Navigating your home purchase with ease

The A-Z of the Olympia Home Buying Process

Aerial View of Olympia Washington
Buying a home is an exciting milestone, but it can also be a daunting process, especially for first-time buyers. If you’re considering purchasing a property in Olympia, Washington and beyond, this comprehensive guide will walk you through the A-Z of the home buying process, ensuring you’re well-prepared for every step.

Determining Affordability and Setting a Budget

Before diving into your Olympia home search, it’s crucial to determine how much you can realistically afford. Lenders typically recommend that your monthly housing expenses (including mortgage, taxes, and insurance) should not exceed 36% of your gross monthly income. Use online mortgage calculators to estimate your monthly payments based on your budget, desired home price, and down payment.

In addition to the home’s purchase price, factor in other expenses such as:

  • Closing costs (typically 3-5% of the home’s value)
  • Moving expenses
  • Potential renovations or repairs

Having a realistic budget will help you avoid overstretching your finances.

A couple preparing to buy a home

Preparing Financially

Credit Score

Your credit score plays a significant role in determining your mortgage interest rate and loan eligibility. Check your credit report for any errors and work on improving your score if necessary. A higher credit score can save you thousands of dollars in interest over the life of your loan. Talking to a lender EARLY in the process will help significantly in getting prepared. Ask you local brokers at Virgil Adams Real Estate for a referral that will set you up for financial success.

Down Payment

While a 20% down payment is ideal to avoid private mortgage insurance (PMI), many first-time buyers in Olympia and beyond opt for lower down payments, sometimes as little as 3%. However, a larger down payment can result in lower monthly payments and a better interest rate. Our veterans have fantastic VA loan programs where they can put 0% down and NO PMI!

Finding the Perfect Neighborhood

Olympia offers a diverse range of neighborhoods, each with its unique charm and amenities. Explore different areas to find the perfect fit for your lifestyle, commute, and preferences. Consider factors such as:

  • Proximity to work, schools, shopping, and recreational activities
  • Future development plans
  • Property values and trends
  • Neighborhood lifestyle w large varieties of yard size, country living, condo lifestyle

Drive around, visit local parks and shops, and get a feel for your new community before making a decision.

Hiring a Real Estate Broker

Working with a Realtor

Navigating the Olympia real estate market and beyond can be challenging, which is why working with a knowledgeable and experienced broker is essential. Look for a broker agent who specializes in the Olympia market and has a proven track record of success. They can provide valuable insights, negotiate on your behalf, and guide you through the entire process.

Some benefits of working with a local realtor include:

  • Access to MLS listings and off-market properties
  • Expertise in local market conditions and trends
  • Assistance with paperwork and legal requirements
  • Negotiation skills to secure the best deal
  • Local connections for affiliates such as inspectors, contractors and beyond

Getting Pre-Approved for a Mortgage

Before you start your home search, get pre-approved for a mortgage. This will give you a better understanding of your budget and show sellers that you’re a serious buyer. This also helps alleviate any questions as to what price range you should be shopping. Pre-approval also allows you to act quickly when you find your dream home. Most sellers and real estate brokers will NOT submit or accept an offer without seeing your pre approval.

To get pre-approved, you’ll need to provide your lender with various documents, such as:

  • Pay stubs
  • Tax returns
  • Bank statements
  • Employment verification
  • Identification documents

Your lender will also check your credit score and assess your debt-to-income ratio to determine your loan eligibility and interest rate.

Negotiating a home sale

Making an Offer and Negotiating

Once you’ve found the perfect property, it’s time to make an offer. Your broker/realtor can help you determine a fair offer price based on market conditions, comparable sales, and the home’s condition. They can also assist with negotiating the purchase price and terms, such as contingencies, closing date, included items and repairs.

Some common contingencies include:

  • Home inspection
  • Appraisal
  • Financing
  • Sale of the buyer’s current home

After talking with your broker and lender, you’ll submit a formal offer to the seller. If your offer is accepted, you’ll enter into a legally binding contract and begin the steps towards the closing process. In a perfect world this takes about 30 days.

Due Diligence and Closing

After your offer is accepted, there are several steps to complete before closing on your new Olympia home:

Hire a professional home inspector to thoroughly evaluate the condition of the home. This can help you identify potential issues and negotiate repairs or credits with the seller. Your broker can provide you with a list of their top 3 for you to consider using.
Your lender will order an appraisal to ensure the home’s value aligns with the purchase price. If the appraisal comes in lower than expected, you may need to renegotiate the price or provide additional funds to cover the difference. Appraisers are also looking to make sure the house is in safe condition for you to occupy.
A title search will be conducted to ensure there are no outstanding claims or liens on the property. This protects your investment and ensures a clear title transfer.
Before closing, you’ll have the opportunity to conduct a final walk-through of the property. Use this time to ensure everything is in the agreed-upon condition and address any concerns with your real estate broker, agent..
On closing day, you’ll sign the final loan paperwork, pay any remaining funds, and receive the keys to your new Olympia home once it has been recorded with the county. Congratulations! You’re now a proud homeowner in this beautiful Pacific Northwest city.

