What closing costs do home sellers pay in Washington state?

Home sellers in Washington typically pay Real Estate Excise Tax (REET), brokerage commission, title and escrow fees, and any negotiated buyer credits or repairs. On Whidbey Island, these expenses often total several percent of the home’s sale price, making it important to estimate your net proceeds before listing.

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The Number That Matters Is Your Net

When homeowners on Whidbey Island or in Anacortes think about selling, they often focus on one number: the sale price.

But the number that truly matters is your net proceeds—the amount left after Washington’s Real Estate Excise Tax (REET), commissions, mortgage payoff, and closing costs are deducted.

Understanding these expenses before your home hits the market helps you price strategically, negotiate confidently, and avoid surprises on closing day.

We’re Jeff and Kara Vallejo, Realtors serving Whidbey Island and Anacortes, and we prepare a personalized seller net sheet for every client so they know exactly what to expect.

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Washington Real Estate Excise Tax (REET)

One of the biggest expenses sellers encounter is Washington’s Real Estate Excise Tax (REET).

Unlike many states, Washington requires sellers to pay a graduated excise tax based on the home’s sale price.

The state tax currently begins at 1.10% on the first portion of the sale price, with higher rates applying as the sale price increases.

In addition, local governments charge their own REET, typically between 0.25% and 0.50%, depending on the property’s location.

For many Oak Harbor and Whidbey Island homes, REET alone can amount to several thousand dollars.

Because this tax applies regardless of whether you made a profit on the sale, it’s essential to include it in your financial planning.

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Brokerage Commission

Real estate commission is negotiable and outlined in your listing agreement.

Today’s market offers more flexibility than ever, allowing sellers to choose compensation structures that fit their goals and marketing strategy.

While commission represents one of the largest selling expenses, effective pricing, professional marketing, and skilled negotiation often help sellers achieve significantly stronger results than attempting to save on representation alone.

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Other Closing Costs Sellers Should Expect

In addition to REET and commission, sellers commonly pay several other closing costs.

These may include:

• Owner’s title insurance policy
• Escrow fees
• Recording fees
• Mortgage payoff processing fees
• Septic inspections for qualifying Island County properties
• Negotiated repair costs
• Buyer closing cost credits, when applicable

Individually these costs may seem modest, but together they can noticeably affect your final proceeds.

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Estimate Your Net Before Listing

One of the most valuable tools for any seller is a seller net sheet.

Before listing your home, we prepare a customized estimate that includes:

• Estimated selling price
• Washington REET
• Agreed-upon commission
• Estimated title and escrow fees
• Mortgage payoff
• Estimated seller concessions
• Estimated net proceeds

This simple calculation helps eliminate uncertainty and allows you to make informed decisions about pricing and timing before accepting an offer.

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Frequently Asked Questions

Who pays the Real Estate Excise Tax in Washington?

In a standard Washington real estate transaction, the seller pays the Real Estate Excise Tax (REET). Escrow collects the funds and submits the payment as part of the closing process.

Are seller closing costs tax deductible?

Many selling expenses are used when calculating capital gains rather than serving as direct tax deductions.

If the home was your primary residence, you may qualify for a federal capital gains exclusion.

Consult a qualified tax professional regarding your specific situation.

Can sellers reduce closing costs?

Some expenses are negotiable, while others are fixed by law.

Preparing your home before listing, pricing it correctly, and addressing maintenance issues early can reduce expensive repair negotiations during escrow.

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Want to Know Your Net Proceeds?

Before selling, it’s worth knowing exactly what you’ll walk away with—not just what your home may sell for.

We’re Jeff and Kara Vallejo, Realtors with Real Broker, LLC, proudly serving Whidbey Island and Anacortes. Send us your property address, and we’ll prepare a complimentary seller net sheet showing what your home could realistically put in your pocket after taxes and closing costs.

Visit us at www.jeffandkara.com, call or text 360-632-1601, or follow us on Instagram @jeffandkaravallejo.