Real Estate Information

What is the Homeowners' Property Tax Credit Program? The State of Maryland has developed a program which allows credits against the homeowner's property tax bill if the property taxes exceed a fixed percentage of the person's gross income. In other words, it sets a limit on the amount of property taxes any homeowner must pay based upon his or her income.

How Is "Income" Defined? For purposes of the tax credit program, it is emphasized that applicants must report total income, which means the combined gross income before any deductions are taken. Income information must be reported for the homeowner and spouse and all other occupants of the household unless they are dependents or they are paying rent or room and board. Income from all sources must be reported whether or not the monies received are included as income for Federal and State income tax purposes. Nontaxable retirement benefits such as Social Security and Railroad Retirement must be reported as income for the tax credit program. Generally, eligibility for the tax credit will be based upon all monies received in the applicant's household in a given year.

What Are The Other Requirements? Before your eligibility according to income can be considered, you must meet four basic requirements

• You must own or have a legal interest in the property.

• The dwelling on which you are seeking the tax credit must be your principal residence where you live at least six months of the year, including July 1, unless you are a recent home purchaser or unless you are unable to do so because of your health or need of special care.

• Your net worth, not including the value of the property on which you are seeking the credit or any qualified retirement savings or Individual Retirement Accounts, must be less than $200,000.

• Your combined gross household income cannot exceed $60,000.

How Is The Credit Figured? The tax credit is based upon the amount by which the property taxes exceed a percentage of your income according to the following formula: 0% of the first $8,000 of the combined household income; 4% of the next $4,000 of income; 6.5% of the next $4,000 of income; and 9% of all income above $16,000.

* For each additional $1,000 of income above $30,000, you add $90 to $1,680 to find the tax limit. Your combined gross household income cannot exceed $60,000. Example:If your combined household income is $16,000, you see from the chart that your tax limit is $420. You would be entitled to receive a credit for any taxes above the $420. If your actual property tax bill was $990, you would receive a tax credit in the amount of $570 --- this being the difference between the actual tax bill and the tax limit.

What Other Limitations?

• Only the taxes resulting from the first $300,000 of assessed valuation.

• It does not cover any metropolitan or fixed charges for water and sewer services that may appear on the tax bill.

• If an applicant owns a large tract of land, the credit will be limited to the lot or curtilage on which the dwelling stands and will not include the excess acreage.

• If a portion of your dwelling is used for commercial or business purposes, the credit will be based only upon the taxes for that portion of the dwelling occupied by your own household.

How Does One Receive The Credit? Homeowners have to complete an application and file by May 1 and then will receive the credit directly on their tax bill or as a credit certificate issued at the same time the property tax bill is mailed. Persons who file later up until the September 1 deadline will receive any credit due either in the form of a revised tax bill or a tax credit certificate to be used in payment of the bill. Applicants filing after May 1 are advised not to delay payment of the property tax bill until receipt of the credit if they wish to receive the discount for early payment offered in some subdivisions. A refund check will be issued by the local government if the tax bill was paid before the tax credit was granted.

What Happens If One Is Not Eligible? Whenever homeowners are found not qualified to receive a tax credit, they are informed in writing. The letter gives the reason for denial and what steps to take if further questions remain. The letter also explains how homeowners can appeal the determination of ineligibility to the local Property Tax Assessments Appeals Board. So, when you meet a potential buyer this is a great opportunity to share this information with them.

What buyer would not be interested in a way to reduce their annual tax bill? On the flip side, if you are the listing agent on an appointment for the first time, why not mention this to your sellers? If they are buying another home and can qualify for the tax credit, I am sure they would love to hear about a way to reduce their taxes too.

For more information on buying, selling or renting a home, please call DeHanas Real Estate Services at 301-870-1717.

In a recent article, The Natoinal Association of Realtos published a list of 8 Do's and Don't's when it comes to tenant screening.  It is worth broadcasting to anyone who owns rental property.  

