The honest answer: there’s no perfect time to buy a home. But there are better and worse times — and understanding what’s actually happening in the market can help you make a decision you’ll feel confident about.

What the Washington Market Looks Like Right Now

Inventory across King County and the broader Washington market is meaningfully higher than it was a year or two ago. Buyers have more options, more time to make decisions, and in some segments — particularly condos and higher-priced Eastside homes — real negotiating room.

At the same time, prices haven’t collapsed. The King County median sale price has barely moved year over year. What’s changed is the dynamic: this is no longer a market where every home gets five offers in the first weekend. Prepared buyers with financing in place can move thoughtfully rather than reactively.

That combination — more selection, stable prices, less competition — is genuinely rare in the Seattle metro area. It doesn’t last indefinitely.

The Rate-Waiting Trap

A lot of buyers are sitting on the sidelines waiting for mortgage rates to drop before they buy. It’s an understandable instinct. But here’s what tends to happen when rates do fall:

Every buyer who has been waiting re-enters the market at roughly the same time. More demand hits a market that’s been absorbing slowly. Inventory gets consumed faster. Sellers regain leverage. The buyers who waited for lower rates find themselves competing more aggressively — and often paying more for the home than they would have at the higher rate.

It happened in every prior rate-drop cycle. The inventory advantage buyers have right now tends to compress quickly when rates improve. There’s no way to know exactly when that shift happens, but waiting for it isn’t a risk-free strategy.

Homeownership as an Inflation Hedge

One thing that often gets lost in the rate conversation is what homeownership actually does for your financial position over time — especially in an inflationary environment.

When you rent, your housing cost is entirely subject to market conditions. Your landlord’s costs go up, your rent goes up. A fixed-rate mortgage, by contrast, locks in your principal and interest payment for the life of the loan. As inflation pushes everything else higher, your mortgage payment stays the same. That’s a meaningful advantage that compounds over time.

Meanwhile, the home itself tends to appreciate. Real estate has historically been one of the more reliable inflation hedges available to everyday households — not because it always goes up, but because it’s a real asset with intrinsic value tied to land, construction costs, and local demand.

A Real Example of a First-Time Homebuyer

One of my clients purchased a home in the Tumwater – Olympia area in May 2024. According to Redfin, that home is now valued at $567,468 — up approximately $27,000 from their purchase price in about two years.

On top of that appreciation, they’ve paid down roughly $9,000 in mortgage principal. That’s $36,000 in equity built in their first year of ownership.

If they had been renting instead, they’d have $0 in equity to show for it — and likely would have paid more in rent this year than last.

This is in Tumwater, not Bellevue or Kirkland. The appreciation story is even stronger closer to Seattle.

Plan to Own It — Even If That Means Renting It Out

One thing I tell buyers who are nervous about timing: go into your purchase with a long-term mindset. If life changes and you need to move, a home you own becomes a rental property. You retain the asset, continue building equity, and your tenant effectively pays down your mortgage.

Washington’s rental market — particularly in the Puget Sound region — is strong enough that this isn’t just a fallback plan. For many homeowners, it becomes a deliberate wealth-building strategy.

The buyers who tend to regret their purchase are those who bought without the financial cushion to hold through a down market. The buyers who bought with a long-term mindset — even at rates or prices that felt high at the time — have generally come out ahead.

Everyone’s Situation Is Different

None of this is a blanket recommendation to buy right now. Your income, savings, job stability, timeline, and goals all matter. A home that makes sense for one buyer may not make sense for another at the same price point.

What I can do is help you run the numbers — actual payment scenarios, breakeven analysis, rent vs. own comparisons — so you’re making a decision based on your specific situation rather than headlines or guesswork. There is no credit pull required for this complimentary service.

If you’re thinking about buying in Washington and want to talk through whether the timing makes sense for you, let’s talk. There’s no obligation, and even if you’re a year or two out, a conversation now can help you prepare.

Rhonda Porter is a Licensed Mortgage Advisor (NMLS #121324), serving home buyers and homeowners throughout Washington State. Start your preapproval here or contact Rhonda to discuss your home financing goals.

