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6 Ways to Save Money Now by Refinancing Your Mortgage

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6 Ways to Save Money Now by Refinancing Your Mortgage

With the news focusing on the bad about the pandemic, they’re forgetting one important thing. Bringing you actual news that can help you or benefit you!

For example, interest rates are incredibly low right now. This makes it a prime time to refinance your mortgage.

Refinancing your mortgage is simply getting a new mortgage to replace your old mortgage. When interest rates drop, you are able to save in the short and long run by paying a lower mortgage interest rates. But that is only one reason to refinance your mortgage now.

Here Are 6 Ways You Can Save by Refinancing Today:

  • 6. Lower Interest Rates Means More Money in Your Pocket

    If you still have a lot to pay off on your loan, going with a lower rate will save you money because your monthly payments will be lower. This can help make life a bit less stressful if you’re having cash flow issues.

  • 5. Lower Interest Rates With Shorter Deals

  • 15 year mortgages are typically around ¼-½ % lower than 30 year mortgages. When refinancing rates are low, like right now, you can likely refinance and choose a shorter loan term and save in the long run.

  • 4. Refinancing to Pay off Debts

  • If you refinance and get a lower rate, you may also be able to take cash out.

    This cash can be used to pay off debts.

  • It can clear space on a credit card, reduce the risk of losing expensive items you’re making payments on, and help you with extra cash if you lost a job and need cash.

    Bonus tip – If you pay off credit cards at 24% to a lower interest mortgage rate, this strategy can save you a ton of money overall!

  • 3. Refinancing to Make a Needed Purchase

  • Just like paying off a debt, you can take the money and use it to buy a car, make an improvement on your home, or even apply it to start a business.

  • 2. Lower Monthly Payments

  • Just like in number 6, lower rates may lower your monthly payments and save you money in the long run.  This seems duplicate, but it is important so I want to add it again.

  • 1. Putting Cash In to Lower Rates & Payment Intervals

  • This may sound weird, but putting cash towards the balance of the loan when refinancing your mortgage can save you money.

    Please note that the numbers below do not reflect actual loan amounts.  I am using simpler numbers for example purposes only.

  • Suppose you inherit 50K and owe 125K on your mortgage. If you go to refinance for a lower rate, by putting money in the rate could drop even further. Here is how.

    If the rate on the refinanced 125K mortgage is 5%, and the rate on a $75K mortgage is 2.5%, by applying your $50K from the inheritance you could now only have to pay 2.5%.

  • By using this money to pay down your balance on the loan (interest free), you can save money in the long run.

As a bonus, did you know that you can choose who does your closing for your refinancing?  See, we made sure there are 6 options in this post as promised.

By choosing your own closing company, you can save even more. If you would like a quote from us, email us by clicking here or click here to learn about our closing services and fill out the form on the top of the page.

Tax Deductions for Real Estate Investors [Guide 2019 & 2020]

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Tax Deductions for Real Estate Investors

Sourcing deals, discovering reliable contractors and staying up on current renovation and rehab trends is tricky enough.  Finding tax deductions for real estate investors shouldn’t add to your stress.  And that is where we come in to help!

Below you’ll find tax deductions for real estate investors with the forms you’ll need and plain english explanations.  We’ll continue to update this guide so it is as current as we can make it, and so you’ll stay in the loop on how to save when it comes to your taxes.

If you know someone that will benefit from these real estate investor tax deductions, feel free to share this post with them on social media or in a newsletter.

Real Estate Investor Tax Deductions Guide:

1031 Exchange – Capital Gains Tax Savings

When you invest in and subsequently sell property, any profits made from that transaction are considered capital gains and become part of your taxable income.

However, Section 1031 U.S. Internal Revenue Code, often referred to as the 1031 Exchange, allows investors to avoid capital gains taxes when they use the proceeds from the sale of an investment property to reinvest in another property.

To leverage this deduction, you must identify a like-kind property of interest within 45 days of selling the previous property and invest in the new property within 180 days.

