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Baltimore, Maryland skyline

Buying A House In Maryland: Must-Read Facts & Tips

Lauren Nowacki9-Minute Read
October 22, 2020

When deciding where in the country to move, you could peruse lists of best places to live in the U.S., or you could get almost everything in one place – Maryland.

Called “America in Miniature” for just that reason, Maryland has most natural features you’ll find spread across the U.S. (except deserts) and people from almost every origin. The state is also packed with American history. It’s one of the original 13 colonies, the birthplace of our national anthem and the site of a pivotal Civil War battle, the Battle of Antietam.

The state is known also for its blue crab, which comes from the state’s plentiful waterways making up more than 4,000 miles of shoreline.

There’s a lot packed into the 9th smallest state in the U.S., but there’s still plenty of room for new inhabitants.

If you’re thinking of buying a house in Maryland, this article will provide the tips you need to navigate the process of buying a house in Maryland.

Why Buy A House In Maryland?

In Maryland, you have your choice of bustling cities and beach towns or sprawling farmlands and quaint, small towns. Nature lovers can walk along the shores of the Atlantic, go white water rafting on rivers, hike through the Appalachian Mountains or explore underground caves. The state also features scenic waterfalls, sunsets over the Chesapeake Bay and views of wildlife moving through wetlands.

You may also find it interesting that Maryland is ranked in U.S. News & World Report’s top five best states for opportunity, based on its economy, pay equality and housing affordability. 

Top Real Estate Cities In Maryland

Ready to enjoy the landscape, scenery and opportunity Maryland affords, but not yet sure where to plant your roots? Check out some of our favorite picks from our list of top cities for Maryland real estate.

Baltimore

Baltimore, Maryland skyline
  • Population: 593,490
  • Median Household Income: $48,840
  • Median Home Sold Price: $159,987
  • Average Commute: 31 minutes

Baltimore is the largest city in Maryland and a major seaport. Many of its neighborhoods – including its walkable waterfront – are filled with row houses and factories converted into lofts and trendy restaurants. Street murals abound in the city, which also hosts several art museums and unique art galleries.

When choosing to live in Baltimore, consider where in the city to live and whether it’s the right place for your family. While it’s affectionally known as “Charm City,” Baltimore does have a higher crime rate than many cities in America and may not be as suited for raising a family as other places on our list.

Check out homes for sale in Baltimore or explore Baltimore real estate trends.

Annapolis

Annapolis, Maryland
  • Population: 39,223
  • Median Household Income: $83,948
  • Median Home Sold Price: $431,100
  • Average Commute: 27.2 minutes

 

Annapolis is home to the United States Naval Academy, one of the city’s longest–standing institutions and the country’s second-oldest U.S. service academies. Situated on the Chesapeake Bay, Annapolis is known as the “Sailing Capital of the U.S.,” and hosts several boating events throughout the year. A suburb of Baltimore, Annapolis has a mix of city life and small-town charm, with brick-paved streets, historic sites and sidewalks lined with cute boutiques, lively bars and restaurants hosting live music. The city’s layout features two main circles (Church and State), one surrounding the domed state building and the other surrounding St. Anne’s Parish, with streets stemming out from them.

Check out homes for sale in Annapolis or explore Annapolis real estate trends.

Ocean City

Ocean City, Maryland
  • Population: 6,944
  • Median Household Income: $54,667
  • Median Home Sold Price: $315,025
  • Average Commute: 22.7 minutes

 

Situated on a narrow barrier island, between the Atlantic Ocean and Isle of Wight Bay, Ocean City is a resort town with a white-sand beach that lines the city’s entire 10-mile, Atlantic coast. Whether on the bay side or the ocean side, you’ll find numerous waterfront restaurants, amusement parks and other attractions. Any time of year, you can walk down the city’s wooden boardwalk that features 3 miles of shops, food stands, arcades and a 1902 carousel.

Check out homes for sale in Ocean City or explore Ocean City real estate trends.

Hagerstown

Hagerstown, Maryland
  • Population: 40,100
  • Median Household Income: $40,531
  • Median Home Sold Price: $160,229
  • Average Commute: 27.3 minutes

 

The Hagerstown area was home to multiple Civil War battles, including the Battle of Antietam. You can visit the battlefield of the bloodiest one-day battle in American history among other Civil War and historic sites. If you’re more of an outdoor enthusiast than a history buff, you can find plenty of outside activities at one of the many state or national parks within the county or along numerous rail trails transformed into biking and hiking trails.

Check out homes for sale in Hagerstown or explore Hagerstown real estate trends.

Frederick

Frederick, Maryland
  • Population: 72,244
  • Median Household Income: $72,088
  • Median Home Sold Price: $290,000
  • Average Commute: 31.3 minutes

 

Frederick’s walkable, 50-block historic downtown area comes packed with breweries, fine dining, boutique shopping and a captivating Public Art Trail featuring murals, sculptures, fountains and a hand-forged iron bridge. Outside of the city, you’ll find local farms and orchards, the Frederick Wine Trail and the Catoctin Mountains, home to Camp David and the Cunningham Falls, a 78-foot waterfall.

Check out homes for sale in Frederick or explore Frederick real estate trends.

