S
Seattle, WA 98118
$750,000*

Beds: 2
Baths: 1
700 sqft
Days on Market: 6
MLS #2061626

Lovable 1930’s bungalow in supreme location just 1 block fr LK WA! Plenty of prized period finishes:Hardwd flrs, coved ceilings & picture rails, frplc flanked by bookcases, blt-ins, crystal doorknobs-the works. Kitch is packed with creative cubbies & nooks, the storage spaces are worthy of applause from hi-end boat builders. Stunning gardens!! Mature maples/fragrant daphnes/quince/ snowbell create a beautiful Arboretum-quality experience. Full basmt w/ great ceil height ezy to finish. Alley access to garage+ guest parking. Gas heat & cooking, expensv bay and dbl windows, PEX plumbing, newer roof, earthquake retrofit. LK WA, BothWays Cafe & Zeek’s Pizza at your doorstep, all other compass points for work or play 1mi or less.

*Listed For: $720,000. Sold for 4.2% over asking.

Buyers • May 25, 2023

Turnkey vs. Fixer-Upper: Pros and Cons

by Don Koonce

The beauty of real estate is that different properties satisfy different needs. Although single-family homes are great for putting down roots, that may not be your motivation for purchasing your next home. If you’re looking to buy a property with the intent of renting it, both turnkey and fixer-upper listings will cross your path during your home search. The main difference between the two is the condition of the property when you buy it. The right one for you depends on your needs as a homeowner and your goals as a landlord.

What is a turnkey property?

Turnkey properties are move-in ready from day one, which means they’re ready for you to rent them out immediately. Whether it’s a new construction home or a recently remodeled listing, these properties are in tip-top shape when they hit the market. Companies that specialize in renovating and selling these properties may also offer property management services, which may appeal to you if you’re looking for a more hands-off approach to managing your investment property.

What does fixer-upper mean in real estate?

Compared to turnkey listings, fixer-uppers are on the opposite end of the investment property spectrum. Buying a fixer-upper means you’re purchasing a home that needs repairs, remodeling, and some major TLC before it’s ready to rent out. These properties are diamonds in the rough; you’re betting on your ability to make high ROI home upgrades that will attract future renters and put money in your pocket.

As an example of turnkey vs. fixer-upper homes, a heterosexual Caucasian couple are remodeling their fixer-upper property. They are re-painting the interior to prepare the property for renters.

Image Source: Getty Images – Image Credit: StefaNikolic

Turnkey vs. Fixer-Upper: Pros and Cons

Turnkey Pros

Because they are move-in ready, turnkey listings have the potential to generate cash flow right away. Without any pending renovations in your way, you can open up the property to renters as soon as you take possession. They’re primed and ready to place in the hands of a property management company, which means you’ll get passive income without having to deal with day-to-day operational tasks. You can also ask the listing agent for permission to use their photos, which can help your rental stand out amongst the competition in your area.

Turnkey Cons

So, what’s the catch? These benefits all come at a cost; turnkey properties typically cost more than fixer-uppers. You’ll pay a premium for the pristine condition and the buttoned-up appearance of these properties, so it’s important to have a strategy to save money for your home purchase. Also, handing off property management duties to a third party means you’ll have less control over the renting process. For more information on whether hiring a property management company is right for you, read the following blog post:

Managing Your Investment Property: DIY vs. Hiring a Professional

Fixer-Upper Pros

Searching for homes in less-than-pristine condition can give you a leg up as a buyer. Fixer-upper homes tend to have less competition from buyers than turnkey properties, since not everyone is willing to take on a major remodeling project. Talk to your agent about how to make the best offer. Given their lessened condition, you can oftentimes get a great deal on these homes with the right strategy. And the best part is, your remodeling efforts will increase the home’s value over time. The more effort you put in, the more the property will be worth, which means higher ROI potential.

Fixer-Upper Cons

Here’s the downside with fixer-uppers: tapping into their potential requires pouring money into the property. Exactly how much you can expect to spend on a fixer-upper varies by location, the size of the home, and the scope of repairs and renovations needed. Tackling some remodeling projects DIY can save you money, but if certain projects require more skilled hands, it may be best to hire a professional. And for all your planning, it’s impossible to predict the future. Projects may go over budget, material costs may rise, and the market may look completely different when you’re ready to rent out your property than it did when you bought it. For more information on buying a fixer-upper and the special financing options available to you, read the following blog post:

Buying a Fixer-Upper

Your real estate agent is your greatest asset in helping you determine which property type is right for you. Connect with a local Windermere agent to see which turnkey and fixer-upper properties are available in your area:

Featured Image Source: Getty Images – Image Credit: hikesterson

Sellers • May 23, 2023

Selling Your Home: 5 Common Myths

by Don Koonce

Selling your home is a crash course in real estate education. You’ll learn how to work with your real estate agent to find a buyer and sell at the right price. As you prepare to sell, it’s important to remember that that not everything you’ve heard is true. There are several common myths that can lead to costly mistakes in the selling process. Knowing the truth behind them will clarify your selling journey and help you align your expectations.