In October, a Massachusetts landlord who refused to rent to pregnant women or families with minor children was found guilty of violating the federal Fair Housing Act and fined $40,000. The same month, the Fair Housing Justice Center in New York sued a landlord for allegedly quoting higher rental rates to black prospective tenants, rejecting applicants with public rent assistance, and making children undergo unnecessary lead tests. Five months earlier, a federal jury in Montana fined a landlord $37,000 after she charged a disabled tenant $1,000 to have a service animal. Cases such as these are stark reminders for property managers and landlords that neglecting to follow antidiscrimination rules designed to protect renters can come with big consequences.

You know the fundamentals of fair housing: You shouldn’t ask any questions or base any housing-related decisions on an applicant’s race, color, religion, sex, national origin, disability, or familial status, and you mustn’t promote a property in terms such as “great building for single professionals.” But knowing the law and complying with it are two different things, which can be made difficult by the continual evolution of case law related to housing discrimination. Tenant screening provides a first line of defense against discrimination complaints. That’s because differences in factors such as an applicant’s income, employment, references, and credit histories can help justify the selection of one tenant over another and thereby help landlords avoid discrimination charges. Here are eight recommendations for using the screening process to keep discrimination lawsuits at bay.

~DO apply your policies and procedures uniformly. Avoid running a full tenant screening report on some applicants and only a credit check on others. If you have a policy of renting to applicants with the best credit, don’t make an exception for a would-be tenant with a better personality but a less positive credit report. Be consistent or be vulnerable to discrimination complaints.

~DON’T get too personal on rental application forms. Ask about jobs, previous addresses, income, and references. But stay away from specific questions about spouses or children, as well as other protected characteristics under the Fair Housing Act. (You can provide space for an applicant to list all the individuals who would be living in the apartment.) Even asking the question may give the impression that you would limit housing access based on the answers.

~DO choose a “colorblind” screening service. Some services have a scoring system that enables landlords to establish their preferred tenant profile based on specific parameters, such as income, past evictions, and credit score. The software then evaluates each applicant according to the criteria and returns a “recommend” or “not recommend” verdict completely independent of race, religion, or other potentially discriminatory factors. This ensures that applicants are evaluated equally, providing a strong defense, assuming you follow the software’s recommendations.

~DON’T automatically reject an applicant with a criminal record. In 2016, the U.S. Department of Housing and Urban Development issued a memorandum on housing providers’ use of arrest and conviction records to make housing-related decisions. According to Jodie McDougal, a partner at the Davis Brown Law Firm in Des Moines, Iowa, these guidelines mean that you cannot have blanket policies excluding all applicants who are felons or consider arrest records. Instead, you should perform a case-by-case evaluation. Read McDougal’s explanation and recommendations.

~DO stay abreast of new developments affecting screening. One of them is a pending amendment to the Fair Credit Reporting Act, introduced in Congress last August. Currently, eviction reports used in the tenant screening process can include records dating back seven years. Under the proposed amendment, called the Tenant Protection Act, only eviction records no older than three years and resulting in a judgment that is not being appealed would be allowed. Use of older records would be viewed as discriminatory.

~DO keep all documentation for up to 10 years. That includes rental applications, signed releases, tenant screening reports, and any other data or documents collected during the screening process—even if you don’t rent to the applicant. This information may be crucial if a rejected applicant questions your denial or selection of a different tenant. A paper trail can help you prove that the person was not denied residency based on discrimination but because a more qualified tenant was selected instead.

~DO send a declination letter when rejecting a potential tenant. This document, also called an “adverse action letter,” specifies the reason or reasons for rejecting a rental application, such as income, employment, or credit history. Some screening services provide free declination letters with all the federally required language, along with a checklist of legitimate reasons for turning down a candidate.

~DO call your attorney when in doubt. With new legal challenges and decisions coming out on a regular basis, it’s wise to have a legal resource you can turn to with questions. Find an attorney who can periodically review your rental application form to make it sure it complies with the latest antidiscrimination requirements. It will help prevent you from making a mistake that may land you in court.

For Property Management Services call DeHanas Real Estate Services at 301-870-1717.  We also offer eviction services on rental properties we manage.

