Home Buying in Seattle>Question Details

Amy, Other/Just Looking in Tri Cities, WA

What closing costs are involved in a cash sale for the buyer in WA state?

Asked by Amy, Tri Cities, WA Mon Jan 9, 2012

Are escrow services needed and who pays for them? And who decides which company to use? Thanks in advance for any advice.

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I cannot believe how many people already answered your question here.. We are such a helpful bunch of great people.
0 votes Thank Flag Link Mon Jan 9, 2012
Amy,
Rather than guess, I ran some numbers through Title Companies fees estimator to give you a clearer idea.
I'm having to guess the purchase price and many of these fees will adjust up or down with different amounts, but based on a purchase of $500,000 the seller would pay for a Title Insurance Policy approx. $1192 plus tax, Escrow at $800 plus tax and they would pay an excise tax of 1.78% which would be $8905 based on $500k, and any remaining property taxes due on the property for the period they owned it.
The buyer would pay $800 toward Escrow and a recording fee of appx $135.
There may be wire transfer or other smaller fees as well. These are estimated and not guaranteed, but intended to provide you a rough idea what you may expect.
0 votes Thank Flag Link Mon Jan 9, 2012
Though you didn't specify the type of property, if a cash buyer was looking at condos, there will be a pre-paid homeowner association dues deposit, association transfer fee and a move-in/move-out fee. In some cases with short sales and bank-owned properties, we're seeing the cost of the resale certificate (documents, CC&Rs, financials, etc) shift from the seller, who traditionally pays for it, to the buyer.
0 votes Thank Flag Link Mon Jan 9, 2012
Must use escrow and title and it's negotiable who chooses the companies. Sometimes the seller will have already ordered title. Depending on the cost of the home it will run about $1,000-$3,000. for both
It's wise to get a home inspection which will be about $400.
And although you don't have a lender madating this, it's not a bad idea to get an appraisal as well. Just to be on the safe side. Will run about $500 + depending on home price.
And if you're not closing right away, you'll likely have to put down some sort of earnest money that will be applied at closing.
0 votes Thank Flag Link Mon Jan 9, 2012
Amy,

Thanks for asking a question about escrow. Few people understand escrow. Escrow officers are licensed and regulated by the state for the purpose of closing real estate transactions. Escrow receives and holds funds from the buyer, and transfers title from seller to buyer, which is commonly referred to as the 'closing'. In Washington, escrow fees are split between buyer and seller. Escrow fees vary, depending upon the terms and conditions of your purchase agreement, but it's unusual for the buyer's portion of escrow to be above 3% of the purchase price. As a buyer, it is your choice which escrow company will close the sale. In some cases, the seller or the lender may stipulate which escrow is used, however, escrow is always neutral no matter which closing agent is selected. In rare cases, you can have two escrow companies involved in the closing of a sale, an escrow for the buyer and different escrow for the seller. That is known as a 'split escrow'. For specific questions, you might contact Patty O'Young at 206.722.4900. Patty is the owner of Columbia Escrow, in Seattle. I hope this information was helpful to you.
0 votes Thank Flag Link Mon Jan 9, 2012
You do not pay any loan costs as there is no loan so therefore, there is no doc fee, no impound of 6 months taxes and insurance. The real estate agent is paid through the SOC by the buyer. You will however pay for your Home Owners Insurance Policy for fire and hazard insurance at closing.

You may wish to have an inspection, I highly recomend it.

After that, you will have one half of the escrow fee, the seller will pay the title policy. The coice of the Escrow Company is negotiable. If it is a condo there may be an HOA transfer fee. You may pay a small recording fee as well.

I would be happy to email you a sample closing statement for your reveiw if you would like.

Hope this helps.

Marcy Spieker
RE/MAX Metro Realty
0 votes Thank Flag Link Mon Jan 9, 2012
The big ones is typically one half the escrow fee. The seller pays for your title insurance, typically agent fee and the excise tax. Those are the most significant of the closing costs.
0 votes Thank Flag Link Mon Jan 9, 2012
Amy, an escrow service should be used. Traditionally the seller chooses the Title company (since they open 'preliminary title') and traditionally the buyer chooses the escrow company (since they open escrow by depositing the earnest money check). However, more and more title companies are offering escrow services at a slight discount so the seller directs both companies since they are frequently the same company. If you use an agent, they will be able to give you several options to use. If not... well, I suggest you do. You will pay your half of escrow (a few hundred to a thousand or more depending on the price of the house), you may pay up to 6 months of property taxes, insurance for a few months, document preparation fees, pro-rated amounts of utilities, and maybe a few other small fees along the way.
0 votes Thank Flag Link Mon Jan 9, 2012
There are also title fees and whatever your loan costs come out to be. That with the escrow fees are a buyers closing costs.
0 votes Thank Flag Link Mon Jan 9, 2012
Escrow services are a good idea, and a general practice in almost all real estate transactions. The costs are paid by both the seller and the buyer equally. The company to use is an agreement between both parties.
0 votes Thank Flag Link Mon Jan 9, 2012
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