The True Cost of Selling a Home in Capitol Hill

When selling a property in Capitol Hill, from Pike/Pine condos to Volunteer Park Craftsman homes, the most critical figure is your net proceeds rather than the gross sale price. In Seattle, closing costs typically consume 6% to 9% of the final sale price, which can amount to $60,000–$90,000 on a $1,000,000 home. It is essential to distinguish these costs, which are deducted at the escrow table, from upfront selling expenses like staging, painting, and landscaping.

The amounts for these closing costs consist of a number of specific charges that must be made in order to successfully transfer ownership. The most expensive of these is real estate commissions in Capitol Hill, which can be fully negotiated, and the Washington State Real Estate Excise Tax, which employs a graduated tax scale depending upon the price of the transaction. Further, it is a practice of sellers in King County to pay for the Owner’s Title Insurance and to split escrow fees equally with the buyer, such that it is essential to arrive at a personalized net sheet analysis well before the closing session.

Breakdown of Seller Closing Costs in Seattle

When you review your settlement statement at the end of the transaction, you aren’t just paying one big “selling fee.” You are paying several different entities for specific services required to transfer the legal ownership of the property.

In King County, these costs generally fall into four main buckets. The largest is usually the real estate broker commissions, followed closely by the Washington State Real Estate Excise Tax (REET). After those two heavy hitters, you have title insurance and escrow fees. Finally, there are miscellaneous costs like recording fees, prorated property taxes, and, if you are in a condo or co-op, HOA transfer fees.

Here is a quick look at the standard lineup:

Real Estate Commissions: Fees paid to the listing and buyer brokerages.
Excise Tax (REET): A graduated tax paid to the state and city based on sale price.
Title Insurance: The premium for the owner’s policy (standard seller cost here).
Escrow Fees: The fee for the neutral third party managing the funds and documents.
Prorations: Reimbursements for taxes or HOA dues you’ve already paid for upcoming months.

Deep Dive: Washington Real Estate Excise Tax (REET)

If you have sold a home in other states, you might be used to a small transfer tax. In Washington, and specifically in Seattle, the Real Estate Excise Tax (REET) is a significant expense. It is the second-largest line item for most sellers.

Crucially, Washington uses a graduated scale (or tiered system). This means you don’t pay a single flat rate on the entire sale price. Instead, portions of your sale price are taxed at different rates. Think of it like income tax brackets: the first portion of your earnings is taxed lower, and only the money above a certain threshold is taxed at the higher rate.

On top of the state rate, Seattle (and most of King County) adds a local portion, which is typically 0.5%.

Here are the 2025 thresholds you need to know:

Tier 1 (Sale price portion up to $525,000): You pay ~1.6% total (State + Local).
Tier 2 (Portion from $525,000 up to $1,525,000): You pay ~1.78% total (State + Local).
Tier 3 (Portion from $1,525,000 up to $3,025,000): You pay ~3.25% total (State + Local).

For a typical condo in Capitol Hill, almost all of your sale price might fall into Tier 1 and a little into Tier 2. However, for most single-family homes in the neighborhood, a large chunk of your equity will be taxed at the Tier 2 rate. If you are selling a luxury property along Millionaire’s Row or near Interlaken Park, the portion of the price above $1.525 million will be hit with that steeper 3.25% rate.

Real Estate Commissions in Capitol Hill

The landscape of real estate commissions has shifted recently, and it’s important to understand where things stand today. Commissions are fully negotiable—there is no such thing as a “standard” rate set by law or any association.

Historically, sellers have often budgeted around 5% to 6% of the sale price to cover commissions. This total was typically split between the listing broker (who markets the home) and the buyer’s broker (who brings the purchaser).

In today’s market, you decide how much you want to pay your listing agent for their marketing strategy for Capitol Hill homes, and separately, you decide how much compensation (if any) to offer the buyer’s broker.

While you are not required to offer compensation to the buyer’s agent, most sellers in Capitol Hill still choose to do so. The strategy here is simple: you want to make your home as accessible as possible. Many buyers are already stretching their budgets to afford prices in Seattle. If they have to pay their agent’s fee out of pocket on top of their down payment and closing costs, they may write a lower offer—or skip your home entirely. Offering a competitive buyer broker commission remains a strong lever to attract qualified traffic.

Who Pays What? Buyer vs. Seller Customs in Seattle

Real estate contracts are negotiable, but over decades, King County has developed standard customs regarding who pays for what. Unless you negotiate differently, the pre-printed language in standard purchase and sale agreements usually defaults to the following splits:

Owner’s Title Policy: The Seller typically pays this. It insures the buyer that you have the clear right to sell the home in Capitol Hill and that there are no hidden liens.
Lender’s Title Policy: The Buyer pays this. It protects their mortgage company.
Escrow Fee: This is almost always split 50/50 between the buyer and seller.
Recording Fees: The buyer pays to record the deed (transferring ownership to them), while the seller pays to record the “reconveyance” (proving your old mortgage has been paid off).
Sewer Capacity Charge: This is a specific King County charge often found on newer homes or updated sewer lines. It is usually a lien that the Seller pays off at closing, though sometimes a buyer can assume the monthly payments.