If you're planning to purchase a horse, you probably already know how much you're willing and able to spend. But the purchase price is just one part of the cost of a horse. In fact, the cost of owning a horse can range dramatically depending on the breed, age and disposition of your horse, where you live, where you plan to keep the horse and what type of work you plan to do with your new friend. Before you buy a horse, know what you have in your monthly budget.

Do your research to determine you have enough financial resources to own a horse. Your local 4-H Cooperative extension can offer some valuable insight, and point you in the right direction. The easiest way to keep the cost of a horse low is to board him on your own property. However, if you live in an urban area or don’t have the facilities to properly board and pasture a horse, you'll need to find a stable in the area that can keep him. Southern Maryland is home to hundreds of farms, many with horses. Boarding a horse can cost anywhere from $100 up to $500 a month depending on the boarding environment (pasture or stable).

If you plan to keep your horse on your own land, you’ll also need to consider whether the property is adequately equipped. First, you should check with your County zoning and planning office to determine if there are any restrictions for having horses. In Charles County, you must have 3 acres for the first horse and an acre per horse after that. You will also want to ensure you have the proper space for a barn, or someplace for the horse to stay in colder weather.

Most horse owners spend about $60 to $100 per month on hay, salt and supplements – and some spend much more, particularly if they feed grain. Maintaining your horse's hooves adds even more to the cost of a horse. Whether or not you plan to shoe your horse, you'll need to have a farrier check and trim his hooves every two months or so. This usually costs around $25 or $30. Add in shoeing, and you could pay $80 to $100 every two months. Routine medical care is an additional cost of owning a horse and includes vaccinations, de-worming and annual teeth cleaning. For a healthy horse, this can cost as little as $300 a year. However, if your horse gets injured or ill, you could pay hundreds or even thousands for a one-time treatment. Although you can't predict such expenses, prepare yourself for the possibility before you buy a horse.

If you are searching for horse property to purchase, DeHanas Real Estate Services can help. Call 301-870-1717 to begin your search.

Click here for a list of all available horse property for sale in Southern Maryland.

Undertaking a home renovation is stressful, even with the best contractors. Unfortunately, not all are trustworthy and many homeowners are scammed. In 2016, more than 32,000 scams were reported to the Better Business Bureau (BBB). On average, homeowners lost $1,400 from shady contractors, painters and repairmen, according to the BBB.

1. Verify the contractor’s license, insurance and at least three references. Make sure you ask for the contractor’s license number upfront. With this information, you can verify the license with your state. Also, ask for at least three references. Even a scammer may have had a couple projects go well in the past, so getting many references reduces the likelihood you’re dealing with one.

2. Ensure the contractor is an active member of a reputable industry organization. Vendors who are part of the National Association of the Remodeling Industry (NARI) and/or the National Kitchen and Bath Association (NKBA) must undergo a certain level of scrutiny to join, plus they pledge to uphold a code of ethics. This also demonstrates a level of commitment to their business and the industry as a whole.

3. Check the contractor’s reputation online. Even if you check a contractor out online, don’t be satisfied with a quick Google search. Make sure you look for news articles, read reviews and ask neighbors on sites like Nextdoor.com. Also, search the name of the company, the address, the owner and any other employees you meet.

You might not even realize you are damaging your home with these 4 mistakes:

1. Using glass cleaners on mirrors Spraying can lead to “black edge,” when liquid seeps beneath the reflective backing and stains your mirror. Instead, use a lint-free microfiber cloth dampened with warm water.

2. Using the wrong caulk There are as many caulks as there are glues, and you wouldn’t use a glue stick to fix broken pottery, according to HouseLogic. Similarly, you wouldn’t use silicone caulk on bricks because it’s made for non-porous surfaces. Check online or at a home improvement store to ensure you’re using the right caulk.

3. Over-mulching Mulch is great for your home, but don’t pile it on too thick. No more than 3 inches should do the trick. Otherwise, you may prevent water from reaching roots and suffocate plants.

