Montgomery County MD Closing Costs: Transfer Taxes, Recordation, and What Buyers Pay

Montgomery County is Maryland's most populous county and one of the most expensive real estate markets in the region. A home in Bethesda, Rockville, Silver Spring, or Germantown easily sells for $500,000 to $1 million or more — and with that price tag comes significant closing costs.

Understanding what you will pay at closing in Montgomery County is essential for budgeting and for negotiating with the other party. Here is the complete breakdown of Montgomery County closing costs for buyers and sellers.

Transfer Taxes in Montgomery County

Transfer taxes are the largest single closing cost line item in Maryland, and Montgomery County has its own rates on top of the state tax:

State transfer tax. Maryland charges a state transfer tax of 0.5% of the purchase price. In Montgomery County, this is typically split between buyer and seller, with each paying 0.25%.

County transfer tax. Montgomery County charges an additional county transfer tax. The current rate is 1.0% of the purchase price. This is also typically split between buyer and seller, with each paying 0.5%.

Combined transfer tax. For a $600,000 home in Montgomery County, the combined transfer tax (at the standard split) would be:

• Buyer pays: $4,500 (0.25% state + 0.5% county)
• Seller pays: $4,500 (0.25% state + 0.5% county)
• Total: $9,000

This can vary if the contract specifies a different split, but this is the traditional Montgomery County custom.

Recordation Taxes in Montgomery County

Recordation tax is based on the loan amount for financed purchases and is almost always paid by the buyer:

• State recordation tax. $5.00 per $1,000 of loan amount.
• County recordation tax. Montgomery County charges $6.90 per $1,000 of loan amount.

For a buyer financing $480,000 on a $600,000 home:

• State recordation tax: $2,400
• County recordation tax: $3,312
• Total recordation: $5,712

Combined with transfer taxes, the tax line items alone can easily exceed $15,000 on a $600,000 transaction in Montgomery County.

Title Insurance in Montgomery County

Title insurance is where Montgomery County (and Maryland generally) differs from Virginia and DC:

• Owner's title insurance. By Maryland tradition, the seller typically pays for the owner's title insurance policy. This is a significant benefit for buyers and one of the key differences in Maryland closing customs.
• Lender's title insurance. The buyer pays for the lender's policy, which is required by any mortgage lender.

For a $600,000 home, the owner's title insurance premium would be approximately $2,000-$2,500, and the lender's policy would be approximately $1,500-$2,000, depending on the specific rates and any discounts applied.

Settlement and Closing Fees

The settlement fee — the title company's charge for handling the closing — is typically paid by the buyer in Montgomery County. This covers document preparation, escrow coordination, signing logistics, and recording.

Expect a settlement fee in the range of a few hundred dollars, depending on the title company.

Other Buyer Closing Costs in Montgomery County

As a buyer in Montgomery County, your closing costs include:

• Your share of transfer taxes. Approximately 0.75% of purchase price (at standard split).
• Recordation taxes. Based on your loan amount (approximately $11.90 per $1,000).
• Lender's title insurance. Approximately $1,500-$2,000.
• Owner's title insurance. Usually paid by the seller, but confirm in your contract.
• Settlement fee. A few hundred dollars.
• Appraisal fee. Paid to your lender.
• Credit report fee. Paid to your lender.
• Survey fee. If required.
• Flood insurance escrow. If the property is in a flood zone.

For a $600,000 home with a $480,000 loan, buyer closing costs in Montgomery County would typically range from $12,000 to $18,000, depending on whether the seller pays for the owner's title insurance and what specific tax rates apply.

Other Seller Closing Costs in Montgomery County

As a seller in Montgomery County, you typically pay:

• Your share of transfer taxes. Approximately 0.75% of purchase price.
• Owner's title insurance. By tradition, you provide this for the buyer (approximately $2,000-$2,500).
• Real estate commissions. Typically 5-6% of the sale price, split between listing and buyer's agents.
• Prorated property taxes. Prorated to the closing date.
• Any liens or judgments. Must be cleared at closing.

How to Get an Accurate Estimate

The best way to know your exact closing costs in Montgomery County is to request an itemized title quote early in your transaction. At Pruitt Title, we calculate transfer taxes, recordation taxes, title insurance, and all settlement fees for your specific property and provide a detailed breakdown before you close.

Get a free title quote for your Montgomery County transaction. We close in Bethesda, Rockville, Silver Spring, Gaithersburg, and every other community in the county. For a broader view of Maryland costs, see our closing costs in Maryland guide, or learn about choosing a title company in Bethesda, MD.