Buying in Bethesda, Silver Spring, Rockville, or Chevy Chase comes with one big question: how much will you need to bring to closing beyond your down payment? If you have heard different numbers from friends or online, you are not alone. Closing costs vary by property, loan, and local taxes, and they add up quickly in Montgomery County’s higher price points. In this guide, you will learn what typical buyer costs include, what is negotiable in Maryland, and a simple way to estimate your cash to close. Let’s dive in.
What closing costs cover
Closing costs are the third-party fees, taxes, and prepaids required to finalize your purchase. They are separate from your down payment.
Common categories you should budget for include:
- Transfer and recordation taxes
- Title search, title insurance, and settlement fees
- Lender fees and loan costs
- Prepaid items and escrow deposits
- Inspections, surveys, and HOA-related fees
- Recording and administrative fees
In Montgomery County’s higher-value neighborhoods, many of these charges scale with price, so total dollar amounts can be higher than national averages.
Who pays what in Maryland
Custom and practice vary by town and by deal. The purchase contract controls who pays which fees, and many items are negotiable.
Transfer and recordation taxes
- What they are: Taxes due when the deed transfers to you and when your lender records the mortgage.
- Who pays: In many Maryland transactions, sellers commonly pay the deed transfer tax and buyers often pay recordation taxes related to the mortgage. This is negotiable and can vary by neighborhood and contract.
- How to estimate: These taxes are typically percentages of the price or loan amount. State and county components may apply, so you add both. Ask your title company to confirm the current Montgomery County and Maryland rates for your specific contract.
- Local check: Verify with Montgomery County finance or clerk offices, Maryland SDAT or Comptroller guidance, or your title company’s estimate.
Title search, title insurance, and settlement fees
- What they are: The title search reviews the property’s history for liens or defects. Title insurance protects you and your lender from covered title issues. The settlement fee covers the closing agent’s work.
- Who pays: Buyers typically pay the lender’s policy. The owner’s policy and settlement fees are negotiable locally. In Maryland, title companies commonly handle closings.
- How to estimate: Premiums are based on purchase price and set by rate tables. Settlement fees are usually flat or tiered. Request a preliminary quote from a local title company.
Lender fees and loan costs
- What they are: Origination charges or points, underwriting, processing, application, credit report, and the appraisal.
- Who pays: The buyer.
- How to estimate: Origination can be a percentage of your loan amount. Points are optional and equal 1 percent of the loan per point. Appraisals in high-cost areas often range from about $400 to $1,000+ depending on property type and value. Credit reports are usually small flat fees.
- Local check: Your lender must provide a Loan Estimate within three business days of application. Use it to compare lenders and understand fees.
Prepaid items and escrow deposits
- What they are: First-year homeowner’s insurance, your share of pro-rated property taxes, daily mortgage interest from funding to your first payment, and initial escrow deposits so your lender can pay taxes and insurance when due.
- Who pays: The buyer.
- How to estimate: Get insurance quotes. Your lender will calculate interest and escrow reserves. Property tax prorations depend on the closing date and county billing schedule.
Inspections, surveys, HOA fees, and other items
- What they are: Home and pest inspections, septic or well tests if applicable, land surveys, HOA document or transfer fees, and title endorsements.
- Who pays: Buyers typically pay for inspections and surveys. HOA document or transfer fees can be paid by either party per contract.
- How to estimate: Inspections often run $300 to $1,000+ depending on scope and property complexity. HOA fees vary by association. Ask early to avoid surprises.
Recording and local administrative fees
- What they are: Fees paid to record the deed and mortgage with the county.
- Who pays: Buyers often pay to record the mortgage. Deed recording can be buyer or seller per negotiation.
- How to estimate: Each recorded document has a fixed fee schedule. Your title company will pull the current Montgomery County schedule for your file.
How to estimate your cash to close
You can build a solid estimate before you receive final numbers. Use this simple framework.
Step-by-step formula
Follow these steps and keep notes as you go.
