“Who pays closing costs?” is one of the questions I hear most, and the honest answer is that Maryland law sets a default for some of them and the contract decides the rest. Sellers are often surprised by two things: how much of the bill is government tax rather than fees, and how one fact about the buyer can shift a big piece of it onto the seller. If the house is in 21234 and you’re dealing with seller closing costs, see a cash offer on a Parkville house.
I’m Evan Weissman. I buy houses for cash across Maryland and sit through a lot of settlements. Here’s how the costs usually break down and where you have room to negotiate.
The legal default for transfer and recordation taxes
Maryland has a statute that answers part of the question directly. Under Real Property section 14-104, if the contract doesn’t say otherwise, the parties are presumed to split recordation tax and state and local transfer tax equally between buyer and seller.
So in an ordinary sale, each side pays half of:
- State transfer tax, 0.5% of the price under Tax-Property section 13-203.
- County transfer tax, which varies by county. Some counties, like Carroll and Frederick, have none; others charge 1% or more.
- Recordation tax, charged per $500 of consideration at a rate set by each county.
The Department of Legislative Services publishes every county’s rates each year. For example, the fiscal 2026 table lists recordation at $2.50 per $500 in Baltimore County and $6.50 in Carroll County, and local transfer tax at 1.5% in Baltimore County and 1.25% in Howard County.
The first-time buyer rule that changes everything
Section 14-104 has an important exception. When the buyer is a first-time Maryland home buyer who will live in the house as a principal residence:
- The seller pays the entire state transfer tax. The statute doesn’t allow the parties to change that.
- The seller also pays the entire recordation tax and local transfer tax, unless the contract expressly says otherwise.
The good news is that the state transfer tax rate drops to 0.25% for a qualifying first-time buyer. The buyer has to sign a statement under oath that they qualify. Since this can shift thousands of dollars to the seller, find out early whether your buyer qualifies and read that part of the contract carefully. I go into this in more detail in my article on first-time buyer tax rules for sellers.
Costs that usually land on the seller
Beyond the taxes, these generally come out of the seller’s proceeds:
- Mortgage payoff and any home equity line. Your lender’s payoff statement includes interest through the payoff date.
- Liens and judgments that need to be cleared for the buyer to get clean title.
- Release recording fees for those liens.
- Real estate commission, if you used an agent, as set in your listing agreement.
- Deed preparation, often a seller charge, though that depends on the title company.
- Unpaid water or sewer charges, where they can become liens.
- Any credits you agree to give the buyer for repairs or closing help.
Costs that usually land on the buyer
- Lender fees, appraisal, and credit report.
- Lender’s title insurance, and usually owner’s title insurance.
- Prepaid interest and the opening deposit for the new escrow account.
- The buyer’s share of transfer and recordation taxes, if not shifted.
- Home inspection and any other inspections they order.
Settlement or closing fees charged by the title company vary; the contract or local practice decides how they’re divided.
How property taxes get prorated
Maryland’s property tax year runs from July 1 to June 30, and bills are typically paid in advance. At settlement, the title company prorates the year. If you’ve already paid the current year’s taxes, you usually get a credit back for the days after settlement. If taxes are due and unpaid, they’ll be paid from your proceeds. Your county’s finance or treasurer’s office can confirm what’s been paid.
What you can negotiate
Almost everything outside the first-time buyer state transfer tax rule is negotiable:
- A buyer may ask you to cover part of their closing costs. Loan programs limit how much a seller can contribute, so the buyer’s lender will tell you the cap.
- You can agree to a different split of transfer and recordation taxes, as long as the contract says so clearly.
- Repair credits can replace actual repairs.
- In a cash sale, the buyer and seller decide together who pays what. Get the split in writing in the contract, not just verbally.
A rough way to estimate your share
Start with your expected price. Multiply by your share of state and county transfer tax, then add your share of recordation tax using your county’s per $500 rate. Add your mortgage payoff, any liens, commission if you’re listing, and a few hundred dollars for releases and deed preparation. Subtract any property tax credit. My net sheet guide gives you a template, and the transfer and recordation tax explainer covers the tax side.
Ask the title company for a draft settlement statement a few days before closing. It will list every charge, who pays it, and your net proceeds, and it’s the easiest moment to catch mistakes.
Does the seller always pay the transfer tax in Maryland?
No. By default, buyer and seller split transfer and recordation taxes equally. The seller pays the whole state transfer tax when the buyer is a qualifying first-time Maryland buyer.
Can I make the buyer pay all the closing costs?
You can propose it, and in some sales a buyer agrees. It depends on the market and the buyer. The one thing you can’t shift is the state transfer tax on a sale to a qualifying first-time buyer.
Who pays the title company in a Maryland sale?
Buyers usually pay for title insurance and their lender’s requirements. Settlement fees vary by title company and contract, and sellers commonly pay for releases and deed preparation.
Are closing costs different in a cash sale?
There’s no lender, so lender fees and lender’s title insurance disappear. Transfer and recordation taxes still apply, and the contract decides who pays them.
Talk through your situation
If you want a rough estimate of your closing costs on a cash sale versus a listing, give me a call or text at (410) 498-7473. I’m glad to walk through the numbers with you.