Buying a home in Olney comes with more than a down payment. If you are wondering what you will actually pay at the closing table, you are not alone. The good news is that most buyer closing costs follow a clear pattern in Montgomery County. In this guide, you will learn what typical buyer fees include, who pays what by local custom, where each item shows up on your Closing Disclosure, and how to budget with confidence. Let’s dive in.
What closing costs include in Olney
Closing costs are the one-time fees, taxes, and prepaids due when you finalize your purchase. In Montgomery County, buyers typically see total closing costs of about 2% to 5% of the purchase price, not counting your down payment. Your exact number depends on your loan type, price point, title insurance choices, and required prepaids and escrow deposits.
Buyer vs. seller responsibilities
By local custom, the seller usually pays the real estate commission and the deed transfer tax on the sale. The buyer commonly pays lender fees, the appraisal, lender’s title insurance, mortgage recording fees and taxes tied to the buyer’s loan, prepaids, and initial escrow deposits. The owner’s title insurance policy is often negotiable in Maryland, and parties can shift who pays certain items in the contract.
Where costs show on your Closing Disclosure
Federal rules require that your lender deliver the Closing Disclosure (CD) at least 3 business days before closing. The CD groups your costs so you can see totals and your cash to close.
Loan Costs
This section includes your lender charges and third-party loan costs. You will see items like origination or points, underwriting and processing, your appraisal, credit report, flood certification if required, and the lender’s title insurance policy.
Other Costs and Prepaids
This area covers title and settlement fees, recording and transfer taxes, owner’s title insurance if you buy it, prepaid interest, your initial escrow deposit for taxes and insurance, and prorations for property taxes or HOA dues. Seller credits and adjustments also appear here and reduce your cash to close.
Typical buyer cost ranges
Title and settlement
- Title search, exam, and settlement/closing fee: about $300 to $800.
- Owner’s title insurance: price-based and often the largest single title charge if you buy it; amount varies with purchase price.
- Lender’s title insurance: based on loan amount; buyers usually pay.
- Miscellaneous title charges like notary, courier, and wire fees: roughly $25 to $150.
Transfer, recordation, and recording
Maryland and Montgomery County charge taxes and fees to record the deed and your mortgage. By custom, sellers pay deed transfer taxes and buyers pay mortgage recordation taxes and fees tied to the buyer’s loan. Totals are transaction-driven and can range from hundreds to several thousand dollars depending on price and loan amount. Your title company will calculate the exact amounts for your CD.
Lender fees and third-party loan costs
- Origination or discount points: often 0% to 1% of the loan amount, higher if you buy down your rate.
- Appraisal: about $400 to $800+ depending on property type and complexity.
- Credit report: typically $20 to $50.
- Underwriting and processing: often $300 to $1,000 combined.
- Program-specific items for FHA or VA loans may apply and can be financed in some cases.
Prepaids and escrow deposits
- Prepaid interest from the funding date to your first payment: a few hundred to a few thousand dollars depending on loan size, rate, and closing date.
- Homeowner’s insurance: first 6 to 12 months, commonly $600 to $2,000.
- Initial escrow deposit: often about two months of taxes and insurance reserves, as your lender requires.
- Property tax and HOA prorations: based on the closing date and billing cycle.
HOA, inspections, and surveys
- HOA or condo transfer/estoppel fees may apply and are negotiable in the contract.
- Surveys, if requested or required, commonly $350 to $1,000+ depending on lot complexity.
- Home, termite, radon, and other inspections are usually buyer-paid; many are paid outside of closing and may not appear on the CD.
Real examples for Olney price points
The following examples reflect common patterns in Montgomery County. Your title company and lender will provide exact figures for your transaction.
Example A — $400,000 purchase, 20% down
Buyer closing costs (excluding down payment) typically range 2% to 4%, or about $8,000 to $16,000. A common breakdown might include lender and appraisal fees of $2,000 to $5,000, title and settlement including both title policies of $1,500 to $4,000, prepaids and escrow of $2,000 to $5,000, and recording and mortgage-related taxes of several hundred up to about $2,000.Example B — $700,000 purchase, 10% down
Buyer closing costs often land around 2.5% to 5%, or about $17,500 to $35,000. Higher price points increase title insurance premiums, potential lender points, and initial escrow reserves.Example C — $500,000 purchase with lender credits
If you accept a higher interest rate in exchange for lender credits, your out-of-pocket closing costs can drop to roughly 1% to 2%. Prepaids and escrow deposits still apply.
Local norms and negotiables
- Sellers commonly pay commissions and the deed transfer tax. Buyers typically pay lender charges, lender’s title insurance, mortgage recordation taxes and fees, and prepaids.
- Owner’s title insurance is often negotiable in Montgomery County.
- Property taxes and sometimes HOA dues are prorated to the closing date.
- Exact state and county taxes change over time, so your title company and lender will confirm current rates and line items on your CD.
How to reduce cash to close
- Request lender credits in exchange for a slightly higher rate if that fits your plan.
- Compare Loan Estimates to evaluate origination charges and points.
- Ask your agent to negotiate seller credits toward closing costs, especially if the market allows.
- Confirm who will pay for owner’s title insurance before you write the offer.
- Choose a closing date that limits prepaid interest if your schedule is flexible.
Step-by-step buyer checklist
- Ask your lender for a detailed Loan Estimate early.
- Request a preliminary quote from your title company that includes title premiums, settlement fees, and estimated taxes and recording charges.
- Clarify in the contract who pays the owner’s title policy and any HOA transfer fees.
- Budget for prepaids and initial escrow deposits in addition to closing costs.
- Review your Closing Disclosure, which you will receive at least 3 business days before closing, and ask questions right away.
- Bring the required funds to settlement as a wire or certified funds per your title company’s instructions.
Final thoughts
If you plan for closing costs in the 2% to 5% range and confirm the negotiable items up front, you can avoid last-minute surprises. In Olney and across Montgomery County, your lender and title company will calculate exact figures and update your CD as each detail is finalized. A clear plan and early estimates make your cash to close predictable.
Ready for a precise, local walkthrough of your numbers and strategy? Connect with Jared Russell for a complimentary, concierge consultation tailored to your Olney purchase.
FAQs
Who pays transfer and recordation taxes in Olney?
- By custom in Montgomery County, sellers pay deed transfer taxes and buyers pay mortgage recordation taxes and fees tied to the buyer’s loan, but contracts can allocate costs differently.
How much should I budget for buyer closing costs on a $400,000 home?
- A practical range is about 2% to 4% of the price, or roughly $8,000 to $16,000, depending on loan terms, title insurance choices, and prepaids and escrow deposits.
What is the Closing Disclosure and when will I receive it?
- The CD is your final itemized statement of costs and cash to close; your lender must deliver it at least 3 business days before closing.
Are prepaids the same as closing costs?
- No; prepaids cover items like interest and insurance paid in advance and initial escrow deposits, while closing costs include third-party fees, taxes, and title and recording charges.
Can seller or lender credits reduce what I bring to closing?
- Yes; negotiated seller credits and lender credits can offset many closing costs, though you will still need to cover prepaids and escrow deposits in most cases.