Selling Your Home: 5 Common Myths

1. Home Value Calculators Are 100% Accurate

Online Automated Valuation Models (AVMs) are a great starting point for understanding how much your home could be worth. However, they are merely a first step in determining home value; to say they are 100% accurate is a myth. When it comes to pricing your home, you need to rely on your real estate agent’s Comparative Market Analysis (CMA), which uses vast amounts of historical and current data on real estate listings to arrive at an accurate and competitive figure.

To get an estimate of how much your home is worth, try our Home Worth Calculator here:

2. Selling FSBO Will Save You Money

Selling a home requires an intimate knowledge of the housing industry and how to solve the complex situations that arise throughout a real estate transaction. Despite this, some sellers will go it alone and attempt to sell their property without being represented by an agent.

Selling For Sale by Owner (FSBO) is a risky proposition. It requires the seller to bear added liability, fills their schedule with various marketing and promotional responsibilities, and can leave money on the table by inaccurately pricing the property, causing it to sit on the market for too long. The potential costs of selling a home on your own far outweigh the commission real estate agents earn on a home sale.

3. You Must Remodel to Sell Your Home

The question you’ll face when preparing to sell your home is whether to sell as is or remodel. The answer usually lies somewhere in between, but it depends on your situation and what kinds of home upgrades are driving buyer interest locally. When making improvements to your home, lean toward high ROI remodeling projects to get the best bang for your buck, and avoid trendy projects that can delay listing your home. If you’re considering major upscale renovations, talk to your agent about which projects buyers in your area are looking for.

A Caucasian heterosexual couple are discussing a home remodeling project with a Latin American contractor as they prepare to sell their home. They look over paperwork on a wooden dining room table.

Image Source: Getty Images – Image Credit: andresr

4. Never Accept the First Offer

You’ve likely heard tell that the first buyer’s offer is nothing more than a springboard to up your asking price and to never accept it. In this case, “never” should be approached with caution. In reality, the best offer for your home is one that you and your agent have discussed that aligns with your goals. If a matching offer happens to be the first one that comes your way, so be it. The market can shift at any time, so you never know what may happen if you leave an offer on the table. And if the buyer backs out of the deal, you and your agent will find a path forward.

Common Real Estate Contingencies

5. Home Staging Doesn’t Make a Big Difference

Staging your home is so much more than a cosmetic touchup; it has been proven to help sell homes faster and at a higher price than non-staged homes.¹Staging ensures that your home has universal appeal, which attracts the widest possible pool of potential buyers. When buyers are able to easily imagine living in your home, they become more connected to the property. You should stage your home regardless of your local market conditions, but it can be especially helpful in competitive markets with limited inventory where even the slightest edge can make all the difference for sellers.

Now that you know some of the most common myths in the selling process, get to know its truths. Connect with a local Windermere agent to get the process started:

1: National Association of REALTORS® – Why Home Staging Inspires the Best Prices in Any Housing Market

Featured Image Source: Getty Images – Image Credit: Renata Angerami

Design • May 18, 2023

How Much Paint Do I Need? Indoor Paint Calculator

by Don Koonce

Whether you’ve just bought a house or you’ve lived in your home sweet home for years, at some point its walls and surfaces will be due for a fresh coat of paint. Repainting can breathe new life into an interior and help you personalize the space, whether you’re working within the latest interior design trends or blazing your own trail. But there’s one fundamental question facing every homeowner as they begin their painting project: How much paint do I need?

How much paint do I need?

Every project has a budget, and with the right planning you can execute the project to its full potential without going over budget. Painting is the ultimate DIY project and can be quite therapeutic, but still requires some calculation to determine how much you should expect to spend. With the right amount of paint, you’ll avoid overspending and getting saddled with the sunk cost of unused paint after you’ve completed your project.

The amount of paint required varies by project, but as a general rule of thumb, one gallon of paint covers about 400 square feet. So, it only takes a few simple measurements to calculate the amount of paint you’ll need for your walls.

How to Calculate How Much Paint You Need:

Start by measuring the length of each wall
Multiply the wall length by the wall height
Total length x total height = total square footage
Total square footage ÷ 400 = number of gallons
Subtract windows and doors square footage

Following this formula will give you the number of gallons you need to purchase for one coat of paint. Depending on your color scheme and the texture of your walls, your painting project may require multiple coats to have it looking just right.

