By Adam Chubbuck, Team Leader, Team Alpha Charlie of Douglas Realty. Retired U.S. Navy Chief. Licensed in Maryland and Virginia.
Buyers save for a down payment and assume that is the number. Then the Closing Disclosure arrives and there are thousands of dollars they were not expecting.
Here is what you actually need at the table in Maryland.
The Two Big Categories
Your down payment. Whatever percentage you agreed to. This goes toward the purchase price.
Your closing costs. Everything else, and in Maryland this is a real number. Plan on roughly 3 to 5 percent of the purchase price as a working estimate, though it varies.
Note that your earnest money deposit already counts. If you put down $5,000 when your offer was accepted, that gets credited toward what you owe at settlement.
The Maryland Taxes
These are the ones out of state buyers never see coming.
County transfer tax. In Anne Arundel County, 1.0 percent of the purchase price. It rises to 1.5 percent on sales of $1 million or more.
State transfer tax. 0.5 percent.
Recordation tax. $7.00 per $1,000, rounded up to the nearest $500.
On a $500,000 purchase, that is roughly $5,000, $2,500, and $3,500, or about $11,000 in transfer and recordation taxes alone.
Here is the important part: who pays these is set by the contract, not by law. Custom is generally a split, but it is negotiable. Asking a seller to cover more of your closing costs is a completely normal part of a Maryland negotiation, and it is often more achievable than asking them to drop the price.
And if you are a first-time Maryland homebuyer, the state transfer tax is reduced for qualifying buyers, and the customary allocation shifts so the seller carries more of it. Ask your agent and title company to confirm your eligibility.
Lender Costs
Origination or underwriting fees. What the lender charges to make the loan.
Appraisal. Typically a few hundred dollars, and often paid up front rather than at closing.
Credit report and other processing fees.
Discount points, if you buy the rate down. Optional.
Title and Settlement Costs
Title search and examination. Researching the ownership history.
Lender’s title insurance. Required by your lender if you are financing.
Owner’s title insurance. Optional but strongly recommended. This protects you, not just the bank.
Settlement or closing fee. What the title company charges to handle the transaction.
Recording fees.
Prepaid Items and Escrow
This category surprises people because it is not really a fee. It is money you would owe anyway, just paid earlier.
Prepaid interest from your settlement date to the end of that month.
Homeowners insurance, usually the first full year paid up front.
Escrow reserves. Your lender collects several months of property taxes and insurance to establish your escrow account.
Prorated property taxes. Anne Arundel County bills July through June, so depending on when you close you either owe the seller for months they already paid or receive a credit.
HOA or condo fees, prorated, plus any transfer or document fees the association charges.
A Rough Example
On a $500,000 purchase in Anne Arundel County with 10 percent down:
- Down payment: $50,000
- Transfer and recordation, if split per custom: roughly $5,500
- Lender fees: $1,500 to $3,000
- Title and settlement: $2,000 to $3,500
- Prepaids and escrow: $3,000 to $5,000
Total cash to close: roughly $62,000 to $67,000.
Your actual number depends on your loan, your negotiated allocation of transfer taxes, your closing date, and your insurance premium. This is illustrative, not a quote.
Three Things That Reduce What You Bring
Seller closing cost help. Negotiated into the contract. This is common and it is often the difference between a buyer being able to close and not.
Lender credits. Some lenders offer credits in exchange for a slightly higher rate. Sometimes worth it if cash is your constraint.
Down payment assistance. Maryland offers programs for qualifying buyers, and Anne Arundel County has its own. These can cover a meaningful share of what you need.
How You Actually Pay
Wire transfer, usually, or a cashier’s check for smaller amounts. Personal checks are generally not accepted.
One warning that matters more than anything else on this page. Criminals target real estate closings with fake wire instruction emails that look exactly like your title company’s. Call the title company at a number you already have, not one from the email, and verbally confirm the wire instructions before you send anything. This happens in Maryland and the money is extremely difficult to recover.
Get Your Number Early
You will receive a Loan Estimate from your lender shortly after applying, and a Closing Disclosure at least three business days before settlement. Read both, and ask about anything you do not understand.
Better yet, ask for an estimate before you write an offer, so you know what you need before you are emotionally committed to a house.
If you want help figuring out what your cash to close actually looks like, reach out to Team Alpha Charlie of Douglas Realty. If this is your first purchase, Maryland first time homebuyer programs for 2026 can change these numbers considerably.
Quick Answers
How much are closing costs in Maryland?
Plan on roughly 3 to 5 percent of the purchase price as a working estimate. Maryland’s transfer and recordation taxes make this higher than in many states. In Anne Arundel County, the county transfer tax is 1.0 percent, the state adds 0.5 percent, and recordation runs $7.00 per $1,000.
Who pays closing costs in Maryland?
Both sides pay some, and the allocation of transfer and recordation taxes is set by the contract rather than by law. Asking the seller to cover more of your closing costs is a normal part of a Maryland negotiation.
Does my earnest money count toward closing?
Yes. Your earnest money deposit is credited toward what you owe at settlement.
Can I roll closing costs into my mortgage?
Generally not directly on a purchase, though seller credits and lender credits can reduce what you bring. Some loan programs allow certain costs to be financed. Ask your lender what applies to your situation.
How do I pay at closing?
Usually by wire transfer, sometimes by cashier’s check. Always call your title company at a known number to verbally confirm wire instructions before sending, because wire fraud targeting closings is a real and serious problem.
Tax rates reflect Anne Arundel County and Maryland published figures. Cost estimates are illustrative and vary by lender, loan program, settlement date, and negotiated terms. This is general information, not lending or legal advice.
I am Adam Chubbuck, Team Leader of Team Alpha Charlie of Douglas Realty. Retired U.S. Navy Chief, licensed in Maryland and Virginia, and I have closed more than 350 homes over the past five years across the Baltimore to Annapolis corridor. My team serves buyers and sellers throughout Anne Arundel County, Howard County, Baltimore County, Baltimore City, and the surrounding markets, with deep experience supporting military, veteran, and Department of Defense families.
443-347-6692 | [email protected] | TACMD.com
Smile more,
Adam Chubbuck
