💰 What Are the Costs Involved in Buying or Selling a Home inWashington DC, Prince George’s County MD, or Montgomery County, MD?

Buying or selling a home in the Washington, D.C. area is exciting — but it’s also important to understand the costs that come with the process. Whether you’re a first-time buyer or an experienced homeowner, knowing what to expect financially will help you plan ahead, avoid surprises, and make confident decisions in one of the country’s most competitive housing markets.

Here’s a breakdown of the most common costs involved in buying or selling a home in the Washington DC area - including Prince George’s County, MD and Montgomery County, MD.

🏠 Costs When Buying a Home in Washington, D.C.

1. Down Payment
   Most lenders require a down payment ranging from 3% to 20% of the home’s purchase price. In D.C., where median home prices often exceed $650,000, even a small percentage can mean a significant upfront investment. First-time buyers may qualify for programs that reduce this amount or offer assistance. Programs like the Maryland Mortgage Program are very popular among first time home buyers. We also work with lenders that offer grant assistance towards closing costs for qualified buyers and / or qualifying census tract properties.

2. Closing Costs
   Buyers should budget an additional 2% to 5% of the purchase price for closing costs. These typically include:

   • Loan origination fees

   • Title insurance and recording fees

   • Transfer and recordation taxes (split between buyer and seller)

   • Appraisal and inspection fees

   • Prepaid property taxes and homeowner’s insurance

   In D.C., closing costs on a $700,000 home can range from $14,000 to $35,000, depending on the loan and negotiations.

3. Home Inspection and Appraisal
   A home inspection costs between $400 and $700, while an appraisal (required by lenders) runs around $500–$800. These help protect your investment by ensuring the property’s condition and value align with the sale price.

4. Moving Expenses and Immediate Repairs
   Don’t forget moving trucks, new furniture, or upgrades. Setting aside $2,000 to $5,000 for these costs is wise.

🏠 Costs When Selling a Home in Washington, D.C.

1. Real Estate Agent Commission
   The largest expense for most sellers is the real estate agent commission, typically 5% to 6% of the final sale price, divided between the listing and buyer’s agents. For a $700,000 home, that’s about $35,000 to $42,000.

2. Staging, Cleaning, and Repairs
   To attract buyers in the D.C. market, many sellers invest in staging, professional photography, and minor repairs. These improvements can cost $2,000–$5,000 but often lead to higher offers and faster sales.

3. Transfer and Recordation Taxes
   D.C. imposes transfer and recordation taxes on real estate transactions — usually 1.1% to 1.45% of the sale price, split between the buyer and seller unless otherwise negotiated.

4. Capital Gains Taxes (if applicable)
   If the home isn’t your primary residence, you may owe capital gains tax on profits from the sale. Homeowners who have lived in the property for at least two of the past five years can exclude up to $250,000 ($500,000 for married couples) from taxable income.

⚖️ Final Thoughts

Whether you’re buying or selling a home in Washington DC or the Maryland suburbs, it’s crucial to understand all potential costs upfront. Work closely with a local real estate agent and lender to get accurate estimates, explore programs that can reduce expenses, and ensure you’re making the most financially sound move possible.

With the right preparation and professional guidance, navigating D.C. real estate costs doesn’t have to be stressful — it can be a smart investment in your future.