How To Buy A House In Maryland

While it’s a big decision, there are really only seven easy steps to buy a house in Maryland.

1. Save for a down payment. You’ll want to try to save at least 20% of the purchase price, so you can avoid paying the private mortgage insurance (PMI).

2. Get mortgage preapproval. A preapproval will help you understand how much home you can afford and show sellers you’re a serious buyer.

3. Decide what you want in a house. Knowing your must–haves and deal breakers will help narrow down your home search.

4. Find an agent. A local real estate agent will better understand the local market, help you find homes and help negotiate to get your offer accepted. We recommend working with a Rocket HomesSM Verified Partner Agent.

5. Tour homes. It can be hard to picture your life in a home when you don’t step foot in it. Take the time to walk through at least a few homes to get a better idea of what you love. You’ll also be able to spot red flags easier in person.

6. Make an offer. Once you find the home you wish to buy, you’ll want to put in an offer that is attractive to the seller, but based on certain factors, like the asking price, your budget, comparables, days on the market, etc. You’ll want to act fast and may need to offer at or above the asking price if it’s a seller’s market, in which there may be heavy competition between buyers.

7. Close on the house. Once your offer is accepted, you’ll go through the closing process, which includes getting the homes appraised and inspected and sitting down to fill out the final paperwork and receive the keys to your home.

Tips For Buying A House In Maryland

If you’re relocating to Maryland or buying your first home, it’s important to understand the nuances of real estate in the state. Here’s what you need to know and prepare for.

Know Your Financing Options

There may be state- and city-specific first-time home buyer grants and programs available. Do your research to see how you can save. If this is the first time you’re buying a house in Maryland, you’ll want to know these programs from Maryland Mortgage Program (MMP):

  • MMP 1st Time Advantage offers eligible first time home buyers a low 30-year fixed interest rate.
  • Flex loans that offer funds to help with down payment and closing costs.
  • MMP Partner Match provides grants, loans and other assistance matches from partners like community organizations, employers, local governments or real estate developers.
  • Maryland SmartBuy assists home buyers with eligible student loan debt by offering special financing, assisting with closing costs and even helping with loan payoff.

Along with statewide programs, some cities also provide different programs. For example, Hagerstown offers city-renovated homes for a low price to eligible applicants and provides down payment assistance for those purchasing eligible, vacant homes in the city.

Be Prepared To Pay Hurricane Insurance

According to the Insurance Information Institute, Hurricane Sandy “resulted in $410 million in private insurance claims in Maryland.” With its location right on the water, Maryland is one of 19 states that require homeowners to pay hurricane deductibles as part of their homeowners insurance policy. When reviewing your policy, check to see if the deductible is automatically included or listed as an option. You’ll also want to check if the deductible is a flat amount or a percentage of the coverage.

Know Maryland Renting Laws

If you plan on leasing your home in the future, you’ll want to know Maryland’s leases and rental agreement laws. Here are some quick laws to keep in mind:

  • A landlord must return deposits within 45 days of lease termination (many states require 30 days).
  • A landlord can request up to 2 months’ rent for security deposits.
  • A landlord must return interest on the deposit at a rate of 4% per year.

Lease, rental and other real estate laws vary by state and may change in the future, so make sure you stay up to date if you are a landlord or tenant.

Understand Maryland Homestead Laws

Homestead protection laws can help prevent loss of real estate or property should a homeowner file for bankruptcy. Most states have some sort of law in place to set aside a piece of “homestead” that would remain off limits to certain collections. In Maryland, that “homestead” is a value, not a certain size of land. The max value a homeowner in Maryland can designate as “homestead” is $3,500 (and an additional $2,500 if it’s a Title 11 bankruptcy).

Include An Inspection Contingency

A contingent offer can let you back out of the contract if the home inspection turns up anything negative. You may want to back out if the cost of the repairs outweighs the value of the home price, if you’ll have major repairs in the future or if the inspection shows that the home is not structurally sound.

Plan To Pay Average Closing Costs

On average, closing costs in Maryland are about 5 – 6% of a home’s purchase price. This stays within the rage of average closing costs in the U.S., which is 3 – 6% of the purchase price. Some typical closing costs may include:

  • Appraisal fee
  • Closing fee
  • Escrow funds
  • Origination fee
  • Title insurance
  • Title search

The Bottom Line

“America in Miniature” has a diverse landscape and population that may make it the perfect place for those who want variety in their life. And since the state has so many different types of areas, make sure you take the time to understand what kind of scenery and lifestyle you wish to surround yourself in before even starting your search. For helpful tips on buying a home anywhere in the U.S., check out more home buying articles on the Rocket HomesSM blog.

*A number of the statistics in each listing were sourced from the U.S. Census Bureau, including 2019 population estimates, 2018 median household incomes and 2014 – 2018 mean travel time to work for those 16 and older. Data from the September 2020 Rocket HomesSM Trend Report was used for the median home values for each city.

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Lauren Nowacki

Lauren Nowacki is a staff writer specializing in personal finance, homeownership and the mortgage industry. She has a B.A. in Communications and has worked as a writer and editor for various publications in Philadelphia, Chicago and Metro Detroit.