4. Piling firewood against your exterior wall Firewood against the exterior wall of a house is an invitation for termites. Stack your wood at least 20 feet from your home

Many real estate deals are dependent on a home inspection, so it’s understandable that there can be a lot of nerves surrounding an inspection, especially for the potential buyer. Many of your clients may not know exactly what a home inspection entails or what to expect. Here are some top myths that may help them adjust their expectations:

6 HOME INSPECTION myths

1.   Having a license ensures a good home inspection. NOT TRUE! Not all states require licenses to be a home inspector and many of the standards vary widely. Make sure to verify other components of an inspector’s credentials, including past clients, years of experience and customer reviews.

2.  You can use a home inspection to identify problems that might be used as a tool to renegotiate the purchase price. NOT TRUE!  This is not the primary objective of a home inspection. The inspector’s professional service is one of unbiased, third-party education. They want to arm buyers and sellers with a good understanding of the physical condition of the home so they can make the best decision for themselves at that time.

3.  A home inspection tells you what your home is worth. NOT TRUE! An appraisal is intended to do this. An inspection also does not make any recommendations about whether or not to buy or sell the home—that is solely up to the client.

4.  All home inspection certifications and professional education are created equal. NOT TRUE! Some programs even offer certification online, without the requirement This article was provided by Pillar To Post home inspectors. For more information, go to pillartopost.com. BY THE NUMBERS It is recommended that a home be inspected every 10years, regardless of whether a sale is taking place. Source: The American Society of Home Inspectors to ever step foot inside a house and produce a real-time inspection. The best certification offers both in-class and hands-on training, as well as examination requirements. When choosing your home inspector, you want your clients to verify the reputation of the certificating organization.

5.  Home inspections are not needed for newly built homes or condos. NOT TRUE! Newly built homes or condos are just as much in need of an inspection as an older home. No home is perfectly built, and it’s best to have an inspector pinpoint potential issues or future repairs. Most inspectors can also give inspections during each construction “phase” of the property at various stages of development.

6.  Home inspections are solely used on the buyer’s side. NOT TRUE! Although most inspections are performed for potential buyers, there are many advantages to a pre-listing inspection for sellers. These include knowing about major issues before the house goes up for sale, increased negotiating power and garnering the best sale price. The American Society of Home Inspectors also recommends that a home be inspected every 10 years, regardless of whether a sale is taking place.

For additional information on obtaining a home inspection, call our office at 301-870-1717.

FHA insured mortgages serve a sector of the market that is not necessarily being met by other loan programs.

Securing an 80% conventional mortgage that doesn’t require mortgage insurance may be the lowest cost of financing but if the buyer doesn’t have 20% down payment, it isn’t really an option.

Securing a 100% VA loan doesn’t require a down payment or mortgage insurance but if the buyer isn’t a veteran with his/her eligibility intact, it isn’t an option either. There are conventional loan programs with as little as 3% down payment but they not only require mortgage insurance, they also require a credit score of 740 or above which may eliminate some buyers.

For these reasons, FHA is a viable alternative to about 20% of new and existing home sales. The Federal backing of these mortgages makes it easier for first-time and low-income buyers to qualify because the requirements are not as demanding.

They’re even more lenient towards buyers who have previously experienced bankruptcy, Foreclosure or a short sale. Finding the right mortgage for the right home is a team effort where both mortgage and real estate professionals work in harmony to get a buyer into their own home. Call us at (301) 870-1717 for a recommendation of a trusted mortgage professional.

General FHA loan requirements include:

• The loan is for primary residences only but can include two, three or four units.

• The property must be appraised by an FHA-approved appraiser.

• The property must be safe, sound and secure, in compliance with minimum property standards as defined by the U.S. Department of Housing and Urban Development.

• The borrower must be a legal resident of the U.S. and have a valid Social Security number.

• The minimum credit score of 580 with a down payment of at least 3.5 percent, or a minimum credit score of 500 with a down payment of at least 10 percent.

• The borrower may not have delinquent federal debt or judgments, or debt associated with past FHA loans. • The borrower must have steady employment history.

• Documentation is required if the down payment was gifted by a family member.

• The borrower must have a debt-to-income not exceed limits of 31% for front-end and 43% back-end ratio (some exceptions may apply).

• Any judgments or collections on the credit report must be resolved or satisfactorily explained.

