How to estimate closing costs - full cash offer MD

Question

I've heard various estimates for closing costs, ranging from 2.5-5% of the property value to the $1500-$2500 that the BP calculator suggests. I'm assuming that all cash offers will be a bit cheaper than convention financing closing costs, since it wouldn't have the lender fees.

Any good heuristics for all cash offers in MD? We've put a couple offers in but no accepted contracts yet, so I'm hoping to hone our estimates in the meantime!

Ruth Lyons · Answer

I agree with Tom, you really need to look at the specific deal/timing/location of the deal. For example, If you're buying in August and the seller has paid their taxes for the full tax year (July 1-June 30) of the current year, your closing costs will include reimbursing the seller for 11 months of prepaid taxes. Transfer fees vary by Maryland county.

Tom Gimer · Answer

I'm not a big fan of % estimates.

For Maryland cash deals you need to add up the following: State Transfer taxes; State Recordation taxes; County (or City) Transfer taxes; Recording fees. Every county is different. Every contract can allocate these items differently.

I would also factor in property tax allocation based upon July - June tax year. Some jurisdictions are way pricier than others. In order to record a Deed, taxes must be paid current.

Tim Johnson · Answer

Closing costs are made up primarily of lender fees.... plus the escrow side of things (escrow fees, recording fees, title insurance, etc.) You're right that it's sometimes tricky to isolate and hone in on what your exact closing costs will be. And yes, of course it's all different when you go with just cash.

One of the tools I love as an agent is the free app - Chicago Agent One. This comes from the Chicago Title & Escrow company. I like to use several of their calculators but in the case you mention - you could use the "Buyer" calculator, enter the correct information (address of property, county, sale price, financing, etc.), hit "compute" and it will provide the figure that you need to bring to closing. Finally, click on "fixed closing costs" and you get some very accurate data of what your costs will be.

It's really designed more for buyers with loans, and sellers getting a very accurate net sheet - but with a few work arounds it can be helpful with understanding those closing costs.

(When I'm just running numbers quickly for myself for investment properties I feel good just going with 3% - that usually gives space for lender fees and escrow fees....)

Brian Silvia · Answer

Thanks @Tim Johnson! It looks like Chicago Agent One isn’t in Maryland; but I was able to find another free app from a local title company. Thanks for the idea!

Joe Norman · Answer

As others have noted, there are plenty of great free, or inexpensive, online calculators. Make sure you use one that is jurisdiction specific (i.e., for Maryland you want one that is specific to each county and Baltimore City). I like Federal Title's Close It! app the best in terms of accuracy and ease of use, but they do have a small monthly subscription fee. Good luck!

Crystal Smith · Answer

We use the First AmericanTitle Fee Calculator:  It covers every county in the US.

How to estimate closing costs - full cash offer MD

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