Key Takeaways
- Maryland settlements (closings) may be conducted by attorneys, title companies, or lenders
- The closing disclosure must be provided to the buyer at least 3 business days before closing per federal law
- Maryland uses deeds (general warranty, special warranty, quitclaim) for property transfers
- Maryland has state and local transfer taxes paid at settlement
- Recording fees are paid to the Clerk of Circuit Court to record deeds
Maryland Settlement Procedures
Maryland has specific requirements for real estate closings (called "settlements" in Maryland).
Who Conducts Settlements
In Maryland, settlements may be conducted by:
| Entity | Role |
|---|---|
| Title Company | Provides title insurance, may conduct settlement |
| Settlement Agent | Licensed party conducting closing |
| Attorney | May conduct settlement and provide legal advice |
| Lender | Provides loan documents and funds |
| Real Estate Agent | Coordinates, but does not conduct settlement |
Settlement Agent Requirements
Maryland regulates settlement agents:
- Must be licensed or authorized
- Must maintain proper trust accounts
- Must follow specific disclosure requirements
- Must comply with MREC regulations
Pre-Settlement Requirements
Closing Disclosure (Federal TRID Rules)
| Document | Timing |
|---|---|
| Loan Estimate | Within 3 business days of application |
| Closing Disclosure | At least 3 business days before settlement |
| Changes requiring new 3-day wait | APR increase >0.125%, loan product change, prepayment penalty added |
Title Examination
The title examination typically:
- Searches public records for title defects
- Examines chain of title
- Identifies liens, encumbrances, easements
- Checks for ground rent
- Results in title insurance commitment
Types of Deeds in Maryland
General Warranty Deed
Provides the greatest protection to the buyer:
- Warrants title against all defects (past and present)
- Guarantees right to convey
- Covenants of quiet enjoyment
- Most common in residential sales
Special Warranty Deed
Provides limited protection:
- Warrants only against defects during seller's ownership
- Does not cover prior owners' actions
- Common in REO and foreclosure sales
Quitclaim Deed
Provides no warranty:
- Transfers only the interest the grantor has (if any)
- No promises about title quality
- Used between family members, to clear title issues
Settlement Costs and Prorations
Maryland Transfer Taxes
Maryland has state and local transfer taxes:
| Tax | Rate | Typically Paid By |
|---|---|---|
| State Transfer Tax | 0.5% of sale price | Split buyer/seller |
| County Transfer Tax | Varies (0.5% - 1.5%) | Split or as negotiated |
| First-Time Buyer Exemption | State tax exempt | Qualifying first-time buyers |
Recordation Tax
| Tax | Rate |
|---|---|
| State Recordation | $7.00 per $1,000 (varies by county) |
Property Tax Proration
Maryland property taxes are typically:
- Paid annually (July 1 - June 30 fiscal year)
- Prorated at settlement based on fiscal year
- Direction of proration depends on payment status
Other Common Prorations
| Item | How Prorated |
|---|---|
| HOA dues (if prepaid) | Seller credited by buyer |
| Rent (if applicable) | Buyer credited by seller |
| Ground rent | Prorated to settlement date |
Recording Requirements
Where to Record
Deeds are recorded with the Clerk of Circuit Court in the county where the property is located.
Recording Fees
| Document | Fee Structure |
|---|---|
| Deed | Per page fee plus recordation tax |
| Deed of Trust (Mortgage) | Per page fee plus recordation tax |
| Other documents | Per page fee |
Priority
Recording establishes priority of interests - first to record has priority.
What federal rule requires the Closing Disclosure to be provided at least 3 business days before settlement?
Where are deeds recorded in Maryland?
What exemption may first-time homebuyers receive in Maryland?