I wish I'd known about the D-SELP http://www.mmprogram.org/dselp.aspx

If I'd known about that ahead of time, I would have gone to one of the sessions to qualify. That would have saved me quite a bit at closing time.

I wish I knew this before we closed on our house a few Novembers back. The escrow payments on our increased assessment ($100,000 up to $200,000) were a colossal burden.

I wish I knew that realtors don't really price a home on its real value and physical/mechanical health of the home, but more nebulous things like "comps" (even those that don't sell) and seller presentation.

We were lucky to get a house with a great roof, systems, and wiring, but I have seen homes with $20,000 in waiting furnace, plumbing, and roof work priced the same as brand-new construction, especially in the City. They sure looked good, though, and were priced on their looks.

Jamie,
In response to your request: “So here's my request to you all: Tell me what a new or new-to-the-area buyer ought to know, besides property tax rates, transfer tax costs and the appeal process. What information should such a post include? What do you wish you knew before you bought? I'm looking for Maryland-specific things.”

A few things I would suggest are information on water bills and how to find it (online with the city for the most part), trash collection and what the days are and how to find out (counties/cities websites), what schools are zoned for the property address (most counties have websites that you can use to find this out with a school locator link).

Some more advice that I would definitely give them is to make sure that they get a comparative market analysis (CMA) completed on any property that they consider purchasing BEFORE they write their offer to make sure they are getting the deal that they think they are getting. Make sure that their contracts include a home inspection contingency even if they are buying a new home as it is very useful to have a “pre-drywall inspection” on new homes.

I would also highly recommend to any buyer (new to the area or not new to the area) to hire a local real estate agent to represent them and negotiate the best possible deal for them as a buyers agent who is familiar with the areas that they are considering moving into. Most first time home buyers don’t understand that as a buyers agent, most of the time (if not all of the time), the sellers will pay their buyers agents commission as is customary practice. So as a buyer, they would basically get a real estate agent to work for them for no commission expense (most of the time) on their part. Many also don’t know that often builders will allow them to have a real estate agent represent them as a buyers agent when they build a new home and most of those builders will pay their buyers agent too. So many first time buyers that I work with, when I first meet or speak with them, are under the impression that if they call the listing agent they will get the best deal. But what they don’t understand is that could not be further from the truth because the listing agent represents the seller and the sellers interests, not theirs! A post you could do as a follow up to your advice post is a post about how to select a good real estate agent (what qualities to look for), because not all agents are created equal and not all agents have the same work ethic or credentials or reputation.

Thanks, guys. Keep that information coming!

New Home Buyers should know to read Jamie's Blog!

I wouldn't have known about the property tax assessment appeals process were it not for Jamie's earlier posts. We appealed and had our assessment dropped from $400K to $200K (the latter number being very close to our purchase price).

Thanks, Jamie.

In Columbia, you need to be aware of the Columbia Association fee which is seperate from property taxes but tied to the appraised value. The home I recently purchased was appraised at $315k and the CA fee is about $1100.

And the CA fee is different from the HOA fee. I don't have a HOA fee, but that can be tacked on if it applies.

Aw, shucks, fronesis -- you made my day. I'm so glad the information helped.

jfg, that's a great point. Thanks for reminding me.

I wish we had been given clear information about how the Homestead Tax Credits provided by the state and county don't apply for the first year for new owners. (Our county assessment increases are normally limited to 5% per year and State Assessment increases are limited to 10% per year, but this doesn't apply to new owners, it all gets reset.)

So the property tax bill of the sellers was useless (way too low) for estimating what our property tax bill would be since they'd lived in the house for decades.

After some internet searching, we roughly calculated ourselves what we thought our property tax bill would be based on the current $ assessment of the home and then calculating out and adding up all the local taxes. I'm glad we did this because otherwise our first property tax bill this summer would have been quite a shock.

A little nerdy...

But it helped to know you can order your MVA change of address online.

Also, a subtle reminder that it is really easy to change your voter registration once you've moved and the state has a good site to see where your new voting district is (research shows that a lot of folks who move tend not reregister or drop out of the electorate). Making it easy helps.

Greyselkie, good point. I'll write up something that walks out how the Homestead credit works, and how to estimate your property-tax bill.

JTK, that's good to know -- thanks!

Thanks for the great post!

I bought new construction in October 2009 and am confused as to what is going on with the property assessment. The property was valued at $265k late last year, now I just received a property tax bill that shows it at $291k. I paid $270k. I sent in the homestead tax credit form but I haven't even lived here a year yet.

