Baltimore Buyer Closing Costs: How Much Cash Do You Need?

How much cash do you need to buy a house in Baltimore?

More than the down payment. Closing costs come on top of it, and in Maryland the biggest piece is usually your share of the transfer and recordation taxes. Baltimore City's taxes add up to 3% of the price, compared with 2.5% in Baltimore County, so the same house costs more to close on in Hampden or Roland Park than in Towson.

Here's what usually goes into a buyer's cash to close:

• Down payment. Anywhere from 0% to 20% or more of the price, depending on the loan. Plenty of buyers put down far less than 20%.
• Your share of transfer and recordation taxes. Usually split 50/50 with the seller. First-time Maryland buyers and owner-occupants can pay less (more below).
• Lender fees and the appraisal. Your lender's Loan Estimate lists these line by line.
• Title insurance and settlement fees. The title company runs the closing and protects your ownership. An owner's title policy is optional, and I recommend it.
• Prepaid taxes and insurance. Your first year of homeowners insurance, a few months of taxes for your escrow account, and your share of any property taxes the seller already paid for the year.
• Inspections. A home inspection, plus radon, sewer line, or termite checks when the house calls for them.
• Buyer's agent compensation, if any. It's set in your buyer agreement, it's fully negotiable and not set by law, and sellers often agree to cover some or all of it.

Example: a $400,000 home, City vs. County

Estimates from the calculator above with its default numbers: 10% down, the buyer will live in the home, not a first-time Maryland buyer, and property taxes estimated from each county's rate. Actual costs will vary with your lender, title company, contract, and closing date. Buyer's agent compensation, if any, isn't included; it's negotiable and set in your buyer agreement.

Maryland transfer and recordation taxes for buyers

Three taxes are due when the deed is recorded. Maryland law presumes buyer and seller split them 50/50 unless the contract says otherwise.

Buying somewhere else in Maryland? Pick the county in the calculator above. It has current rates for all 23 counties and Baltimore City, including Montgomery County's tiered recordation tax and Anne Arundel's higher transfer tax at $1 million and up.

First-time Maryland homebuyers pay less

If you've never owned a home in Maryland that you lived in, and you'll live in this one, you're likely a first-time Maryland homebuyer for tax purposes. The state transfer tax drops from 0.5% to 0.25%, and the seller pays it unless your contract says otherwise. On a $400,000 home, that saves you about $1,000. You sign an affidavit at closing to claim it.

Maryland's state housing agency and Baltimore City both run down payment assistance programs, and the details change often. A lender who works with them can tell you what fits. More in my guide for first-time home buyers in Baltimore.

Ways to lower your cash to close

• Ask for a seller credit. It's negotiated in your offer and comes off your closing costs. Lenders cap how much you can take, so check with yours first.
• Compare Loan Estimates. Lender fees vary more than most buyers expect. Get two or three.
• Claim every exemption you qualify for. Owner-occupant and first-time buyer savings only apply when the paperwork says so.
• Watch your closing date. It changes how much prepaid interest and property tax you owe at the table.

Ready to look? Start with North Baltimore homes for sale, Towson, MD homes for sale, or a search of all homes for sale. Buying in Owings Mills? Here's my breakdown of buyer closing costs in Owings Mills. Selling first? My seller net sheet calculator shows what you'll walk away with.

Frequently asked questions

How much are closing costs for a buyer in Baltimore?

Plan on roughly 3% to 5% of the price on top of your down payment, more in Baltimore City than in Baltimore County because of the higher transfer and recordation taxes. On a $400,000 home, the calculator above estimates about $17,300 in the City and about $13,900 in the County, including prepaid taxes and insurance.

Who pays transfer and recordation taxes when you buy a house in Maryland?

Maryland law presumes buyer and seller split them 50/50, but the contract can change that. First-time Maryland homebuyers usually pay no state transfer tax, because the seller pays the reduced 0.25% rate.

Do first-time homebuyers pay transfer tax in Maryland?

Not the state transfer tax, in most cases. It drops to 0.25%, and the seller pays it unless your contract says otherwise. You still pay your share of the county or city transfer tax and the recordation tax.

Do I have to pay my buyer's agent?

It depends on your buyer agreement. Real estate commissions are fully negotiable and aren't set by law. Many sellers still agree to pay some or all of the buyer's agent compensation, and you can ask for it in your offer.

How accurate is this closing cost calculator?

It's an estimate, not a Loan Estimate or a settlement statement. Your lender, title company, contract terms, and closing date set the final numbers. For a real number on a specific house, ask me before you write an offer.