Understanding closing costs is an essential part of the home-buying process in Edmonds, Washington. These costs can significantly impact your overall budget, so it's important to know what to expect. Closing costs include various fees and expenses that buyers and sellers incur during the finalization of a real estate transaction. In Edmonds, these costs can vary based on several factors, including the property's value, location, and the specifics of the transaction. By gaining a clear understanding of these costs, buyers can better prepare financially and avoid surprises at the closing table.
One of the key items I share and teach my wonderful clients, what is the best way to structure their offer to benefit you the buyer the most!
Often times future home owners do not fully understand what "Closing Costs" mean. I know this can feel like a lot—between all the numbers, terms, and questions like 'What does this all mean?' My job is to walk with you every step of the way, making sure you not only feel confident but also clearly understand what each of these closing costs represents.
Next, we’ll break each of these down into simple bullet points, covering the different components step by step so everything is easy to follow and understand.
There is what is called "3rd Party fees" this is where depending on what type of home you will be purchasing, these can vary based on a condo vs. a Single Family Residence i.e. SFR.
When you purchase a condominium there are other fees that will be involved, from a HOA Lender Questionnaire, HOA Transfer Fee, HOA monthly reserve setup for your account.
Single Family Residence typically will not have these fees. Even if there is a small HOA fee for your SFR Home, these are on title Called a PUD ( Planned Urban Development ) then this will have a few smaller 3rd party fees. Typically much less than the Condo fees.
3rd Party Fees can vary - but an easy rule of thumb is 1% of your purchase price.
When you any questions make sure you reach out to me @ 206.963.5525
Loan Origination Fees or Discount Points
One of the primary components of closing costs is the loan origination fee or discount point. This fee is charged by lenders for processing a new mortgage application and is typically a percentage of the loan amount. In Edmonds, as in other areas, the loan origination fee can vary depending on the lender and the type of loan. It's important for buyers to shop around and compare offers from different lenders to find the best terms and lowest fees. Understanding the loan origination fee is crucial, as it can significantly affect the overall cost of obtaining a mortgage.
This discount point will be set at the time of locking in your interest rate. Buying down the rate is what lenders call Discount Points. Based on your loan amount, credit scores, loan to value, and type of home can make up variations based on this.
When you need help with this - we have excellent, knowledgeable local lenders that we work with that will walk you through all of this information.
Appraisal Fees
Appraisal fees are another key component of closing costs. An appraisal is conducted to determine the fair market value of the property, ensuring that the lender is not lending more than the property is worth. In Edmonds, appraisal fees can vary based on the size and complexity of the property. Buyers should be prepared to pay for this service, as it is a necessary step in securing a mortgage. The appraisal process provides valuable insights into the property's value and can impact the loan amount and terms offered by the lender.
Title Insurance
Title insurance is a crucial part of the closing process, protecting both the buyer and the lender from potential title disputes or claims. In Edmonds, title insurance fees are typically split between the buyer and seller, although this can be negotiated. The cost of title insurance can vary based on the property's value and the specific policy chosen. It's important for buyers to understand the coverage provided by title insurance and ensure that they are adequately protected against any potential issues with the property's title.
Escrow Fees
Escrow fees are charged by the escrow company for managing the closing process and ensuring that all conditions of the sale are met. In Edmonds, escrow fees can vary based on the complexity of the transaction and the escrow company's rates. These fees cover the cost of services such as holding funds, preparing documents, and coordinating the closing. Buyers should be aware of the escrow fees involved and factor them into their overall budget for closing costs.
Recording Fees
Recording fees are charged by the local government for officially recording the change of ownership in public records. In Edmonds, these fees are typically based on the number of pages recorded and the property's value. Recording fees are a necessary part of the closing process, ensuring that the transfer of ownership is legally documented. Buyers should be prepared to pay these fees as part of their closing costs and understand their importance in finalizing the transaction.
There is now a new recording fee of 80.00 that just became mandated in WA State on July 27th, 2025. Why and what is this for? Well when you buy a home in Washington State with a residential mortgage loan, a portion of your closing costs includes an $80 fee that helps fund the Foreclosure Mediation Program and other foreclosure prevention efforts.
Home Inspection Fees
While not always included in closing costs, home inspection fees are an important consideration for buyers in Edmonds. A home inspection provides a thorough evaluation of the property's condition, identifying any potential issues or repairs needed. Buyers typically pay for the inspection, and the cost can vary based on the size and complexity of the property. Conducting a home inspection is a valuable step in the home-buying process, providing peace of mind and helping buyers make informed decisions.
Prepaid Expenses ( Pre-Paid Items )
Prepaid expenses are costs that buyers must pay in advance at closing, such as property taxes, homeowner's insurance, and mortgage interest and per-diems, based on the day you close on your home. In Edmonds, these expenses can vary based on the property's value and the timing of the purchase. Buyers should be prepared to cover these costs as part of their closing expenses, ensuring that they have adequate funds set aside. Understanding prepaid expenses is essential for budgeting and avoiding surprises at the closing table. An easy calculation is use 1% of your purchase price to set in your budget, this can be less, as it is all based on the cycle of when your closing date is.
Survey Fees
Survey fees may be required if a property survey is needed to determine the property's boundaries and ensure there are no encroachments. In Edmonds, survey fees can vary based on the size and complexity of the property. While not always necessary, a survey can provide valuable information about the property's boundaries and potential issues. Buyers should consider whether a survey is needed and factor the cost into their overall closing expenses.
Attorney Fees
In some cases, buyers may choose to hire an attorney to review the closing documents and ensure that their interests are protected. In Edmonds, attorney fees can vary based on the complexity of the transaction and the attorney's rates. While not always required, having legal representation can provide peace of mind and help buyers navigate the closing process. Buyers should consider the potential benefits of hiring an attorney and factor the cost into their closing budget.
Excise Tax in WA State
Transfer taxes, or in WA state what we call Seller Excise Tax, are imposed by the local government on the transfer of property ownership. In Edmonds, these taxes are typically based on the property's value and are paid by the seller, although this can be negotiated, just do not plan for this to happen. Transfer or Excise taxes are an important consideration in the closing process, as they can impact the overall cost of the transaction. Buyers should be aware of any transfer taxes involved and understand their role in the closing process. However this in most cases is paid by the seller as part of their side of the closing costs.
Ready to Navigate Closing Costs in Edmonds?
Understanding closing costs is a crucial step in buying a home in Edmonds. By knowing what to expect, you can better prepare for this important financial commitment. If you have any questions or need guidance, the Christophilis Team is here to help. Reach out to them today to ensure a smooth and informed home-buying experience in the Edmonds neighborhood.