Last Week in Review

Inflation remained elevated in April. Consumer prices rose 0.6% for the month and are up 3.8% year over year, driven largely by higher energy and food costs. Core inflation — which excludes food and energy — also came in hotter than expected, suggesting that underlying price pressures remain stubborn. On the wholesale side, producer prices jumped 1.4% in April and are running 6% above year-ago levels. The message is clear: price pressures are still sticky.

That keeps the Fed in a tough spot — balancing persistent inflation against signs of a cooling labor market. On that note, the Senate confirmed Kevin Warsh as the new Chair of the Federal Reserve, succeeding Jerome Powell. His first FOMC meeting is in June, and markets will be watching closely for any signals on the direction of interest rates.

On the housing front, existing home sales edged up 0.2% in April, while inventory rose nearly 6% from March. Supply remains below historical norms, but buyers are finding a bit more breathing room as bidding wars continue to ease.

The labor market is sending mixed signals: new jobless claims remain relatively low at around 211,000, while continuing claims held at 1.78 million — indicating it’s taking longer for workers to find new jobs. Retail sales rose 0.5% in April, showing consumers are still spending despite the uncertainty.

The dominant driver of bond market volatility right now is the ongoing conflict involving Iran and oil prices — and that’s likely to remain the case this week.

Mortgage Rates: Optimal Blue Index

According to the Optimal Blue Index, the average 30-year fixed rate as of Friday, May 15th was 6.499%.

A few important reminders:

• The Optimal Blue index reflects data from approximately 35% of mortgage transactions (lenders using their platform).
• You cannot lock in last Friday’s rate today.
• Your credit score, loan-to-value ratio, and other factors will affect the rate you personally qualify for.

This number is meant to give you a general sense of where rates are trending — not a quote.

Economic Calendar: Week of May 18, 2026

• Monday: NAHB Housing Market Index
• Tuesday: ADP Employment, Pending Home Sales
• Wednesday: 20-Year Treasury Auction, Fed Minutes
• Thursday: Jobless Claims, Housing Starts & Permits
• Friday: Consumer Sentiment

Next FOMC Rate Decision: June 17, 2026

While the economic calendar is full, these reports are likely to take a back seat to headlines around Iran and oil prices, which continue to drive most of the bond market movement.

In the Spotlight: The Buyers Pass

If you’re actively shopping for a home, make sure you have your Buyers Pass ready.

A Buyers Pass is a next-level preapproval letter — and here’s what sets it apart:

• Fully pre-underwritten — not just a quick pre-qualification
• Stored in your phone’s digital wallet for instant access at showings
• Includes your buyer’s agent’s information
• Features a short video introduction from me confirming your qualifications

This gives listing agents and sellers confidence that you’re a serious, qualified buyer — and it can make a real difference in a competitive market.

Ready to get your Buyers Pass? Contact me and I’ll get you set up.

Ready to talk through your mortgage options? I’m here to help — no pressure, no obligation.

There’s a better way now.

What is the Buyer’s Pass?

The Buyer’s Pass is a digital credential that lives in your phone’s wallet — right next to your boarding passes and coffee loyalty card. It’s tied to your pre-approval and designed to be shared instantly with a single QR code scan.

When a listing agent scans it, they receive:

• An introduction to you as a buyer
• Confirmation of your pre-approved status
• Your buyer’s agent’s contact information
• A copy of your pre-approval letter

No fumbling. No “I’ll email it to you later.” Just a clean, professional handoff that signals you’re serious.

Why it matters in this market

Sellers and their agents want certainty. When multiple buyers are interested in a home, the ones who can demonstrate — quickly and credibly — that their financing is in order have a real advantage.

The Buyer’s Pass is even more powerful when paired with a pre-underwritten pre-approval. That means an underwriter has already reviewed your income, assets, and credit — not just run a quick check. It’s the strongest form of pre-approval available, and the Buyer’s Pass lets you communicate that instantly at the door.

