Are you comparing homes in Montgomery County and Washington, DC and wondering why the same price can lead to different closing costs? You are not alone. Transfer and recordation taxes vary by location, and those differences can change your bottom line as a buyer or seller. In this guide, you will learn what typically appears on a settlement statement, how Maryland and DC handle taxes differently, and a simple way to estimate your numbers with confidence. Let’s dive in.
Key differences at a glance
Closing costs share many common pieces across jurisdictions. You will see lender fees, title and settlement charges, recording fees, and prepaid escrows in both Maryland and DC. The big swing factor is local transfer and recordation taxes. DC administers its own city taxes through the DC Office of Tax and Revenue, while Maryland combines state rules with county-level charges that apply in Montgomery County.
Because these taxes change over time and can vary by price point or property type, always confirm current rules with official sources and review your Closing Disclosure before settlement. For clear background on closing disclosures and timelines, the Consumer Financial Protection Bureau explains what to expect and when you will receive your forms on the CFPB site. You can also see general buyer and seller guidance from the National Association of REALTORS for context on typical closing costs and who usually pays what.
What buyers usually pay
As a buyer in either Montgomery County or DC, you typically pay:
- Lender charges, including origination, underwriting, and any points if you choose them.
- Appraisal and credit report fees.
- Title insurance for the lender and often an owner’s policy, plus title search fees.
- Settlement or closing agent fees.
- Recording fees for your mortgage.
- Escrows and prepaids for property taxes and homeowner’s insurance.
- Inspection costs such as home, pest, or specialized inspections.
These items are broadly similar across both jurisdictions. The exact totals depend on your loan program and local taxes. Request a Loan Estimate early from your lender so you have a clear baseline. The CFPB outlines how the Loan Estimate works and what it includes on its site at the Consumer Financial Protection Bureau.
What sellers usually pay
As a seller in either jurisdiction, you typically see:
- Real estate broker commissions, as agreed in your listing agreement.
- Transfer and recordation taxes associated with conveying the deed, based on local rules.
- Payoff of any existing mortgage or liens.
- Prorated property taxes.
- Title or settlement-related charges, which may be split or negotiated.
Local custom and your purchase contract can shift who pays certain items. In some cases, sellers offer credits to buyers that offset buyer closing costs, which can help a buyer’s cash to close while still meeting the seller’s net goals.
Taxes that change by location
The largest differences between Maryland and DC show up in transfer and recordation taxes. The names, rates, thresholds, and exemptions can vary, and who pays can be negotiable.
Montgomery County, MD basics
Maryland structures these taxes at the state and county levels. Montgomery County adds its own county components on top of state rules. To confirm current rules and forms, check the Maryland Comptroller and Maryland Department of Assessments and Taxation websites, and the Montgomery County Government site for county-specific transfer or recording guidance.
- Start with Maryland state rules on the Maryland Taxes site.
- Verify recording and land record processes with the Maryland Department of Assessments and Taxation.
- Confirm any county-level transfer tax details with Montgomery County Government.
Washington, DC basics
DC collects real property transfer and recordation taxes at the city level through the DC Office of Tax and Revenue. DC also publishes forms and guidance on exemptions and specific tax treatments. If you are exploring down payment assistance or local buyer programs, consult the DC Department of Housing and Community Development for up-to-date program details.
- Confirm DC transfer and recordation tax rules with the DC Office of Tax and Revenue.
- Review DC homebuyer assistance and abatements with DC DHCD.
Because rules can change, verify your transaction type, price point, and property use with these official sources and your title company.
How to estimate your closing costs
Use this simple method to build a realistic estimate without guessing rates:
- Start with price. Note your expected purchase price or the projected sale price.
- Add lender costs. Ask your lender for a Loan Estimate with origination fees and points.
- Add title and settlement charges. Request a buyer closing estimate or a seller net sheet from your title company.
