Are you trying to estimate how much cash you will need to close on a Chevy Chase home? You are not alone. Closing costs in Maryland can feel complex, especially when you see transfer taxes, title fees, and lender items on your statement. In this guide, you will learn what those line items mean, what is negotiable in Montgomery County, and practical ways to reduce your cash to close. Let’s dive in.
Closing costs in Maryland: what’s included
Transfer and recordation taxes
- Transfer tax is charged when property ownership changes.
- Recordation tax is charged to record the deed and mortgage in county land records.
- Maryland has state-level taxes, and many counties add local taxes. Montgomery County does this.
- Who pays is negotiated in the contract and influenced by local custom. In many transactions the seller pays transfer tax and the buyer pays recordation tied to the mortgage, but it varies. Always review your contract and ask your title company for exact numbers.
Title insurance and closing fees
- Lender’s title policy protects the lender and is usually required. The premium is based on your loan amount.
- Owner’s title policy protects your equity. It is optional but strongly recommended. The premium is based on the purchase price.
- Payment for the owner’s policy is negotiable. In some deals the buyer pays, in others the seller pays or the parties split it.
- Other common title fees include title search, settlement or escrow fee, document prep, and wire fees.
Lender fees and mortgage items
- Typical lender fees include origination, underwriting, processing, discount points if chosen, appraisal, credit report, flood certification, and tax service.
- Recordation tax on the mortgage is often a buyer cost. Your lender and title company will calculate the amount.
- Prepaid interest covers the period from closing to your first payment. Your lender will estimate this based on your closing date.
Prepaids, escrows, and prorations
- You may prepay your first year of homeowners insurance at closing.
- Your lender may set up an escrow account and collect an initial deposit equal to a few months of taxes and insurance.
- Property taxes and any HOA or condo dues are prorated based on your closing date under Montgomery County’s tax schedule.
Other buyer costs
- Inspections such as home, pest, or radon, plus any required survey.
- HOA or condo resale packages and transfer fees, which are often negotiated.
- Recording fees and, if you choose, your own attorney’s fees.
Chevy Chase specifics and agencies
State and county tax sources
- Maryland sets statewide rules for transfer and recordation taxes.
- Montgomery County sets local transfer and recordation rates and recording fees.
- For accurate, current rates, check with the Maryland State Department of Assessments and Taxation, the Montgomery County Department of Finance or Recorder of Deeds, and your title company. Your lender can estimate loan-related items.
Local negotiation norms
- In Montgomery County, buyers and sellers commonly negotiate who pays which costs in the purchase contract.
- In competitive segments of Chevy Chase, sellers may have more leverage. In a slower market, buyers may secure more closing-cost help.
- Credits toward buyer closing costs and payment of the owner’s title policy are common bargaining chips.
HOA and condo fees
- Some Chevy Chase homes are part of an HOA or a condominium.
- Resale packages, certificates, and transfer fees can apply. Who pays is negotiable, so confirm early and write it into your contract.
Assistance programs
- State and county programs can reduce your cash to close if you qualify.
- The Maryland Mortgage Program and Montgomery County homeownership assistance options may offer down payment or closing-cost help. These programs have eligibility rules based on income, property location, and buyer status. Ask your lender and agent to review what could fit your situation.
Negotiable items and savings tips
Contract items to negotiate
- Seller credits to cover part of your closing costs.
- Responsibility for transfer or conveyance taxes.
- Who pays for the owner’s title insurance policy.
- Payment of HOA or condo resale and transfer fees.
Strategies to reduce cash
- Compare Loan Estimates from at least two lenders to shop fees and potential credits.
- Request seller concessions to offset closing costs, subject to loan program limits.
- Ask about lender credits in exchange for a slightly higher interest rate.
- Explore state or county assistance programs if eligible.
- Discuss splitting or negotiating the owner’s title policy with the seller.
Costs that are fixed
- Government taxes and recording fees are set by law. You can negotiate who pays them, but not the amount.
- Lender-required items like the appraisal are typically required by the loan program.
Plan your cash to close
Use this simple framework with your lender and title company to estimate funds needed.
