Property tax relief for seniors

Did you know that the District of Columbia provides a substantial discount on real estate property taxes for seniors?

If eligible, a senior can save 50% on his or her property tax bill. Further, the threshold for the income level was raised to its current level on October 1, 2013 (previously the threshold was $100,000), so some seniors who were unable to qualify previously might want to take another look at their eligibility.

To be eligible:

  • At least one owner of the property must be 65 of older;
  • The total household adjusted gross income must be less than $125,000; and
  • The senior must have at least 50% ownership of the property to qualify.
Keep in mind that if the senior no longer occupies the property, or if any of the above eligibility requirements are no longer met, a cancellation form must be submitted to the DC Office of Tax and Revenue within 30 days of the change in eligibility.

Failure to do so could result in the DC Office of Tax and Revenue applying penalties and interest.

The Senior Citizen Tax Relief application can be found the DC Office of Tax and Revenue website.

New Maryland bill to limit cost of condo resale package

Maryland law requires the seller to provide specific information pertaining to the resale of property within a Homeowner’s Association (HOA) or a property designated under a condominium regime.

Typically, this information is produced by the management for the HOA or condominium, and the HOA or condominium charges the seller a fee for the production and delivery of the information.

It is the belief of some Maryland legislators that the fees being charged are excessive and, as such, these legislators are seeking to limit the amount that may be charged.

Before the Maryland legislature are bills S229/HB412, which would limit the fee a condominium council of unit owners or HOA may charge an owner (seller) for providing this legally required information to a prospective homebuyer.

The current law calls for a "reasonable fee," but it is left undefined so many organizations have simply been using the requirement as a way to profit – charging upwards of $400 to $500.

There's currently a proposal to limit the fee to $50. Hearings on the legislation continue and we will keep you apprised of the final bill.

UPDATE: The Senate passed SB 229.  They amended HOA’s out of the bill, thus making it applicable only to Condo Associations; and they upped the fee that could be charged from $50 to $100.  The House Committee then amended the bill further, but the Senate committee refused to concur with those amendments and so the bill died when the clock ran out at midnight.

Scheduling a settlement date is a contractual obligation for homebuyers

An often overlooked provision in paragraph #6 of the GCAAR Regional Sales Contract provides that the "Purchaser agrees to contact the Settlement Agent within 10 Days after the Date of Ratification to schedule Settlement and to arrange for ordering the title exam and, if required, a survey."

Homebuyers and their agents should pay particular attention to this requirement.

Recently our office was notified that a seller had declared the purchaser in breach of contract due to purchaser's failure to schedule settlement within 10 days from the date of ratification.

While the purchaser had ordered a title exam with our office, neither he nor his agent had scheduled the settlement date.

Through email notification, Federal Title reminds homebuyers and their agents to schedule the closing with our office within this time period. Unfortunately, in this particular instance, our notifications were ignored.

What's up in real estate?

Housing outlook 2014: 10 predictions from the experts
Forbes

In 2013 the housing recovery was a welcome bright spot for the economy: prices were shooting up, fewer homeowners were underwater, and builder confidence was finally on the upswing. It's looking like 2014 should be another good year for housing – mostly.

What are your gripes about closings?
Realtor Magazine

The Consumer Financial Protection Bureau (CFPB) is asking for feedback on the most stressful, confusing, and problematic areas for consumers when it comes to the closing process in a home purchase.

This guy spent the last month dressing up like local realtors and pasting himself over their bench ads
Buzzfeed

For the last month Phil Jones has been recreating the ads from local realtors and then taping over them with his own version. He called it The Faces Of Real Estate.

Local news

Photos: Metro shows off railcar of the future
DCist

Metro today gave the media a look at its new 7000 series railcar, which was greeted at the Greenbelt station by Mayor Vince Gray, Del. Eleanor Holmes Norton, Maryland Gov. Martin O'Malley and other politicians.

New condo supply on the rise
DC Urban Turf

The number of unsold condo units in new projects or those under construction (and not yet marketing) rose to 3,308 in the DC area by the end of 2013, an increase of 1,000 units from the third quarter when the new condo supply hit its lowest level in a decade.

Report: DC-area condo prices to keep rising for the next three years
Washington Business Journal

In its quarterly snapshot of the Washington condo market, Delta notes the year-over-year change in condo prices in the third quarter was positive for the sixth consecutive quarter, even as sales volume fell to the lowest level since the final quarter of 2011.

Technology

4 methods for your mobile house hunt madness
Trulia Blog

You’ll want to make sure you find the best solution (home), with the most efficiency (time, money, etc.) and strategic smarts (not driving yourself wild with anxiety or overwhelm). What you need is a little method to avoid the madness that mobile house hunting can bring.

5 DC startups positioned for major growth in 2014
Huffington Post

HomeSnap makes hunting for real estate a breeze. The algorithm uses a combination of big data and iPhone features (accelerometer, gyroscope, location services) to determine where you are and then present a home's details.

Home Improvement

7 storage solutions you didn't know you had
House Logic

Every square foot of your home is valuable. These storage solutions take advantage of underused nooks and crannies. And just for fun, we did some back-of-the-napkin calculations based on the average price per square foot of a U.S. home ($81) to attach a theoretical value to the bonus space.

Low-cost cabinet makeovers
Better Homes & Gardens

Save thousands of dollars by using paint and new hardware to update your existing kitchen cabinets instead of buying new ones. These colorful, budget-friendly examples will help you get started.

Supplemental tax bill catches some Maryland homebuyers off guard

When people purchase a home, especially for the first time, many practice their due diligence and find out the amount of the present tax bill and proposed insurance in order to calculate their closing costs and future expenses in addition to their proposed mortgage payment.

This is not as easy when purchasing a newly renovated or built home. Yes, you can estimate taxes based on the purchase price of the property, but people are often blindsided by a supplemental tax bill. Not all jurisdictions have supplemental tax bills, so it is wise to check the jurisdiction in which you are buying to be certain.

What is a supplemental tax bill?

A supplemental tax bill is a bill that is issued when a property is reassessed during the current tax year. Often the supplemental bill will be for a specific period, i.e., a quarter, half or three-quarter tax period. This bill is an additional bill that is sent directly to the home owner and is paid directly by the owner.

Tax escrows that are collected by the mortgage companies as part of the servicing of a loan do not contemplate supplemental tax bills. In fact, most mortgage companies will have you sign a document at closing stating the borrower/home owner will be responsible for paying any supplemental tax bill directly.

What "triggers" a reassessment of a property?

Typically, major renovations or improvements added to a property will trigger a reassessment at time of completion.

What constitutes completion?

Usually, completion is when all permits are closed, certificate of occupancy is issued, and/or the property is sold as an improved lot.

Why would this affect a new home buyer?

At time of purchase of a new home, the real property taxes are often based only on the assessed value of the lot. The sale itself triggers a reassessment. Although this can be contemplated for purposes of an escrow account by estimating the taxes based on the purchase price, there is no way to know what the new actual assessment will be and when it will be actually done.

It is prudent for a new home buyer to put money aside based on the timing of closing and the estimated amount of taxes based on the purchase price. In Maryland, the fiscal year runs from July 1 through June 30 of the following year. So for example, if you purchase in September you should expect to get at least a three-quarter supplemental bill.

Whether you are a first-time homebuyer, first-time new homebuyer or just someone who likes to do the homework – remember to consider supplemental tax bills when looking at not only the closing costs but future carrying expenses for your new home.

For further information, feel free to contact Catherine Schmitt at Federal Title & Escrow Company.
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  • What's title insurance?

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