Who pays excise tax? In the state of Washington excise tax is 1.28% of the purchase price of the home and is paid by the SELLER. So on a purchase price of $200,000, the state excise tax would be $2,560. (some counties may add a small levy to this amount. King County total excise is 1.78%)
As a home buyer, why do I care what the seller is taxed? In most instances you probably wouldn’t, UNLESS you’re buying a foreclosed/bank-owned property. Some financial institutions may require the BUYER to pay the excise tax, and such is stated as part of the purchase and sale real estate contract!
Is this a rip off? It depends on the scenario. Maybe if you’re getting the property for 20% under fair market value, you’d be more than happy to pay an extra 1.28% out of pocket. However, it’s something you need to be aware of BEFORE you get under contract on a home.
Can any real estate agent help me buy a foreclosed/bank-owned property? Generally yes, but for the previous reason as well as others, it’s important to use a real estate agent that has EXPERIENCE with these type of properties, so you can go into the transaction eyes wide open.
Don’t make the biggest decision of your life without getting educated first! If you would like more information about foreclosure/bank-owned properties or the first time home buying process in general, go to our Calendar/Reservations page and register for one of our FREE First Time Home Buyer/Down Payment Assistance workshops.