Closing Costs In Washington: What to Know
Originally posted on https://www.biggerequity.com/closing-costs-in-washington-what-to-know/
Washington’s population is in an upswing, growing by more than 115,000 new residents in 2018 alone.
Are you looking to join these ranks?
Whether you’re moving into a new WA home or you want to sell yours and look elsewhere, you’ll have to go through a real estate closing process, first.
No matter which side you’re on, this can be an expensive part of the journey.
Today, we’re sharing a detailed overview of what both buyers and sellers can expect to pay to cover Washington closing costs. This way, you can understand your obligation and set your budget.
Ready to learn more? Let’s get started!
Typical Closing Costs for WA Buyers
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Before you can drive away with a title in your name, you’ll pay for a few services, first. In most cases, closing costs for Washington home buyers equal between 1% and 3% of the home’s total purchase price. This helps cover the work that key stakeholders, including title companies, appraisers, lenders, and real estate agents must perform to finalize the transaction.
When you apply for a loan with your lender, you’ll receive an estimate of all of these charges, which will vary depending on your specific situation. Let’s take a look at some of the standard charges that most buyers in the state will incur.
As the buyer, you’ll pay for title insurance, which protects you and ensures that there are no issues with the current title in place. This can run you more than $1,000 in some instances.
Document Recording Costs
Next, you’ll have to pay to change all official documents related to the property from the current owner’s name to yours. You’ll pay these fees, which cover the cost of creating new land records, to the city or county. They are around $225.
In addition, you’ll incur additional costs related to your mortgage. Some of the most common fees in this category include:
- Origination fees (Vary)
- Discount points (Vary)
- Credit report processing ($25)
- Appraisal fee ($375)
- Processor fees
- Survey fees ($300)
- Flood certification ($15 to $17)
Many sellers will work it out with the buyers to split the escrow fees 50/50. You’ll verify this setup in your purchase agreement. Most buyers in Washington pay around $750 in escrow.
Finally, expect to pay around $700 in state tax and $400 in intangible tax. Your mortgage loan amount determines the latter, which is similar to a real estate transfer tax.
Seller Closing Costs to Expect
Think closing costs are only designated toward the buyer? Not quite. Before you can sell your property and start looking for your next piece of Washington real estate, you’ll sign a few forms and pay a few fees, first.
While a seller closing cost calculator can give you a more exact estimate, let’s take a look at some of the most common fees you’ll incur.
State Excise Tax
In Washington, the state excise tax for the sale of a home is 1.78% of the home’s total sale price. So, for a $250,000 home, you’ll pay $4,450 as the seller.
This fee covers the work required to ensure that you’re the actual owner of the property and that the title is clean and marketable. If the buyer is taking out a mortgage to buy the property, he’ll also pay a title insurance fee to his lender.
In most cases, this fee will be around 1/3 of 1%. If you sell your home for $180,000, for instance, the seller’s title insurance fee would be about $600.
This percentage increases as the price of your home go down and vice versa. This means the most expensive homes in WA can see a title insurance fee of 1/5 of 1% or less. If you chose to bundle your policy with the buyer, you can often qualify for discounted rates.
You’ll also pay escrow fees as the seller. These will vary depending on which party you’re paying them to. In Washington, you may pay escrow to your title company, the closing service or your real estate attorney.
Real Estate Commission
If you work with a real estate agent to sell your home, you’ll pay that person a commission for the services rendered. This will usually be around 6% of the home’s purchase price.
You’ll agree to a commission rate in writing before you partner with an agent.
You’ll pay for the title change to occur and for the real estate attorney to make the official update to the county record. Most sellers in Washington pay to record a reconveyance of the title, which runs around $150.
If there are other forms that your attorney must process before the sale is complete, such as a road maintenance agreement or quit claim deed, you’ll pay extra for that service, as well.
You’re responsible for paying for all the property taxes up until the close date. The exact amount will depend on your location and the closing timeline. For instance, if you live in Spokane County, you’ll pay property taxes every six months, with the first payment due April 30 and the second due October 31.
Depending on when you close, you could see a credit or debit to your property tax account.
Sell Smart and Skip Washington Closing Costs
For both buyers and sellers, Washington closing costs can add up. Whether you’re getting new keys or giving yours up, you don’t want to lose a ton of valuable money in the process.
Want to sell you WA property and avoid this costly hassle?
That’s where we come in.
We buy houses for cash, and we’re looking for homes in Washington. We’ll help you skip the expensive and time-consuming closing process in a few quick steps.
Contact us today to learn more and see how simple real estate can be.