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.
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Maryland sellers almost always pay these closing costs
While some closing costs are negotiable, sellers are customarily on the hook for the following:
1. Mortgage payoff
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.
2. Property taxes
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.
3. Title company fees
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.”
4. Transfer tax
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.
5. Real estate agent commission
Real estate agent commissions are usually the most expensive closing cost that sellers pay. Sabelhaus advises that real estate agent commissions in Maryland usually cost around 5% of the home’s sale price, covering both the listing and buyer’s agents’ fees. Sellers are expected to pay the listing agent’s fee, which is around 2.5% to 3%, but you may also offer to pay for the buyer’s agent fee to sweeten the deal for buyers.
While 5% might seem like a hefty price, it’s marginal compared to the benefit of teaming up with an excellent agent. Our research shows that the top 5% of real estate agents sell homes for up to 10% more than their peers, meaning that a great agent pays for their service and then some. You can find a top Maryland agent with HomeLight’s Agent Finder. Simply plug in your property details, and we’ll put you in touch with three leading agents in your area.
Maryland sellers may run into these closing costs
These costs won’t always apply, but they often do. Here are the main additional closing costs Maryland sellers need to know about:
6. HOA fees and condominium dues
There are 7,100 homeowner’s associations (HOAs) in Maryland as of 2024; around 23.3% of homeowners across the state belong to one. This means that about a quarter of sellers may owe HOA fees at the end of their sales. According to Sabelhaus, Maryland HOAs fees typically range from $60 to $150 per month while condominium dues range from $250 to $1000 on average.
If you haven’t paid for the month during which your sale takes place, you’ll pay a prorated amount on the day of sale. If you have already paid, the buyer will credit you based on the number of days they’ll own the property during the month.
7. Liens
Sometimes, properties are used as financial instruments for debt collection. If you owe contractors, parking tickets, child support, IRS fees, or other unpaid debts, the entity you owe may take a lien out on your property, essentially claiming part of its value as repayment for their loss. A title search reveals any existing liens on your property, and you’ll need to settle them before you can sell the house.
8. Seller concessions
In some home sales, buyers may negotiate for sellers to pay a portion of their closing costs to offset the cost of necessary repairs, or to simply lower the amount of cash the buyer needs to close the sale. Sabelhaus shares that sellers concessions were more commonly seen in the pre-2020 market.
“I would say pre-2020, you would see buyers reasonably expecting 1% to 3% in closing cost assistance negotiated into the sale price.” However, when the market is tight and competitive, “concessions have pretty much just disappeared,” Sabelhaus shares.
Get a quick Maryland closing costs estimate
During the final stages of your sale, you’ll receive a settlement statement, a document that includes an itemized list of every cost you’re covering. However, if you want an estimate of your total closing costs before you’ve signed any paperwork, you can use HomeLight’s Net Proceeds Calculator. By looking at your property’s value, location, outstanding mortgage amount, and other key information, our calculator will give you a ballpark estimate of how much money you’ll make on your home sale.
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