How it works

1. Get pre-approved — ideally pre-underwritten — with your loan originator
2. Your Buyer’s Pass is generated and added to your phone’s wallet
3. At open houses, open your wallet and let the listing agent scan your QR code
4. They instantly receive your pre-approval details, a personal introduction, and your agent’s contact info

It’s a small thing that makes a big impression — and in a competitive market, that matters.

Ready to level up your pre-approval?

If you’re planning to buy a home in Washington State and want to show up to every open house with the strongest possible credentials, I’d love to help. Let’s get you pre-underwritten and set up with your own Buyer’s Pass.

The reality is that self-employed borrowers have more mortgage options today than ever before. The key is understanding how different loan programs view your income, and finding the one that best fits how your finances actually look on paper.

Here’s a clear breakdown of what to expect.

Why Self-Employed Income is More Complicated for Lenders

When you work for an employer, your income is straightforward: a W-2, a pay stub, and you’re off to the races. When you’re self-employed, your “income” on paper can look very different from what’s actually flowing through your life.

Business owners often write off significant expenses to reduce their taxable income — which is smart tax strategy, but it can make your adjusted gross income (AGI) look lower than what you actually earn. Lenders use your tax returns to verify income, so what you show the IRS tends to be what they use to qualify you.

That said, there are multiple paths forward depending on your situation.

Conventional Loans (Fannie Mae and Freddie Mac)

Best for: Self-employed borrowers with two years of tax returns showing strong net income.

For a conventional loan, lenders typically require two years of personal and business tax returns. They’ll average your net income (after business expenses) over those two years — and if your income has been declining year over year, they may use the lower figure or disqualify the income altogether.

What lenders look at:

• Schedule C income (for sole proprietors)
• K-1 distributions (for S-corps and partnerships)
• Business bank statements to confirm the business is active and liquid
• Year-to-date profit and loss statement (often required)

One helpful nuance: lenders can add back certain non-cash deductions like depreciation and depletion to your qualifying income. Working with an experienced loan originator who knows how to properly document self-employed income can make a meaningful difference in what you qualify for.

FHA Loans

Best for: Self-employed borrowers with lower down payments or credit scores who have documented income.

FHA loans follow similar documentation requirements to conventional loans — two years of tax returns, a year-to-date P&L, and business bank statements. The advantage is that FHA is generally more flexible on credit scores and allows down payments as low as 3.5%.

The income calculation method is similar: average the two-year net income after deductions, add back allowable items, and that’s your qualifying number.

One thing to keep in mind: FHA does require that you’ve been self-employed in the same line of work for at least two years. A career change alongside self-employment can complicate things.

VA Loans

Best for: Self-employed veterans and active-duty service members with qualifying service history.

VA loans are one of the best mortgage products available — no down payment required, no private mortgage insurance, and competitive rates. For self-employed veterans, they follow a similar income documentation process: two years of tax returns, a business P&L, and documentation of business stability.

VA underwriters are generally practical and experienced — they want to see that your business is viable and that your income is likely to continue. Strong bank statements and a well-organized loan file go a long way here.

Non-QM Loans: When Your Tax Returns Don’t Tell the Full Story

Here’s where things get interesting for many self-employed borrowers. Non-QM (non-qualified mortgage) loans are designed specifically for situations where traditional documentation doesn’t capture your true financial picture. They come with slightly higher interest rates in exchange for that flexibility — but for the right borrower, they’re a genuine solution.

Bank Statement Loans

Best for: Self-employed borrowers with strong cash flow but significant tax deductions.

Instead of using tax returns, a bank statement loan qualifies you based on 12 or 24 months of business or personal bank statement deposits. The lender calculates an average monthly income from those deposits (after applying an expense ratio) and uses that figure to determine what you can afford.

This can be a game-changer if you gross $20,000 a month but your tax return shows $60,000 annually after write-offs. Your deposits tell a much more accurate story.