I'm really confused on how all this taxing stuff works. I suppose I need to file an appeal immediately? Everyone else living around me doesn't seem to know what to do either. Some people saw a bigger increase than others.

BigDragon, if you send me your address (to jamie.smith.hopkins(AT)baltsun.com), I can check the property-tax records for you. But here's what I think is happening:

You aren't eligible to receive the Homestead credit's cap on taxes until your SECOND July 1 in the property (the start of your second full tax year there). Whatever your market-rate assessment is, meanwhile, phases in over three years. So this July 1, you were bumped up to the next phase-in figure of your assessment. Next July 1, the Homestead credit will kick in, capping your increase (if any).

You can certainly appeal if you think the assessment is too high. Just get the appeal in by (or better yet before) Jan. 1.

Jamie, thanks for the information! That makes sense now. I did receive notice that there would be a phase-in increase on the way. The builder did come up with the $291k figure at closing too, so I was surprised when it initially came up valued at $265k last year. It makes sense that the phase-in is moving things to the market-rate assessment. Since the numbers are matching up I'm not too concerned. I just wanted to make sure I didn't miss something.

Given that the builder is selling my model again at $270, the price I paid, perhaps it would be worth it to look into an appeal to try and knock things down to the selling price. First I have to go babysit the bankers though. It seems they're not very good at paying property taxes on time...

Thanks for the great post. Jamie, the appeal procedure - is this just the city or statewide?

Not sure if it's specific to MD, but it's important to understand difference in taxes between the counties. When we just started looking a while ago, I looked up the property tax rates and saw that percentage wise the difference was not big (if any). However, HO county, for example, have "ad valorem", which adds hundreds more. AA doesn't have this. CPRA is another good point (by the way, it's usually listed as HOA fee).

For example, a 350K house in Columbia could cost about 2000$ per year more than the same house in, say, Severna Park, which has excellent schools.

Jelena, the appeal process is the same statewide -- it's handled by the state Department of Assessments and Taxation. Thanks for the tax rate/HOA fee suggestions!

While the state doesn't automatically adjust the assessed value of a house based on the reduced sales price, they will nail you in the middle of the three-year assessment cycle if you purchase a rehabbed home in Baltimore City. To counter this large tax increase, be sure to file for the city's New Construction Tax Credit immediately upon purchase- which phases in the tax increase in a five-year span. The discount starts at 50% for the first tax year and is then reduced in increments of 10% over the next four years.

Oh yes -- thanks very much, Matt, for reminding me. That's an excellent bit of advice to include.

I recently bought a house in frederick county and as a new homebuyer requested a reassessement of my homes value. I was told that they do not use foreclosures and short-sales as comps in the re-assessment. Do you have any thoughts on this?

jmy, I've gotten mixed messages on that. When the bank actually forecloses on a homeowner, that's not an arms-length sale, so it makes sense that such a transaction would not be included. But when the home is resold, that is arms-length. Settlement folks have told me that they consider both the foreclosure resales and short-sales to be arms-length.

I'll see if I can get a clearer answer when I put together this "what you should know" post.

Although the law recently changed (but a court challenge may change the change), ground rent is a completely foreign concept for most people moving into the area (unless they are coming from certain parts of Pennsylvania). The prospective home owner should be made aware of whether ground rent is or is not involved in the transaction, and if so, what rights and obligations the owner of the ground, and what rights and obligations the owner of the 'improvements', have.

Bmore residents pay the most taxes and get virtually nothing for it. trash in the water, brown grass in the parks, dead fish heads on the prom, the list goes on. They cant even fix lombard street. How do they expect young people to want to come here? Yet when it comes time to get their tax $$$ their like vultures picking away at the residents.

The property tax issue is real however in some areas it does appear that market values and current assessed property values are far more in line for 2010. There are still some pockets of homes on the I-95 corridor where assessed values are still too high and until residents take the time to make a stand they will remain so.

Thank you for such a well-researched, informative column! Regarding Matt's comment about the New Construction Tax Credit- what happens if we move in to new construction (2006) but we are the second owners? Are we eligible for this tax credit, or is it only the original/first owners after construction? Thank you!

Megan, that tax credit is "non-transferable and only applies if the owner is the first party to purchase the newly constructed dwelling after its completion," according to the city Finance Department. Sorry!