Doug Burger
As of January 1, 2024, per Chapter 18.86 RCW - "Washington State law now requires brokers to enter into a written services agreement to represent either a buyer or a seller. Agreements must address the broker’s compensation, the scope of representation and all related terms."
Unless you happen to find a private owner and are willing to take the risks of going it alone, if you are going to purchase real estate in the State of Washington, you must enter into a Buyer Agency Agreement. Real Estate Brokers and their respective Brokerages are required to have this agreement in place PRIOR to rendering real estate services.
Doug Burger
As of January 1, 2024, per Chapter 18.86, RCW - "Washington State law now requires brokers to enter into a written services agreement to represent either a buyer or a seller. Agreements must address the broker’s compensation, the scope of representation and all related terms."
Unless you happen to find a private owner and are willing to take the risks of going it alone, if you are going to purchase real estate in the State of Washington, you must enter into a Buyer Agency Agreement. Real Estate Brokers and their respective Brokerages are required to have this agreement in place PRIOR to rendering real estate services.
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What Are the Costs Involved in Purchasing Real Estate?
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Listen or read as you go through this page to learn about the costs involved in purchasing real estate.
So you're considering buying real estate but are totally confused as to how to go about it. First of all, what is it ultimately going to cost? What are all of the different fees involved? Who pays them. Your mind is swimming with questions. Totally natural. It's not every day that you venture into the complex industry of real estate sales.
You've come to the right place. While this website covers virtually everything about buying and selling real estate, this page is dedicated to talking about the costs involved and various ways buyers can allocate them. By allocating the costs, I'm meaning that a buyer could pay all of their own costs, thus possibly negotiating a better price on a property. They could also pay little to no costs by asking the seller to pay them. Of course there are unlimited scenarios between these to extremes.
Let's first start with listing various costs for both buyers and sellers. While this list is fairly extensive, there are costs which may not be present in your particular purchase. Although rare, there could be something that isn't covered here. The point being is that almost every purchase and sale is a little different. Our goal is to make you aware of these costs and who typically pays them. We've purposely not entered any actual dollar amounts as each can vary. Also, some costs are fixed, either by dollar amount or percentage, while others are negotiable.
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Theoretically, either the buyer or the seller can pay for almost every cost involved in the purchase and sale of real estate. Exceptions to this can arise, however, where certain lending guidelines will prohibit a buyer from paying certain costs, and/or a seller from paying more than a certain percentage of buyer costs. Your lender can help you on this subject.
While the costs below are shown as Seller and Buyer costs, it does not, by any means, indicate that all of these costs are paid by the entity they fall under. Through negotiations, some, and on occassion all of the buyer costs, as an example, are shifted to the Seller column.
Typical Seller Costs
- Reconveyance Fee
- County Deed/Excise Tax
- State Deed/Excise Tax
- Seller Broker Fees
- Title Insurance for Buyer
- One Half of the Escrow Fee
- Prorated Property Taxes
- HOA Transfer Fee
- Prorated HOA Dues
- Prorated Utility Fees
- Document Recording Fees
Typical Buyer Costs
- Down Payment
- Title Insurance for the Lender
- Home Inspection
- One Half of the Escrow Fee
- Prepaid Interest
- Prepaid Property Taxes
- Buyer Broker Fees
- 12 Months Property Insurance
- Prepaid Property Insurance
- Appraisal Fee
- Appraisal Re-inspection Fee (rare)
- Mortgage Origination Fee
- Credit Report Fee
- Document Preparation Fee
- Underwriting Fee
- Loan Processing Fee
- Document Recording Fees
- Prorated HOA Dues
Typical Seller Costs
- Reconveyance Fee
- County Deed/Excise Tax
- State Deed/Excise Tax
- Seller Broker Fees
- Title Insurance for Buyer
- One Half of the Escrow Fee
- Prorated Property Taxes
- HOA Transfer Fee
- Prorated HOA Dues
- Prorated Utility Fees
- Document Recording Fees
Typical Buyer Costs
- Down Payment
- Title Insurance for the Lender
- Home Inspection
- One Half of the Escrow Fee
- Prepaid Interest
- Prepaid Property Taxes
- Buyer Broker Fees
- 12 Months Property Insurance
- Prepaid Property Insurance
- Appraisal Fee
- Appraisal Re-inspection Fee (rare)
- Mortgage Origination Fee
- Credit Report Fee
- Document Preparation Fee
- Underwriting Fee
- Loan Processing Fee
- Document Recording Fees
- Prorated HOA Dues
Below are charts depicting approximate percentages each fee has on the total costs to buy or sell. Actual percentages are not listed because they will vary from case to case. However, the relativity of each cost to the others is in the ballpark. It, at least, gives you a visual of the relative size of each cost to the total costs.
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Seller Costs
NOTE: These costs can vary. Some may not apply, some are optional, and there could be others not listed.
Buyer Costs
NOTE: These costs can vary. Some may not apply, some are optional, and there could be others not listed.
Seller Costs
NOTE: These costs can vary. Some may not apply, some are optional, and there could be others not listed.
Buyer Costs
NOTE: These costs can vary. Some may not apply, some are optional, and there could be others not listed.
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In reality, every transaction is a bit different. It all depends on the situations of the buyer and seller, their financial pictures, the type of loan the buyer is getting, and each sides motivation when it comes to buying or selling real estate.
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While the variations are virtually unlimited, below you will see depictions of scenarios very common in real estate transactions. These are negotiated transactions with the seller paying some or all of a purchaser's closing costs, and/or brokerage fees. Obviously, there has to be tradeoffs involved to accomplish these scenarios. Your dedicated buyer broker can best advise you as to how to accomplish this.
Seller Pays Their Own Closing Costs Plus the Buyer Brokerage Fee for the Buyer
This is a very common negotiation between buyers and sellers. Basically, the buyer is rolling the cost of the buyer brokerage fees into the price of the home and the seller then pays it through escrow. As opposed to paying the fees upfront, the buyer is essentially financing the fees. Theoretically, if they paid the buyer brokerage fee, the price of the home could be less by that amount. This, of course, would be subject to negotiation with the seller.
Seller Pays ALL of Both Their Closing Costs as Well as the Buyer's Closing Costs
This is quite common in low to no-downpayment loans where the buyer is paying minimum to nothing out of pocket. The chart depicts an FHA loan where the seller is paying all of the buyers' closing costs. All the buyer has to pay is their 3.5% down payment and a home inspection fee.
Seller Pays Their Own Closing Costs Plus the Buyer Brokerage Fee for the Buyer
This is a very common negotiation between buyers and sellers. Basically, the buyer is rolling the cost of the buyer brokerage fees into the price of the home and the seller then pays it through escrow. As opposed to paying the fees upfront, the buyer is essentially financing the fees. Theoretically, if they paid the buyer brokerage fee, the price of the home could be less by that amount. This, of course, would be subject to negotiation with the seller.
Seller Pays ALL of Both Their Closing Costs as Well as the Buyer's Closing Costs
This is quite common in low to no-downpayment loans where the buyer is paying minimum to nothing out of pocket. The chart depicts an FHA loan where the seller is paying all of the buyers' closing costs. All the buyer has to pay is their 3.5% down payment and a home inspection fee.
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Seller Pays ALL of Both Their Closing Costs as Well as the Buyer's Closing Costs on a Zero Down VA Loan
This is quite common in no-downpayment VA loans where the buyer is paying nothing out of pocket with the exception of a recommended home inspection. In this negotiated scenario, the buyer is able to purchase a home for approximately $500 out of pocket.