For additional infomration on obtaining an FHA loan, call Bryan Pumphrey at Everbank at 301-399-0595, or call DeHanas Real Estate Services at 301-870-1717.

The last thing you want if you’re traveling these holidays is to worry about someone burglarizing your home. Use this check list to add some peace of mind while you’re out of town.

• Ask a trusted friend - to pick up mail, newspaper and keep yard picked up to avoid an appearance of being empty.

• Consider discontinuing your mail (USPS Hold Mail Service)

• Don’t post about your trip on Facebook and other social media until you return – some burglars actually look for this type of announcement to schedule their activities.

• Do notify police or neighborhood watch – especially if you’re going to be gone for more than just a few days. Let your monitoring service know when you’ll be gone and if someone will be checking on your home for you.

• Light timers make it look like someone is home – use several sets for different times to better simulate someone being at home.

• Do unplug certain appliances – TV, computers, toaster ovens that use electricity even when they’re off and to protect them from power surges.

• Don’t hide a key – burglars know exactly where to look for your key and it only takes them a moment to check under the mat, above the door, in the flower pot or in a fake rock.

These easy-to-handle suggestions may protect your belongings while you’re gone while adding a level of serenity to your trip.

Would someone really refinance their home and not take money out of it? Certainly, if they could get a lower rate, build equity faster and pay off the home sooner.

For people with extra cash available, this can be very attractive compared to the low savings rates being paid by banks.

In the example below, the current mortgage is 5% for 30 years after 48 payments of $1,342.05. The owner can refinance for 15 years at 3.37%. If they put $36,000 into the refinance, their payments will be slightly more but the mortgage will be paid off in 15 years. At that same point, if they keep the current mortgage, their unpaid balance will be $136,049.03. If you have a goal to get your home paid off and have the available funds, a Cash-In Refinance may be just the strategy for you.

To learn more, call DeHanas Real Estate Services at 301-870-1717.  Know someone looking to buy, sell or rent a home? Call DeHanas Real Estate Servoices today!

The Mortgage Debt Forgiveness Act, originally passed in 2007, was extended three times to protect homeowners from paying income tax on debt that was relieved due to Foreclosure, short sales or deed in lieu of foreclosure.

The law expired on December 31, 2016 and unless it is extended again, homeowners with debt relief in 2017 may be subject to tax.

A homeowner might feel a sense of relief without the obligation of a delinquent mortgage but just because the payments are no longer due doesn’t mean that there isn’t another obligation that replaces it. If a lender cancels or forgives debt, a taxpayer must include the cancelled amount in their income for tax purposes depending on the circumstances. The tax significance could be serious.

This previously allowed relief only applied to a taxpayers’ acquisition indebtedness of their principal residence which did not include second homes and investment property. The maximum amount was limited to $2 million of mortgage debt forgiveness or $1 million if filing separately.

Due to the serious consequences involved in short sales and foreclosures, it is advised that homeowners faced with this possibility should seek expert advice from their legal and tax professionals.

If you or someone you know is looking to buy, sell or rent a home, please call DeHanas Real Estate Services at 301-870-1717.

Be very leary of who you give your personal information.  It might not be going to the party you think it is going to. 

As a home buyer you are looking through Realtor.com or another home search site, and you come across a listing you would like more information on. There is a button in the ad that says "Contact Agent". When you click on it, you are required to leave your name and contact info. Are you expecting the listing agent to respond? Most consumers would say "yes". However, that is not the case. Realtor.com gives your information to multiple agents who have paid for your lead, and now you are talking to someone who has never even stepped foot into the property.

This week, I had a buyer tell me about their experience, and said "I thought I was contacting you. I don't understand why I have to work this other agent".

I called Realtor.com to see what I could do about this deceptive practice, and I was told I could either "buy a zip code or become a Pro member", and buy all my listings back for $1200 a month. 

In doing more research, I spoke with someone who paid the money to buy their own listings back, and learned that when the system was tested, the "consumer" still received multiple calls from other agents. As a Broker and business owner, ensuring that my clients and customers have a great experience when they contact us is my highest priority. In the case of Realtor.com. the consumer thinks they are getting one thing and they end up with a completely different and disappointing experience.