Are you interested in moving to Tacoma, WA? Tacoma is a port city and is located along Washington’s Puget Sound. Tacoma is just 32 miles from the popular city of Seattle, making it a popular area to live among commuters. Tacoma is best known for its rich history, amazing art scene, and family-friendly neighborhoods. The average household income in Tacoma is $69,956, which is just above the national average. The cost of living in Tacoma is 23% higher than the national average, which is expected due to it being a large city.
If you are thinking about buying a house in Tacoma, WA, then you need to be prepared. The Tacoma, Washington real estate market is very competitive, although it is slowing down compared to previous years.
House hunting might feel like an overwhelming process, especially if you’re a first time home buyer in Tacoma- but it doesn’t have to be this way! Here’s everything you need to know about what it takes to buy a house in Tacoma.
The Steps to Buying a House in Tacoma
Whether this is your first time buying a home or you are experienced in the Tacoma real estate market, there are a few things you need to look out for. This is everything you should know before you buy a home in Tacoma.
How Much Does It Cost to Buy a House in Tacoma?
When you buy a home in Tacoma, WA, the price of the home is not all you have to take into consideration. You also have to think about mortgage payments, property taxes, and homeowner’s insurance. It is also important to think about the day-to-day expenses you’ll have when living in the city.
In order to better determine what you can afford, you should plan out a budget. To begin planning your budget, you’ll want to determine your gross income and your monthly debt payments. When you get ready to apply for a mortgage, you will find that most lenders require you to have a debt-to-income ratio of 36% or lower. The debt-to-income ratio is the percentage of your income that you will spend on your mortgage.
Consider using a mortgage affordability calculator to ensure that you can afford the house. According to the affordability calculator, if you make the median Tacoma household income of $69,956 and have a monthly debt of $250 and a down payment of $20,000, you can afford a house of up to $248,300. Getting rid of student loans, not living in an area with an HOA, or increasing your down payment are just a few examples of how you can afford a higher priced home.
Before buying a house in Washington, you’ll also want to consider the cost of living. The Cost of Living Index in Tacoma is 118. This means that living in the city is 18% more expensive than the national average of 100. Depending on where you are moving from, you may need to consider that your daily expenses will get higher just from living in the city of Tacoma.
According to Numbeo, you can expect to pay an average utility bill of $207.42 per month and an average HOA fee of $350 per month. You will also have to plan to pay property taxes after buying a house in Tacoma. The city of Tacoma does not collect its own property taxes, and the property tax rate is determined by Pierce County. You can check out the county’s interactive map to determine how much you will pay in property taxes.
What is the average home price in Tacoma?
How much does it cost to buy a house in Tacoma? The Tacoma median home price is $472,750, and the average sale price per square foot is $319. On average, a house only stays available on the Tacoma, WA real estate market for six days–making the market very competitive. Although the market is hot, it is slowing down compared to last year. Home prices have gone down 6.5% over the last 365 days.
No matter what your budget is, you are sure to find a great home in Tacoma. Some of the best neighborhoods to buy a house in Tacoma include North East Tacoma (average home price of $610,000), North End Tacoma (average home price of $694,500), Fife (average home price of $468,000), and Fircrest (average home price of $717,500).
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Find the Right Mortgage and Get Pre Approved
After determining a budget, you’ll want to get pre-approved for a mortgage. This increases your chances of getting an offer accepted quickly, as it lets the buyer know that you are serious about buying a home. Some of the most common loan types are:
- Conventional: Not insured or guaranteed by the government.
- Fixed Rate: Loan with a specific interest rate for the entire repayment term.
- Adjustable Rate: Loan with an interest rate that adjusts based on the market.
You also need to look out for factors that can affect the pre-approval process, such as:
- Credit score: The higher your score is, the better your chances are of getting approved and securing a good interest rate.
- Down payment: Put down the highest down payment that you can comfortably afford. Most lenders will require a 10% down payment, but 20% is preferred.
