Who Pays Closing Costs in Maryland? Buyer vs Seller Customs Explained

One of the first questions Maryland home buyers and sellers ask is simple: who pays what at closing? Unlike some states where customs are rigid, Maryland has traditions that vary by county, market conditions, and negotiation. Understanding who pays what before you sign a contract prevents surprises at the closing table.

Here is the breakdown of Maryland closing cost customs and what you can expect to pay or receive as a buyer or seller in the Free State.

Maryland Transfer and Recordation Taxes: The State's Biggest Closing Cost

The largest closing cost line item in Maryland is almost always the transfer and recordation taxes. These are taxes imposed by the state and county whenever real estate is transferred.

Transfer tax is calculated on the purchase price and is split between buyer and seller — but the split varies:

• State transfer tax. The state charges 0.5% of the purchase price. In most counties, this is split evenly between buyer and seller (each paying 0.25%), though in some counties the buyer pays the full 0.5%.
• County transfer tax. Each county in Maryland imposes its own transfer tax, from none in Frederick County to 1.4% in Prince George's County (1.5% in Anne Arundel County at $1 million or more). Montgomery County, Prince George's County, and Baltimore County each have their own rates. This is also typically split, though the exact split varies by county custom.

Recordation tax is based on the purchase price, not the loan, and Maryland law presumes the buyer and seller split it equally unless the contract says otherwise (for a qualifying first-time Maryland buyer, the seller pays it by default). This tax varies by county as well.

For a $500,000 principal residence in Montgomery County, transfer and recordation taxes come to about $11,060 in total ($2,500 state transfer, $5,000 county transfer and $3,560 recordation), divided between buyer and seller according to the contract.

Who Pays Title Insurance in Maryland?

Here's how title insurance is usually handled in Maryland:

• Owner's title insurance. In Maryland, the buyer customarily pays for the owner's title insurance policy as in Virginia, though it can be negotiated with the seller. In Stewart Title's published Maryland schedule, the premium on a $500,000 home is $2,507.50 before discounts.
• Lender's title insurance. The buyer almost always pays for the lender's policy, which is required by any mortgage lender.

If the seller has agreed to cover your owner's policy, make sure the contract says so in writing.

Settlement and Closing Fees

Settlement fees — the fee charged by the title or settlement company for handling the closing — are typically paid by the buyer in Maryland. This covers the administrative work of preparing documents, coordinating signatures, holding escrow funds, and disbursing proceeds.

However, this is negotiable. In a competitive seller's market, sellers may agree to pay a portion of the buyer's closing costs. In a buyer's market, buyers may request seller concessions to cover settlement fees.

The key is asking — and getting the agreement in writing before the contract is signed.

Other Buyer Closing Costs in Maryland

As a buyer in Maryland, expect to pay:

• Lender's title insurance premium. Required by your mortgage lender.
• Owner's title insurance. If the seller does not agree to pay it.
• Recordation taxes. Based on your loan amount.
• State and county transfer taxes. The buyer's share (typically 0.25% state + the county's share, if split).
• Appraisal fee. Paid to your lender (often wrapped into closing costs).
• Credit report fee. Paid to your lender.
• Survey fee. If required by your lender or the title company.
• Flood insurance escrow. If the property is in a flood zone.

Other Seller Closing Costs in Maryland

As a seller in Maryland, you typically pay:

• Transfer taxes. Your share of the state and county transfer taxes.
• Owner's title insurance premium. If you have agreed to provide this for the buyer (traditional Maryland custom).
• Real estate commissions. The largest seller cost — typically 5-6% of the sale price, split between the listing agent and buyer's agent.
• Attorney fees. If you use an attorney for the closing.
• Any outstanding property taxes. Prorated to the closing date.
• Any liens or judgments. Must be cleared at closing.

How to Negotiate Closing Costs in Maryland

Maryland closing cost customs are exactly that — customs. They are not laws. Everything is negotiable, and the market conditions at the time of your transaction determine what is realistic:

• In a seller's market. Sellers have leverage and may not agree to pay any closing costs. You may need to pay your own way.
• In a buyer's market. Sellers are more likely to offer concessions, pay for the owner's title policy, or chip in on buyer closing costs to make the deal work.
• With a new construction home. Builders often have their own customs and may offer closing cost credits as incentives rather than paying specific line items.

The important thing is knowing what you want going into the negotiation. If paying the owner's title insurance is important to you as a buyer, ask for it. If you are a seller and want the buyer to pay their own transfer tax share, specify that in your listing terms.

Get a Clear Picture Before You Close

Whether you are buying or selling in Maryland, the best way to understand your actual closing costs is to get an itemized quote early in the process. Pruitt Title provides a detailed breakdown of every line item — transfer taxes, recordation, title insurance, settlement fees — so there are no surprises at signing.

Get a free title quote or contact Will to walk through the numbers for your specific transaction. Pruitt Title closes across Maryland and knows the local customs that affect what you pay. For more on Maryland closing costs, see our full closing costs in Maryland breakdown, and compare buyer and seller obligations with our who pays closing costs in Virginia guide.