What Are Seller Closing Costs and How Do They Work When Selling in Maryland 

First of all, what the heck are closing costs?

Closing costs are fees and expenses not included in the purchase price of a property. Kind of like the processing fees you have to pay when you buy tickets to a sporting event or a concert. Closing costs are just more involved than your typical Ticketmaster or Seatgeek fees. 

Second of all, how much are the closing costs for sellers in a Maryland home sale. Closing costs are best calculated as a percentage of the purchase price of a property. This can range from 1% on the low to 6% or more on the high end. 

Now let’s go over some more specific examples of closing costs and who pays them. 

Maryland seller closing costs
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Disclaimer: This blog post and website provides general information on Maryland real estate. Maryland Estates, LLC, doing business as Creo Home Buyers, and its authors are not liable for the accuracy or use of this information; consult with a trusted real estate professional or attorney for guidance regarding your unique selling situation.

What do closing costs usually include when selling a home?

The most expensive closing cost in Maryland is paying real estate agent commissions. The real estate agent commissions are usually paid by the home seller. This usually includes the seller paying both the buyer’s agent and seller’s agent.

Maryland imposes state and, sometimes, local transfer taxes. Who pays these taxes is negotiable between buyer and seller. Property sellers also commonly pay prorated property taxes up to the closing date.

There are several other potential seller costs involved with closing. This can include unpaid liens, attorney fees, and home warranty expenses. Sellers of a house in Maryland usually cover repairs identified during the home inspection and it’s included as part of the costs for sellers.

When selling your house, you can ask a settlement agent for an estimate of your closing costs. There are also online calculators available to estimate your selling closing costs. Reviewing these estimates with a real estate attorney can help you understand the breakdown of these selling costs.

This can give you an idea of how much you could save by reducing or eliminating these fees. This is an area where some diligence and homework can help you move that bottom line.

How do seller closing costs work in Maryland?

In Maryland, seller closing costs are the expenses that the seller is responsible for paying at the time of closing. These costs are due at the time of sale. As the seller, you may also be responsible for paying off any outstanding liens or judgments on your Maryland home.

Property sellers in Maryland are usually expected to pay half of the closing costs of a typical home sale. While buyer closing costs account for the other half. Closing costs can include items such as transfer taxes, title insurance, and real estate agent commissions.

There is a particular case that can arise with homes that are difficult to sell. In these cases a seller may agree to cover all or a portion of the buyer’s closing costs as part of the sales agreement.

Understanding the potential seller closing costs in Maryland can help sellers prepare. For both the financial aspects of selling their property to house buyers in Maryland and finding ways to cut their costs. 

Which closing costs can buyers and sellers negotiate? 

Buyers and sellers can negotiate various closing costs when buying and selling real estate in Baltimore or anywhere in Maryland.

Negotiation may vary based on local customs, market conditions, and the terms of the purchase agreement. Here are some common closing costs that can be subject to negotiation in a Maryland real estate transaction:

  • Real Estate Agent Commissions: Sellers can negotiate the commission rates with their real estate agents.
  • Home Warranty: Sellers may offer to pay for a home warranty as an incentive to buyers.
  • Title Insurance: Sellers might negotiate to pay for some or all of the buyer’s title insurance.
  • Transfer Taxes: Negotiations may involve whether the buyer or seller covers transfer taxes.
  • Home Repairs: Sellers might negotiate to cover certain lender required repairs identified during the inspection.
  • Settlement Agent Fees: In some cases, sellers may contribute to or cover the closing fees charged by the title company or settlement agent.

It’s important for both parties to communicate openly. Collaboration will be needed to reach an agreement where all sides leave happy. 

How these negotiations go can depend on several factors. These factors can include the local real estate market and the motivations of the parties involved. Prevailing industry practices can be a factor as well.  

Working with experienced real estate professionals can provide you with valuable insights into the total closing costs for home sellers in Maryland. That experience can also help guide you throughout the negotiation process.

Maryland Seller Closing Cost FAQ 

Are closing costs and lender’s fees the same thing? 

Short answer: Yes. Remember when you were in geometry class in elementary school? No. That’s okay. Well, all rectangles are quadrilaterals but not all quadrilaterals are rectangles. Same principle here. All lender’s fees are closing costs but not all closing costs are lender’s fees. As we have discussed here, closing costs can be a variety of things, not just lender’s fees. Lender’s fees fall under the umbrella of closing costs. 

Are closing costs in Maryland high compared to other states? 

On average, Maryland has some of the highest closing costs in America. According to an article published on Forbes, Maryland ranks in the top 5 in the U.S. for highest closing costs. This is both in total money paid in fees and as a percentage of the sale price. Other states with high closing costs for sellers are Delaware, New York, Pennsylvania and the District of Columbia (not a state, but you get the idea). Professionals usually use a calculator to estimate them. 

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