Capitol Hill Net Sheet Examples

For illustration purposes, let’s look at how a specific property valuation Capitol Hill Seattle translates into actual dollars by calculating the math on two possible scenarios you could encounter within the neighborhood.

Scenario A: The Modern Condo

Imagine you are selling a one-bedroom condo near Broadway for $550,000.

Commissions (Est. 6% total): $33,000
Excise Tax (REET):

Tier 1 ($525k @ ~1.6%): $8,400
Tier 2 ($25k @ ~1.78%): ~$445
Total REET: ~$8,845

Title & Escrow: ~$2,000
Misc (Recording/HOA transfer): ~$500
Estimated Total Cost: ~$44,345
Net Proceeds (Pre-Mortgage Payoff): ~$505,655

Scenario B: The Classic Single-Family Home

Now let’s look at a detached home north of Aloha Street selling for $1,300,000.

Commissions (Est. 6% total): $78,000
Excise Tax (REET):

Tier 1 ($525k @ ~1.6%): $8,400
Tier 2 ($775k @ ~1.78%): ~$13,795
Total REET: ~$22,195

Title & Escrow: ~$3,500 (Higher sale price = higher insurance premium)
Misc (Recording/Utilities): ~$300
Estimated Total Cost: ~$104,000
Net Proceeds (Pre-Mortgage Payoff): ~$1,196,000

As you can see, the costs scale up, particularly the excise tax. For the single-family home, you are effectively “giving back” over $100,000 of the sale price to facilitate the transaction.

Can You Lower Your Closing Costs?

Since these costs take a significant bite out of your profit, it is natural to ask if they can be reduced. The answer is yes, but usually with trade-offs.

The most direct way to lower costs is by negotiating the commission. However, be careful not to cut specifically into the marketing budget or the buyer broker incentive. If a lower commission reduces the exposure of your home or makes agents less likely to show it, you might end up selling for a lower price that wipes out any savings on the fee.

You can also shop around for title and escrow services. While the seller customarily pays for the owner’s title policy, the choice of which company to use is technically negotiable. If you have a preferred provider with lower rates, you can request to use them in the purchase agreement.

Another approach is selling “as-is.” While this doesn’t lower your closing fees directly, it prevents you from agreeing to “seller credits” for repairs after the inspection. In a hot market, buyers may waive inspection contingencies, saving you from that secondary round of price reductions.

Navigating Negotiations and Concessions in the Seattle Market

Selling a home in Seattle requires a deep understanding of the financial landscape to ensure a successful closing day. Seattle home sellers generally expect to pay the largest seller expenses—primarily real estate agent commissions and excise taxes—while buyer closing costs for mortgage-related costs and administrative costs typically costs 2% to 5%. In the current seattle market, negotiation is key; sellers may offer a concession after a home inspection or to bridge a financial gap. Whether listing your home as a house in Washington or a condo, knowing what you need to pay and how a real estate agent can help reduce these costs ensures a smooth real estate transaction.

Total seller costs typically range from 6% to 9% of the home’s sale price, meaning seller’s closing costs on a median-priced Seattle home are significant. These seller closing costs in Washington include title insurance, escrow fees, and clearing any liens on your home. Because average closing costs vary across Seattle neighborhoods, many Seattle home owners find that successful sell your home strategies require early clarity on fees and expenses. By understanding the costs associated with the sale of your home and its true value of your home, homeowners can better manage the buying or selling a home process in the Seattle area.

Preparing for Your Sale

If you are thinking about selling your Seattle home, the best first step is to get a custom net sheet drawn up. While online calculators are great for rough estimates, they often miss the nuances of the graduated REET tiers or specific condo move-out fees.

Understanding the “6% to 9%” rule of thumb is helpful for broad planning, but when you are dealing with hundreds of thousands of dollars, precision matters. Before you list, it is smart to review your seller disclosures in Capitol Hill Seattle and have a title representative run a preliminary search on your property. This helps ensure there are no old liens or permit problems that could delay your closing or lead to additional fees at the very end.

Being informed about these numbers puts you in the driver’s seat of the process. You won’t have any surprises at the closing table, allowing you to make decisions that ensure you secure the profit you need for the next chapter of your life.

FAQs

Who pays for title insurance in Seattle, WA?

In Seattle and King County, custom dictates that the seller pays for the Owner’s Title Insurance Policy, which protects the buyer against past title defects. The buyer typically pays for their own Lender’s Title Policy if they are getting a mortgage.

What is the value of Real Estate Excise Tax (REET) paid in Seattle in 2025?

In Seattle sales, a gradated State Realty Transfer tax is payable as a further 0.5% tax. For 2025, the rates are approximately 1.6% on the purchase price up to a maximum value of $525,000 as well as 1.78% on the sum between $525,000 and $1.525 million.

Are closing fees tax-deductible for sellers in the state of Washington?

Normally, the costs of closing cannot be claimed as deductions when filing the tax returns. But the costs of closing will be added to the ‘basis,’ the cost of the home, reducing the gain of the property. This would help in reducing the amount of capital gains tax to be paid.

In Washington State, do the sellers pay escrow fees?

Yes, but usually not the full amount. In the Puget Sound region, the escrow fee, which deals with the disbursement and handling of funds by a neutral party, is typically split 50-50 between buyer and seller.