Hi, I am buying a new construction home in Maryland, builder had agreed to give certain amount to closing cost. Now I am in final stage of settling and looking at the HUD statement I see they have included the State Transfer taxes that seller pays for the First time home buyers in the credit towards closing that we had agreed upon, is that right? After some research I learned the seller pays the state transfer taxes for first time home buyers in maryland, so can the builder claim this money towards the credit they had promised? Please help me , asap !!!
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Answer #1
Tejas – thank you for your question and for reaching out to me directly. As we discussed, in Montgomery County Maryland it is normal and customary to split transfer taxes 50/50 between the borrower and seller unless negotiated differently in the contract. As a 1st time homebuyer, your 50% share of the state transfer tax (.25% of the sales price) is waived by the state. If the contract was written with you the buyer paying 100% of transfer taxes as many builder contracts are, then the credit you are receiving from the builder will cover all the remaining transfer and recordation fees attributed to both you and the seller on the HUD1. It comes down to the way the contract was written and it is the settlement agents responsibility to make sure that your credit is applied in accordance with the written contract. Good Luck today with your settlement. Should you ever need any mortgage help in the future, please give me a call.
Eric Strasser
NMLSR# 111971
301.517.5434