Settling Up: Sellers in Washington State Pay These Closing Costs

Who pays what?

Many closing costs fall on the buyer’s side of the score sheet. Some costs are shared, and some are negotiable. Still, many real estate experts say sellers in Washington should prepare to pay anywhere from 2% to 9% of the sales price.

Seller fees

In Washington state, sellers typically pay the following closing costs:

• Real estate agent commission: Our research reveals that the national average real estate agent commission is 5.8% of the sales price; the listing agent and the buyer’s agent typically receive around 3% commission each. As the seller, it’s customary for you to cover the listing agent commission with your home sale proceeds, but you may also be on the hook for the buyer’s agent fee as an additional marketing tool for your property. You can use HomeLight’s Real Estate Commission calculator to estimate the commission for your home sale.
• Escrow fee: Most lenders require an escrow fee: a deposit sufficient to cover two months’ worth of property tax and mortgage insurance payments at closing. In Washington state, the buyer and seller usually split this fee unless it’s a VA transaction; in that case, the seller pays the entire amount. You pay the escrow fees at closing to the title company, escrow company, or attorney conducting the proceedings. The exact amount depends on the purchase price of the house.
• Title insurance premiums: Both buyer and lender will have title insurance policies. The owner’s and the lender’s title insurance covers the parties if there is an ownership dispute or conflicting liens that the title search missed. According to Lance Kenmore, a top agent who handles 84% more single-family homes than the average agent in his area, “Title insurance fees cover the cost to transfer title to the buyer,” adding that it’s usually about half a percent of the sales price of the house. In Washington state, the seller typically pays the buyer’s owner policy, while the buyer usually pays the lender policy and is responsible for extended coverage if they want it. The cost of title insurance depends on numerous variables, though it typically starts at a few hundred dollars.
• Title search fee: The seller pays the cost for a title company to search public property records for liens and ownership disputes. On average, title search fees run between $75 to $100. Kenmore notes that the title search is typically rolled into the title insurance fee due at closing.
• Tax liens or other judgments against the seller: As the seller, you must settle any judgments or liens to clear the title before transferring it to the buyer. There are two types of liens: voluntary and involuntary. A voluntary lien is when the homeowner uses their property as collateral to obtain another loan, such as a car loan. Involuntary liens are usually the result of a court judgment and can include property tax liens, child support liens, and IRS liens. In King County, it costs $18 plus $1 for each additional page to record the satisfaction of a lien.
• Homeowner’s association dues: The seller must pay all HOA dues or condo association fees; these dues are usually prorated according to the time of the sale. HOA and condo association dues vary considerably depending on the locale, the home’s size, and the amenities included. For example, Seattle condos commonly charge $200 to $300 per month for a one-bedroom.
• Loan payoff: The seller must pay off the balance of the mortgage on the property, including principal and interest owed up until closing.
• Reconveyance fees: Once the seller pays the mortgage balance, they’ll receive a reconveyance deed as proof. The seller is responsible for paying the fees for the new deed, which average $50 to $60 nationwide, to the mortgage company.
• Reconveyance recording fees: After obtaining a reconveyance deed, the seller must have it recorded, usually at the county recorder’s office. This fee is often passed along as a part of the cost of paying off your loan. It costs around $303.50 to record the first page of real estate documents in most Washington counties.
• Property taxes: Buyer and seller usually share this cost, which is prorated according to how many days are in the tax year under each party’s ownership. Property taxes in Washington are paid twice a year in the middle of each tax period. For example, taxes for January through June are due in April. Washington state is fortunate to have property tax rates below the national average, at about 0.9%. San Juan County comes in at the lowest tax rate: 0.62%, while Pierce County has the highest at 1.28%.
• Home warranty: The seller sometimes pays for a one-year home warranty. Kenmore suggests this is a negotiable fee that buyers like to request to sweeten the deal. In Washington, the average cost of a home warranty is $44–$109 per month, a reasonable amount to ward off emergency repairs and instill peace of mind in the buyer.
• Real estate excise taxes (REET): Also referred to as an excise tax or a documentary transfer tax, REET is the sales tax on the transfer of property and is a percentage usually about 0.5% to 1% of the sale price. REET differs in each county. The Department of Revenue has a calculator for the state REET tax.Washington sellers are responsible for this fee, but the buyer can be liable if it isn’t paid. Here’s the state’s graduated rate structure for excise tax in 2024:

Many fees depend on location. For example, because states, counties, and municipalities are responsible for levying transfer taxes and recording fees, those costs will vary region by region. Closing costs may differ depending on whether a title company or a real estate attorney conducts the closing. Anything outside of these listed costs is the buyer’s responsibility, Kenmore states.

Concessions and miscellaneous fees

Some Washington sellers may incur additional fees, such as document preparation fees to finalize legal papers, a licensed notary’s cost to verify signatures, or attorney fees if an attorney assists with closing.

In a buyer’s market, or a slow market, the seller may incentivize a buyer to purchase a property by offering concessions – closing costs or other expenses the seller agrees to pay to essentially reduce the amount of cash the buyer needs at closing.

These are “extras” the buyer sometimes asks for, Kenmore explains, and typically include things like appraisals, inspections, or points. “When we had high inventory, about 50% of offers had concessions,” Kenmore states. Meanwhile, when there is a lower inventory and multi-offers, “there are fewer concessions – about 10%.”

There are two different types of seller concessions:

• A financing concession means the seller agrees to pay part of the buyer’s closing costs.
• A sale concession involves non-real-property that the seller gifts to the buyer, such as furniture or moving costs.

There are rules to concessions, predicated on the type of loan the buyer gets, whether the property is a primary or secondary residence, and the size of the down payment. Most lenders limit seller concessions to 2% to 6% of the purchase price of the home.

Calculate your net home sale proceeds

If you find the list of Washington closing costs daunting, fear not. HomeLight provides a calculator to determine your net home sale proceeds; our tool takes into account your location, home value, closing costs, outstanding mortgage, and additional costs, such as staging and home repairs.

Know before you go

There shouldn’t be any surprise fees awaiting you at closing. You will have an opportunity to review an itemized list of all fees and credits in the seller’s settlement statement. The seller’s settlement statement will also detail your net profit and summarize the finances of the sale.

Washington sellers can consult the American Land and Title Association for additional information about closing. ALTA is a national trade association that searches, reviews, and insures property titles to protect homebuyers and mortgage lenders in real estate transactions.

A final word to the wise: Prepare to sign a seemingly endless stack of documents. Try not to get writer’s cramp.

DISCLAIMER: This article provides an estimate of a seller’s closing costs that is meant for educational and research purposes only; our calculation is not a guarantee. 

Header Image Source: (bill wegener / Unsplash)