Key things to know:

• Most lenders use 12 or 24 months of statements
• A business expense ratio is applied to business deposits (often 40–50%, though it varies by lender)
• Personal bank statement programs typically use a lower expense ratio
• Rates are higher than conventional loans, but the qualifying income can be dramatically higher

1099 Loans

Best for: Independent contractors, freelancers, and gig workers who receive 1099 income.

If you work as an independent contractor and receive 1099s rather than W-2s, a 1099 loan lets you use one or two years of 1099 forms — rather than full tax returns — to document your income.

This matters because many 1099 earners have business expenses that reduce their net income on Schedule C significantly. Using the gross 1099 amount (or a portion of it) can produce a much stronger qualifying number.

Common requirements:

• One or two years of 1099s from the same client or industry
• Proof that the self-employment continues (active contracts or current work)
• Bank statements to support the income

Asset Depletion / Asset Utilization Loans

Best for: Borrowers with substantial liquid assets but low or irregular income.

Asset depletion — sometimes called asset utilization — is a creative qualifying method that converts your liquid assets into a calculated monthly income. The lender takes your eligible assets (retirement accounts, brokerage accounts, savings) and divides them over a set number of months to arrive at a qualifying income figure.

For example: if you have $1.5 million in liquid assets and the lender divides that over 360 months (30 years), that’s $4,167/month in qualifying income — even if you have little to no documented earned income.

This can be an excellent fit for:

• Retirees or semi-retired business owners
• Borrowers between ventures
• High-net-worth individuals who pay themselves minimally on paper

Important notes:

• Retirement accounts are often discounted (80% of value is typical)
• The assets must be accessible — pledged or restricted funds don’t count
• Guidelines vary significantly by lender

Profit and Loss (P&L) Only Loans

Best for: Self-employed borrowers who can document income through a CPA-prepared or CPA-reviewed profit and loss statement.

Some non-QM lenders will qualify a self-employed borrower using a 12 or 24 month profit and loss statement prepared or certified by a licensed CPA — without requiring tax returns at all. This is often used when returns haven’t been filed yet, when the business is newer, or when the P&L better represents current income than older returns do.

What lenders typically require:

• CPA-prepared or CPA-signed P&L (some lenders accept self-prepared with certification)
• 12 or 24 months of business bank statements to support the P&L figures
• Strong credit profile (typically 680+ for most programs)

The interest rates on P&L-only loans are generally higher than bank statement loans, but they’re a legitimate and often underutilized option.

How Do You Know Which Program Is Right for You?

There’s no single answer — it depends on how your income is structured, what your tax returns show, your credit profile, how much you have for a down payment, and your long-term goals.

The best first step is to sit down with an experienced loan originator who works with self-employed borrowers regularly and knows how to evaluate all the options — not just the conventional path.

As a mortgage professional in Washington State with over 30 years of experience, I work with borrowers in exactly this situation all the time. Whether your income shows up cleanly on a tax return or not, there’s likely a program that works for you.

Ready to Explore Your Options?

If you’re self-employed and thinking about buying, refinancing, or just want to understand where you stand, I’d love to talk. I’ll take a look at your full picture and help you find the best path forward.

Rhonda Porter is a licensed Mortgage Loan Originator in Washington State. NMLS #121324.

Here’s what Washington State homebuyers need to know before making an offer on a FSBO
home.

What Does FSBO Mean?

FSBO stands for “for sale by owner” (often pronounced “fizz-bow”). It means the homeowner has chosen to sell the property themselves without hiring a listing agent. The seller takes on everything an agent would normally handle: setting the price, marketing the home, scheduling showings, and negotiating the sale.

The primary motivation is usually financial. Sellers who go FSBO are hoping to avoid paying a listing agent’s commission, which typically runs 2.5–3% of the sale price. On a $700,000 home in the Seattle area, that’s $17,500–$21,000 they’re hoping to keep.

FSBO sales are less common than you might think. According to the National Association of REALTORS®, only about 6% of home sales in 2024 were FSBO — a historically low share that reflects just how complex the process can be for sellers without professional support.

