The HUD-1 lists a complete accounting of the purchase transaction. It’s the financial picture of the closing.  All money flowing in and out of settlement appears on the form.

The Contract or Escrow Agreement is the written agreement between Buyer and Seller which shows the purchase price of the home as well as the “who-pays-what” information relating to closing costs. The Loan Closing Instructions, provided by the Lender, show all loan-related costs.

Title evidence, in the form of a title commitment, title report or other document, reflects any existing mortgages or judgment liens that must be satisfied or paid off at time of closing.

It is the responsibility of the Settlement Agent to see that all charges on the HUD-1 are substantiated in writing and to see that all deposits and disbursements are made in accordance with the HUD-1.

Sample Settlement Statement (pdf format)

 

When preparing your Good faith for a purchase in the State of Maryland the Buyer and Seller typically split the recordation and Transfer taxes.

If the Purchaser is a First time Maryland Home Buyer they are not charged for the State Transfer tax, the seller is required to pay .25%.

If the property is going to be an investment property for the purchaser then the State requires $115.00 to be charged to the purchaser to record the Deed of Trust instead of the normal $60.00. In Baltimore City, the City requires the purchaser to register the investment property with the City which is a $30.00 charge per dwelling unit. There are 7 Counties in the State of Maryland that require Lien Certificates before they will transfer the Title. This is a charge to the buyer only. The counties are and their charges are:

• Baltimore County-$40.00
• Baltimore City- $55.00
• Harford- $50.00
• Howard- $20.00
• Carroll- $30.00
• Charles County-$20.00
• Cecil- $10.00.

On principal residence Refinances the recording taxes are based on the difference between the new loan amount and the principal balance of the existing loan(s). If the borrower is doing a HELOC loan or second trust loan and they are not paying off an existing mortgage then they will be charged the full Documentary Stamps. If the property is located in Prince George's County and their Deed has not been on record for 12 months the borrower is required to pay recording taxes for the difference between the new loan amount and the principal balance of the existing loan(s) as well as 1.4% transfer tax on the difference between the new loan amount and the original loan amount of the existing loan(s).

On non-principal residence Refinances the recording taxes are based on the difference between the new loan amount and the principal balance of the existing loan(s) and the cost to record the Deed of Trust will be $115.00. In Prince George's County the borrower is required to pay 1.4% transfer tax on the difference between the new loan amount and the original loan amount of the existing loan.

If we are required to prepare a Deed for a refinance and the Record Title Owners are not Husband and Wife we are required to collect recordation, state and County Transfer taxes on half of the principal balance of the existing loan or the assessed value which ever is the higher amount and a lien certificate is required in order to record the Deed. In Baltimore City and Harford County they require a lien certificate even if they are Husband and wife.

For Virginia Purchases the Purchaser is required to pay the County and State Recordation Taxes for the full Purchase Price or Assessed Value whichever value is higher and the full loan amount. The only tax the Seller is required to pay is the .25% Grantors Tax.

For Virginia Refinances the borrower is required to pay the County and State Recordation Tax on the full loan amount at a discounted rate. County Recordation Tax is $0.60 per $1,000, State Recordation Tax is $1.80 per $1,000.

For The District of Columbia the Buyer typically pays the 1.1% Recordation tax and the Seller pays the 1.1% City transfer tax with a purchase price below $400,000.00. Purchases $400,000.00 and up the Recordation Tax is 1.45% and the City Transfer Tax is 1.45%.

For the District of Columbia refinances there are no recordation taxes collected.

For further information, we recommend these links:

Glossary of Real Estate Terms

What is a 1031 Exchange?

Home Seller’s Guidelines and Checklists