4 Things You Can Do To Get Your Home Ready To Hit The Market After Coronavirus


While the spring market would typically be in full force right now, coronavirus has put a temporary halt to most real estate activity. However, that doesn’t mean that you can’t take the time to get your home ready to go up for sale once the pandemic is under control.

With that in mind, I’ve brought you four suggestions on things you can do to get your home ready to hit the market after quarantine. Read on below to learn more.

Address any minor repairs

Even the most conscientious of homeowners typically have a list of minor home repairs that they’ve been meaning to get around to when they have time. For example, you might have a toilet that’s been running for a while or a patch of broken fence that needs to be mended.

Whatever fixes may be on your to-do list, it’s important to take care of them before you put your home up for sale. While these repairs typically won’t take a lot of effort on your part, they will go a long way towards improving buyers’ opinions of the overall condition of the home, which can lead to higher-priced offers.

Pump up curb appeal

The term “curb appeal” refers to the way your home looks when viewed from the street. To that end, when you’re selling your home, the way it looks from the outside is just as important as the way it looks on the inside, maybe even more so. After all, the view of your home from the street often serves as the buyers’ first impression of the property.

That said, as the seller, you’ll want to take the time to make sure that your home’s exterior looks its best. Make sure your lawn stays mowed and that any plantings are weeded and pruned. If you want to take things a step further, consider power-washing your home’s exterior, as well as your deck or patio. 

Start decluttering

On the inside of your home, quarantine is the perfect time to start decluttering. Often, when there is too much clutter laying around a home, it makes it hard for potential buyers to be able to picture themselves living in the property. Given that is an important step for many buyers before deciding to make an offer, your goal should be to make it as easy as possible. 

With that in mind, do your best to get rid of some of the clutter around your home. Start tackling projects like cleaning out closets and reorganizing the various rooms in your home. Each task you take care of now will also be one less thing that you have to do once it’s time to move. 

Get your paperwork in order

Marketing your home is about more than just making it visually-appealing to buyers. It’s also about providing them with the information they need to be able to make an informed decision about buying the home. 

In light of that, you’ll want to start collecting any important documents that might be of interest to a potential buyer. These could include recent utility bills, the permits for any renovations that you’ve done to the home, or a land survey, which outlines the boundaries of the property.

~Tara Mastoeni, Forbe

Tips for First-Time Home Buyers

Buying a home can be nerve-racking, especially if you’re a first-time home buyer.
These tips will help you navigate the process, save money and avoid common mistakes.

1. Start saving for a down payment early

It’s common to put 20% down, but many lenders now permit much less, and first-time home buyer programs allow as little as 3% down. But putting down less than 20% may mean higher costs and paying for mortgage insurance, and even a small down payment can still be hefty. For example, a 5% down payment on a $200,000 home is $10,000.

 Some tips for saving for a down payment include setting aside tax refunds and work bonuses, setting up an automatic savings plan and using an app to track your progress.

2. Explore your down payment and mortgage options

There are lots of mortgage options out there, each with its own combination of pros and cons. If you’re struggling to come up with a down payment, check out these loans:

  • Conventional mortgages They conform to standards set by the government-sponsored entities Fannie Mae and Freddie Mac, and require as little as 3% down.

  • FHA loans Loans insured by the Federal Housing Administration permit down payments as low as 3.5%.

  • VA loans Loans guaranteed by the Department of Veterans Affairs sometimes require no down payment at all.

Making a higher down payment will mean having a lower monthly mortgage payment.

If you want the smallest mortgage payment possible, opt for a 30-year fixed mortgage. But if you can afford larger monthly payments, you can get a lower interest rate with a 20-year or 15-year fixed loan. 

3. Research state and local assistance programs

In addition to federal programs, many states offer assistance programs for first-time home buyers with perks such as down payment assistance, closing cost assistance, tax credits and discounted interest rates. Your county or municipality may also have first-time home buyer programs.

4. Determine how much home you can afford

Before you start looking for your dream home, you need to know what’s actually within your price range. 

5. Check your credit and pause any new activity

When applying for a mortgage loan, your credit will be one of the key factors in whether you’re approved, and it will help determine your interest rate and possibly the loan terms.

So check your credit before you begin the homebuying process. Dispute any errors that could be dragging down your credit score and look for opportunities to improve your credit, such as making a dent in any outstanding debts.

