Selling your home is a major change, and while it’s definitely exciting to move on to a new chapter in your life, there’s a lot to learn about the process before you get started. One of the most important things that you should keep in mind is that there are several costs you’ll need to pay to finalize your sale. Nationwide, closing costs for sellers can range from 6% and 10% of a property’s sale price. The average combined closing costs for sellers and buyers in Maryland, excluding agent fees, are around $14,721, or approximately 3.68% of the sale price. However, every sale is unique, and it’s difficult to project an accurate estimate without considering your specific home sale circumstances. To help you estimate your closing costs, HomeLight consulted a top real estate agent in the area to create this comprehensive guide on estimated closing costs for sellers in Maryland. While some closing costs are negotiable, sellers are customarily on the hook for the following: Maryland has a homeownership rate of 71.6%, and the average mortgage balance carried by homeowners is $283,092. This means that the majority of Maryland sellers must pay off their existing mortgage before they can transfer the property title to the new buyer. In most cases, homeowners use the proceeds of their sale to cover their outstanding loan amount and other closing costs. In Maryland, county governments issue property tax bills in July or August each year. Lisa Sabelhaus, a top real estate agent in Clarksburg, Maryland, with over 1,771 home sales under her belt, shares that payments on property taxes are due semiannually, with one payment due at the end of the year and the other at the end of July of the following year. Maryland has an effective property tax rate of 0.91% of your home’s value per year. However, the specific amount depends on your local government. Check here to find out the 2024 tax rates for your local government. When you sell your home, you’ll settle upon any outstanding property taxes prorated to the day of sale. Sabelhaus assures us that if sellers have already paid their property taxes, they’ll receive a refund for the days that they did not live in the property when they file their state tax return. There are several fees involved in legally changing ownership of a home. In Maryland, sellers pay a title company to facilitate this process. “Maryland is a title company state. There are a lot of closing costs that title companies will wrap into a one-time fee for sellers to pay,” Sabelhaus shares. “I like to give a high estimate to my sellers of around $900 to engage the services of a title company.” In addition to settling up on your regular property taxes, you’ll need to pay a one-time tax to both the state of Maryland and to your local government to finalize your home sale. Sabelhaus tells us that sellers and buyers customarily split the transfer taxes, but when market trends favor sellers, many buyers offer to pay transfer taxes outright to sweeten the deal. Maryland’s transfer tax costs 0.5% of your home’s sale price. However, if the buyer is a first-time home buyer, the state lowers the fee to 0.25%. Transfer taxes for counties and municipalities vary. For instance, Baltimore City charges 1.5% of purchase price, while Montgomery County charges only 1%. For a full rundown of local Maryland transfer taxes, check out this spreadsheet.Maryland sellers almost always pay these closing costs
1. Mortgage payoff
2. Property taxes
3. Title company fees
4. Transfer tax
