The Quick Guide to Buyer Closing Costs in Seattle

There is something special about buying a piece of real estate. Whether you are purchasing your first condo in Downtown Seattle or upgrading to your dream home on the shores of Lake Washington, there is a sense of excitement and satisfaction.

That feeling of accomplishment likely comes from the time it takes to diligently save up for the down payment. However, most buyers in Seattle - especially first-time buyers - don’t realize that buyers need more than just a down payment to purchase a home.

In addition to the initial equity buyers put down at closing or full purchase price if they are buying all cash, buyers also have to shell out additional funds for transaction-related costs called closing costs.

Below, we’ve compiled a quick guide to help inform Seattle buyers before starting their property search.

What are buyer closing costs in Washington State?

Buyer closing costs in Washington State, sometimes referred to as closing fees or purchase transaction costs, include various one-time fees that home purchasers pay in addition to the down payment. 

These costs can include mortgage loan origination fees, escrow fees, lien search fees, title insurance premiums, local recording fees, survey fees, inspection fees, and attorney fees if applicable.

Average closing costs in Seattle

The average closing costs buyers pay in Seattle will total between 2% and 5% of the purchase price. These closing fees will vary from transaction to transaction depending on the mortgage lender chosen, purchase price, mortgage loan amount, county the property is located in, and property type.

The closing fees related to underwriting and originating a mortgage are some of the largest transaction costs Seattle homebuyers incur. Therefore, buyers pursuing mortgage financing pay closing costs that total a larger percentage of their purchase price than all-cash buyers.

How to estimate buyer closing costs

There are two individuals you will interact with during your home buying journey that can provide guidance on potential closing costs. 

First, your mortgage broker can educate you on the potential closing fees when determining your budget during the pre-approval process. And once you formally submit a mortgage loan application for a specific property, the mortgage lender provides you with a document called a loan estimate, an itemized breakdown of every closing cost you will need to pay to close the transaction.

Second, your buyer’s agent can provide perspective on closing costs, including the buyer related fees most applicable to the local area. 

How to reduce closing costs in Seattle

Closing costs are a rite of passage for the home buying process, and it is important for buyers to do their research on what they can expect to pay prior to starting their home search.

That said, there is an easy way to offset a significant portion of your closing costs by working with a buyer’s agent in Seattle that offers a home buyer commission rebate.

The concept of a commission rebate is fairly simple. A buyer’s agent gives a portion of their commission to the buyer as a cash back rebate when buying a house. Prevu Real Estate rebates up to 1% of the buyer’s purchase price. That’s huge savings that can help offset closing costs, furnish the home, go toward renovations, or replenish a buyer’s savings post close.

Prevu’s Smart Buyer Rebate is the largest commission rebate in Seattle and buyers benefit from the company’s full service brokerage.Their local agents guide you every step of the way.

When are closing costs paid in Seattle?

The timing of when buyers can expect to pay closing costs will vary from transaction to transaction based on negotiated terms. 

Generally speaking, some smaller closing fees are paid when escrow is opened following the seller’s acceptance of a buyer’s offer. But the majority of buyer closing costs are paid when title of the property is transferred from seller to buyer at the closing of the real estate transaction.

Closing costs in a seller’s market vs. buyer’s market

The overall competitiveness of the Seattle real estate market may influence the closing costs a buyer pays. 

In a low competition market, sometimes referred to as a buyer’s market, there is a larger inventory of listings than there are interested buyers. When this occurs, buyers can sometimes negotiate that the seller pay a concession to help cover some buyer closing costs. While it is rare for sellers to agree to such a concession, it never hurts to ask if the property has been on the market for a while.

Alternatively, in a highly competitive market, sometimes called a seller’s market, there is a larger pool of interested buyers than there are listings. As a result, sellers have a stronger bargaining position when selling a home and are unlikely to entertain the idea of helping buyers with closing costs at all.

Interested in buying a home in the Seattle area? Browse listings and see how much you can save with Prevu’s Smart Buyer Rebate.