South Carolina Closing Costs: The Deed Recording Fee, Title Insurance, and Earnest Money Rules

Most buyers go into a South Carolina closing with a rough sense of what "closing costs" means — around 2% to 5% of the purchase price, they've read somewhere. What they do not realize until the Closing Disclosure arrives a few days before settlement is that South Carolina has a set of transaction-specific costs that differ from what national calculators or out-of-state advice will show you.

Three of the most frequently misunderstood items: the deed recording fee (which functions as a transfer tax), title insurance rates (which are state-regulated and formula-based), and earnest money mechanics (which work differently in South Carolina than in most other states). Here is how each one actually works.

The South Carolina Deed Recording Fee

South Carolina imposes a deed recording fee on all real estate transfers, governed by SC Code Section 12-24-10. Despite being called a "recording fee," it functions economically as a real estate transfer tax — a levy on the sale itself rather than a flat administrative charge.

The calculation: $1.85 per $500, or any fractional part of $500, of the property's consideration or realty value.

On a $250,000 purchase:

• $250,000 ÷ $500 = 500 increments
• 500 × $1.85 = $925.00

On a $375,000 purchase:

• $375,000 ÷ $500 = 750 increments
• 750 × $1.85 = $1,387.50

The fee splits between state and local government: $1.30 per $500 goes to the state general fund, and $0.55 per $500 stays in the county where the property is located.

Who pays it: By long-established South Carolina custom, the seller (grantor) pays the deed recording fee out of their net proceeds at closing. However, this is contractually negotiable. In a competitive seller's market or in certain transaction structures, buyers may be asked to absorb this cost. The standard SC Form 310 contract designates the seller as the responsible party, but make sure you understand how it is allocated in your specific contract.

Exemptions: SC Code Section 12-24-40 exempts certain transfers from the fee entirely, including deeds to the federal or state government, transfers in Chapter 11 or 12 bankruptcy, transfers to qualifying trusts, and transactions where the consideration is less than $100. For standard residential purchases, none of these typically apply.

Title Insurance in South Carolina: How the Premium Is Calculated

Title insurance protects against ownership claims, hidden liens, forged documents, and defects in the chain of title that were not discovered during the title search. In South Carolina, there are two types:

Lender's title insurance is required on any mortgage transaction. It protects the lender's lien position.

Owner's title insurance protects your equity as the buyer. It is technically optional, but South Carolina's status as an attorney-closing state — where the attorney conducts a rigorous 40-to-60-year title search before closing — does not eliminate all risk. Undiscovered liens, fraudulent prior deeds, or errors in public records can surface years after closing. The owner's policy is generally recommended.

South Carolina title insurance rates are state-regulated. They are not freely negotiated. The premium is calculated on a tiered rate schedule based on the liability amount (the property's purchase price for an owner's policy):

• First $50,000 of liability: $3.60 per $1,000 = $180.00
• Next $50,000 ($50,001–$100,000): $3.00 per $1,000 = $150.00
• Next $400,000 ($100,001–$500,000): $2.10 per $1,000

Example calculation for a $250,000 home:

• First $50,000: $180.00
• Next $50,000: $150.00
• Remaining $150,000: $150,000 × $2.10 / $1,000 = $315.00
• Total owner's policy base premium: $645.00

The lender's policy is issued simultaneously at a reduced "simultaneous issue" rate — typically $100 to $200 additional. Total title insurance on a $250,000 purchase generally runs $750 to $900.

These are base premiums. Attorney fees for the title search, preparation of the title commitment, and other legal work are billed separately and typically add $1,000 to $1,500 to your total closing costs.

Earnest Money in South Carolina: How It Works and How to Protect It

Earnest money in South Carolina is a good-faith deposit submitted with your offer to demonstrate you are a serious buyer. It is held in an escrow account — either the buyer's agent's brokerage trust account or the closing attorney's IOLTA account — not given directly to the seller.

Typical amounts: There is no legally mandated amount. In practice, South Carolina earnest money deposits commonly run 1% to 2% of the purchase price, though competitive offers in hot markets may go higher. On a $300,000 purchase, $3,000 to $6,000 is a typical range.

The critical distinction from the Termination Fee: South Carolina's standard SC Form 310 contract uses a due diligence structure that separates two distinct concepts first-time buyers frequently confuse:

• The Termination Fee is paid directly to the seller at contract execution as compensation for taking the home off the market during the due diligence period. This fee is non-refundable — it is the seller's regardless of what happens during due diligence.

• Earnest Money is held in escrow and is applied toward your closing costs at settlement if the transaction completes.

During the due diligence period (typically 7 to 14 days), the buyer can terminate for any reason and receive the earnest money back — but the termination fee is gone. After the due diligence deadline passes, if the buyer defaults without a valid contingency (like a financing contingency), the earnest money becomes at risk.

How earnest money is released after termination: If you terminate during due diligence, you must submit written notice before the deadline and sign a mutual release agreement (SC Form 518) to get the earnest money returned from escrow. South Carolina license law requires that the holding brokerage obtain a signed release from all parties — or a court order — before disbursing any escrowed funds. Neither party can unilaterally demand the funds released. If there is a dispute, the money stays in escrow until both parties sign or a court resolves it.

Applying DPA funds to earnest money: If you are using SC Housing down payment assistance, note that any cash returned to you at closing — including earnest money you prepaid — is limited to the documented amount you actually paid out of pocket. You cannot receive cash above and beyond your documented pre-payments as part of the DPA structure.

What Total Closing Costs Actually Look Like in South Carolina

For a $250,000 purchase with a conventional loan, a reasonable closing cost estimate from the buyer's side:

This range excludes the down payment itself (3.5% for FHA, 0% for USDA or VA, 3–5% for conventional). When SC Housing's $10,000 forgivable DPA or Palmetto Home Advantage assistance is stacked against these closing costs, buyer out-of-pocket exposure can be reduced to the earnest money deposit and inspection fees.

For a complete guide to the South Carolina closing process — including the attorney's role, what happens on closing day, and the property tax application you must file afterward — visit the South Carolina First-Time Home Buyer Guide.

See more South Carolina guides →