What are closing costs for buyers in Bethesda and Montgomery County?
Buyers in Bethesda and Montgomery County typically pay between 3% and 5% of the purchase price in closing costs — not including the down payment. On a $900,000 home, that’s $27,000 to $45,000 in additional cash at settlement. These costs include Maryland state and Montgomery County transfer taxes, recordation tax, lender fees, title insurance, and prepaid items. First-time Maryland homebuyers pay a reduced state transfer tax rate of 0.25% instead of 0.50%, which eliminates the buyer’s share of that tax entirely.
By Pey Behin | April 30, 2026
When buyers start looking at homes in Bethesda, they’re usually focused on the down payment. That’s the number that stares back at them from every mortgage calculator.
But closing costs? Those often come as a genuine surprise — and in Montgomery County, Maryland, they can be significant. I’ve sat across from buyers who had their down payment squared away and then discovered they needed an extra $30,000 to $40,000 in cash at the table. That’s not a number you want to find out about the week before closing.
On a $900,000 home in Bethesda, closing costs for a buyer can easily run $27,000 to $40,000, depending on your loan type, lender, and any credits negotiated in the contract. Here’s what makes up that number and how to plan for it.
The Maryland and Montgomery County Tax Stack
This is what surprises most buyers, especially those relocating from other states. Maryland levies both state and county transfer taxes when a property changes hands — and Montgomery County has its own recordation tax on top of that.
Maryland State Transfer Tax: 0.50% of the purchase price. On a $900,000 home, that’s $4,500 total. By custom in Maryland, this tax is split equally between buyer and seller, so each pays 0.25% — roughly $2,250 at a $900,000 purchase price.
Here’s the meaningful exception: if you’re a first-time Maryland homebuyer purchasing a principal residence, your half of the state transfer tax is waived entirely. You pay nothing on the state tax. That’s $2,250 back in your pocket.
Montgomery County Transfer Tax: 1.00% of the purchase price. On a $900,000 home, that’s $9,000. Unlike the state tax, the county transfer tax is customarily paid by the seller — but it’s negotiable in your contract, and sellers are aware of this. Know where this sits in your offer before you sign.
Recordation Tax: charged on the mortgage amount, not the purchase price. The rate is $8.90 per $1,000 of mortgage up to $500,000, then 1.35% on any amount above that. On a $720,000 mortgage (80% of a $900,000 purchase):
- First $500,000 at $8.90/$1,000 = $4,450
- Remaining $220,000 at 1.35% = $2,970
- Total recordation tax: ~$7,420
The recordation tax is typically paid by the buyer and is often the single largest closing cost line item. It’s also the one most buyers don’t see coming until they review their Loan Estimate.
Combined, Maryland’s tax stack on a $900,000 purchase with a $720,000 loan runs roughly $9,700 to $11,000 in buyer-paid taxes — before lender fees, title, or prepaids touch the total.
Lender Fees
Your lender charges origination fees, underwriting fees, and processing fees — sometimes bundled as a flat origination fee, sometimes itemized. On a $720,000 loan, expect roughly $3,600 to $7,200 in loan costs, depending on your lender and loan program.
Request your Loan Estimate within three business days of submitting an application. That document shows every lender fee line by line, and it’s the clearest tool you have for comparing quotes. Don’t just compare interest rates — compare the full Loan Estimate, including origination charges and any discount points.
Shopping two or three lenders, including a local bank or credit union alongside a larger lender, often reveals meaningful differences in origination costs. I’ve seen buyers save $4,000 to $6,000 just by getting a second quote.
Title Insurance and Settlement Fees
In Maryland, lender’s title insurance is required by virtually all lenders — it protects the lender’s interest in the property against title defects. You can also purchase an owner’s title insurance policy to protect your own interest, and in most cases you should.
Maryland title insurance premiums are regulated by the state. For a $900,000 purchase with a $720,000 loan, expect:
- Lender’s title policy: ~$1,200 to $2,000
- Owner’s title policy: ~$1,500 to $2,500
Your settlement company — Maryland is a title company / settlement company state, not an attorney state — will also charge a closing or settlement fee, typically $500 to $900 in the DC metro area. This covers the actual coordination and execution of the closing.
Prepaids and Escrows
These aren’t fees in the traditional sense — you’re paying for things you’d owe anyway, just collected upfront at closing. But they’re real cash out the door and often the part of the closing disclosure that catches buyers off guard.
Homeowner’s insurance: Most lenders require one full year paid upfront, plus two months set aside in escrow. For a $900,000 home in Bethesda, expect to budget $3,000 to $5,500 annually, depending on the home’s age, construction, and coverage level.
Property taxes: Montgomery County’s effective property tax rate is approximately 0.89% of assessed value. On a $900,000 home, annual taxes run roughly $8,000. Depending on when you close relative to the county’s tax billing cycle, you may need to prepay several months and set up an escrow account. Budget $2,000 to $5,000 in property tax prepaids and initial escrow deposits at closing.
One note worth flagging for buyers in 2026: Montgomery County property values increased by 12.2% in the most recent state reassessment. If the home you’re purchasing was last assessed more than a year ago, your property taxes could step up meaningfully in the next reassessment cycle. When budgeting your monthly housing costs, model in a potential 5–10% property tax increase over the next two to three years.
Prepaid mortgage interest: Interest accrues from the day you close through the end of that month. A mid-month closing on a $720,000 loan at 6.5% means roughly $800 to $1,200 in prepaid interest, depending on the exact close date.
