Washington State Closing Costs: What Buyers Pay and What to Expect

Washington buyers consistently underestimate what they'll need at closing. The down payment is only part of the picture — closing costs add another 1.5% to 3% of the purchase price on top. On a $700,000 home, that's $10,500 to $21,000 in additional cash due at closing.

Here's what those costs actually consist of, what's negotiable, and what comes as a surprise to buyers moving from other states.

Earnest Money: What It Is and What Happens to It

Earnest money is a good-faith deposit that goes into escrow when you sign the purchase and sale agreement. In Washington, standard earnest money is 1% to 3% of the purchase price, though buyers in competitive Puget Sound markets often offer more to strengthen their offer.

For a $700,000 purchase, 1% to 3% means $7,000 to $21,000 sitting in escrow.

Your earnest money is protected by contingencies in NWMLS Form 21 and its addenda:

• If your home inspection reveals problems and you exercise your inspection contingency, you get your earnest money back
• If your lender denies the loan after a good-faith application and you exercise your financing contingency, you get your earnest money back
• If the seller's required Form 17 disclosure statement reveals something material, you have a three-day right of rescission and get your money back

If you simply change your mind and walk away without a valid contingency, the earnest money is typically forfeited to the seller as liquidated damages — provided the default clause in Form 21 was initialed by both parties.

Earnest money must be deposited into the escrow company's trust account within three business days of mutual acceptance. It counts toward your down payment and closing costs at settlement.

Escrow Fees

Washington is an escrow state — there are no real estate attorneys at closing. Instead, a licensed escrow company manages the transaction as a neutral third party. Escrow fees typically run $500 to $800 per side. So as a buyer, you'll pay somewhere in that range.

Escrow fees vary by transaction complexity and purchase price. Some escrow companies charge flat fees; others calculate as a percentage of the purchase price with a minimum. Get a fee estimate from the escrow company early in the process.

Title Insurance

Title insurance is split into two policies in Washington:

• Owner's title policy — Protects your ownership interest against pre-existing title defects, undisclosed liens, or fraud. In Washington, it's traditional for the seller to pay for the buyer's owner's policy.
• Lender's title policy — Required by your mortgage lender. You pay for this one. The lender's policy protects the lender's collateral interest, not you personally.

Both policies are typically issued simultaneously, which usually qualifies the transaction for a "simultaneous issue discount." Combined, title and settlement services run roughly 0.5% to 1.0% of the purchase price. On a $700,000 home, budget $3,500 to $7,000 total — though you're only paying the lender's portion directly.

Recording Fees

Washington's recording fees are set by the county auditor and have risen significantly due to state-mandated housing surcharges. Current fees effective July 27, 2025:

• Deed (Warranty Deed): $303.50 for the first page, $1.00 per additional page
• Deed of Trust (Mortgage): $304.50 for the first page, $1.00 per additional page

These fees include a $183 Housing Affordability surcharge and a $100 Covenant Homeownership surcharge embedded in each document recording. Both the deed and the deed of trust are recorded at closing — that's roughly $608 in base recording fees, plus additional pages if the documents are lengthy.

Lender Fees

Lender fees are the most variable part of closing costs and depend heavily on which lender you choose and what loan product you're using.

Common lender charges:

• Origination fee: 0% to 1% of the loan amount. Many lenders charge a flat fee ($500 to $1,500) rather than a percentage.
• Discount points: Optional. Each point equals 1% of the loan amount and buys down your interest rate. In a high-rate environment, some buyers pay points; others don't.
• Appraisal: $600 to $900 for a standard single-family appraisal in Washington. Condos and complex properties run higher.
• Underwriting fee: $400 to $900, depending on the lender.

Shopping multiple lenders and comparing Loan Estimates (which lenders must provide within three business days of your application) is the most effective way to reduce this component of closing costs.

Prepaid Expenses

Prepaid expenses are not fees — they're money you pay upfront that covers future obligations:

Homeowners insurance: Lenders require you to prepay the first full year's premium at closing, plus the first two months as an escrow impound reserve. Washington homeowners insurance typically costs $1,200 to $2,500 annually for a standard home, depending on age, location, and coverage level.

Property tax escrow impound: Your lender will collect two to four months of property taxes upfront to fund an escrow account that pays your taxes when they come due. Washington property taxes run 0.80% to 1.10% of assessed value. On a $700,000 home assessed at that value, annual property taxes of $7,000 mean a monthly tax component of about $583 — so two months is roughly $1,166.

Prepaid mortgage interest: You pay per-diem interest from the closing date to the end of the month. The later in the month you close, the less you pay.

How Much House Can You Afford in Washington

Washington's mortgage markets follow federal qualification standards, so the core calculation is the same as anywhere: your debt-to-income ratio, not the home price, determines how much lenders will give you.

Most conventional lenders cap your total debt-to-income (DTI) ratio at 43% to 45%, with the housing expense portion (principal, interest, taxes, insurance, and HOA if applicable) ideally under 28% to 32% of gross monthly income.

For a $700,000 home with 5% down ($35,000), you're borrowing $665,000. At a 7% interest rate over 30 years, principal and interest is about $4,426/month. Add $583 in property taxes and $150 in homeowners insurance for a housing payment of roughly $5,159/month. To keep the housing ratio under 30%, that requires gross household income of roughly $17,200/month, or $206,000 annually.

King, Snohomish, and Pierce counties have 2026 conforming loan limits of $1,063,750, which means conventional loans — with 3% to 5% down — work on homes well above $700,000 without requiring jumbo loan underwriting standards.

Home Inspection: What Washington Buyers Should Check

Your inspection contingency window under NWMLS Form 35 is typically 5 to 10 business days. Use that time to assess:

Standard structural and mechanical: Foundation, roof, HVAC, electrical, plumbing, water heater. Standard in any state.

Sewer scope: In Western Washington, many older homes have cast iron or Orangeburg sewer laterals. A sewer scope inspection ($150 to $300) sends a camera down the line to check for roots, cracks, or deterioration. It's not included in a standard inspection.

Septic inspection: For rural properties in Eastern Washington or unincorporated Western Washington, NWMLS Form 22WW governs septic tank inspection and pumping requirements. Septic system inspections run $300 to $600.

Radon testing: Spokane County is an EPA Zone 1 high-risk radon area, with average indoor levels of 9.8 pCi/L — well above the EPA action limit of 4.0 pCi/L. Over 59% of Spokane County homes test above EPA limits. If you're buying in Spokane or Eastern Washington, always include a radon test during your inspection period. Mitigation costs $1,500 to $3,000.

Seismic risk: For homes built before 1994 in Western Washington, ask whether the home has been seismically retrofitted. A foundation bolting inspection runs $200 to $400.

Flood zone verification: Check FEMA's Flood Map Service Center (msc.fema.gov) and request any existing elevation certificate from the seller.

Total Cash Needed at Closing

To estimate your total cash requirement for a Washington purchase:

Down payment assistance programs through WSHFC can cover a substantial portion of these costs — particularly the down payment itself and sometimes closing costs when structured correctly.

The Washington First-Time Home Buyer Guide includes a closing cost worksheet you can complete with your specific numbers, plus guidance on which items are negotiable and which come as set fees in Washington's escrow-based closing system.

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