To keep your score from dipping after you apply for a mortgage, avoid opening any new credit accounts, like a credit card or auto loan, until your home loan closes.

6. Compare mortgage rates

Many home buyers get a rate quote from only one lender, but this often leaves money on the table. Comparing mortgage rates from at least three lenders can save you more than $3,500 over the first five years of your loan, according to the Consumer Financial Protection Bureau. Get at least three quotes and compare both rates and fees.

As you’re comparing quotes, ask whether any of the lenders would allow you to buy discount points, which means you’d prepay interest up front to secure a lower interest rate on your loan. How long you plan to stay in the home and whether you have money on-hand to purchase the points are two key factors in determining whether buying points makes sense.

7. Get a preapproval letter

You can get pre-qualified for a mortgage, which simply gives you an estimate of how much a lender may be willing to lend based on your income and debts. But as you get closer to buying a home, it’s smart to get a preapproval, where the lender thoroughly examines your finances and confirms in writing how much it’s willing to lend you, and under what terms. Having a preapproval letter in hand makes you look much more serious to a seller and can give you an upper hand over buyers who haven’t taken this step.

8. Hire the right buyer’s agent

You’ll be working closely with your real estate agent, so it’s essential that you find someone you get along with well. The right buyer’s agent should be highly skilled, motivated and knowledgeable about the area.

9. Pick the right type of house and neighborhood

You may assume you’ll buy a single-family home, and that could be ideal if you want a big yard or a lot of room. But if you’re willing to sacrifice space for less maintenance and extra amenities, and you don’t mind paying a homeowners association fee, a condo or townhouse could be a better fit.

But even if the home is right, the neighborhood could be all wrong. So be sure to:

  • Research nearby schools, even if you don’t have kids, since they affect home value.

  • Look at local safety and crime statistics.

  • Map the nearest hospital, pharmacy, grocery store and other amenities you’ll use.

  • Drive through the neighborhood on various days and at different times to check out traffic, noise and activity levels.
10. Stick to your budget

Look at properties that cost less than the amount you were approved for. Although you can technically afford your preapproval amount, it’s the ceiling — and it doesn’t account for other monthly expenses or problems like a broken dishwasher that arise during homeownership, especially right after you buy. Shopping with a firm budget in mind will also help when it comes time to make an offer.

In a competitive real estate market with limited inventory, it’s likely you’ll bid on houses that get multiple offers. When you find a home you love, it’s tempting to make a high-priced offer that’s sure to win. But don’t let your emotions take over. Shopping below your preapproval amount creates some wiggle room for bidding. Stick to your budget to avoid a mortgage payment you can’t afford.

11. Make the most of open houses

When you’re touring homes during open houses, pay close attention to the home’s overall condition, and be aware of any smells, stains or items in disrepair. Ask a lot of questions about the home, such as when it was built, when items were last replaced and how old key systems like the air conditioning and the heating are.

If other potential buyers are viewing the home at the same time as you, don’t hesitate to schedule a second or third visit to get a closer look and ask questions privately.

First-time home buyer mistakes to avoid

With so much to think about, it’s unsurprising that some first-time home buyers make mistakes they later regret. Here are a few of the most common pitfalls, along with tips to help you avoid a similar fate.

12. Not budgeting for closing costs

In addition to saving for a down payment, you’ll need to budget for the money required to close your mortgage, which can be significant. Closing costs generally run between 2% and 5% of your loan amount. You can shop around and compare prices for certain closing expenses, such as homeowners insurance, home inspections and title searches. You can also defray costs by asking the seller to pay for a portion of your closing costs or negotiating your real estate agent’s commission.

13. Not saving enough for after move-in expenses

Once you’ve saved for your down payment and budgeted for closing costs, you should also set aside a buffer to pay for what will go inside the house. This includes furnishings, appliances, rugs, updated fixtures, new paint and any improvements you may want to make after moving in.

14. Buying a home for today instead of tomorrow

It’s easy to look at properties that meet your current needs. But if you plan to start or expand your family, it may be preferable to buy a larger home now that you can grow into. Consider your future needs and wants and whether the home you’re considering will suit them.

15. Passing up the chance to negotiate

A lot can be up for negotiation in the homebuying process, which can result in major savings. Are there any major repairs you can get the seller to cover, either by fully handling them or by giving you a credit adjustment at closing? Is the seller willing to pay for any of the closing costs? If you’re in a buyer’s market, you may find the seller will bargain with you to get the house off the market.