Settling into Your New Home

After closing, it’s time to settle into your new Olympia home. Some essential tasks include:

  • Setting up utilities (electricity, water, gas, internet, etc.)
  • Updating your address with the post office, banks, and other important contacts
  • Planning for any necessary repairs or renovations
  • Exploring your new neighborhood and getting involved in the community
Family setting into new home
Owning a home in Olympia area and beyond opens up a world of opportunities to embrace the vibrant community, explore the great outdoors, and live life to the fullest. The Pacific Northwest Area offers so many great adventures. By following this A-Z guide, you’ll be well-equipped to tackle the Olympia home buying process with confidence and ease. Remember to work closely with your realtor broker, lender, and other professionals to ensure a smooth and successful journey to homeownership. After all it is a team effort, let us help you create the best team possible for success!

Frequently Asked Questions About Home Purchases

What is the first step in the home buying process?
Getting pre-approved for a mortgage is typically the first crucial step. This involves submitting an application with details about your income, assets, job history, and credit score to a lender, who will then evaluate your eligibility and provide a pre-approval letter stating the maximum loan amount you qualify for.
Pre-approval gives you a clear understanding of your budget and shows sellers that you are a serious and qualified buyer, increasing your bargaining power. It also allows you to act quickly when you find the right home.
Lenders typically require one month’s pay stubs, two months’ bank statements, W-2s for the past two years, and any other relevant financial documents. Self-employed individuals may need to provide additional information, such as tax returns and profit and loss statements.
Look for an experienced agent who specializes in the Olympia area and beyond and has a proven track record of success. Ask for recommendations from friends or check online reviews. A good agent broker should have extensive knowledge of the local market, strong negotiation skills, and the ability to guide you through the entire process. LOCAL matters!!
Consider proximity to your workplace, schools, shopping, and recreational activities. Explore different neighborhoods to get a feel for the community, amenities, and overall lifestyle. Your real estate agent broker can provide valuable insights into various areas.
Your budget should factor in not only the purchase price but also closing costs (typically 3-5% of the home’s value), potential renovations or repairs, moving expenses, and ongoing costs like property taxes and homeowners insurance. Lenders generally recommend that your monthly housing expenses should not exceed 36% of your gross monthly income.
A professional home inspection is crucial to identify any potential issues or defects with the property before finalizing the purchase. The inspector will thoroughly evaluate the condition of the home, including the structure, electrical, plumbing, and HVAC systems. This can help you negotiate repairs or credits with the seller.
Once your offer is accepted, you will enter into a legally binding contract and begin the closing process. This involves gathering additional documentation, ordering an appraisal, and obtaining final loan approval from the lender. You will also schedule a final walk-through of the property before closing.
The closing process can vary, but it typically takes 30-45 days from the time your offer is accepted until the actual closing date. This time frame allows for the necessary steps, such as the appraisal, title search, and final loan approval.
At closing, you will be responsible for paying your side of the closing costs, which can include lender fees, title insurance, property taxes, and any remaining down payment or prepaid expenses. Your lender will provide you with an estimated closing cost statement before the closing date.
Understand and calculate the cash flow, identify properties that match your investment goals (e.g., passive income, fix and flip), hire a reputable property management company with local expertise, and consider factors like location and potential for appreciation. It is VERY important to be up to date on current laws & regulations on landlords.
Olympia’s proximity to Joint Base Lewis McChord ensures a steady flow of potential tenants, and the area has experienced significant property value appreciation over the years. Additionally, Olympia offers a diverse range of property types to suit different investment goals and budgets, not to mention it is the capital of Washington. The Pacific Northwest is surrounded by numerous lakes and the puget sound itself making it a very sought after area.
A reputable property management company like The Rants Group, Olympic Rental and Landlord Service, Hometown Property Management, along with others can provide valuable local expertise, advise on the location, rental rates, management fees and be your guide on following local laws and regulations to ensure things go as smoothly as possible.
Always ask your accountant first! They can guide you as to how you should hold ownership whether that is your name, LLC, S or C Corps and so on. As a property owner, you may be able to write off maintenance expenses, depreciation, and mortgage interest paid, among other tax benefits. Consult with a tax professional for specific advice.
Olympia’s proximity to Joint Base Lewis McChord ensures a constant influx of potential tenants. Being in the state’s Capitol offers numerous different working professionals that come and go from this area. Additionally, working with a property management company can help you market your property effectively and screen tenants thoroughly.

Have Questions? Get in Touch with our Team Today.