- 28/36 rule: This rule states that your total housing costs should not exceed 28% of your gross monthly income and your total debt payment should not exceed 36%.
- Mortgage payment: Lenders will look at your income and assets to figure out how much you can afford to pay back every month.
You will want to get pre-approved for a mortgage at least one year before deciding to purchase.
Tacoma first time homebuyer programs
If you are a first time home buyer in Tacoma, WA, then you may be in need of some financial assistance. Here are a few examples of homebuyer assistance programs beneficial for first-time buyers.
Home Advantage Program
If you are buying a home in Washington for the first time, then you need to know about the Home Advantage program. This downpayment assistance program is available to all Washington residents, not only those in Tacoma. This down payment loan offers a 0% interest rate and payment deferred for 30 years. To qualify for this loan, you cannot have an income of more than $180,000. This loan program is often combined with the Home Advantage first mortgage loan program.
Tacoma Down Payment Assistance Program
The City of Tacoma’s down payment assistance program often gets combined with the Home Advantage program for first-time homeowners. With this loan, you can borrow up to $30,000 for your down payment and defer repaying the loan for up to 30 years, but interest will start immediately at a 2% interest rate. If you decide to move or pay off your house before 30 years, the clock for paying back the down payment assistance loan will begin.
For the Tacoma Down Payment Assistance Program eligibility, you must be a first-time home buyer (someone who has yet to own a house within the last three years), attend a seminar, and be within the income limits.
Find a Tacoma Real Estate Agent
Finding a qualified real estate agent is an essential part of the process of buying a house in Tacoma. Your agent is your go-to person for questions during this time, so you will want to work with someone who has experience and can give you peace of mind during the home-buying process. They will write your offers and work hard to get them accepted by the sellers.
We recommend that you work with a buyer’s agent rather than a listing agent. Buyer agents are legally bound to help you get the best deal, while listing agents represent the home listing and may not have your best interest in mind.
To find the best real estate agent in Tacoma Washington, make sure you thoroughly interview multiple candidates to find one that is a good fit for you.
Go House Hunting in Tacoma
House hunting in Tacoma, WA is where the fun starts! To help make the house hunting process seamless and as stress-free as possible, consider writing out a list of the necessities for your new home. Think about school districts, location, the size of your home, and proximity to your job. Creating this list will help you to narrow down the best areas to focus on for your search. You can also share this list with your real estate agent to help them get a better idea of which homes they should show you.
What is the best place to buy a house in Tacoma? Here are a few guides that will help Tacoma home buyers figure out where to settle down:
No matter what you are looking for, there is a Tacoma neighborhood that will match your specific needs!
Submit an Offer!
Once you fall in love with a home, it’s time to submit an offer. Your buyer’s agent will help you put together an offer that will stand out to the seller.
Don’t be caught off guard if the seller comes back with contingencies or tries to negotiate, your agent will help you navigate this. After negotiations are complete and you are on the same page with the seller, you will go under contract. Before the final day of escrow, you will be required to complete an inspection and get an appraisal done. This gives you the opportunity to retract your offer if something was not disclosed by the seller. Once the inspection and appraisal are complete and everything looks good, then it’s time to close the deal!
Close On Your Tacoma Home
Before the home is yours, there are a few things to take care of. First, the lender will need to approve everything one last time based on the inspection and appraisal. You will then go through the underwriting process to finalize your mortgage. It’s also never a bad idea to do one last walkthrough with your real estate agent to make sure everything is perfect. Once all of these tasks are complete, you will sign the closing documents. The closing process typically takes anywhere from 60-90 days, so you will not likely be able to get into your new home right away.
Congratulations on buying a home in Tacoma! Now that you have secured your dream home, you need to hire experienced movers. All Ready Moving is the best Tacoma moving company in the area. With 18+ years of experience, our Tacoma movers are here to make your transition seamless and give you peace of mind! Call us today at (360) 507-2447 to discuss your move and receive a free estimate!
