Merritt Island, FL asked in Real Estate Law and Tax Law for Maryland

Q: Selling property in Maryland. Contract states buyer pays all settlement fees. does seller have to pay any?

Settlement company is saying that seller fees have to be paid by seller despite contract stating "buyer agrees to pay all settlement costs and charges, including, but not limited to..."

Can the settlement company do this or is there a law that states that sellers are required to pay certain closing costs despite what is in the contract and signed by all parties?

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1 Lawyer Answer
Cedulie Renee Laumann
Cedulie Renee Laumann
  • Crownsville, MD
  • Licensed in Maryland

A: The contract dictates who pays the closing costs and settlement fees and the title company should follow those instructions. Note that in most cases the Seller will pay the cost of the deed preparation and the cost of recording the release for any mortgage, even if the Buyer will pay the settlement fee and other settlement costs.

Unfortunately it seems increasingly common for some title companies to slip a few extra hundred onto a party who is not obliged to pay settlement fees under the contract. If the contract says that the buyer pays the settlement costs, that should be that. There is no law that changes the contract terms.

Setting aside a settlement fee, it is reasonable and customary for a Seller to pay whatever it might cost to wire funds to the seller's mortgage company and/or to record a release of the seller's mortgage, as well as to pay for deed prep. A well-written contract will usually separate those costs from the "settlement fee".

While not legal advice I hope that this helps.

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