16. Not knowing the limits of a home inspection

After your offer is accepted, you’ll pay for a home inspection to examine the property’s condition inside and out, but the results will only tell you so much.

  • Not all inspections test for things like radon, mold or pests, so be sure you know what’s included.

  • Make sure the inspector can access every part of the home, such as the roof and any crawl spaces.

  • Attend the inspection and pay close attention.

  • Don’t be afraid to ask your inspector to take a look — or a closer look — at something. And ask questions. No inspector will answer the question, “Should I buy this house?” so you’ll have to make this decision after reviewing the reports and seeing what the seller is willing to fix.

17. Not buying adequate homeowners insurance

Before you close on your new house, your lender will require you to buy homeowners insurance. Shop around and compare insurance rates to find the best price. Look closely at what’s covered in the policies; going with a less-expensive policy usually means fewer protections and more out-of-pocket expenses if you file a claim. Also, flood damage isn’t covered by homeowners insurance, so if your new home is in a flood-prone area, you may need to buy separate flood insurance.

Amazon: 15,000 new jobs coming to Bellevue

Amazon is continuing to expand its Bellevue reach.

On Thursday, Feb. 6, the company announced it was on track to create more than 15,000 new jobs in the city within the next few years. Currently, there are about 2,000 Amazon employees in Bellevue.

Amazon’s first Bellevue office opened in 2017. However, when CEO Jeff Bezos started the company some 25 years ago, it was in a home in West Bellevue.

Many of Amazon’s incoming employees will be working out of an in-the-works 43-story building, which is known as Bellevue 600. The building, which will be Bellevue’s tallest, takes up 1 million square feet of office space.

It is anticipated that the tower will be open within the next four years.

In a statement released on Feb. 6, Bellevue city officials shared their thoughts on the announcement.

“With the downtown area’s successful growth over the last several years, we’ve created a dynamic and thriving neighborhood, and one that’s attractive to businesses, workers and residents,” Mayor Lynne Robinson said. “Accelerated growth does come with impacts, and we hope to mitigate those by proactively working together as a community to address our resident needs. We appreciate Amazon’s eagerness to be a partner during this process and to take the role as an engaged Bellevue stakeholder.”

The city noted prior planning in the press release.

“While Bellevue, specifically Downtown, has seen major growth over the last decade, it’s taken a lot of work and planning to get to this point,” city manager Brad Miyake said. “It’s exciting to see that Amazon and other businesses want to invest in Bellevue, and we look forward to strengthening all our partnerships. Just as important, the city is committed to ensuring the high quality of life that residents, visitors and workers have come to expect.”

Amazon is hoping to start construction on the 43-story tower in 2021 and move in in 2024.

An additional tower at 600 108th Avenue Northeast will stand 33 stories and take the place of the Bellevue Corporate Plaza building, though the starting “phase” for the additional tower’s construction has not yet been determined.

Bellevue 600 also will come with a commons space, retail, possible daycare and meeting center during its first phase. An included below-grade, six-level parking garage is planned to have some 1,815 stalls.

“We look forward to continue growing our presence in Bellevue, bringing more jobs to the city, collaborating with its leaders and being an active member of this thriving community,” Amazon said on its website.

~Mercer Island Reporter

ZILLOW SEES ULTRA-COMPETITIVE SPRING SELLING SEASON

The latest housing market outlook from Zillow projects that the nearly two-year slowdown in the housing market may be coming to an end right as home shopping season kicks off.

U.S. home values grew 3.8% year-over-year to $245,193, less than one-hundredth of a percentage point slower than the previous month, according to the January Zillow Real Estate Market Report. Annual home value appreciation has slowed in each month since April 2018, but this is the smallest drop from one month to the next during that period.

Though the number of homes listed for sale increased from record lows a month earlier, inventory is down 8% annually — the biggest annual drop since March 2018, Zillow said. There were 1,500,262 homes on the market in January, up 4,295 from the previous month but down 130,310 year-over-year.

This persistently low inventory is a key reason why Zillow expects home value growth to speed up once again. The economy has remained strong, mortgage rates are low and buyers will be competing for a limited number of homes this home shopping season.

