What closing costs does a seller pay in Washington state?

Reading the settlement statement

Every closing ends with a settlement statement, a page or two from escrow with the sale price at the top and a column of subtractions underneath. For a seller in Tacoma or anywhere else in Pierce County, those subtractions fall into two groups.

Some are set by law or by long local custom: the excise tax, the owner’s title policy, your half of escrow, property taxes and utilities split to the day, and whatever it takes to clear the loans and liens recorded against the house. Others are set by your own contract: the commission in your listing agreement, any money you agree to put toward the buyer’s side, and credits you give after an inspection.

Read those lines before you list, or at the latest before you sign an offer. The signing appointment is a bad place to meet them for the first time.

Real estate excise tax: the state’s graduated rate plus the local portion

For most sellers this is the largest fixed cost after the mortgage payoff. Washington charges real estate excise tax on the sale of real property, and the seller customarily pays it. The Department of Revenue notes that if the seller doesn’t pay, the buyer becomes responsible, which is why escrow collects it at closing.

The state portion is graduated. The sale price is cut into tiers and each tier is taxed at its own rate, so the higher rates apply only to the part of the price that reaches them. The thresholds are adjusted every four years. Below are the tiers in effect through the end of 2026, next to the ones the Department of Revenue has published for sales on or after January 1, 2027. What counts is the date of sale, which in an ordinary escrow closing is the closing, not the day you went under contract, so a sale that goes under contract in December and closes in January falls under the new column.

Cities and counties can add a local portion on top of the state tax, and most cities around here, Tacoma among them, do. The local rate depends on the property’s exact location, so an address in University Place and one in the Stadium District may not come out the same. Your escrow officer looks up the rate for your parcel and prepares the excise tax affidavit you sign at closing. Some transfers are treated differently, such as certain transfers between spouses or into a trust, and if one of those might apply to you, ask your escrow officer or an attorney before you assume anything.

Title insurance and escrow fees: who customarily pays which part

In Pierce County the seller customarily pays for the buyer’s standard owner’s title insurance policy. That policy protects the buyer against title problems that existed before the sale, such as an old lien or a recording error. If the buyer wants extended coverage, or the buyer’s lender requires its own policy, those costs usually go on the buyer’s side. The premium is priced from the sale amount using the title company’s filed rates, so it is predictable once a price is set.

The escrow fee pays the neutral party who holds the money, prepares the documents, and records the deed. In Washington that work is done by escrow companies and by the escrow departments of title companies, often by limited practice officers licensed to prepare closing documents. The standard purchase agreement most brokers use splits the escrow fee evenly between buyer and seller, and most transactions leave it that way. Cash buyers sometimes offer to pay all of it as part of their terms.

Escrow also itemizes the small charges: recording the release of your deed of trust, wire fees, courier fees.

Property taxes and utilities, settled to the day

Washington property taxes cover the calendar year and are paid in two halves, due April 30 and October 31, to the Pierce County Assessor-Treasurer. Closings rarely land on a due date, so escrow prorates. If you close in August with the first half paid, you have covered January through June, and you owe the buyer for July through your closing day. If you close in November with the full year paid, the buyer credits you for the rest of December. Any delinquent tax gets paid first, straight out of your proceeds.

If your lender has been paying your taxes and insurance from an escrow account, that account is handled separately from the sale. Once the loan is paid off, the servicer refunds whatever balance is left, usually by check a few weeks after closing. Watch the mail for it.

Utilities follow the same logic. For most addresses inside the city, Tacoma Public Utilities handles power and water and bills sewer and garbage along with them. Escrow will ask for a final reading and hold back enough to cover the last bill, because unpaid water and sewer charges can follow the property. Outside city limits the providers vary, so give escrow the name of every utility you pay early on.

The mortgage payoff and anything else recorded against the house

The payoff is almost never the balance printed on your last statement. Mortgage interest is paid in arrears, so the payoff includes interest right up to the day your lender receives the funds, plus any fees the lender is owed. Escrow orders a written payoff statement directly from the servicer, and that figure is the one used.

The preliminary title report shows everything else recorded against the property. A home equity line has to be paid off and formally closed, and escrow will have you sign a request to close it. Judgments, contractor liens, unpaid local improvement assessments, and any old deed of trust that was paid years ago but never released all have to be cleared before the buyer gets clean title. Read that report the week it arrives. A forgotten lien from a roofer can take weeks to clear, and it is far easier to deal with before a closing date is set.

If you are behind on payments, the payoff will also include late charges and any foreclosure costs already incurred. The article on selling a house before foreclosure in Washington walks through how that timeline affects a sale.

Commission and buyer credits are negotiated

There is no set commission in Washington. What you pay your listing broker is written into your listing agreement, and it is negotiable. Since 2024, Washington has required buyers and their brokers to sign a written agreement that spells out how the buyer’s broker is paid. Contributing toward that fee is a separate decision for the seller. Some sellers offer it up front, and some buyers ask for it in their offer.

Credits work the same way as a price reduction. A closing cost credit to help a buyer with their loan, or a repair credit after inspection, comes off your bottom line just as a lower price would. The difference is mostly in how the buyer’s lender treats it, which is why buyers sometimes prefer a credit.

A few things never appear on the settlement statement but still affect what you keep. Prep costs, a pre-listing inspection or sewer scope, cleaning, and hauling are paid as you go. Taxes on any gain are a separate question entirely: Washington’s own capital gains tax does not apply to the sale of real estate, but federal rules may, and a CPA is the right person to confirm where you stand.

Comparing a cash offer and a listing by what you keep

The settlement statement is also the fairest way to compare two ways of selling. A cash offer often looks lower at the top of the page, and then the lines underneath change. There is no buyer’s lender, so no lender-driven repairs or closing cost credits, and some cash buyers pay escrow or title fees themselves. A listing can bring a higher price, and it also brings commission, prep, inspection requests, and the mortgage payments, taxes, insurance and utilities you keep paying while the house is on the market.

The front page sets the two paths side by side in general terms, and the cash offer page explains how a request works. The version that helps you decide has your own address on it: two estimated net sheets built from the same payoff and excise tax, with honest estimates for everything else.