Washington

Washington is a non-attorney closing state with a strong escrow-and-title-company convention. Closings are handled by escrow officers at title or escrow companies; attorneys are involved only when contractually negotiated or when complications arise. The state's NWMLS (Northwest Multiple Listing Service) publishes a widely-used standard purchase and sale agreement that most transactions follow, with riders for specific contingencies and conditions.

There's no state income tax in Washington, and despite the 2022 capital gains tax on certain investment income above $250,000, real estate capital gains are explicitly exempt from that surcharge. For sellers above the federal § 121 exclusion, this is a meaningful advantage relative to high-tax states (CA, NY, NJ, MA): the only cap-gains layer on a Washington home sale is federal LTCG plus, for higher earners, the 3.8% Net Investment Income Tax. Combined effective rates of 18.8%–23.8% are typical, versus 28%+ in the highest-tax states.

The Real Estate Excise Tax

The biggest closing-cost surprise for Washington sellers is the Real Estate Excise Tax (REET), a graduated marginal-rate transfer tax paid by the seller at closing. The state portion is structured in tiers, with each rate applying only to the portion of sale price within that bracket:

(Threshold values are adjusted periodically by the legislature; the closing-costs estimator uses a simplified flat-rate approximation. For specific deals, the Department of Revenue's REET calculator gives the exact bracket math.)

Local jurisdictions add additional REET on top of the state base (typically 0.25%–0.50%) bringing the seller's combined effective rate to 1.35%–1.78% on the first $525,000 in most counties, with substantially higher rates on the upper brackets. On a $1M Seattle sale, total seller REET runs roughly $14,000–$16,000. On a $3M sale, total REET can approach $80,000.

What buyers should know

The Washington standard contract is the NWMLS Form 21 for residential purchases and includes the standard contingency package (inspection, financing, title, sale-of-buyer's-current-home where applicable). Inspection contingencies typically run 5–10 business days; the period is sometimes shortened in competitive offers but rarely waived entirely.

Title insurance in Washington is state-regulated, meaning rates are filed with and approved by the Office of the Insurance Commissioner. Premiums don't vary materially between insurers within the same county. The lender's title policy is required (buyer customarily pays); the owner's policy is customarily paid by the seller in most Washington counties, a regional convention that benefits buyers.

Property tax in Washington runs about 0.9%–1.0% of assessed value statewide on average, with King County (Seattle metro) often higher and rural counties lower. Voter-approved levies can add to this; the levy lid was relaxed in recent years, and Seattle-area parcels frequently see annual increases above the historical 1% cap when voters approve specific bonds. Washington has no homestead exemption that meaningfully affects the property-tax bill, it's all assessed-value times rate.

The buyer-broker agreement (post-2024 NAR settlement) is required before showings. Buyer-side compensation in Washington is now negotiated separately from the listing agreement, similar to other states.

What sellers should know

The REET dominates seller closing costs. On a $1M sale: 5–6% commission ($50,000–$60,000), REET state + local of roughly 1.4%–1.8% ($14,000–$18,000), escrow fee ($800–$1,500), title insurance ($1,500–$3,000), and remaining smaller items. Total seller closing costs typically run 8–10% of sale price in WA, with the upper REET brackets pushing higher-priced sales toward 10–13%.

No state income tax means sellers face only federal capital gains tax (0/15/20%) plus optional NIIT (3.8%) on long-held appreciated homes above the federal § 121 exclusion. This is a meaningful advantage and is part of why many sellers from California or New York relocate to Washington before triggering large gains. Note that the move must be genuine (a primary residence in WA, not a brief residency) for the federal exclusion's ownership-and-use tests to be met.

The Washington seller disclosure form (Form 17) is comprehensive and requires the seller to disclose every material defect and condition known to them. Failure to disclose known defects is a significant source of post-closing liability. A pre-listing inspection often pays for itself by surfacing items for proper disclosure.

How closing typically works

The closing happens at the escrow company. The buyer signs loan documents at the escrow office (or via mobile notary or remote online notarization, where available); the seller signs the deed and disclosures separately; the escrow officer prepares the closing statement and coordinates funding; funds wire from the lender to escrow; the deed records at the county auditor's office, typically electronically the same business day funds arrive.

The full timeline from mutual acceptance to recorded deed runs 30–45 days for financed transactions and as fast as two weeks for cash. Out-of-state-buyer remote signings are common and well-supported in Washington; the escrow framework is set up to handle them.

For specific deals, particularly higher-bracket REET transactions, leasehold or trust-owned properties, or any out-of-state-buyer scenario, a Washington real estate attorney can supplement the escrow process. The structural framework is here; closing-cost math runs through the closing-costs estimator with the WA state base.