What You Can Negotiate
Closing costs aren’t entirely fixed. Here’s where you have real leverage:
Seller credits. In many transactions, particularly when a home has been sitting on the market or when you have negotiating room on price, sellers can credit you money at closing. A $10,000 to $20,000 seller credit directly reduces your cash needed to close. This is one of the first things I discuss with buyers who are stretched on upfront cash — it’s a legitimate and common strategy, and sellers in Bethesda are accustomed to it. You can read more about how earnest money and the contract structure work in Bethesda if you want more context on how negotiations flow.
Lender shopping. Loan costs vary significantly across lenders. Getting a second or third Loan Estimate costs nothing and could save several thousand dollars.
Lender credits. Some lenders offer credits — they cover some closing costs in exchange for a slightly higher interest rate. This can make sense if you plan to sell or refinance within five to seven years. It trades upfront cash for a higher monthly payment, so run the math before accepting.
Closing date timing. Closing at the end of the month minimizes prepaid interest. It’s a small number, but worth knowing.
What This Looks Like in Practice
Here’s a realistic estimate for a buyer purchasing a $900,000 home in Bethesda with a $720,000 loan (20% down):
| Cost Item | Estimated Amount |
|---|---|
| MD State Transfer Tax (buyer’s half) | ~$2,250 |
| Recordation Tax (on $720K loan) | ~$7,400–$7,600 |
| Lender origination and processing fees | ~$3,600–$7,200 |
| Title insurance (lender + owner policies) | ~$2,700–$4,500 |
| Settlement / closing fee | ~$600–$900 |
| Homeowner’s insurance (year 1 + escrow) | ~$4,000–$6,500 |
| Property tax prepaid and escrow | ~$2,000–$5,000 |
| Prepaid mortgage interest | ~$500–$1,200 |
| Miscellaneous (recording fees, flood cert, credit report) | ~$300–$600 |
| Total estimated buyer closing costs | ~$23,350–$33,750 |
Add your $180,000 down payment, and your total cash to close is approximately $203,000 to $214,000. If you’re a first-time Maryland homebuyer, subtract $2,250 from the transfer tax line.
If you’re buying in the $1.2M to $2M range — which is common in Potomac, Chevy Chase, and parts of North Bethesda — scale these numbers proportionally. The recordation tax on a $1.2M loan runs significantly higher, and your prepaids increase with the home’s value. Your total closing costs at $1.5M can easily reach $55,000 to $75,000 before any negotiated credits.
This is exactly the kind of number I walk through with every buyer before we start writing offers. Understanding your full cash requirement upfront prevents last-minute surprises and makes your financial planning accurate from day one. If you’re also wondering what the seller’s closing cost picture looks like in Bethesda, that’s a useful companion read — especially if you’re selling one home and buying another simultaneously.
Frequently Asked Questions
How much are buyer closing costs in Bethesda, MD?
Buyers in Bethesda and Montgomery County typically pay 3–5% of the purchase price in closing costs, not including the down payment. On a $900,000 home, that’s roughly $23,000 to $34,000 before any seller credits. The largest line items are the recordation tax on your mortgage, lender origination fees, title insurance, and prepaids for taxes and insurance.
Who pays the transfer tax in Maryland?
The Maryland state transfer tax (0.50% of the purchase price) is customarily split equally between buyer and seller — each pays 0.25%. First-time Maryland homebuyers purchasing a principal residence have their half waived entirely. The Montgomery County transfer tax (1.00%) is customarily paid by the seller, though everything in a Maryland real estate contract is negotiable.
What is the recordation tax in Montgomery County, Maryland?
The recordation tax applies to the mortgage amount at a rate of $8.90 per $1,000 up to $500,000, then 1.35% on any amount above that threshold. On a $720,000 loan, expect to pay approximately $7,400 to $7,600 in recordation tax. This is typically the buyer’s largest individual closing cost line item.
Can the seller help pay my closing costs in Bethesda?
Yes — seller closing cost credits are a standard negotiating tool in Bethesda and throughout Montgomery County. Sellers can offer credits ranging from a few thousand dollars to $20,000 or more, depending on the transaction. A credit is applied at settlement and directly reduces the cash you need to bring to closing. See also: understanding contract contingencies in Bethesda, which covers how credits and other terms are handled.
What is title insurance and do I need it in Maryland?
Title insurance protects against defects in the chain of title — undisclosed liens, ownership disputes, recording errors, or claims from previous owners. Lender’s title insurance is required by virtually all lenders and protects their interest in the property. Owner’s title insurance is optional but protects your equity. Both are one-time premiums paid at closing. Given the complexity of title chains in older Bethesda neighborhoods, an owner’s policy is worth the cost.
Closing costs in Bethesda are real money. On most transactions in the $700,000 to $2,000,000 range, you should budget $25,000 to $65,000 in additional cash at closing beyond your down payment, depending on your loan size and negotiated credits.
If you want a specific number built around your situation — your target price range, down payment percentage, first-time buyer status, and whether seller credits are realistic in your target market — I can run that for you. It takes about 10 minutes, and it means you’ll head into your home search knowing exactly what you’re working with.
Reach out anytime.
About Pey Behin
Pey Behin is a residential real estate agent serving the Washington, DC metro area, with a focus on Bethesda, Montgomery County, and Northern Virginia. He works with buyers and sellers who want clear strategy, data-driven pricing, and direct guidance throughout the transaction process. His approach combines market analytics, negotiation expertise, and modern marketing to position clients effectively in competitive conditions.