“As the economic storm clouds on the horizon in early 2019 cleared up, we saw buyers return in droves, taking advantage of ultra-low mortgage rates,” said Zillow economist Jeff Tucker. “Our first look at 2020 data suggests that we could see the most competitive home shopping season in years, as buyers are already competing over near-record-low numbers of homes for sale. That is likely to mean more multiple-offer situations, and that buyers will have a harder time finding the perfect fit for their families. The good news for buyers is that low mortgage rates are helping to make home ownership more affordable, and home builders are responding to the hot housing market by starting construction on more homes than at any time since 2007.”

Home values are growing faster than they were a month ago in about half of large markets (17 of the top 35). The hottest large markets are Phoenix (up 6.7%), Columbus (6.2%), Charlotte (5.4%) and Cincinnati (5%). Home values fell year-over-year in San Jose for the 12th consecutive month. But its Bay Area neighbor, San Francisco, saw home values grow 1% year-over-year, breaking a streak of declines that dated back to May 2019.

Inventory fell in all but three top-35 metros — San Antonio (+7.7%), Detroit (+6.4%) and Chicago (+0.3%). Inventory was hit the hardest in Seattle (-27.6%), Phoenix (-24.5%) and San Diego (-23.1%).

Rent growth remained stable. The typical rent is now $1,602, up 2.3% year over year and just $1 more than last month. Rents are growing faster than a year ago in 28 of the 35 largest U.S. metros, led by Phoenix (+7.9% annually) — also the fastest-growing for-sale market — Pittsburgh (+7%), Cincinnati (+5.7%) and Las Vegas (+5.7%).

Mortgage rates listed by third-party lenders on Zillow rose to a peak of 3.77% on January 31 after starting the month at 3.70%. Rates reached their monthly low on January 24 at 3.51%. Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site by third-party lenders and reflect recent changes in the market.

~Builder

Too Few Housing Units Built in Washington for Demand

Not enough housing has been built in Washington to meet in-migration and job growth, which has fueled home price and rent escalation, longer commutes as people drive farther for affordable housing, and lower quality of life, according to a January report that calls for more high-density housing walkable to transit corridors and other amenities. More high- and medium density housing and fewer single-family homes would improve lifestyles, the environment, Gross State Product (GSP) and tax revenues, it projected.

The report, Housing Underproduction in Washington State: Economic, Fiscal, and Environmental Impacts of Enabling Transit-Oriented Accessible Growth to Address Washington’s Housing Affordability Challenge, was authored by Up For Growth, a national nonprofit.

The housing problem is especially acute in King and Snohomish counties, where only 0.65 units of housing were built per new household between 2010 and 2017, according to data in the report. A functioning housing market needs to produce at least one new housing unit for each new household formed, the report says, noting the national ratio has been about 1.1 housing units per new household since 1960.

The report also notes that King County added 3.33 jobs for every new housing unit during from 2010-17, the highest imbalance between job growth and housing unit production in the state. Snohomish added 2.12 jobs per new housing unit.

“In counties with large imbalances, rents and home prices have rapidly increased and have even surpassed the previous housing bubble’s peak prices,” the report said. “If these ratios worsen in the short run, substantive policy interventions may be necessary to bring the ratio of jobs-to-units back into longer-term equilibrium.”

From 2000 to 2015, Washington underproduced housing by about 225,600 units, about 7.5 percent of the total 2015 housing stock, creating a supply and demand imbalance reflected in the housing and homelessness crisis in myriad communities, the report said.

The report also notes too little housing produced for low- and moderate-income households, those making 80 percent or less of area median incomes (AMI). Since 2000, Washington underproduced 181,000 rental units for this category, accounting for 80 percent of the total housing units underproduced from 2000 to 2015.

In King County, the underproduced units were equivalent to about 61 percent of all renter households earning less than 80 percent of AMI, and 42 percent in Snohomish County, which demonstrates the need for more rental units available to households earning less than 80 percent of AMI in the state’s most populous areas, the report said.

Currently, housing development is allocated roughly 4 percent to high density residential apartment towers; 29 percent to “missing middle” (accessory dwelling units, duplex, triplex, and quad homes, or courtyard-style apartments) and medium density (podium apartments); and 67 percent to low density single-family homes. This is what the report calls a “more of the same growth pattern.”

If an “accessible growth pattern” were used instead, those 225,600 units could be divided into 38 percent high density, 54 percent medium density, and 8 percent low density, the report said. That would use 12 percent of the land to produce the same number of units, and with developments closer to transit and employment centers, could reduce vehicle miles traveled by up to 36 percent. That kind of development pattern also could increase GSP by $25 billion over 20 years and generate an additional $660 million in state revenue (via sales, business and occupation taxes), the report said.

