Closing costs in Calvert County are the lowest in Maryland, according to a SmartAsset study of the fees paid at the closing of a real estate transaction, incurred by either the buyer or the seller of the property. SmartAsset is a personal finance technology company.

Charles County is third lowest. St. Mary’s and Prince George’s counties are among the highest in the state, ranking 17th and 19th out of Maryland’s 24 jurisdictions.

“We look at the average closing cost that was paid and median home value and we see that the actual dollar amount that people are paying in Calvert is higher than in some other counties, but as a percentage of home value it is the lowest in the state,” SmartAsset Financial Education Vice President A.J. Smith said.

Calvert County’s average closing cost is $8,268, and has a median home value of $347,200. Closing cost as a percentage of home value was 2.4% in Calvert, yielding it a closing cost index is 77.09.

“As we know, housing affordability and opportunity are some key issues for the local market and anyway we are able to help make the process more competitive by keeping costs lower is a win for homeowners," Southern Maryland Association of Realtors government affairs director Theresa Kuhns said. "Calvert has done a good job of maintaining a high homeownership rate in part due to lowered costs."

In second is Carroll County with closing costs at $7,946, a median home value of $328,100, at 2.4% and has a closing cost index of 76.54. Smith said Carroll ranks second because its closing cost is a percentage of the home value, which is lower than Calvert’s. “That’s why Calvert ranks No. 1,” Smith explained.

Smith said when people are considering buying a home versus renting a home that they sometimes compare just their monthly mortgage payment to what they pay in rent each month.

“They don’t really factor in or think about those upfront costs — the down payments, the closing costs you pay when you buy a home,” Smith said, noting the reason behind the study, which is to get people talking about personal finance topics.

Smith said some consumers do not know what closing costs are, and that there are some fees that are non-negotiable, and some fees that vary by county. She said in some cases homebuyers can shop around to get lower fees.

Smith said there have also been changes to closing cost documents, specifically a movement from good faith estimates to loan estimates.

“That’s something people should get familiar with because the government has changed those documents. The idea was to make them easier to tell which things were negotiable, which things you can shop around for and which things you were locked into paying,” Smith said, noting that it gives buyers a better idea of what they can expect closing costs to be.

Data from the U.S. Census Bureau 2017 5-Year American Community Survey and Bankrate was used for the SmartAsset study. Smith said the study does not “look into the why,” it just looks into the data.

Realtor Chris Banks was always of the opinion that homes in Calvert were totally unaffordable for many, and was surprised to learn that the county has the lowest closing costs in the state. Banks, who now works at Exit 1 Stop Realty in Dunkirk, sold real estate in Prince George’s County for four years until last December.

After conferring with a title company staff person, Banks agreed and noted a few reasons why Calvert’s closing fees are among the lowest.

“Many Calvert homes are detached and do not have high [homeowner association] fees if any. Additionally many homes are on well and septic, hence at closing there is no line item for water escrow accounts as I would see in other counties that were more urban,” Banks said.

Calvert is one of five Maryland counties where there are no county transfer taxes.

“People in Calvert come out paying less,” Banks said. “Buyers and sellers around Maryland have four types of recording fees, whereas Calvert has three.”

Movement Mortgage loan officer Beth Swoap also believes that the lack of county transfer taxes contributes to Calvert’s low closing costs, but believes there is another contributing factor.

“The real difference is in our recordation charges,” Swoap said, noting that recordation stamps, or the rate imposed at the recording of a mortgage, is one percent of the sales prices in Calvert County.

Swoap further explained that in the industry “transfer taxes” refer to all the types of transfer tax: state transfer tax, county transfer tax and county recording tax/ stamps.

Calvert has no county transfer tax and $10/1000 of recording tax/stamps, which equals 1% of the price or loan amount, whichever is higher.

“The combination of the county transfer tax and the recording tax/stamps is where the differences between the counties for an apples to apples deal comes in,” Swoap explained, stressing it is important to look at the same sales price across the board when assessing closing costs.

Each county has its own rate for state recordation tax and transfer tax. The taxes are split evenly between buyer and seller.

Swoap said real estate taxes in Calvert are a “little bit” less than in Charles and Prince George’s counties, and about the same as St. Mary’s County. She said the only counties that have a lower recordation tax than Calvert are Wicomico and Somerset.

“As we know, housing affordability and opportunity are some key issues for the local market and anyway we are able to help make the process more competitive by keeping costs lower is a win for homeowners. Calvert has done a good job of maintaining a high homeownership rate in part due to lowered costs," Southern Maryland Association of Realtors government affairs director Theresa Kuhns said.

Smith hopes the SmartAsset study “gets people thinking about [closing] costs and that when thinking of buying they factor that into their budget and make a good decision.”

SmartAsset's analysis can be found https://smartasset.com/mortgage/closing-costs#maryland.

Twitter: @CalRecTAMARA

Twitter: @CalRecTAMARA