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Buying a House in Maryland: An In-Depth Guide

Buying a house in Maryland can be a complicated process. Knowing what you’re getting into before you begin house hunting can better prepare you for the long road ahead. In this article, we’ll go over the major phases in the home buying process.
Buying a house in Maryland can be a complicated process. Knowing what you’re getting into before you begin house hunting can better prepare you for the long road ahead. In this article, we’ll go over the major phases in the home buying process.

While the rewards of homeownership are many, the road to purchasing a home is one often fraught with stress, complications, and numerous setbacks. Luckily, the home buying process doesn’t have to be so difficult: by educating yourself on what’s involved in buying a house in Maryland, you can prepare yourself for many of the difficulties you’ll encounter and be better equipped to handle them.

In this guide, we’re going to outline the main parts of the home buying process: from finding a good buyer’s agent to budgeting for closing costs. After reading this article, you’ll be better poised to begin your home buying journey and start this exciting phase of your life.

How to Find a Maryland Buyer’s Agent

The first and perhaps most important step you’ll need to take when buying a home is finding an experienced buyer’s agent. Partnering with the right person will set you up for success and make the entire process much easier. They’ll be able to guide you through every piece of the puzzle, answering any questions you may have along the way and advising you on the many decisions you’ll need to make.

Clever can connect you with top-rated buyer’s agents in your target market. Not only will our Partner Agents help you get the best deal on your new home, but they’ll also give you a $1,000 home buyer rebate on all homes over $150,000. To schedule a no-obligation consultation with one of our qualified agents, simply fill out our form and we’ll reach out to you shortly.

Learn More: What Does a Real Estate Agent Do for a Buyer?

Maryland Housing Market Forecast for 2019 — and Beyond

The housing market in Maryland is currently very hot, meaning sellers are in power and there’s lots of competition among buyers. Good negotiating skills are important in a market like this, so be sure to work with a real estate agent that can help you work out a deal with the seller.

The median home value in Maryland is currently $291,500, which represents a 3.7% increase over the past year. The value is expected to increase another 1.9% in the coming year.

The median home listing price is $317,000, but the median selling price is $265,000. This means that homes are currently listed significantly above their value, but are selling below their value. On average, homes spent about 112 days on the market.

Best Time of Year to Buy a Home in Maryland

The time of year during which you decide to buy your home can have a drastic effect on its closing price. In general, buyers prefer to go to viewings and walk around neighborhoods when it’s pleasant out, so most homes are bought and sold during the spring and summer months. Sellers know this and usually plan to sell their houses around this time, so there’s often the biggest selection of houses to choose from around this time.

However, because both buyers and sellers prefer to do their house hunting and house selling during the warmer months, there’s much more competition and fewer bargains to be had than in the colder seasons. If you look for a home in Maryland during the winter, you’ll likely get a better bargain, as sellers in these months are usually more desperate to sell their homes. Prices tend to be lowest in December and January, and highest in June.

Learn More: The Best Time to Buy a House in Maryland

Calculate Your Property Taxes in Maryland

Property taxes are calculated based on the value of your home and can be paid either monthly as part of your mortgage payment, semi-annually, or annually. Your home’s value will be assessed, and you’ll multiply the assessed value by the local property tax rate to determine how much you owe.

The taxation rate varies greatly depending on what specific municipality your house is in. In Anne Arundel County, for example, the tax rate is 0.830%, so your yearly tax burden on a home valued at the Maryland median ($291,500) would be $2,419. In Baltimore City County, however, the tax rate is 1.519%, so you’d have to pay $4,428 per year on a home of the same value.

As you can see, the area in which you decide to purchase your home will not just affect the price of the home, but how much you’ll have to pay each year in taxes. Make sure you budget for this when choosing where to live, as you don’t want to end up in a situation where you can afford the mortgage and utilities, but can’t handle the property taxes.

Learn More: The Ultimate Guide to Maryland Real Estate Taxes

How Much Are Closing Costs for Home Buyers in Maryland?

In general, buyers can expect to pay 3% of the home’s value in closing costs. For a home worth the median value for Maryland, $291,500, you’ll have to pay approximately $8,745.

Some of the major expenses you’ll have to pay as part of your closing costs are the county transfer tax, state transfer tax, state recordation tax. The state transfer tax rate is 0.5%, but since it is split 50/50 with the seller, you’ll only pay 0.25% of the closing price in taxes. On a median valued home, you’ll have to pay $728.75.

County transfer taxes vary from county to county. In Montgomery County, for example, the rate is 1% split between buyer and seller, so you’ll be responsible for 0.5%: an additional $1,457.50. However, in Kent County, the rate is only 0.5% — again split between buyer and seller — so you’ll need to pay $728.75 in addition to the state transfer tax.

Finally, there’s a recordation tax. This tax also changes from county to county and is also customarily split between buyer and seller. In Montgomery County, it’s 0.69% on the first $500,000 in value, and 1% on any value over that threshold. That means that for a home at the median value, you’d need to pay $1,005.68. In Frederick County, however, the recordation tax rate is 1.2%, so you’d be responsible for $1,749 for a home of the same value.

In Montgomery County, you’d be responsible for $3,191.93 total. In Frederick County, your total tax burden would be $3,206.50. Add in mortgage origination fees, appraisal fees, title searches, title insurance, and credit report fees and you’ll soon end up with something around the $8,745 figure we started with.

Learn More: Who Pays Closing Costs on a House?

Clever Will Help Pay Your Closing Costs!

Closing fees can be intimidating and worrying, but Clever can help! All Clever Partner Agents in Maryland have pre-agreed to offer their clients a $1,000 home buyer rebate to help cover the closing costs. That would bring your closing costs down from $8,745 to $7,745 — that’s a pretty substantial savings! Not only do Clever Partner Agents provide savings in the form of the home buyer rebate, but they’ll also help you negotiate a better price from the outset, saving you money in two different ways.

Learn More: How to Get a Home Buyer Rebate

If you’re interested in buying a house in Maryland, just fill out our form and we’ll reach out to you shortly.

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Jamie Ayers

Jamie is the Director of Content at Clever Real Estate, the free online service that connects you with top real estate agents and helps you save thousands on commission. In the past, Jamie has managed columns for clients in a variety of leading business publications, including Forbes, Inc., CEO World, Entrepreneur, and more. At Clever, Jamie's primary goal is to provide home sellers, buyers, and investors with the information they need to successfully navigate the ins and outs of the real estate industry.

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