The accessible growth approach prioritizes building housing near transit and “job-rich but housing-poor areas,” Up For Growth said on its website in prefacing the report. “Such an approach could be achieved by increasing and expanding funding for affordable housing, zoning reforms, regional planning and accountability, and public-private partnerships.”

Up For Growth adds, “The report makes it clear that Washington is indeed experiencing a severe shortage of housing for people of all income levels. Solving it will require leadership and the state and local levels, as well as the private sector.”

~425 Business

Weekly mortgage applications soar 30% as homebuyer demand hits the highest level in 11 years

It was a seriously strong start to 2020 in the mortgage business for new home loans and refinances.

Total mortgage application volume surged 30.2% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

Refinancing led the surge, thanks to a drop in mortgage rates. Those applications jumped 43% for the week and were 109% higher than a year ago. The refinance share of mortgage activity increased to 62.9% of total applications from 58.9% the previous week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to the lowest level since September, 3.87%, from 3.91%, with points decreasing to 0.32 from 0.34 (including the origination fee) for loans with a 20% down payment. The rate was 87 basis points higher the same week one year ago.

“Refinances increased for both conventional and government loans, as lower rates provided a larger incentive for borrowers to act,” said Joel Kan, an MBA economist. “It remains to be seen if this strong refinancing pace is sustainable, but even with the robust activity the last two weeks, the level is still below what occurred last fall.”

Homebuyers also rushed in, sending purchase application volume up 16% for the week and up 8% from one year ago. Purchase mortgage activity hit the highest level since October 2009.

“Homebuyers were active the first week of the year. Low rates and the solid job market continue to encourage prospective buyers to enter the market,” Kan said.

Unfortunately, buyer demand is bumping up against near record-low supply. Price gains have reaccelerated, and if supply doesn’t improve markedly, some of the tightest markets will overheat quickly, leaving less affluent buyers out in the cold.

~Diana Olick, CNBC

Puget Sound housing supply dwindles as prices continue to climb

Despite seeing a dip at the start of 2019, housing prices increased in the Puget Sound region in 2019, all while supply continued to dwindle.

“Inventory shortages persisted throughout 2019,” said the Northwest Multiple Listing Service in a newly-released report on 2019’s housing market.

The NWMLS reported the addition of 110,040 listings in 2019, a 5.3 percent decrease over the previous year. All while the median price of single-family homes sold by NWMLS brokers jumped from $410,000 to $435,000 between 2018 and 2019.

According to a recent report from Redfin, that trend persisted in Seattle city limits as well, punctuated by a 6 percent increase in the median price of a home year-over-year, while seeing a 39.7 percent decline in available homes for sale.

Median home prices in Tacoma climbed 9.3 percent, paired with a massive 44.3 percent decline in inventory.

“Prices heated up in West Coast metros like Seattle and Los Angeles, which indicates the slowdown of 2019 has officially ended in these markets,” said Redfin chief economist Daryl Fairweather.

That trend started in late 2019, when inventory began to dip dramatically across King, Pierce, and Snohomish Counties.

“The most recent data certainly appears to bolster the idea of a ‘new normal,’ as we see the same trends continuing,” Coldwell Banker Bain President and COO Mike Grady predicted in November.

~Nick Bowman, My Northwest

2019 Mortgage Rates Were Lowest in Nearly 50 Years

The interest rate for the 30-year fixed-rate mortgage averaged 3.9% for 2019, the fourth lowest annual average since 1971, according to Freddie Mac. For 2020, Freddie’s outlook mirrors that of the real estate industry’s top economists, who discussed their predictions at the National Association of REALTORS®’ first-ever Real Estate Forecast Summit earlier this month: Low mortgage rates and an improving economy will help drive steady home sales, construction, and increases in home prices.

“While the outlook for the housing market is bright, worsening housing affordability is no longer a coastal phenomenon and is spreading to many interior markets, and it is a threat to the continued recovery in housing and the economy,” says Freddie Mac Chief Economist Sam Khater. NAR Chief Economist Lawrence Yun, too, has long called for greater homebuilding in entry-level price points to satisfy affordability and housing demand for first-time buyers.

Freddie Mac reports the following national averages with mortgage rates for the week ending Dec. 26:

30-year fixed-rate mortgages: averaged 3.74%, with an average 0.7 point, mostly unchanged from last week. Last year at this time, 30-year rates averaged 4.55%.

