Thinking about buying or selling on both sides of the Potomac and noticing different closing cost estimates? You are not imagining it. Washington, DC and Northern Virginia handle transfer and recordation taxes differently, which can change your bottom line. In this guide, you will learn what closing costs include, who usually pays what in each jurisdiction, and smart ways to plan your budget before you sign. Let’s dive in.
What closing costs include
Closing costs cover lender fees, third-party services, government taxes, and prepaids. Some items are standard across the region, while others depend on where the property sits and what you negotiate in your contract.
Common buyer costs across jurisdictions include:
- Lender charges like application, underwriting, and processing fees.
- Appraisal and credit report.
- Title and settlement services, plus the lender’s title insurance policy.
- Recording fees for the deed and mortgage.
- Prepaids and escrow deposits for property taxes and insurance.
- Inspections, and optional items like termite or sewer scopes.
Common seller costs include:
- Broker commissions, typically the largest expense.
- Payoff of existing mortgages.
- Prorated taxes and utilities through the day of closing.
- Transfer, recordation, or grantor taxes, depending on local custom and contract.
- Title and settlement services and deed prep if needed.
Key differences: DC vs Northern Virginia
Government taxes and fees
- Washington, DC assesses both a transfer tax and a recordation tax on most property transfers. The taxes are administered by the DC Office of Tax and Revenue. For current definitions and rate structures, use the DC Office of Tax and Revenue site and search for real property transfer and recordation taxes at the DC Office of Tax and Revenue.
- Northern Virginia uses a combination of state and local recordation taxes and a conveyance or grantor tax. Localities like Arlington County and Fairfax County administer recording procedures and local surcharges. For Virginia’s framework, start with the Virginia Department of Taxation, then check county guidance at Arlington County and Fairfax County.
In practice, total government tax line items often appear higher in DC than in many Northern Virginia localities. The actual impact depends on price, loan amount, and how the parties allocate taxes in the contract.
Who typically pays what
Custom and contract drive the split.
- In DC, transfer and recordation taxes are commonly negotiated. Some deals split them between buyer and seller, while others assign them to one side.
- In Northern Virginia, sellers often pay the grantor or transfer tax, while buyers pay mortgage-related recordation taxes and recording fees. Allocation is negotiable in the contract.
Always confirm the cost split in your offer paperwork and with your title company.
Buyer closing costs: what to expect
What buyers usually pay
For financed buyers in the DC metro area, plan for lender charges, appraisal, title and settlement fees, the lender’s title policy, recording fees, and prepaids for taxes and insurance. If you buy down your interest rate, discount points will increase your total. Cash buyers avoid lender fees but still pay title, settlement, and government taxes or fees.
Typical line items include:
- Lender fees: roughly $500 to $3,000 depending on lender and program.
- Appraisal: commonly $400 to $800.
- Title and settlement: fees vary by provider and price point, and title insurance premiums vary by state schedules.
- Recording: generally modest, often $50 to $300 per instrument.
- Prepaids and escrow deposits: usually 1 to 3 months of taxes and insurance, determined by the lender and timing of the tax cycle.
DC buyer considerations
DC applies both transfer and recordation taxes. Whether you pay these taxes, split them, or negotiate the seller to cover them depends on the agreement. Given DC’s structure, plan for the possibility of higher government tax entries on your Closing Disclosure. For definitions and current guidance, consult the DC Office of Tax and Revenue.
Arlington and Fairfax buyer considerations
In Northern Virginia, buyers typically pay mortgage-related recording taxes and fees, while sellers often handle the grantor or transfer tax. Local recording charges vary by county. For county specifics and procedural details, check Arlington County and Fairfax County.
How much to budget as a buyer
A practical planning range for financed buyers across the DC region is about 2% to 4% of the purchase price, excluding the down payment. Your total can be lower with seller help or higher if you add points or purchase at a price tier where government taxes increase. To see your exact estimate, review your Loan Estimate and Closing Disclosure. The Consumer Financial Protection Bureau explains how to read these forms and what to look for.
Seller closing costs: what to expect
What sellers usually pay
Sellers typically cover broker commissions, mortgage payoff, prorated taxes and utilities, and any agreed concessions. You will also see title and settlement charges and government transfer or grantor taxes based on local rules and your contract.
Common items include:
- Broker commissions, often about 5% to 6% of the sale price in the DC region.
- Payoff of existing loans and any prepayment penalties.
- Title and settlement fees, and deed preparation if needed.
