DC Tax Abatement income, purchase price limits increase

DC Tax Abatement income, purchase price limits increase
Purchase price and income thresholds to qualify for the popular DC Tax Abatement Program have increased, hopefully making it easier for more homebuyers to become homeowners.

The District of Columbia Office of Tax and Revenue upped the purchase price threshold to $439,160 from $408,000.

At the same time, the income threshold for a single buyer increased to $58,980 from $57,540 while the income threshold for a two-person household increased to $67,380 from $65,760.

In "Economic Development Zones," the income limits are higher. For a single buyer, it's $67,265 and for a couple it's $76,890.

For more on income limitations and the DC Tax Abatement Program, please visit our page on the DC Tax Abatement Program.

Real estate website Trulia reports the median sales price for homes in DC was $539,000 over the past three months, an increase of 5 percent over the previous year.

The DC Tax Abatement Program provides an exemption from the DC 1.1% Recordation Tax and an allowable credit from your seller(s) of 1.1% equal to the DC Transfer Tax. Additionally, the program provides a five-year real estate tax abatement that begins October 1 following your date of closing.

The numbers in this article may be out of date. Visit our guide how to qualify for DC Tax Abatement for the most current information.

How to change your chosen title company after you have a ratified sales contract

Most homebuyers know by now that it’s their legal right to choose their own title company and that shopping for title services is one of the most effective ways to reduce costs at the closing table.

(For those who haven’t heard this, read our content on Marketing Service Agreements and Affiliated Business Arrangements and see for yourself how these common deals jack up closing costs for consumers.)

But what happens if a homebuyer doesn’t learn about this important right until after her sales contract has been drafted, accepted and signed by all parties? And is it possible to change title companies once a title company has been designated in the contract and an earnest money deposit has been delivered to that designated title company?

The short answer is you can change your mind with the consent of the seller, through a simple addendum to the sales contract. View our a settlement agent-change sample addendum.

Once the addendum is completed and signed by all parties, the homebuyer can then use the new title company listed on the addendum.

Even if the earnest money deposit was already delivered, with the addendum in place, the new title company would simply reach out to the old title company holding the funds and arrange for a wire transfer. That’s it!

How might a homebuyer find herself in a situation where she wishes to change her company after all parties have signed a sales contract with a designated and undesired title company?

First and foremost, we encourage every homebuyer to get closing cost quotes from several local title companies and compare costs and online reputations to avoid this situation. We also remind homebuyers that title companies don’t necessarily include all the same services in their settlement fee. Sometimes additional services, i.e., document fees, processing fees, amount to hidden costs, so it’s important to ask what services are included and what extra costs may be charged.

And while it’s technically illegal for real estate agents to fill in the name of a preferred title company if their brokerage has a professional affiliation with that title company, the practice persists. In these cases, homebuyers may not realize until after they have a ratified sales contract that they could have chosen their own title company.

It’s important to ask your agent if his company has a professional affiliation with the title company he’s listed in your sales contract and what benefits or incentives the real estate agent or brokerage may be receiving by recommending that title company. Sometimes the answer is there is no affiliation; the agent is familiar with a certain company and recommends that company from the perspective of good service and pricing.

There’s nothing inherently wrong with an agent directing their client to use their favorite title company, except that it may lead a homebuyer to falsely believe she does not have a choice, or once a title company’s name is written into the contract and that contract is ratified, the decision is set in stone and the title company can’t be changed.

A homebuyer maintains a right to choose her own title company and also has the right to change her mind and choose a different title company.

This isn’t an invitation to change title companies several times prior to closing or to change for no good reason. Keep in mind any addendum to a ratified sales contract must be signed by all parties, including the sellers. You may risk delaying closing, annoying your sellers or even causing your deal to fall through by abusing your right to change title companies after you have a ratified sales contract.

We put this post together specifically to help those who learned after the fact they could have chosen their own title company and would like to exercise that right. Two primary reasons a homebuyer may choose to change title companies might be she’s found a title company that charges lower prices and/or provides better customer service than the company initially listed on the sales contract.

A better way to deliver EMDs

Delivery of earnest money deposit checks is about to become incredibly easy and more secure than ever.

We are excited to share with you the benefits of our new partnership with ZOCCAM, a revolutionary service that lets real estate agents and homebuyers send their EMDs directly to Federal Title's escrow account – with just a few taps on their smart phone.

Simply take a picture of the front and back of your EMD check, select Federal Title's escrow account, confirm the information on your check and hit send.

You and the homebuyer will immediately receive email notification that the EMD was received, plus you’ll have saved yourselves the time and hassle of driving a check across town.

ZOCCAM doesn’t contain or hold any financial account information, and all content is encrypted and sent using state-of-the-art security techniques that ensure every client’s non-public personal information is protected.

We're in the final stages of building our partnership with ZOCCAM and believe it’s only a matter of time before this superior method of delivering EMDs becomes standard practice in our business.

We look forward to providing this great benefit to all real estate agents and homebuyers very soon and will keep everyone posted when the service goes live.

Close It!™ House of the Week: Fabulous location, condo in Dupont Circle

This week we’re strolling over to Dupont Circle to check out a unique and appealing condo on the penthouse level of a boutique building. List price is $449,000.

This updated 1BR / 1BA unit features modern wood cabinets, high-end appliances and loads of closet space. The community is a hidden gem with a residential entrance tucked away on quiet Corcoran Street, NW. The new owner of this home will also enjoy sunny western exposures and a fabulous location that’s steps away from shopping, restaurants, culture and nightlife.

Assuming a homebuyer puts down 20 percent on a conventional loan, her cash to close number will be approximately $104,020.86. Monthly payments will then be around $2,296.99 including the HOA fee. For a complete picture of the cash to close, including the seller’s side of a transaction like this, try the Web version of Close It™ or download the free Close It™ iOS app.

Close It™ House of the Week: Light-filled historic row house in Mount Pleasant

This week we’re heading into the white-hot Mount Pleasant neighborhood to check out a light-filled historic row house that dates back to the 1920s. With original hardwood floors, coffered ceilings and transom windows, it’s filled with original character. List price is $899,000.

Possibly the best feature of this 3BR / 3BA abode is the enclosed reach porches that have created a sunny and tranquil family room as well as second-floor solarium den space that overlooks a rear garden. The first-floor enclosed porch also opens onto an outdoor deck.

Assuming a homebuyer puts down 20 percent on a conventional loan, her cash to close number will be approximately $203,985.12. Monthly payments will then be around $3,843.24. For a complete picture of the cash to close, including the seller’s side of a transaction like this, try the Web version of Close It™ or download the free Close It™ iOS app.

  • Ways to save at closing

    Title charges are the largest chunk of closing costs and can vary by hundreds of dollars.

    Learn more

  • What are closing costs?

    The real estate closing process involves loan steps, legal steps and title steps.

    Learn more

  • What's title insurance?

    Insure your legal ownership just like you'd insure the building, but for lots cheaper.

    Learn more

Connect with us


Our blog contains general information only, not intended to be relied upon as, nor a substitute for, specific professional advice. Rate tables and figures that appear on our blog are deemed reliable but not guaranteed. For current rates & policies, refer to our Quick Quote and Consumer Guide. We accept no responsibility for loss occasioned to any purpose acting on or refraining from action as a result of any material on our blog.