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How Much Are Closing Costs for Sellers in Maryland?

Closing costs is an umbrella term for expenses that accrue during the closing phase of a home sale. Here, we’ll break each of them down to give you an idea of typical closing costs for sellers in Maryland.
Closing costs is an umbrella term for expenses that accrue during the closing phase of a home sale. Here, we’ll break each of them down to give you an idea of typical closing costs for sellers in Maryland.

When finishing, or “closing on”, a home sale, buyers and sellers pay several miscellaneous expenses, broadly referred to as closing costs.

In Maryland, sellers typically pay 2-4% in closing costs on top of the typical 6% commission fee.

Selling your home isn’t cheap, so sellers need proactive ways to save money whenever they can.

If you want to sell your home without breaking the bank, Clever Real Estate can help reduce the commissions you pay at closing by up to 50%.

Get in touch with us to learn how you can save thousands on your home sale and get matched with a top agent in your area.

For now, here’s what you need to know about closing costs in Maryland.

What are closing costs?

To understand what closing costs are, we first need to define closing.

Closing is the process of finishing up a home sale. During this phase, the final paperwork is signed and processed, money is paid to the seller, and ownership of the home is transferred to the buyer.

“Closing costs” covers all the fees associated with these processes. In Maryland, these fees generally come to 2-7% of the home’s final sales price and are split between the buyer and seller.

Typical closing costs include:

  • Title searches
  • Title insurance
  • Home inspections
  • Appraisals
  • Surveys
  • Credit reports
  • Loan payoff fees
  • Settlement or attorney fees
  • Transfer tax
  • Recording fees
  • Mortgage payoff or prepayment penalties
  • Outstanding balances

How much are closing costs in Maryland?

In Maryland, closing costs can total up to 7% of the home’s final sales price. Typically, buyers pay the majority of closing costs and the money comes out of pocket.

Sellers have things a bit easier, and can simply deduct their closing costs from their sale’s profits as long as they’ve built up enough equity in their home.

In general, closing costs for sellers relate to transferring ownership, while costs for buyers focus on securing financing.

How to Calculate Your Closing Costs in Maryland

Let’s use a concrete example to get a better idea of what your closing costs will likely look like.

According to Zillow, the 2019 median sale price in Maryland is $279,300. Assuming you’ll be paying 2-4%, you can expect to pay $5,586-$11,172 in closing costs.

But remember, this is just an estimate; your agent can provide you with a net sheet that lists the exact amount you can expect to pay.

What’s included in Maryland closing costs?

Typically, buyers and sellers are responsible for separate closing costs. However, who pays what is negotiable; a buyer might ask you to cover some of their closing costs in their offer. To understand if that’s a good idea for you, you need to be familiar with all closing costs in Maryland.

Let’s take a closer look at each of the typical Maryland closing costs.

Title Search: $300-$600

A title search is a way to ensure that the current homeowner has the right to sell the property. In short, it checks for any liens on the property and it was legally purchased. The cost varies, but a good estimate is $300-$600, according to Realtor.com.

Title Insurance: $1,000

Title insurance covers buyers and lenders against any issues with the previous owner’s title that can arise after closing.

Title insurance generally costs $1,000.

Home Inspection: $300-$500

Home inspections are performed to find unknown issues or hazards in the home. It’s a buyer’s way of doing their due diligence before signing on the bottom line.

A typical inspection costs $300-$500, according to Nerdwallet.

Appraisal: $300-$400

Appraisals determine the home’s value to verify whether it serves as sufficient collateral for the buyer’s mortgage.

According to fixr.com, appraisals generally cost $300-$400.

Survey: $345-$676

A survey confirms a property’s legal boundaries. They typically cost $345-$676, according to HomeAdvisor.

Credit Report: $20-$50

When a buyer applies for a mortgage, the lender will run a credit report to check for their creditworthiness.

Credit reports typically cost around $20-$50, according.

Loan Payoff Costs: 0.5-1.5% of the Closing Price

Typical loan payoff costs include loan origination, assumption, and prepaid interest fees.

You can expect to pay 0.5-1.5% of the final sales price, according to Money Crashers.

Mortgage Payoff/Prepayment Fees: Variable

If you pay off your mortgage before its term, you may be subject to certain penalties. These vary from mortgage to mortgage, so check with your lender to see if any apply to you.

Outstanding Amounts Owed on the Property: Variable

If you have any remaining balances for homeowners insurance, HOA fees, etc., they’ll be prorated to your closing date. You’ll need to pay the remaining balance before transferring the property to the buyer.

Transfer Taxes: 0.5% (Maryland state), County Rates Vary

Maryland charges sellers a 0.5% transfer tax on all home sales. If you are a first-time buyer, your rate will be lowered to 0.25%.

Some counties may impose a local transfer tax as well.

> Learn more about Maryland transfer tax.

Recording Fees: Variable

Recording fees cover the cost of filing the deed with the local court. These fees vary from county to county. In Cecil County, for example, they come to $4.10 for every $500 worth of property, making it an effective rate of 0.82%.

Settlement or Attorney Fee: Variable

When you close on your home, you may need to pay a settlement fee to the escrow or title agent who handles paperwork and escrow funds until closing. Also, Maryland requires an attorney be part of all real estate transactions and oversee the legal documents. Their expenses can vary widely.

State Recordation Tax: $750

Maryland imposes a $750 recordation tax on all home sellers.

Other Home Selling Costs in Maryland

Aside from the aforementioned closing costs, sellers in Maryland should also budget for presale improvements, repairs, and realtor commission fees.

If your home is in good condition, you likely won’t need to spend too much on repairs and improvements. However, if you haven’t taken care of your home over the years, expect to pay a pretty significant bill.

In Maryland, most realtor commission fees average out to around 6% of the home’s closing price. This will need to be paid at closing, as well. If you were selling a home at the median sale price of $279,300, you’d owe $16,758 in commissions.

> Learn more about how much it costs to sell a house in Maryland

Who pays closing costs in Maryland?

Closing costs differ for both the buyer and the seller. Here’s typically what each side of the sale is responsible for:

Typical Seller Closing Costs

Closing costs for sellers revolve around transferring ownership of the property, verifying their title, and paying off their outstanding balances. These costs include:

  • Transfer tax
  • Title searches
  • Title insurance (for the buyer)
  • Loan payoff fees
  • Mortgage prepayment penalties
  • Outstanding balances
  • Attorney or settlement fees

Typical Buyer Closing Costs

Buyer closing costs focus on taking out a mortgage. These include loan origination fees and credit checks. Here are all the typical fees for buyers:

  • Title insurance (for the lender)
  • Home inspections
  • Appraisals
  • Surveys
  • Credit reports
  • Recording fees
  • Settlement or attorney fees
  • Mortgage origination fees

Should you pay the buyer’s closing costs?

In most cases, the seller will not pay any of the buyer’s closing costs. However, in buyer’s markets, there may arise certain scenarios in which the seller will offer to pay some of their closing costs as a negotiation tactic.

If you are considering paying some of the buyer’s closing costs, make sure to consult with your real estate agent beforehand.

Key Takeaways for Maryland Home Sellers

In Maryland, home sellers will typically need to pay 2-4% of their home’s sales price in closing costs. These fees are paid in addition to realtor commission fees.

Selling a home is an expensive endeavor, so sellers need to look for as many ways to save as possible. By selling your home with Clever Real Estate, you can reduce your overall selling costs by thousands of dollars.

Get in touch to learn how you can save and get matched with a top-rated, local agent for a free, no-obligation consultation.

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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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