What are the typical Seller Closing Costs in SW Washington State?
Congratulations, you have sold your home! Time to celebrate – or is it?
Seller closing costs are an important topic because many sellers are a little surprised when they see their estimated closing statement from the title company.
We often get questions such as “what is this excise tax?” and “why do I have to purchase title insurance for the buyer?”
In addition, pro-rated items such as taxes, insurance, and HOA fees may not be top-of-mind you are thinking of your bottom line.
With that said, what is excise tax anyway??
Specifically, excise tax is “a tax on the sale of real estate” (Department of Revenue Washington State p. 1).
· Tax is applied to the seller and is typically paid by the seller.
· Counties get 1.3% of the excise tax amount to cover administrative costs and the state gets the remainder.
· The state further divvies up the tax by allocating 2% to public works assistance, 4.1% to the education legacy account, and the balance goes to the general fund.
· The state excise tax rate is 1.28%, HOWEVER, the excise tax rate for most of SW Washington state is 1.78%
In addition, in Washington state, the seller is typically charged for an “Owner’s Title Policy.” This policy protects the buyer against some title issues that can arise such as undisclosed heirs, errors or omissions in deeds, forgery, and even mistakes in examining title records.
Of course the seller usually has an underlying loan to payoff so that must be deducted from the proceeds.
Furthermore, there are also real estate commissions, title recording charges, escrow fees, unpaid HOA dues, and any liens or judgments against the seller that must be paid at closing.
Let’s look at an example of a typical sale in Camas Washington. We are going to assume the home sold for $435,000, which happens to be the current median sales price in Camas, Washington. Let’s also assume a closing date of July 7, 2017 and a mortgage payoff amount of $325,000.
Sales price: $435,000
· Owner’s Title Policy: $1,382.00
· Title Policy Sales Tax: $116.09
· Escrow Fees: $575.00
· Escrow Fee Sales Tax: $48.30
· Excise Tax: $7,748 (1.78% of sales price)
· Real Estate Commissions (figured at 5%): $21,750
· Pro-rated taxes (assuming a 7/7/17 closing date): $52.14
· Loan payoff: $325,000
This is just an overview of an assumed sale on this date in Camas, Washington.
If you would like help figuring out your net at close, just shoot us an email and let us help you figure out your potential bottom line.
PS: If you are thinking about selling, now is a GREAT time to sell in the Vancouver, Washington area. The inventory is historically low so sellers are getting top dollar and usually getting it in a short amount of time!
With over 13 years in the industry we have track record of helping folks get top dollar for their homes!
Ron and Sherry Patterson