Posted in Sell Your House, Taxes

Sellers plan around the sale price. The number that matters is what is left after settlement, and in Washington DC the gap between the two is wider than in most markets — the District’s transfer tax sits on top of the usual costs, and DC’s older housing stock generates more repair negotiation than newer suburbs do.

Here is everything that comes out.

Agent commission

The largest single line on a listed sale. Commission is negotiable and always has been, and how the buyer’s agent gets paid has changed in recent years — but in practice a seller who lists is still budgeting several percent of the sale price for representation, whether it is paid to one side or split between two.

On a DC house, a single percentage point is real money. Ask what you are paying and what it buys before you sign a listing agreement.

DC deed transfer tax

The District charges a deed transfer tax on the sale, calculated as a percentage of the price, with a higher rate applying above a price threshold. By custom the seller pays this one and the buyer pays recordation tax at a comparable rate — but custom is not law, and who pays what is a term of the contract like any other. In a slow market buyers sometimes ask sellers to cover both.

Rates and thresholds are set by the District and change from time to time. Get the current figure from your title company rather than from any article, including this one.

Settlement and title costs

Smaller individually, and they add up:

  • Settlement or closing fee
  • Deed preparation and recording
  • Release of your existing lien, and the payoff processing fee lenders charge
  • Any survey or lien resolution the title search turns up

Title searches in DC surface things owners genuinely did not know about: unpaid water and sewer charges, old DCRA fines, a contractor’s lien from work done years ago, or a clouded title on an inherited property. Every one of those gets cleared out of your proceeds at settlement.

Mortgage payoff and proration

Your payoff is not your balance. It includes interest through the settlement date, and if you have an escrow shortage or a prepayment provision, that lands here too. Property taxes get prorated between you and the buyer, which can go either direction depending on where you are in the District’s billing cycle.

Repairs, credits, and the inspection

This is the cost sellers underestimate most, because it arrives after they have already accepted a price they were happy with.

Much of DC’s housing stock predates 1950. Inspections on century-old rowhouses routinely turn up knob-and-tube wiring, galvanized supply lines, failing pointing, moisture in the basement, and a roof at the end of its life. Whatever the inspector writes down becomes a negotiation, and it is a negotiation you are having from a weak position — relisting means starting over, and the next buyer’s inspector will find the same things.

Add pre-listing work as well: paint, cleaning, staging, landscaping, and hauling. None of it is optional if you want the spring-market price.

Carrying costs while it sits

Every month between listing and settlement costs you a mortgage payment, property tax, insurance, and utilities. On a financed sale, budget 30 to 45 days from contract to closing on top of however long it takes to find the buyer.

If the house is empty, watch the DC vacant property classification specifically. The District taxes registered vacant and blighted property at rates far above the ordinary residential rate, and an empty house that misses an exemption deadline can generate a tax bill that dwarfs every other cost on this page.

What a cash sale removes

A cash sale is a lower gross price. What it takes off the list is everything that follows the price: no commission, no repairs, no inspection renegotiation, no staging, no months of carrying costs, and no financing contingency that can collapse the deal in week five.

Whether that trade favors you depends entirely on the house and your timeline. A move-in-ready home with a patient owner should be listed. A house needing $40,000 of work, owned by someone who does not have $40,000, usually nets more in a cash sale once every line above is counted.

8 Day Home Sale buys houses in Washington DC as-is, pays no commission, and closes on your date. We buy in Maryland and Virginia too. Request an offer or call (301) 242-SELL to see the number.

General information, not tax or legal advice. Confirm current DC rates and your own numbers with a title company or attorney.

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