The Part Nobody Talks About Until It's Too Late
When buyers get pre-approved for a $700,000 loan, they're often thinking about the down payment and the monthly payment. What they're not always thinking about is the additional $15,000–$25,000 in closing costs sitting between them and the keys.
When sellers list a home at $750,000, they often expect to walk away with $750,000 minus whatever they owe on the mortgage. The reality is they'll likely net somewhere in the $690,000–$710,000 range after transaction costs.
Neither of these is a surprise if you know what to expect going in. That's what this is for.
If You're Buying
Buyer costs fall into a few categories. Here's what to expect in Central Maryland:
Lender fees (0.5%–1% of loan amount)
Origination fees, underwriting, processing — these vary by lender. On a $600,000 loan, that's roughly $3,000–$6,000. Shop lenders. This number is negotiable more than most people realize.
Appraisal ($500–$800)
Required by your lender to confirm the home is worth what you're paying. Paid upfront, non-refundable, even if the deal falls apart.
Home inspection ($400–$700)
Not technically required, but skipping it is a significant risk. Older homes, larger homes, and homes with visible deferred maintenance may warrant additional specialty inspections — sewer scope, radon, mold, structural — each adding $150–$400.
Title insurance and settlement fees (~0.5%–1% of purchase price)
Title insurance protects you and your lender from claims against the property's ownership history. Settlement fees cover the title company's work to conduct the closing. On a $750,000 purchase, budget roughly $4,000–$7,500 for this bucket.
Maryland recordation and transfer taxes
Maryland has both state and county transfer taxes, along with recordation taxes. These are split between buyer and seller in most transactions, though it's negotiable. Buyers typically contribute the recordation tax (state portion: $6.60 per $1,000 of purchase price, plus county amounts). First-time buyers may qualify for an exemption on the state transfer tax. Your title company will calculate the exact figures based on your county and purchase price.
Prepaid items (varies)
At closing, lenders typically require prepayment of homeowner's insurance (first year, ~$1,500–$3,000 depending on home value) and a few months of property tax held in escrow. These aren't "fees" — they're money going toward your actual insurance and taxes — but they're due at closing and often catch buyers off guard.
Rule of thumb for buyers in Central Maryland: Budget 2.5%–4% of the purchase price for closing costs, on top of your down payment. On a $750,000 home, that's roughly $19,000–$30,000 in closing-related costs. Your lender is required to give you a Loan Estimate within 3 business days of application — read it carefully.
If You're Selling
Sellers typically carry a higher share of transaction costs. Here's where your proceeds go:
Agent commissions (negotiable — typically 2.5%–3% per side)
Post-NAR settlement, commissions are fully negotiable and must be agreed upon in writing before your home goes on market. The total commission structure varies, but sellers should budget for their listing agent's fee, plus any buyer agent compensation they choose to offer. See the separate article on buyer agent commissions for a full breakdown of this decision.
Maryland transfer taxes (~2% of sale price)
In Howard County, sellers typically pay the state transfer tax (0.5%) and county transfer tax (1.5%), totaling about 2% of the sale price. On a $750,000 sale, that's approximately $15,000. These rates vary by county — Baltimore County, Carroll County, and Frederick County each have their own rates.
Recordation taxes (split with buyer, varies)
The seller's portion of recordation taxes depends on the county and purchase price. Your title company will calculate this precisely.
Home preparation costs (varies widely)
Paint, cleaning, landscaping, minor repairs, staging — these can range from a few hundred dollars of elbow grease to $5,000–$15,000 for a thorough prep. Generally, money spent on preparation returns more than it costs in both final sale price and time on market.
Rule of thumb for sellers in Central Maryland: Expect net proceeds of roughly 92%–94% of your sale price after agent commissions and transfer/recordation taxes — before paying off your mortgage. On a $750,000 sale, that's approximately $690,000–$705,000 in gross proceeds before your payoff. A good listing agent will prepare a detailed net sheet before you list so there are no surprises.
The Takeaway
None of this is meant to discourage buying or selling — these costs are real but manageable when you know what to expect. The problem isn't the costs themselves. The problem is finding out about them for the first time the week before closing.
If you're even thinking about a transaction in the next 6–12 months, I'm happy to put together a personalized estimate — what you'll likely net as a seller, or what you'll need to bring to the table as a buyer. No obligation, no pressure. That's just information you should have.