How a FSBO Sale Differs From a Traditional Listing

In a traditional home sale, there are two agents: a listing agent representing the seller and a buyer’s agent representing you. Both are licensed professionals with a legal obligation to their clients, experience navigating contracts and disclosures, and a financial stake in getting the deal to close.

In a FSBO sale, the listing agent is gone. The seller is handling everything themselves. That changes the dynamic in a few important ways:

None of this makes FSBO homes off-limits — many close without a hitch. But it does mean you need to go in informed, with solid professional support on your side.

The NAR Rule Change and What It Means for FSBO Buyers

In August 2024, new rules stemming from the National Association of REALTORS® settlement went into effect. One of the most significant changes: sellers are no longer required to offer compensation to a buyer’s agent.

In a traditional MLS listing, buyer’s agent compensation is typically negotiated as part of the listing agreement. In a FSBO sale, the seller may not have thought about this at all — and may have no intention of covering it.

If you want buyer’s agent representation for a FSBO transaction, clarify upfront:

• What does your agent charge, and what does your buyer-broker agreement say?
• Will you try to negotiate seller-paid compensation as part of your offer?
• If the seller won’t cover it, are you prepared to pay it yourself?

This is a real conversation to have before you fall in love with a FSBO listing. The rules have changed, and buyers need to understand what professional representation will cost them in this new environment.

Why Pre-Approval Matters Even More With FSBO

In a traditional sale, a listing agent vets buyers before accepting offers — they’ll push back on an offer that arrives without a pre-approval letter. A FSBO seller doesn’t always know to do this, but that doesn’t mean you should skip it.

Getting pre-approved before approaching a FSBO seller signals that you’re a serious, qualified buyer — not someone who’s just curious. It also gives you negotiating credibility with someone who hasn’t been coached by an agent on how to evaluate offers.

Beyond the optics, pre-approval tells you what you can actually afford before you’re emotionally invested in a home. That’s always true — but in a FSBO transaction, where you may be negotiating face-to-face with someone who built a life in that house, knowing your numbers before you sit down at the table matters even more.

Mortgage Considerations Specific to FSBO Transactions

The mortgage process itself works the same way whether the home is listed by an agent or sold by the owner. The same loan programs apply — conventional, FHA, VA, USDA — and the same underwriting and appraisal requirements are in place. But a few things deserve extra attention in FSBO transactions.

Appraisals and Seller Pricing

FSBO sellers sometimes don’t accurately price their homes. Without a listing agent pulling comparable sales and providing a professional market analysis, sellers may rely on Zillow estimates or a neighbor’s sale from two years ago. If the home appraises below the contract price, your lender will base the loan on the appraised value — not what you agreed to pay. That creates an appraisal gap you’ll need to either negotiate away, pay out of pocket, or walk away from.

Make sure your purchase contract includes an appraisal contingency. This protects you if the value comes in short.

Repairs and Inspection Findings

In a traditional sale, a buyer’s agent presents repair requests to the listing agent, who frames them professionally to the seller. In a FSBO transaction, you or your agent are talking directly to someone who painted that deck and replaced that water heater themselves. Repair negotiations can get personal. Include a home inspection contingency in your contract, and be prepared for the possibility that the seller responds differently than a professionally represented seller would.

Lenders may also require certain repairs before funding, particularly for FHA and VA loans, which have minimum property standards. If the appraiser flags a condition issue, those repairs need to happen regardless of how the seller feels about it.

Earnest Money and Escrow

Your earnest money deposit should always be held by a neutral third party — an escrow or title company, not the seller directly. In Washington State, it’s standard practice for a licensed escrow company or title company to hold earnest money. Make sure that’s spelled out in your purchase and sale agreement. A FSBO seller who asks you to write a check directly to them is a red flag.

Seller Disclosures

Washington State law requires sellers to complete a Form 17 seller disclosure statement — a detailed document covering everything from known defects to boundary disputes to HOA assessments. Listing agents make sure this happens. FSBO sellers are still legally required to complete it, but may not be aware of all the requirements or may complete it incompletely. Review the Form 17 carefully, and if anything is missing or unclear, address it before removing contingencies.

