Estimated closing costs are usually of some concern to just about anyone buying or selling a home. It is probably the No. 1 Question I get from both buyers and sellers: “What will be my closing costs?”
Estimated Closing Costs
The costs incurred at closing differ from region to region and across the country. So like much of this blog, be careful if you’re looking for information about a transaction outside of Washington. But if you’re looking for the skinny on closing costs in the Puget Sound region, you’re in the right spot.
Estimated Closing Costs in Western WA
This post relates to Seattle, the Puget Sound region, and pretty much everywhere served by the Northwest Multiple Listing Service (which is most of the state). That is because closing costs are largely apportioned by the NWMLS form that is routinely used for the Purchase and Sale Agreement (PSA).
Closing requires the involvement of a title insurance company to make sure title is good and all liens are paid. The buyer obtains a title insurance policy, as does any lender. Closing also requires the services of escrow and a closing agent. Finally, the Tax Man gets his share too.
Total Estimated Closing Costs Incurred by a Transaction
There is a great tool on the internet that will give you this exact information. From Fidelity National Title (but allowing for quotes from other title companies), this closing costs calculator really delivers the goods. It omits just the tax due. For more on that, see below.
The total costs as shown on the calculator are apportioned between the buyer and the seller per the terms of the PSA. I’ve summarized them here:
Closing Costs Paid by Seller in Seattle
- Excise tax of 1.78%
- Owner’s title insurance policy (for the buyer)
- One half escrow
- Recording cost of deed
And of course a handful of “miscellaneous” charges and fees of a few hundred bucks. All told, these costs usually approach 3%, which is a good rule of thumb.
Closing Costs Paid by Buyer in Seattle
- Loan costs (includes origination fee, appraisal, buy-down, etc. – get this info from your lender)
- Pre-paid property taxes and homeowner insurance premiums (as required by your lender)
- Lender’s title insurance policy (which protects your lender’s security interest in the house)
- One half escrow
- Recording cost of deed of trust
With, once again, the usual “miscellaneous” charges and fees.