Home Buying in Battle Ground>Question Details

Paige, Home Buyer in Battle Ground, WA

What are the sellers expenses at closing when doing a owner contract to sell a home?

Asked by Paige, Battle Ground, WA Thu Mar 13, 2008

I am buying my brothers house on a private contract but we are still going to fill out a sales agreement and go through closing in Washington State. What are the sellers closing costs and what would buyers closings costs be in the state of Washington? We are going to split the costs and he is selling for what he owes plus the cost of selling it to us. Any advice?

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The costs of selling on a real estate contract, is essentially no different than financing thru a lender, except the lender costs.

There is 1.78% excise tax due by the seller...
there are title and escrow fees . You can get estimates online at Clark County Title,
There are minimal recording fees etc. very typical of any transaction
The property taxes will be pre-paid to the next collection date. Whether those taxes are current makes a difference, and the buyer pays in advance, at closing from the date of closing.

IF there is an underlying mortgage, there may be a "due on sale" clause, which you need to understand the possible ramifications of your plan.

If you utilize a 3rd party note service company.(I recommend this)..the set up fee is 125.00 and the monthly from 7-14/mo,
this records the payments, provides the interest paid statement for end of year taxes, and generally a good idea..even with family. Your payment goes to a 3rd party servicer, then to the bank.

The title company will create a HUD SETTLEMENT STATEMENT for you in advance, so you each know your respective costs, fees.

If you need further assistance, with your agreement, note or real estate contracts... Drop me a note. I can assist you with the preparations, but some legal council is advised.

Gloria Matthews
1 vote Thank Flag Link Fri Mar 25, 2011
In your situation...I think this is a pretty good start..
Sellers Costs:
-state excise tax of 1.78% of sale price (this is the big one next to agent commissions which you'll have none)
-half the escrow fee which is based on sale price (ie. $450K house is $1400 total, ..so cost to you $700)
-title insurance to buyer, based on sale price (ie, $450K house is upwards of $1120 total)
-remaining balances of loans that are on the house, plus any pre-payment penalties
-utility payoffs (could range from $0 to whatever is owed to the utilities)
-oh..there's sales tax on title and escrow
-different escrows will charge some junk fees for stuff... just negotiate them out.

Buyers (assuming there is a lender involved):
-pro-rated county property taxes
-all lender fees which can include origination fees, tax services, appraisals, credit reports, etc.
-loan interest from day you closed to first of the next month
-home owner's insurance policy (some (all?)) lenders won't give you a loan unless you have insurance)
-the other half of escrow
-title insurance to the lender
-recording fees to the county
-sometimes other miscellaneous junk fees...try to negotiate them out...the one that annoys me is an email doc fee. ..they charge you to email the documents ..they claim it's to cover the cost of toner. I say..that's the cost of doing business.

Sorry, I can't give you exact numbers on the lender fees.. Often times the origination fee is 1% of the amount being borrowed. Appraisals can be $400-$500 bucks, credit report is around $35... ask the lender for a good faith estimate and that should have all the fees there.

The big cost for the buyer is the loan fees + title + escrow. For the seller ...in your case without an agent..it's excise tax + title + escrow.

Good luck. Check the web reference for escrow and title rates. there are lots of companies, but not everyone publishes their rate schedule.
1 vote Thank Flag Link Thu Mar 13, 2008
Approximatly 3% of the sales prices of the home to each the buyer and the seller is what you can expect to pay.
0 votes Thank Flag Link Wed Nov 17, 2010
The largest of the closing costs to the seller will be the state Excise tax which is 1.78%. To the buyer, it's usually the loan fees. Other closing costs will be title and escrow fees, property tax, insurance and other misc. fees. The final total wouldn't be known as it calculated as of the actual closing date. The Title company can provide you with what is called an estimated HUD statement which is usally pretty close. The basic rough number I use going in is about 3% of the sales price to each the buyer & seller. It should not be worse than that unless there is something out of the ordinary.
0 votes Thank Flag Link Thu Mar 13, 2008
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