(1) “Sale” shall have its ordinary meaning and shall include any conveyance, grant, assignment, quitclaim, or transfer of the ownership of or title to real property, including standing timber, or any estate or interest therein for a valuable consideration, and any contract for such conveyance, grant, assignment, quitclaim, or transfer and any lease with an option to purchase real property subject to rules promulgated by the Washington State Department of Revenue, or other contract under which possession of property is given to the purchaser, or any other person by his direction, which title is retained by the vendor as security for payment of the purchase price.

The term shall not include a transfer by gift, devise, or inheritance, a transfer or any leasehold interest other than of the type mentioned above, a cancellation or forfeiture of the vendee’s interest in a contract for the sale of real property, whether or not such contract contains a forfeiture clause, or deed in lieu of foreclosure of a mortgage or the assumption by a grantee of the balance owing on an obligation which is secured by a mortgage or deed in lieu of forfeiture of the vendee’s interest in a contract of sale where no consideration passes otherwise, or the partition of a property by tenants in common by agreement or as a result of a court decree, or any transfer, conveyance, or assignment of property or interest in property from one spouse to the other in accordance with the terms of a decree of divorce or in the fulfillment of a property settlement agreement incident thereto, the assignment or other transfer of a vendor’s interest in a contract for the sale of real property, even though accompanied by a conveyance of the vendor’s interest in the real property involved, transfers by appropriation or decree in condemnation proceedings brought by the United States, the State or any political subdivision thereof or a municipal corporation, a mortgage or other transfer of any interest in real property merely to secure a debt, or the assignment thereof, any transfer of conveyance made pursuant to an order of sale by the court in any mortgage or lien foreclosure proceeding or upon execution of a judgment, or deed in lieu of foreclosure to satisfy a mortgage, a conveyance to the Federal Housing Administration or Veteran’s Administration by an authorized mortgagee made pursuant to a contract of insurance or guaranty with the Federal Housing Administration or Veteran’s Administration, nor a transfer in compliance with the terms of any lease or contract upon which the tax as imposed by this chapter has been paid or where the lease or contract was entered into prior to the date this tax was first imposed, nor the sale by or to the United States, this State or any political subdivision thereof, or a municipal corporation of this State.

(2) “Seller,” unless otherwise indicated by the context of this chapter, shall mean any individual, receiver, assignee, trustee in bankruptcy, trust estate, firm, copartnership, joint venture, club, company, joint stock company, business trust, corporation, association, society, or any group of individuals acting as a unit, whether mutual, cooperative, fraternal, nonprofit or otherwise; but it shall not include the United States, the State of Washington, a political subdivision of the State of Washington, or a municipal corporation of this State.

(3) “Selling price” shall mean the consideration, including money or anything of value, paid or delivered or contracted to be paid or delivered in return for the transfer of the real property or estate or interest in real property, and shall include the amount of any lien, mortgage, contract, indebtedness, or other encumbrance, either given to secure the purchase price, or any part thereof, or remaining unpaid on such property at the time of sale.

The term shall not include the amount of any outstanding lien or encumbrance in favor of the United States, the State, or a municipal corporation for taxes, special benefits or improvements.