- Purchase price = P
- Down payment = D (P × your down payment percentage)
- Loan amount = L = P − D
- Transfer or conveyance tax = Tconv = P × applicable rate
- Recordation tax = Trec = base amount × applicable rate (base is often the mortgage amount; confirm with the county/title company)
- Owner’s title policy premium = TOP(P)
- Lender’s title policy premium = TL(L)
- Lender fees = LF
- Appraisal = A
- Homeowners insurance (first year) = HI
- Initial escrow deposits for taxes and insurance = ESC
- Prepaid interest = PI
- Prorated taxes or HOA adjustments = PR
- Recording and miscellaneous county fees = RF
- Settlement or attorney fee = CF
- Other inspections and surveys = O
- Earnest money deposit already paid = E
- Seller credits = SC
Cash to close = D + Tconv (if you pay) + Trec (if you pay) + TOP + LF + A + HI + ESC + PI + RF + CF + O − E − SC
Hypothetical example A
- Purchase price: 900,000
- Down payment: 20 percent = 180,000
- Loan amount: 720,000
- Illustrative transfer tax: 0.5 percent of price = 4,500
- Illustrative recordation tax on mortgage: 0.5 percent of loan = 3,600
- Owner’s title policy: 3,200
- Lender fees: 3,000
- Appraisal: 650
- Homeowners insurance: 1,500
- Initial escrow: 4,000
- Prepaid interest: 1,500
- Recording and misc: 300
- Closing fee: 700
- Inspections and HOA: 800
- Earnest money: 20,000
- Seller credit: 0
Illustrative cash to close: Down payment 180,000 + buyer costs and prepaids about 23,250 − earnest 20,000 = about 183,250. These are hypothetical figures for illustration only. Always use current county and state rates.
Hypothetical example B
- Purchase price: 2,200,000
- Down payment: 25 percent = 550,000
- Loan amount: 1,650,000
- Illustrative transfer tax: 0.5 percent = 11,000
- Illustrative recordation tax on mortgage: 0.5 percent = 8,250
- Owner’s title policy: 7,000
- Lender fees: 5,000
- Appraisal: 1,000
- Homeowners insurance: 3,500
- Initial escrow: 8,000
- Prepaid interest: 3,500
- Recording and misc: 500
- Closing fee: 900
- Inspections and survey: 1,500
- Earnest money: 50,000
Illustrative cash to close: Down payment 550,000 + buyer costs about 41,150 − earnest 50,000 = about 541,150. Your actual numbers will depend on contract terms, assistance programs, and lender escrow requirements.
After offer: local checklist
- Request a preliminary closing statement from your title company to see estimated taxes and fees.
- Get a Loan Estimate from at least two lenders and compare origination fees, points, and credits.
- Ask your agent and title company what is typical in Chevy Chase for transfer taxes and the owner’s title policy, then negotiate accordingly.
- Confirm HOA or condo resale and transfer fees and decide who pays in the contract.
- Verify Montgomery County recording fees and tax rates before you remove contingencies.
- Review eligibility for state or county assistance options that can reduce cash to close.
Ready to buy in Chevy Chase?
Understanding your closing costs early helps you write a stronger, cleaner offer and avoid surprises on settlement day. If you want a clear, customized estimate for your price point and timeline, we are here to help. Reach out to schedule a friendly walk-through of your numbers and a plan to make your funds go further. Connect with Levin Group Real Estate to get started.
FAQs
Who pays Maryland transfer and recordation taxes in Chevy Chase?
- Responsibility is negotiable and set by the purchase contract and local custom. Ask your agent and title company how it is typically split and what you can negotiate.
Is owner’s title insurance required for Maryland purchases?
- The lender’s policy is usually required, but the owner’s policy is optional. It is strongly recommended because it protects your equity. Who pays is negotiable.
Can Chevy Chase buyers roll closing costs into the mortgage?
- Some costs can be financed or offset with lender credits or seller concessions. Statutory taxes and initial escrow deposits generally must be paid at closing.
How much should I expect for prepaids and escrow deposits in Montgomery County?
- It depends on property taxes, insurance cost, your closing date, and your lender’s escrow rules. Lenders often collect a few months of taxes and insurance up front.
Where can I get exact Chevy Chase closing-cost numbers?
- Ask your title company for a preliminary settlement statement and request a Loan Estimate from your lender. Confirm county tax and recording rates with local offices or your title team.
