Assessed values, are they important?

Tax assessment values in the Puget Sound area counties  are lower for 2011 than 2010 for median priced homes by  $20-$30,000.00 or more.  Land assessments are similar. Assessment values on MLS listings may be out of date.  Home prices are driven mainly by the market comps  and not assessed value.

Seller's Home Pre-Listing Inspection

Sellers who want to be fully prepared to market their home may want to include a pre-listing inspection.  This is particularly beneficial to owners of older homes and homes that have had multiple owners.  A pre-listing inspection will give the seller important information as to the real condition of the home and what a buyer might potentially discover upon inspection that could devalue the property or terminate the sale.  Surprise defects and requests for expensive repairs prior to closing or something that doesn't pass an appraiser's inspection are no fun for the seller and creates concern and worry on the part of the buyer.    Inspection reports will contain all the noted defects from a missing light bulb to a furnace or roof that needs replacing.  These are items the seller can take care of before listing the property and will be able to assure a buyer they are getting a well maintained home in good condition.

What are Buyer’s Closing Costs? Who Pays?

What are the Buyer's costs?

Buyers and Seller's of property both have what is termed " customary costs " incurred for the transaction.  The buyer's customary costs are a  50/50 split of the escrow fee, (except for the portion required to be paid by the seller in an FHA or VA transaction ), prorated taxes, HOA dues if applicable, pre-paid interest and insurance premiums.  Additionally,  buyer's costs also include Loan fees, appraisal charges and title insurance costs for the lender.   These costs combined are what make up the buyer's closing costs and can add up to 3.0% - 3.5% of the purchase price for an FHA, VA or USDA loan or other special program loan.    ( Ex: up to $ 7500.00  on a $200,000.00 purchase ).  Buyer closing costs are generally lower when using a Conventional Loan and lowest for a cash purchase.

Who Should Pay?

Buyer's closing costs are just that, the buyer's costs.  In contrast, it has become almost a custom in our northwest area market for an offer to purchase to include a request for the seller to contribute funds to the buyer's costs to close.   In some cases the seller will include an offer to pay some of the buyer's closing costs pre-calculated into the listing price.    When making an offer to purchase that includes a request for buyer closing costs, keep in mind that the seller has closing costs as well ( see What are Seller's Closing Costs? on this Blog ) and work with your Realtor to structure an offer that can be accepted by the seller.   At times the price of the property may need to be raised to accommodate the buyer's costs.

Are There Advantages to Paying My Own Closing Costs?

Yes, for many buyers, closing costs are a deduction on your tax return.  If you have funds to close, it may be to your advantage to pay at least some or all of your own closing costs and negotiate a lower price for the property.   Seller's are more willing or able to accept a lower selling price if the offer does not include a seller contribution to buyer closing costs.

What are Seller's Closing Costs?

Sellers should consider closing costs and  bottom line ( net proceeds ) when pricing their home. Ask your Realtor to provide you with a net proceeds statement for possible selling price scenarios prior to listing and for any offer to purchase during the listing period.

Customary closing costs for sellers include:

• Half of the escrow fee (for some programs, the seller pays all of the escrow fee)


• Title insurance for the buyer


• Real estate brokerage fees ( negotiable, but generally 5-6% of selling price )


• Misc recording fees


• Washington State  real estate excise tax.  In King, Pierce and Kitsap counties in the excise tax rate is 1.78% of the contracted selling price.

Sellers hiring a brokerage to list and sell their properties should estimate their closing costs to be 8-9% of the contracted selling price.   Delinquent taxes or unpaid assessments due at closing are not included in this estimate.  FSBO ( Seller's selling their own properties )  should expect their customary costs of 3.-3.5% of the contracted selling price.

Realtors have seen over time a growing expectation on the part of buyers that the seller will pay all or part of the buyer's closing costs.  This can be expensive for buyers.  When pricing your home to sell,  keep in mind that you will most likely receive a request for a closing cost allowance or specific dollar amount to be paid for the buyer within an offer to purchase.   Expect to receive a request of up to  3% of the selling price to be contributed to the buyer's closing costs.  This is most common when the buyer is purchasing with a VA, FHA or USDA loan.  Conventional and cash buyer's closing costs are lower overall and they generally request a smaller amount or nothing at all.   It is in the seller's best interest to keep the door open and offer your home for sale to buyers using all of the buyer programs your property will qualify for.   Your Realtor will advise you how to adjust price to accommodate buyer closing costs within the home's value.