- Government transfer, grantor, and recordation taxes as negotiated.
DC seller considerations
Because DC imposes both transfer and recordation taxes, your net can shift based on how those taxes are assigned in your contract. For higher-priced homes, these line items can be material. Confirm the allocation early and have your title company prepare a preliminary seller net sheet based on the DC Office of Tax and Revenue guidance.
Arlington and Fairfax seller considerations
In many Northern Virginia transactions, sellers pay the conveyance or grantor tax while buyers pay mortgage recordation charges. County practices and local surcharges can affect totals. Your title company will use the current county schedules for Arlington County or Fairfax County to prepare accurate figures.
How much to budget as a seller
A useful planning range for sellers is about 6% to 9% of the sale price, including broker commissions. Your number can be higher if you agree to concessions or if the contract assigns more taxes to the seller. Reviewing a draft settlement statement early helps you understand net proceeds and adjust your pricing or concessions strategy.
Cross-border planning and examples
For the same $800,000 home, DC and Northern Virginia often produce different combinations of transfer and recordation taxes and local fees. In DC, you will likely see separate transfer and recordation tax lines that can add up to several thousand dollars, with the split decided in the contract. In Fairfax County, the seller may pay a grantor or conveyance tax, while the buyer pays mortgage recording taxes and fees. The totals differ by structure and allocation, not just by price.
The practical takeaway: you should request a preliminary settlement statement as soon as you go under contract. Your title company will pull the correct formulas from the Virginia Department of Taxation and your county site, or from the DC Office of Tax and Revenue. That estimate shows your exact line items and who is paying each one.
Negotiation tips and checklist
Smart negotiation moves
- Clarify tax allocation in writing. Make sure your offer or counter spells out who pays transfer and recordation taxes.
- Compare net, not just price. When you evaluate multiple offers, compare the seller’s net and the buyer’s out-of-pocket after taxes, fees, and any concessions.
- Ask for credits strategically. In a competitive setting, a seller credit might help a buyer manage closing costs without reducing price.
- Time your close thoughtfully. Prepaid taxes and insurance are calendar-driven. Closing just after a tax due date can change escrow deposits.
Cross-border checklist
- Identify the jurisdiction early: DC, Arlington, or Fairfax.
- Confirm local tax structure with your title company and lender.
- Obtain a preliminary settlement statement for buyer and seller.
- Verify who pays transfer and recordation taxes in the contract.
- Ask your lender for a Loan Estimate early and review the Closing Disclosure at least 3 business days before closing. The Consumer Financial Protection Bureau has plain-language guides.
- Review title insurance options. The American Land Title Association explains coverage basics so you can decide what you need.
- Lean on local custom insights. Area associations like the Northern Virginia Association of REALTORS outline standard forms and practices that shape who pays what.
Resources for exact numbers
- DC definitions, forms, and tax structures: DC Office of Tax and Revenue
- Virginia recordation and conveyance tax framework: Virginia Department of Taxation
- County recording guidance: Arlington County and Fairfax County
- Understanding your Closing Disclosure: Consumer Financial Protection Bureau
- Title insurance basics: American Land Title Association
- Local custom and forms context: Northern Virginia Association of REALTORS
Buying or selling across the DC and Northern Virginia line does not have to be confusing. With a clear plan, accurate settlement estimates, and a strong negotiator, you can manage closing costs and move forward with confidence. If you would like a tailored estimate and strategy for your next move, connect with The Shively Team.
FAQs
How do closing costs differ between DC and Northern Virginia?
- DC typically shows both transfer and recordation taxes on most sales, while Northern Virginia uses recordation taxes and a separate grantor or conveyance tax that often falls to the seller. Allocation is negotiable in both areas.
What are typical buyer closing costs in the DC region?
- A common planning range is about 2% to 4% of the purchase price for financed buyers, excluding the down payment. Your total varies by loan program, points, and negotiated credits.
Who usually pays transfer taxes in Northern Virginia?
- Sellers often pay the grantor or conveyance tax in Northern Virginia, while buyers pay mortgage-related recordation taxes and recording fees. Your contract can allocate costs differently.
Are DC transfer and recordation taxes paid by the buyer or the seller?
- It depends on the contract and local practice. In many DC deals these taxes are split or negotiated. For definitions and rate structures, consult the DC Office of Tax and Revenue.
How can I estimate my seller net in Arlington or DC?
- Ask your title company for a preliminary settlement statement based on current county or DC schedules, then factor in commissions, prorations, and any concessions to see your true net.
