Like other states, Washington has some rules that govern real estate transactions, foreclosures and the division of property during divorce. Read on to learn about the rules that impact the Washington real estate market:
Home seller and buyer laws
In the state of Washington, sellers are required to fill out a property disclosure form unless the buyer waives their right to disclosure in writing. The seller is required to disclose information regarding the following:
- Encroachments and easements
- Potential zoning issues or assessments
- Water availability and quality
- Availability of sewers or on-site sewage systems
- Any structural issues
- Any potential problems with household systems or fixtures
- Any environmental issues
- All information regarding any homeowners association tied to the property
Judicial and nonjudicial foreclosure
The state of Washington allows both judicial and nonjudicial foreclosures. While judicial foreclosure requires the process to take place in the courts, nonjudicial foreclosure is handled outside the court system by the mortgage lender or their representatives.
In the state of Washington, lenders cannot pursue homeowners for a deficiency after a nonjudicial foreclosure if their home sells for a price that is less than the amount owed. With a judicial foreclosure in Washington, on the other hand, lenders can go after homeowners for a deficiency.
Equitable distribution state
Washington is an equitable distribution state, meaning that property is to be divided “equitably” upon divorce. The division of assets does not have to be 50/50. Factors considered by Washington courts during equitable distribution can include the nature and extent of community property, any separate property acquired before and during the marriage, the duration of the union, the economic situation of both parties and where any children may reside after the divorce.
Washington state law does not require an attorney to be present for real estate transactions to move forward. Instead, buyers and sellers can work with their real estate agents, a title company and an escrow agent who can handle the paperwork involved in the closing of their home as well as any issues regarding the transfer of ownership. However, escrow agents are not attorneys, so they cannot offer legal advice throughout the homebuying process. Buyers and sellers are also legally able to work with any title company and escrow company of their choosing.
The state of Washington levies a real estate transfer tax whenever property is sold. This tax works out to .0128% of the total sales price, although cities and counties can charge additional real estate transfer taxes that vary by area.
In Washington, the median property tax in 2019 is $2,631 on a home worth the median value of $287,200, or 0.92% of a home’s value, according to Tax-Rates.org. This makes Washington the 11th most expensive state in terms of property taxes when you consider median income. Property taxes vary throughout the state though. King County, which includes Seattle, reported an average of $3,572 in taxes on homes in its jurisdiction. Meanwhile, Ferry County, which has the lowest property tax rate in the state, collects an average tax of $941.
The state of Washington has several programs that allow individuals to reduce their property taxes. For example, grants are available to disabled veterans and widows who meet certain conditions, provided they have a disposable income of $40,000 or less. Senior citizens and disabled persons may also receive a reduction in property taxes owed if they own and occupy their home and have a disposable income of $40,000 or less.
Conforming loan limits
In Washington in 2019, the conforming loan limit for single-family properties is generally $484,350. However, some areas with a high cost of living are granted higher conforming limits. King County, Pierce County and Snohomish County have a conforming loan limit of $726,525.
Conforming loan limits are the maximum limits that mortgages must adhere to in order to be purchased by government-sponsored enterprises Fannie Mae and Freddie Mac. Mortgages that fall under conforming limits are advantageous because they tend to come with lower interest rates that can help you save money over the life of the loan. Loans that don’t meet conforming limits are known as “jumbo loans.”