Patricia is selling her Seattle condominium for $525,000. Her broker tells her that the REET on this transaction will be calculated at the first-tier rate only. Is the broker's statement accurate, and what is the correct REET rate that applies?
Correct Answer
D) The broker is correct; a sale price of exactly $525,000 falls entirely within the first tier at 1.1%
Under RCW 82.45, Washington's first REET tier applies to the portion of the selling price up to and including $525,000 at a rate of 1.1%. A sale price of exactly $525,000 falls entirely within the first tier, so the broker is correct. The second tier (1.28%) only begins on the portion of the price above $525,000 — i.e., from $525,001 onward. The total REET would be $525,000 × 1.1% = $5,775.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The comparable sales approach estimates a property's value by comparing it to similar properties that have recently sold in the same market area. It is the most widely used and reliable approach for appraising residential properties.
The cost approach estimates a property's value by calculating the current cost to rebuild the improvements, subtracting accumulated depreciation, and adding the land value. It is most reliable for new construction and special-purpose properties.
Depreciation is an accounting method of allocating the cost of an asset over its useful life, allowing investors to deduct a portion of the asset's cost each year.
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