15-year fixed-rate mortgages: averaged 3.19%, with an average 0.7 point, unchanged from last week. A year ago, 15-year rates averaged 4.01%.

5-year hybrid adjustable-rate mortgages: averaged 3.45%, with an average 0.3 point, rising from last week’s 3.37% average. A year ago, 5-year ARMs averaged 4%.

~Realtor Magazine

First American says low mortgage rates are driving home price growth

In September, home prices rose 0.9%, declining 7.6% year over year, First American said in its Real House Price Index. According to the company, unadjusted house prices sit 8.1% above the housing boom peak.

Consumer buying power, which measures the influence of income and interest rate changes on house-hold spending, increased by 0.2% between August and September, rising 15.8% year over year.

When consumer house-buying power is factored in, home prices are actually 42.2% below their 2006 peak and 18.8% below prices from January 2000.

Although housing affordability improved during the month, Mark Fleming, First American’s chief economist said the growth just wasn’t enough.

“Two of the three key drivers of the Real House Price Index, household income and mortgage rates, modestly swung in favor of increased affordability in September, yet affordability declined month over month,” Fleming said.

This is because September’s home price growth outpaced improvements in overall affordability, according to Fleming.

“The 30-year, fixed-rate mortgage fell by 0.01 percentage points and household income increased 0.03 % compared with August 2019,” Fleming said. “When household income rises, consumer house-buying power increases. Declining mortgage rates have a similar impact on consumer house-buying power.”

“However, nominal house price appreciation jumped 1.1% in September, outpacing the benefits of rising house-buying power on affordability,” Fleming said. “Accordingly, the RHPI increased 0.9% month over month.”

Increases in the RHPI indicate a decline in affordability, and September ‘s was the largest month-over-month affordability decline since November 2018, Fleming said.

While declining mortgage rates have increased house-buying power throughout the year, Fleming said it has also led to a greater demand of supply, which has put pressure on the nation’s home prices.

“When demand increases for a scarce (limited or low supply) good, prices will rise faster,” Fleming said. “While year-over-year, the RHPI shows an improvement in affordability, the increase in house-buying power in September was not enough to offset nominal house price gains compared with August.”

~Alcynna Lloyd, Housing Wire

Your home may not be a mansion. But you might still have to pay a ‘mansion tax’

Beginning in January, homeowners in Washington state will soon pay a real estate tax that increases based on the sale price of their home.

Under the new provision, the tax rate on properties that sell above $1.5 million will more than double, rising from 1.28% to 2.75%. Homes that sell for more than $3 million will be taxed at 3%.

And Washington isn’t the only state changing the way it taxes real estate. New York also recently expanded its “mansion tax” — an additional tax that targets higher-end home sales.

Most real estate deals in the US trigger what is known as a transfer tax. But certain states — including Connecticut, Hawaii, New Jersey, Vermont and New York — also levy a mansion tax on homes that sell above a certain price.

What is a mansion tax?

The aim of a mansion tax is to make the state and local tax systems fairer and to raise money, says Samantha Waxman, a policy analyst at the Center for Budget and Policy Priorities. The additional taxes can be used to fund things like schools or roads, or can be specifically targeted toward things like affordable housing projects.

“Mansion taxes are one way for states to provide for their long-term future,” she said.

But how expensive does a home have to be to trigger a mansion tax?

Washington state made its transfer tax progressive in 2019, according to CBPP, with graduated rates that increase for homes sold that are worth over $500,000, $1.5 million, and $3 million. These new rates will apply as of January 1, 2020. The state cut the rate for homes worth less than $500,000.

Who pays a mansion tax?

Using transfer taxes to raise public funds is nothing new, says Kim S. Rueben, director of the State and Local Finance Initiative at the Urban-Brookings Tax Policy Center. But more recently, some states and cities are adopting tax rates that go up as the value of the property increases, similar to income tax rates that go up as your income increases, rather than a flat tax.

In deciding who should pay these taxes, lawmakers are considering two things, said Rueben.

First: How badly does the state need the money?

“If you need the money for basic services, like Vermont, you need a lower threshold to get more people to pay,” Rueben said.

The second factor is income inequality and how housing prices in the area are widening the gap.

In Washington state, the real estate excise tax is typically paid by the seller of the property, although the buyer is liable for the tax if it is not paid, according to the state Department of Revenue.

~Q13 Fox News