- Add local taxes. Ask your title company to calculate transfer and recordation taxes for your location and price. Cross-check on official sites such as Maryland Taxes, Montgomery County Government, and DC Office of Tax and Revenue.
- Add prepaids and escrows. Include property tax and insurance escrows plus prorated taxes.
- Subtract credits. Deduct any seller credits, lender credits, or negotiated concessions.
Before closing, review your Closing Disclosure carefully. The CFPB explains what is included and your right to receive it several days before settlement on the Consumer Financial Protection Bureau website.
First-time buyer and assistance programs
Both Maryland and DC offer programs that can reduce upfront costs or provide support:
- Maryland and Montgomery County. Explore state and county homeownership resources, including the Maryland Mortgage Program, and check Montgomery County Government for local assistance and program links.
- Washington, DC. Review down payment programs and potential tax abatements through DC DHCD, and confirm any DC-specific transfer or recordation exemptions with the DC Office of Tax and Revenue.
Eligibility, benefits, and documentation vary. Confirm requirements directly with each agency and coordinate with your lender and title company.
Montgomery County checklist
Use this quick list to keep your numbers on track in Montgomery County:
- Ask your lender for a written Loan Estimate with fees and points.
- Request a buyer estimate or seller net sheet from your title company.
- Verify current state rules on Maryland Taxes and land-record procedures at Maryland Department of Assessments and Taxation.
- Confirm county transfer or recordation details on Montgomery County Government.
- Check local assistance or first-time buyer resources through Montgomery County Government and the Maryland Mortgage Program.
- Review your Closing Disclosure at least 3 days before settlement.
Washington, DC checklist
If your home is in DC, start here:
- Ask your lender for a Loan Estimate and rate options, including lender credits.
- Request a full title estimate showing transfer and recordation taxes in DC.
- Confirm DC tax rules and forms with the DC Office of Tax and Revenue.
- Explore buyer assistance and abatements through DC DHCD.
- Review your Closing Disclosure and confirm final tax calculations with your title company.
Ways to reduce or manage costs
You may be able to manage closing costs with a few smart moves:
- Shop your title services. Title premiums and settlement fees can vary by company.
- Ask about credits. A seller credit or lender credit can offset part of your cash to close. Understand the tradeoff if a lender credit increases your rate.
- Verify exemptions. If you qualify for a first-time buyer program or a local abatement, confirm documentation early with your lender and title team.
- Confirm every line. Review your Closing Disclosure for accuracy and ask about any unfamiliar entries.
Make your numbers clear
The fastest way to clarity is to combine official resources with a tailored estimate from your lender and title company. If you are comparing Maryland and DC, align on the same price point and timeline so you can see your true apples-to-apples costs.
If you want an experienced, concierge-level guide who works across Montgomery County and DC, reach out to Gerly Oden. You will get a clear plan, vetted local resources, and hands-on support from offer to closing.
FAQs
How much should I budget for closing costs in Montgomery County vs DC?
- Ask your lender for a Loan Estimate and your title company for a detailed closing estimate, then add local transfer and recordation taxes verified on Maryland and DC official sites.
Who typically pays transfer and recordation taxes in MD and DC?
- Local custom and the purchase contract control this; sellers often pay transfer-related taxes, but parties can negotiate how taxes and fees are split.
Are there first-time buyer exemptions or assistance in MD or DC?
- Yes, both offer programs; check the Maryland Mortgage Program and Montgomery County resources, and review DC DHCD and DC OTR for eligibility and required steps.
Will property taxes be prorated at closing in Montgomery County or DC?
- Typically yes; the settlement statement prorates taxes so each party pays the portion for their time of ownership based on local schedules and contract terms.
How do I get exact numbers for my situation?
- Request a Loan Estimate from your lender and a buyer or seller estimate from your title company, then confirm transfer and recordation tax rules on the Maryland and DC official sites before reviewing your Closing Disclosure.
