What are Closing Cost?Washington State

In Washington State, home closing costs are fees and expenses that are associated with the purchase of a home. They are paid at the time of closing, which is when the home is transferred from the seller to the buyer. Closing costs can vary depending on a variety of factors, such as the location of the home, the type of loan being used, and the fees charged by the lender and other parties involved in the transaction.

Here are a few examples of common closing costs in Washington State:

• Loan origination fee or lender fee: This is a fee that is charged by the lender to cover the cost of processing the loan application and preparing the loan documents. This origination fee/lender fee can be a percentage of the loan amount or a flat fee. 

• Appraisal fee: This is a fee that is paid to a licensed appraiser to determine the value of the home. The lender will use the appraisal to ensure that the home is worth the amount being borrowed. This amount can range from $800-$1200 on average and depends on what type of loan program you use. Some appraisals can incur rush fees. 

• Title fee: This is a fee that is paid to a title company to conduct a search of the property's title to ensure that there are no outstanding liens or other issues that could affect the ownership of the property.

• Escrow fee: This is a fee that is paid to a neutral third party (the escrow company) to hold earnest money, prepare the closing documents, and ensure that all parties involved in the transaction are following the terms of the agreement.

• Survey fee: This is a fee that is paid to a surveyor to prepare a map of the property, showing the boundaries and any structures on the land. This is now a common fee, but it can be charged for certain types of title insurance. 

• Homeowner's insurance: This is insurance that protects the home and its contents from damage or loss. It is typically required by the lender as a condition of the loan.

• Property taxes: Prorated roperty taxes are taxes that are paid to the local government based on the value of the property usually based on the day of closing. They are typically collected by the lender and held in escrow until they are due.

• Title Insurance: This is a fee that you can elect to pay to cover the cost of title insurance. Title insurance is a product that protects the home in the event that the title search erroneously leaves something off, is missed/overlooked, or someone brings a claim on the property that relates to ownership.

• HOA Dues: This applies if you have an HOA - they will collect prorated fees to cover from day of closing until their next collection date. 

• Commissions: This is the real estate agents fee for providing a service to either the buyer or seller - review your listing and buyer agency agreements for those amounts. 

Closing costs can add up, so it's important to understand what costs you will be responsible for when you purchase a home. Be sure to ask your lender for a detailed list of closing costs, and shop around to compare fees from different lenders and service providers. Be sure to work with someone who can review those fees so they are not hidden, and then you are locked in. By being informed and proactive, you can help ensure that you are prepared for the costs of closing on your new home.

Interested more about life in Kitsap, WA? Reach out to Kelsey for her interactive guide to Kitsap filled with local tips - restaurants, things to do, and local vendors. Thinking about buying or selling? Kelsey would love to chat to see how she can help or if she is a good fit for you. She also knows agents around the country part of her military-affiliated network - The Military Move - she would love to connect you.