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Closing costs tend to total 5% to 6% of purchase price


Dear Mr. Gisriel: How do you calculate closing costs? What are the major components, and how do they vary among the city and the surrounding counties?

Robin Kessler

Owings Mills

Dear Ms. Kessler: The best way to calculate closing costs is to simply go to a lender, real estate agent or title company -- they are usually happy to do the math for a potential customer. In general, closing costs in Maryland are about 5 percent to 6 percent of the purchase price.

The major components of the closing costs are the state and local transfer and recording costs, and about 13 months' escrow for real estate taxes and lender charges. Maryland has one of the highest closing costs in the country -- mostly because of the high local and state government transfer and recording costs and the requirement that real estate taxes be paid one year in advance.

Excluding the upfront taxes and government fees, private closing costs in Maryland are about the national average, or about 1 percent of the purchase price.

Each jurisdiction in Maryland sets its own transfer and recording charges; thus, closing costs vary. For example, Baltimore charges 2.05 percent for transfer and recording costs; Baltimore County, 2.1 percent; Anne Arundel County, 1.7 percent; Carroll County, 0.66 percent; Harford County, 1.66 percent; and Howard County, 1.5 percent. All these are in addition to the 0.5 percent the state charges for transfer tax.

Also, the amount of advance property taxes required will vary by jurisdiction based on the property tax rate. The amount in Baltimore -- with a tax rate of about $6 per thousand -- will be much more than that in Baltimore County -- where taxes are closer to $3 per thousand.

For a $100,000 house in the city, 13 months of taxes would equal about $2,600. In the county, the same-priced house would require about $1,300. Of course, you probably would have to pay more for the same house in the county.

All of this does not include the down payment -- which will add thousands of dollars to the money that the buyer will have to come up with to buy the home -- traditionally between 5 percent and 20 percent of the purchase price.

Dear Mr. Gisriel: My neighbor wants to install an in-ground swimming pool, but I believe that it will extend into my property. How can I be sure where my property ends and his begins? I received a "location survey" at settlement when I bought my house.

John Wallace


Dear Mr. Wallace: The only accurate way to be sure of the location of your property is to have a boundary survey performed. According to David S. Thaler, a licensed surveyor and engineer, the location surveys commonly received at settlement are not suitable for the accurate boundaries of property. Although they are inexpensive (approximately $135), they only generally verify that a home appears to be positioned on the lot. What is needed is a "boundary survey" performed by a qualified surveyor. Although somewhat more expensive ($750 to on average), the boundary survey will accurately show the land you own.

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