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Are you in the market to buy a home in Washington, DC? You may have heard of some of the many programs, lending options, and tax benefits that exist in the market today. To name a few: DC Opens Doors, Loan Programs for Teachers, and the Down Payment Assistance Program. You may have even heard of first-time home buyer tax benefits in the past, but they have not been renewed or implemented for years.

As recently as 2011, there was a DC first-time home buyer tax credit in place that reduced the buyer's recordation tax by 50 percent. This credit saved many first-time home buyers thousands of dollars. There may be good news on the horizon for first-time buyers in DC. On October 6th, a few DC council members proposed a new first-time home buyer tax…

Many buyers think that an FHA loan should only be used as a last resort. Indeed, more often than not conventional loans are the way to go over FHA (which stands for Federal Housing Administration) loans. However, if you’re only able to put 3% or 3.5% cash down on a property, an FHA loan could make more sense for you. Home prices in the DC area have skyrocketed in the last few years, and with that comes more difficulty on the part of buyers to put a greater percentage down on a property. What exactly are the pro’s and con’s of FHA loans? Well, that’s exactly what we’re here to tell you:

Pro’s:

1. The buyer only has to put down 3.5% of the total sales price on a property.

2. 100% of the down payment can be a gift from a family member, friend,…

Are you a teacher in Washington, DC? We understand that buying property can seem daunting for a number of reasons, including cost, but there are a few loan programs that can help. One is the Employer-Assisted Housing Program, or EAHP. This helps full-time DC Government employees become first-time homeowners within the District. You must have a good credit rating and enough income to afford a mortgage loan. If you are deemed eligible, you will receive matching closing cost funds up to $1,500 ($500 for each $2,500 saved by an employee) and a deferred second trust loan up to $10,000. Applicants are allowed to select a first trust lender of their choice. The maximum loan amount for the EAHP is $625,500. A second program that we recommend is the Home Purchase…

Earnest money deposits (EMD’s) are an often-discussed and misunderstood part of real estate transactions. Also known as an escrow deposit, an earnest money deposit shows a buyer’s interest in a property when they make an offer. The potential buyer will write a check either to their real estate agent’s brokerage or to a title company of their choice. The amount of the earnest money deposit is up to the buyer, but it is usually 2.5%-3% of the purchase price. For example, Capital Park Realty recently closed on two properties: one with a purchase price of $585,000 and one with a price of $365,000. For both, the earnest money deposit was $20,000, or 3.4% for the $585,000 property and 5.5% for the $365,000 property. As you can see, it is not uncommon for the…

Title insurance is one of the least understood components of the real estate process. What exactly does it do, you may ask? To put it simply, title insurance protects lenders and owners against unforeseen problems with titles and mortgage liens. There can be hidden defects in a title that not even the most experience settlement agent will catch. A lender’s policy is required by every public mortgage lender and protects for the amount of the loan. This does not cover buyers, who must purchase their own policy to be covered.

Title insurance is not a recurring cost and does not have annual fees; it is paid once at the time of settlement and is good for the duration of the time one owns a property. There are four basic steps to what happens when title…

The DC Homestead Deduction went up earlier this year. When we last wrote about the tax benefit in 2012, it was $67,500. But now the DC Office of Tax and Revenue (OTR) has increased the deduction to $69,100.

Periodically, OTR will increase the DC Homestead Deduction based on cost of living adjustments. For historical reference, the deduction was $60,000 in 2006 and 2007. In 2008, it increased to $64,000. 

The DC Homestead Deduction benefits District residents who own and occupy property. It helps save you money in two ways -- by reducing your annual tax liability and providing a cap on the assessed value of your property.

The latest increase in the DC Homestead Deduction will reduce the annual property tax bill of qualified owners. It works by…

DC transfer and recordation tax is due to the Office of Tax and Revenue (OTR) Recorder of Deeds during the sale of residential property in the city. This tax is part of various closing costs such as lender charges, settlement fees, title insurance, escrow reserves, pre-paid interest, and real estate tax. But generally, the DC transfer and recordation tax is the highest of all closing cost line items.

In DC, deed transfer tax is generally paid by the seller, while the buyer covers deed recordation tax.  These tax amounts are calculated based on the purchase price of the home. If the sale is $399,999 or less, then the DC transfer and recordation tax rate is 1.1%. Sales of $400,000 and above are taxed at the rate of 1.45%. For example, if you bought a…

The tax abatement program in DC helps lower income residents purchase a home by eliminating transfer, recordation, and property taxes. Homeownership is part of the American Dream for many, and these tax incentives help more people achieve it for themselves.

In order to qualify for tax abatement in DC, the value of the property purchased must be less than $367,200, and the owner must occupy the property as his principle residence. In addition, there are income limits depending on the number of people in your household. For a person living alone, the maximum allowable gross income (including all jobs, Social Security income, public assistance, retirement pay, unemployment compensation, military housing allowance, etc.) is $56,100. For a family of four,…

Generally speaking your offer will be based on a few key factors:

1) The most recent comparable sales.
2) How long the property has been on the market. 
3) How much competition is out there.  For example: Are there multiple offers? Has the seller received a previous offer that wouldn't work for them?
4) Terms: It's not always just about price!  If you can work with the seller on terms such as the closing date, the inspection, a potential rent back etc you may have extra leverage.

If you're a buyer looking to make your offer more attractive without offering more money, you'll need to adjust your terms. Remember, it's not just the offer price that may sway the seller in your direction; well crafted terms may make the difference between losing out on an…