Should You Use a Buyer’s Agent for a FSBO Home?

This is ultimately your decision, and the answer depends on your experience level, the complexity of the transaction, and the compensation question we discussed above. But here’s my take as a mortgage advisor who has seen both go smoothly and go sideways:

The financing side of a FSBO transaction is no different. I’m working the same process, pulling the same documents, coordinating with the same escrow and title teams. What I’ve seen buyers underestimate is the contract side — the purchase and sale agreement, the contingency language, the repair addendum. These documents have real financial and legal consequences, and a FSBO seller isn’t going to protect your interests in them. A buyer’s agent does.

If you’re an experienced buyer with a clean transaction and a motivated seller who’s cooperative and knowledgeable, you may feel comfortable proceeding without representation. If you’re a first-time buyer, or the property has any complexity — a septic system, a shared well, an HOA, deferred maintenance — having a buyer’s agent in your corner is worth the conversation about cost.

How I Fit into a FSBO Transaction

My role doesn’t change whether the home is listed by a top-producing agent or sold directly by the owner. I review your full financial picture — income, assets, credit, existing obligations — and structure financing that works for the specific property and your goals. I coordinate with the escrow and title company on the lender’s requirements. And I flag anything I see that could affect your ability to close.

Where FSBO transactions sometimes need extra attention is on timeline communication. When there’s no listing agent fielding calls and keeping the seller informed, I make sure to communicate our milestones clearly — when appraisal is ordered, when underwriting is moving, what we need from the seller’s side to keep closing on track. A well-informed seller is a calmer seller, and that makes for a smoother transaction for everyone.

If you’re looking at a FSBO home in King, Pierce, or Snohomish County, I’m happy to walk through your options before you make an offer. Contact me to get started.

Frequently Asked Questions About FSBO Homes

What does FSBO mean?

FSBO stands for “for sale by owner.” It means the homeowner is selling the property themselves without hiring a listing agent. The seller handles pricing, marketing, showings, and negotiations directly.

Can I get a mortgage on a FSBO home?

Yes. The mortgage process works the same way whether the home is listed by an agent or sold by the owner. The same loan programs, underwriting standards, and appraisal requirements apply. The main difference is that there’s no listing agent coordinating on the seller’s side, so clear communication between buyer, seller, and lender is especially important.

Do I need a buyer’s agent to buy a FSBO home?

You’re not required to use a buyer’s agent, but it’s worth considering. A buyer’s agent represents your interests in the negotiation, reviews the purchase and sale agreement, and coordinates the transaction on your behalf. In a FSBO sale, there’s no listing agent acting as a professional buffer — the negotiation can be more direct, and sometimes more emotional. Your mortgage lender handles the financing side regardless, but contract representation is a separate decision.

Will the seller pay my buyer’s agent in a FSBO transaction?

Not necessarily. Since August 2024, sellers are no longer required to offer buyer’s agent compensation under NAR settlement rules. In a traditional MLS listing, compensation is typically negotiated as part of the listing agreement. In a FSBO sale, the seller may not have planned for this. Before engaging an agent, discuss their compensation structure and whether you’ll need to negotiate that with the seller or cover it separately.

What happens if the FSBO home appraises below the purchase price?

If the home appraises below the agreed purchase price, your lender will base the loan amount on the appraised value, not the contract price. That means you’d need to renegotiate the price, make up the difference in cash, or walk away if you have an appraisal contingency. FSBO sellers sometimes overprice their homes — an appraisal contingency in your purchase agreement is important protection.

What is earnest money and how does it work in a FSBO sale?

Earnest money is a good-faith deposit you make when your offer is accepted. In a traditional sale, it’s held by the escrow company or a real estate brokerage. In a FSBO transaction, make sure earnest money is held by a neutral third party — an escrow or title company — not paid directly to the seller. This protects your deposit if the transaction falls apart for any reason covered by your contingencies.