Closing costs can be the biggest surprise when you buy on Capitol Hill. You might be budgeting for your down payment, only to see line items like transfer taxes, title insurance, and prorated taxes add up fast. You deserve a clear, realistic number before you write an offer. In this guide, you’ll learn what closing costs include, how DC’s transfer and recordation taxes work, and a simple way to estimate your cash to close for a Capitol Hill purchase. Let’s dive in.
Closing costs at a glance
Closing costs are the fees, taxes, and prepaid items you pay at settlement in addition to your down payment. Nationally, buyers’ closing costs often total about 2% to 5% of the purchase price, but your DC numbers depend on your loan type, property, and negotiated terms.
Here are the major categories you should expect:
- Lender fees and loan costs: origination, underwriting, discount points if you choose them, and a small credit report fee.
- Appraisal: typically several hundred dollars depending on property type.
- Title and settlement: title search, settlement or escrow fee, and title insurance. Lender’s title insurance is usually required. Owner’s title insurance is optional and negotiable in DC.
- Recording charges: administrative fees to record your deed and loan documents.
- DC transfer and recordation taxes: material line items unique to the District’s tax structure. Allocation is negotiated in the contract.
- Prepaid items and prorations: homeowners insurance, prorated property taxes, and any escrow deposits your lender requires. Condo or HOA dues may also be prorated.
- Inspections: home, pest, radon, and other specialized inspections as needed.
- Miscellaneous: wire, courier, and notary fees. Attorney fees are uncommon in DC residential closings, though some buyers hire counsel.
Tip: The most reliable way to pin down your numbers is to request a Loan Estimate from your lender and a fee quote or draft settlement statement from your title company.
DC transfer and recordation taxes
DC assesses transfer taxes on the property sale and recordation taxes when documents are recorded. These are separate from fixed recording fees. Because rates, brackets, and any exemptions can change by law or regulation, always verify current rules with the DC Office of Tax and Revenue and your title company.
What to know as a buyer:
- These taxes can be significant in dollar terms, especially on higher-priced Capitol Hill homes and condos.
- Who pays is negotiable in your contract. Local practice can influence expectations, but there is no universal rule.
- Certain exemptions or credits may be available for first-time buyers or qualifying programs. Ask your lender and title officer to check current eligibility.
- Refinances are treated differently from purchases, often with no transfer tax but with recordation tax. Confirm specifics with your title company.
Estimate your cash to close
Use this simple process to build a conservative, Capitol Hill–ready estimate.
Step 1: Gather deal specifics
- Target purchase price and down payment amount or percentage.
- Loan type: conventional, FHA, or VA.
- Property type: condo or rowhouse/single-family, plus HOA status.
- Planned closing date and whether seller concessions are likely.
- Earnest money already paid.
Step 2: Request your Loan Estimate
After you submit a complete mortgage application, your lender provides a Loan Estimate within three business days. It outlines estimated lender fees, third-party costs, prepaids, and cash to close. Your Closing Disclosure, delivered three business days before settlement, will show final figures.
Step 3: Get a title company quote
Ask your chosen title company for a buyer estimate or draft settlement statement. It should include title premiums, settlement fees, recording charges, and DC transfer and recordation tax calculations based on current rules.
Step 4: Build your worksheet
List each line item so you can update figures as quotes arrive:
- Purchase price
- Minus earnest money deposit
- Down payment
- Lender fees and any discount points
- Appraisal and inspections
- Title search, settlement fee, lender’s title insurance, and possible owner’s title insurance
- DC transfer tax and recordation tax (use title company’s current calculations)
- Recording and miscellaneous fees
- Prepaid homeowners insurance and prorated property taxes or HOA dues
- Escrow deposits for taxes and insurance (if required by lender)
- Subtotal closing costs and total cash to close
- Minus any seller credits
Step 5: Add a contingency buffer
Build in a cushion of about 1% to 2% of the purchase price or a fixed amount, such as 2,000 to 5,000 dollars. This covers last-minute items like higher-than-expected prorations, wire fees, or inspection-related adjustments.
