June 30, 2011

Baltimore offers $10,000 incentive to buyers of formerly vacant rehabs

The $8,000 federal homebuyer tax credit pushed up sales in 2009 and part of 2010. Now Baltimore's housing department is hoping $10,000 toward closing costs and downpayment will drum up as much interest in vacant homes, the city's perennial problem.

The agency plans to officially announce the incentive today -- a total of $500,000 available for the first 50 buyers of Vacants to Value properties. Homeowners can qualify either by finding a recently rehabbed home that the city considers a Vacants to Value property or by purchasing a still-vacant home with a rehab loan such as a 203(k).

Ken Strong, assistant commissioner for green, healthy and sustainable homes at Baltimore Housing, said the city is putting together a list of eligible homes. The program will launch July 1, he said.

The money comes from bond funds intended for homeownership incentives.

"We've had such a slow year -- the housing market has been so depressed -- that some of the money we've set aside for homeownership incentives in the past year have been unspent," Strong said. "Now we want to target them to get real stimulus into Vacants to Value."

The city's Office of Homeownership, 410-396-3124, will handle questions about the program. The money can be used with other incentives, such as Live Near Your Work and Buying into Baltimore.

Buyers, do these sorts of incentives make a difference? I'm curious whether they get people off the fence or change buying patterns. The now-gone federal tax credit was widely seen as encouraging people who would have bought a bit later to speed things up -- at a multi-billion-dollar cost.

UPDATE: Here are more specifics from the city about which homes are eligible:

1. A city-owned vacant house sold since July 1, 2010 and rehabbed for homeownership

2. A city-cited property with a "vacant house" notice since July 1, 2010

3. Any property that has been vacant for a year, as long as the evidence of that -- from the seller and/or buyer -- is acceptable to the city

June 2, 2011

Trulia launches CrimeMaps



Part of what people want when they're home- or apartment shopping is a crime-free neighborhood, or at least as little crime as they can get for their budget. So it's no surprise that a real estate search site would incorporate police data into its offerings.

Trulia says it's launching a crime-tracker feature today that aims to let users "explore and compare" incidents in neighborhoods across the country. CrimeMaps will show the most and least common crimes, dangerous intersections and when problems tend to occur, the company says. (Above is a screen shot for part of the Baltimore region.)

Neighborhood Scout is another search site with crime information, but users there are prompted to fill in a city in order to get a list of the neighborhoods with the best crime rates. (Other options: getting the neighborhoods judged best for certain demographics, i.e. families or executives.)

And, of course, there are a variety of places to get crime data outside of the online real estate world, from CrimeReports to Baltimore Sun maps (city, Baltimore County and Anne Arundel County so far).

What would you find most helpful?

Posted by Jamie Smith Hopkins at 1:00 AM | | Comments (3)
Categories: Resources for new buyers & owners

December 8, 2010

Don't get surprised by this property-tax rule

Maryland caps annual property-tax increases for people who live in their homes. But there's an exception for sizable home improvements -- and you really don't want to find out about it after you're on the hook.

Normally, the state's Homestead tax credit kicks in once you hit your second July 1 in your property. That means your property-tax bill can increase only up to a certain amount every year -- 4 percent in Baltimore and Baltimore County, for instance. (Full list here.)

But if you've made more than $100,000 in improvements to the property, the Homestead cap doesn't shield you from the taxman. Even if you didn't make the improvements yourself but instead bought a recently spiffed-up home that the state hasn't already reassessed, you could end up with a sizable tax hike a few years down the road.

That's the sort of thing you want to budget for. Here's how the exception works:

Continue reading "Don't get surprised by this property-tax rule" »

September 27, 2010

Got a credit score under 620? Good luck getting a loan, Zillow says

If your credit score is under 620, don't expect to get a mortgage until your financial situation improves.

Zillow, the real estate site that also runs a "mortgage marketplace," says few would-be homebuyers with a score in that subprime category get even one loan quote in response to their requests. That's true "even if they offered a relatively high down payment of 15 to 25 percent," the company says.

Nearly three in 10 Americans fall into that under-620 group, Zillow says.

It analyzed 25,000 loan quotes and purchase requests made on the mortgage marketplace in the first half of September.

Here's how quoted rates varied for people with higher credit scores:

Continue reading "Got a credit score under 620? Good luck getting a loan, Zillow says" »

September 23, 2010

A property-tax reminder for new buyers

A colleague of mine had an unfortunate new-homeowner surprise this summer: She got her first full fiscal year property-tax bill, and the monthly cost is a lot higher than she expected based on the taxes she paid for part of the last fiscal year.

She's hardly the first to be caught off guard, thanks to the state's complex Homestead tax credit.

I did a post recently that explains how you can calculate your property-tax bill in advance to avoid a shock come July 1. But here are more details on how the Homestead credit works, since it seems to be a frequent point of confusion.

The Homestead credit is really a cap: It limits the annual increase in owner-occupants' taxable assessments, thus limiting the increase in your property-tax bill as long as rates don't change. The Homestead ceiling ranges across the state. It's 4 percent in Baltimore and Baltimore County, for instance, which means you can't see more than a 4 percent increase in the portion of your assessment you're taxed on in any one year.

There are four exceptions to the rule, the state assessors say. The cap lifts for a year if the previous assessment was "clearly erroneous," if you successfully request a zoning change that increases the property value, if you make a substantial change to the property (rehab it, for instance) or -- and this is the one that comes into play for new buyers -- if the property transfers to new ownership.

Continue reading "A property-tax reminder for new buyers" »

September 22, 2010

Home-purchase help

Homebuyers: Are you aware that a variety of state and local programs offer closing cost and down payment help?