Step A: Start with purchase price and financing
- Purchase price (P)
- Down payment amount or percent (D)
- Loan amount = P − D
Step B: Add loan-related costs (L)
- L = origination or points + appraisal + credit report + underwriting or processing
Step C: Add title and settlement costs (T)
- T = title insurance premiums + title search + settlement fee + recording fees
Step D: Add transfer and recordation taxes (X)
- X = state transfer tax + county or local transfer tax if applicable + recordation tax on the mortgage
Step E: Add prepaids and escrow deposits (E)
- E = homeowner’s insurance first year + property tax proration + initial escrow deposits + per diem mortgage interest
Step F: Subtract credits and offsets (C)
- C = earnest money deposit + any seller credits or concessions + lender credits + grants or assistance
Step G: Cash-to-close calculation
- Cash to close = D + L + T + X + E − C
Hypothetical example
The numbers below are for illustration only. Always verify with your lender and title company for exact amounts.
- Purchase price: $750,000
- Down payment at 20 percent: $150,000
- Loan amount: $600,000
- Lender fees and appraisal estimate: $6,000
- Title and settlement estimate: $3,500
- Transfer and recordation taxes estimate: $7,500
- Prepaids and escrow estimate: $6,000
- Earnest money deposit: $15,000
- Cash to close = 150,000 + 6,000 + 3,500 + 7,500 + 6,000 − 15,000 = $158,000
Smart ways to manage costs
- Request a Loan Estimate early. You will receive one within three business days of application. Compare fees across lenders and ask about rate options with and without points.
- Ask your title company for a preliminary estimate. They will apply local title premium tables and the Montgomery County recording schedule so you can plan accurately.
- Negotiate transfer tax responsibility in the contract. In Maryland, this is often negotiated and local custom can vary by community.
- Explore credits. Some buyers accept a small rate increase in exchange for a lender credit that reduces cash due at closing. You can also negotiate seller concessions when market conditions allow.
- Confirm HOA and condo fees early. Document or transfer charges vary by association and can impact your final number.
- Review the Closing Disclosure at least three business days before settlement. Compare it to your Loan Estimate and ask questions right away if you see changes.
Local verification checklist
When you want precise numbers for a Bethesda, Chevy Chase, Potomac, Silver Spring, or Rockville purchase, confirm with these sources:
- Montgomery County finance, treasurer, or clerk offices for transfer, recordation, and recording fee schedules
- Maryland Department of Assessments and Taxation for state rules and possible exemptions
- Maryland Comptroller or revenue guidance for taxes related to real estate transfers
- Your title company or settlement attorney for exact premiums and county fees on your contract
- Your lender for the Loan Estimate and escrow requirements
- HOA or property manager for association document and transfer fees
Working with a local, senior-led team
Your closing is smoother when your team coordinates lender disclosures, title estimates, and contract terms early. REP Real Estate Partners takes a concierge approach that keeps you informed while we manage the moving pieces behind the scenes. You get senior attention, practical guidance on cost tradeoffs, and efficient coordination from contract to keys.
Ready to map your cash to close for a specific home in Montgomery County? Reach out to Request a Concierge Consultation with Charisse McElroy and get a tailored estimate for your Bethesda, Silver Spring, or Rockville purchase.
FAQs
How much are closing costs for a Montgomery County homebuyer?
- Plan for several thousand dollars to several percent of the purchase price, since taxes and title costs often scale with price in Montgomery County.
Can I negotiate who pays transfer taxes in Maryland?
- Yes. Responsibility for transfer taxes is often negotiated in the contract, and local custom can vary by area and listing.
What prepaid items will I fund at closing as a buyer?
- Expect first-year homeowner’s insurance, your share of pro-rated property taxes, per diem mortgage interest, and initial escrow deposits if required by your lender.
When will I see my final closing numbers as a buyer?
- Your lender must provide a Closing Disclosure at least three business days before settlement, which you should review against your Loan Estimate.
Who typically handles closings for homes in Maryland?
- Title companies or settlement attorneys usually conduct the closing, issue title insurance, and coordinate recording with Montgomery County.