Typical fee ranges to expect
Use these as planning ranges, not guarantees. Your lender and title company will provide exact numbers:
- Appraisal: roughly 400 to 900 dollars
- Credit report: about 25 to 50 dollars
- Title search and closing fee: several hundred dollars
- Title insurance premiums: vary with price and loan amount
- Recording, courier, and wire fees: typically a few hundred dollars total
- Condo HOA estoppel or transfer paperwork: often 150 to 500 dollars
- Inspections: 300 to 1,000 dollars depending on scope
Capitol Hill factors that affect costs
- Older housing stock: Many rowhouses and conversions are older, so you may choose broader inspections. Findings can lead to negotiated repair credits.
- Condos and HOAs: Expect resale packages, estoppel or transfer fees, and possible reserves. These are building specific.
- Historic districts: Exterior changes may require permits. This is not a closing cost, but it matters when planning post-closing projects.
- Pricing and competitiveness: Higher sale prices mean larger dollar amounts for percentage-based taxes. In competitive moments, sellers may be less open to concessions.
Who pays what in DC
There is no hard rule in the District. Contracts allocate costs. In some markets, sellers often pay the owner’s title policy and transfer tax, while buyers cover lender-related costs and recordation tax. On Capitol Hill, practice can vary by property and market conditions. Ask your agent and title officer what is customary for your situation and decide what to request in your offer.
Negotiation strategies for buyers
- Ask for seller-paid closing costs: A lump-sum credit toward buyer costs can offset transfer and recordation taxes.
- Split or shift taxes: Request that the seller pay a portion of transfer or recordation taxes.
- Inspection credits: Use your inspection period to request a credit in lieu of repairs if appropriate.
- Cap your ask: In hot listings, a targeted, capped credit can be more acceptable to a seller than a broad request.
How your team helps you plan
- Your agent: Explains current customs on Capitol Hill, drafts offer language to allocate costs, and prepares buyer estimates modeling different scenarios.
- Your lender: Issues the Loan Estimate and Closing Disclosure, and explains escrow requirements for taxes and insurance.
- Your title company: Calculates title premiums, DC transfer and recordation taxes, recording fees, and provides your final settlement statement.
Local expertise matters. A neighborhood-focused advisor can help you balance a competitive offer with smart cost allocation.
Wiring funds and timing
- Three-day review: Expect your Closing Disclosure at least three business days before settlement. Review it line by line.
- Wiring: Call the title company to confirm wiring instructions verbally before sending funds. Use bank-level security and avoid emailing sensitive data.
- Availability: Ensure your funds are cleared and ready to wire by the deadline your title company provides.
Your next step
If you want a tailored cash-to-close estimate for a specific Capitol Hill home, connect with a local advisor who models costs the way you budget. For a clear plan, current DC tax calculations, and a negotiation strategy that fits the market, reach out to Chuck Burger. Request a Free Market Valuation or ask for a buyer estimate to get started.
FAQs
What do DC buyer closing costs include on Capitol Hill?
- They typically include lender fees, appraisal and credit report, title search and settlement, title insurance, DC transfer and recordation taxes, recording fees, prepaid insurance and taxes, prorated HOA dues, inspections, and small admin charges.
How can I get a reliable cash-to-close number before I make an offer?
- Ask your lender for a Loan Estimate and your title company for a fee quote or draft settlement statement, then build a worksheet that includes taxes, title, prepaids, and a contingency buffer.
Who usually pays DC transfer and recordation taxes in a purchase?
- It is negotiable in the contract. Local custom can vary, so confirm expectations with your agent and title company and decide what to request based on market conditions.
Are there DC exemptions or credits that reduce these taxes?
- Some buyers may qualify for programs or credits based on status or purchase details. Your lender and title officer can check current eligibility and apply any available savings.
What should condo buyers on Capitol Hill budget for besides lender and title fees?
- Expect an HOA resale package, estoppel or transfer fees, possible reserves, and prorated dues. These are building specific and should be confirmed early.
When will I see final closing numbers and how do I prepare funds?
- You receive your Closing Disclosure at least three business days before settlement. Verify totals with your lender and title company, then confirm wiring instructions by phone and send cleared funds by the deadline.