Personal finance columnist Eileen Ambrose offers details -- who's offering, whether the money is a no-interest loan or a grant, and what you have to do -- in this story.

August 20, 2010

Busting a myth about Md. property-assessment appeals

Psst ... better not appeal your property assessment -- the state will take away your Homestead tax credit!

It's a persistent rumor. Like many persistent rumors, it has a bit of truth all twisted out of shape.

You have to understand how the Homestead tax break works to see why this could be true, depending on the circumstances, but not in the "if you dare question us we'll show you" way that some homeowners assume.  

Here's the bottom line: If you were eligible for the tax break before you appeal, you're still eligible afterward -- but the value of your credit might drop to zero if you convince the state to lower your assessment in a big way.

Trust me, this isn't bad news. Read on to see why.

Continue reading "Busting a myth about Md. property-assessment appeals" »

August 18, 2010

Real estate closing costs on the rise

If you got a "good faith estimate" for a loan last year and again more recently, the  closing-cost figure probably went way up.

Closing costs -- minus taxes -- are about 35 percent higher on lenders' good faith estimates in Maryland and nationwide this year, says in its annual mortgage fee survey.

Some of that jump is actual, honest-to-goodness increase. But a big part of it, Bankrate says, is more honesty. Or at least more careful calculation.

"Before this year, lenders were not penalized for underestimating fees in the good faith estimate. Now they are penalized for lowballing fees," the company says, referring to a federal rule that went into effect Jan. 1.

Maryland's closing costs
, not including taxes, average $3,402 for a $200,000 loan, according to Bankrate's survey of lenders. That ranked the state 15th lowest.

Continue reading "Real estate closing costs on the rise" »

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (14)
Categories: Closing costs, Resources for new buyers & owners

August 10, 2010

State program ups its down-payment help

The state-run Maryland Mortgage Program is increasing to $5,000 the down-payment and closing-cost assistance it makes available to its borrowers.

State officials also announced Monday that the mortgage program's interest rate is being lowered to 4.25 percent, the second recent drop.

The down-payment and closing-cost assistance -- which had been $3,500 -- comes in the form of a no-interest loan that's paid back when you sell the home, refinance or pay off the mortgage. It's known as DSELP, for Downpayment and Settlement Expense Loan Program.

Other programs provide additional assistance on top of that money, such as House Keys 4 Employees, an employer-help initiative. (Here's the list of participating employers.)

The mortgage program requires borrowers to attend a homebuying workshop, so include that in your buying timeline if you want in. Most of the Baltimore region has specific housing-counseling requirements, listed here.

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (0)
Categories: Closing costs, Resources for new buyers & owners

August 2, 2010

Maryland property tax rates -- what you'll pay

Property taxes might not seem like the most pressing issue to consider while you're searching for a home, but you'll definitely want to know what your costs will be before you buy. It's especially critical if you're planning to purchase near the top of your affordability range.

And remember, many sellers reap benefits from the Homestead tax credit, so you can't assume that your property-tax bill will in any way resemble theirs. (As Wonk reader mjm mentioned recently, "I saw a 74% increase.")

Here's the good news: It's not hard to calculate your bill for specific homes. Look up the property assessment record online. Divide by 100. Then multiply by the rate in that jurisdiction. (The state's rate is $0.112 for every $100 in assessed valuation, so you'll want to take that into account, too. Just add the state rate to the county rate before you multiply.)

EDIT: Montgomery County resident Louis Wilen notes that Montgomery has a property-tax lookup so you can find out what you'll pay for specific homes. A good thing, since the county's tax schedule is VERY complicated. More on that in a moment.

Wondering what homeowners pay if their property-tax assessments are exactly the same as their jurisdiction's average sale price? Read on:

Continue reading "Maryland property tax rates -- what you'll pay" »

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (23)
Categories: Property taxes, Resources for new buyers & owners

July 28, 2010

Is the Homestead tax credit a bad idea?

Edward L. Kennedy, a Perry Hall resident, qualifies for the Homestead tax break. That doesn't mean he likes it.

His credit for the condo he moved into three years ago is $85. His neighbors, who moved in several years earlier, is substantially larger. Thus his tax bill is nearly $800 more than theirs even though their condos have identical assessment values.

"Now if that’s not fair, I don’t know what is," said Kennedy, 83.

The Homestead credit caps the annual increase in owner-occupants' tax bills. That ceiling ranges across the state; in Baltimore County, where Kennedy lives, it's 4 percent. The idea behind it is to protect owner-occupants from huge one-year spikes in their bills, but it has the side effect of pushing more of the tax burden onto newer buyers.

"You're robbing Peter to pay Paul. I’m Peter,” Kennedy says.

As colleague Larry Carson pointed out in a story in 2005, the height of the housing boom, neighbors' tax bills can differ "sharply" under this system.

Continue reading "Is the Homestead tax credit a bad idea?" »

July 26, 2010

Buying a home in the Baltimore area for the first time?

If you're a first-time home buyer, or just buying a home in the Baltimore area for the first time, you might not know everything you need to know. Worse, you don't necessarily know what you don't know until it comes back to bite you.

A newcomer who got bitten inspired me to start collecting New Buyer 101 posts in one easily accessible place. I'll link them all to this one, adding more as they're written. Some are most helpful if you haven't bought yet, and others are intended as aids once you're already in your home. (Some long-time homeowners might find useful tips here.)

A number of readers suggested subject matter, and I'll be working through that list as I can. I'll happily take more suggestions (or requests) in the comments on this post.

One word of warning -- some of these posts were written a few years ago. I glanced through for outdated information or broken links, but please let me know if anything needs fixing. 

Here are the links:

Continue reading "Buying a home in the Baltimore area for the first time?" »

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
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