If the walls you’re painting have windows and/or doors, simply perform the same basic calculation to determine their square footage and subtract that number from the total square footage value before calculating how many gallons you’ll need. When painting your ceilings, remember to account for the square footage of any skylights you may have in your home.

Colorful Modern Design Trends for Your Home

A middle-aged Caucasian man with dark hair paints bedroom walls sky blue. He wears painting overalls and uses a long-handled roller to apply the blue paint from the baseboard to the trim bordering the ceiling.

Image Source: Getty Images – Image Credit: aydinmutlu

Primer and Trim

It’s often the case that a paint job is only as good as its base coat. A solid layer of primer can really make your painting project shine. But the same query with your topcoat applies to your primer: how much do you need? A gallon of primer will cover up to 300 square feet, so you’ll need more primer than topcoat for your project. Perform the same calculations as above and divide your paintable square footage by 300 to determine how many gallons of primer you’ll need to pick up.

How to Calculate How Much Primer You Need:

Start by measuring the length of each wall
Multiply the wall length by the wall height
Total length x total height = total square footage
Total square footage ÷ 300 = number of gallons
Subtract windows and doors square footage

Calculating square footage for trim isn’t as straightforward as it is for a square or rectangular wall. When preparing to paint your baseboards and crown molding throughout your home, think in quarts rather than gallons. Trim paint may go on smoother depending on the wood finish, and you’ll be using a brush rather than a roller. If you end up with extra trim paint at the completion of your project, it never hurts to keep it around for future touchups.

For more information on DIY projects, home design and more, visit the Design page of our blog:

Windermere Blog – Design

Featured Image Source: Getty Images – Image Credit: svetikd

Buyers • May 16, 2023

How to Pay for a House

by Don Koonce

Buying a home is, for many people, the largest financial undertaking of their lives. So, how do the numbers work? How is the price of a property converted into a transaction? Let’s take a look at how to pay for a house by focusing on some of the major components in a real estate purchase, namely the down payment, earnest money, and the mortgage payments required to successfully buy a home.

How to Pay for a House

If you have enough money available, it is possible to make an all-cash offer on a house. Most home buyers, however, save enough money to make a down payment that works for them and finance the remainder of a home purchase with a mortgage. Saving money to buy a house requires significant planning, but by being proactive, you’ll eventually put yourself in a position of higher buying power. Reducing debt, increasing savings contributions, and finding additional streams of income are all helpful ways of generating some extra cash to pay for a house.

How to Save Money to Buy a House

Making a Down Payment on a Home

The down payment is a lump sum paid upfront by the buyer. The actual down payment amount varies by transaction, but it’s usually somewhere between 3% and 20% of the home’s purchase price. It’s one of the most important home buying costs, given how much planning goes into it. There’s a snowball effect with the down payment; once you figure out how much of a down payment you can afford, that will determine your home loan’s principal amount. The higher the down payment, the less risk for the mortgage lender. When buyers aren’t able to make a down payment of 20% of the purchase price, lenders will require they purchase additional mortgage insurance to protect the investment.

Making a Down Payment on a Home

To get an idea of how different down payment amounts affect the financial structure of a home purchase, use our Home Monthly Payment Calculator by clicking the button below. With current rates based on national averages and customizable mortgage terms, you can experiment with different values to get an estimate of your monthly payment for any listing price.

A closeup of two men’s hands doing paperwork at an office desk as they figure out how to pay for a house. One man points to a calculator while the other takes notes.

Image Source: Getty Images – Image Credit: Perawit Boonchu

Earnest Money and Escrow

A real estate transaction is not your typical purchase. With so much money being moved around, it requires a little extra protection. This is where escrow comes in. Escrow ensures that your earnest money or “good faith deposit” gets properly disbursed according to plan during the home buying process, and holds property tax and homeowners insurance funds during the life of your home loan.

A Guide to Understanding Escrow

Making Mortgage Payments

Searching for a home loan is similar to searching for a home: there are many options, but based on what’s affordable and what works for your situation, you’ll eventually find the right one. When looking at the different types of home loans, you’ll compare the loans’ terms, interest rates, and conditions for repayment. For example, 15-year and 30-year mortgages are two of the most common home loan products. You’ll have lower monthly payments with a 30-year loan, but you’ll pay more interest over the life of the loan. With a 15-year mortgage, you’ll have higher monthly payments but pay less in total interest. Work with your mortgage broker to find the best home loan for you.

The Difference Between a Real Estate Agent and a Mortgage Broker

For more information on the home buying process, connect with a local Windermere agent:

Featured Image Source: Getty Images – Image Credit: Hispanolistic