Tax forms requirements:

  • Form 8824
  • Form 4797/Schedule D
  • Form 6252

Click here to read about the ins and outs and how to use a 1031 exchange.

Rental Property Depreciation

Depreciation is often described as the loss of value in a property, particularly due to wear and tear over time.

Real estate owners and investors who choose lease or rent property to consumers or businesses can leverage depreciation as a deduction, but the nature of it shifts slightly from the general definition of depreciation.

In this case, property owners and investors can deduct the costs associated with purchasing and improving a rental property.

To deduct depreciation, you must own the income-producing property and the property must be available and ready to rent.

Tax forms requirements:

  • Schedule E (Form 1040/1040SR)
  • Form 4562

Client Gifts

Though the cost of client gifts can be deducted, business owners can only deduct up to $25 per gift, even if the gift exceeds that amount. If you intend to deduct these types of gifts, it’s important to keep detailed records that support your claim.

Keep in mind that the Tax Cuts and Jobs Act (TCJA) adjusted tax code regarding entertainment deductions. If you’ve claimed entertainment as gifts in the past, you may need to update your approach.

Now, entertainment gifts are only considered as such if you do not attendant/participate in the event with the client. If you attend/participate, it is considered an entertainment expense and cannot be deducted.

Potential tax form requirements:

  • Schedule C (1040/1040-SR) to claim as a sole proprietor
  • Schedule E (1040/1040-SR) to claim as partnership or s corp

Property Losses (passive income)

Under the U.S. tax code, rental income is considered passive income, and thus losses from that income are passive losses.

Basically, if your real estate property or investment is a source of losses, you may be able to deduce those losses under certain circumstances.

If your AGI is $100,000 or less, you can claim up to $25,000 in property losses. If you make between $100,000 and $150,000, you may still be able to collect but deductions will be gradually reduced.

It’s also important to note that, according to the IRS, property loss deductions are not available to anyone who “[holds] any interest in a rental real estate activity as a limited partner or as a beneficiary of an estate or trust.”

Potential tax forms requirements:

  • Form 8682
  • Schedule E (Form 1040/1040-SR)
  • Schedule K-1 (1040/1040-SR)
  • Form 4835 (Farm rentals)

Self Employment Taxes

Self-employment tax consists of social security tax (12.4%) and Medicare (2.9%). For some self-employed individuals, that can turn into a considerable tax bill each quarter.

Fortunately, self-employed real estate professionals can deduct 50% of their self-employment tax.

Potential tax form requirements:

  • Schedule SE (Form 1040/1040-SR)
  • Schedule 1 (Form 1040/1040-SR)

Self Employed Health Insurance

Self-employed individuals that report a net profit can deduct their health insurance premiums, including those paid to cover premiums for their spouse, child/children (under 27), or other dependents. This includes both medical benefits and dental benefits. If you don’t report 100% of your premiums paid, then you may be able to include medical expenses as itemized deductions.

Potential tax form requirements:

  • Schedule C (Form 1040/1040-SR)
  • Schedule K-1 (Form 1065)
  • Schedule A (Form 1040/1040-SR)

How Real Estate Agents Can Save on 2019 & 2020 Taxes

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real estate agent tax deductions

If finding deals and buyers wasn’t tricky enough, as a sole proprietor and real estate agent you also must navigate the tricky federal tax system.  Good news, you are not alone in this!

Below you’ll find a list of the top tax deduction rules specific to real estate agents and professionals.  As a bonus we’ve also included tax-saving tips that you can use to pass real estate tax savings on to your clients.

Click any of the links below to skip to the section that will walk you through the options, share which forms you may need and also help you learn how to save on your taxes as a real estate agent.  If you know someone who could benefit from this list, share it with them on Facebook or your other social media channel of choice.

Real Estate Agent Business Tax Deductions

Home Buyer and Seller Tax Programs

Real Estate Agent Business Tax Deductions

Home Office Expenses

If you use all or part of your home for business purposes, you may be able to deduct several related expenses, including insurance, internet costs, utilities, repairs, and even mortgage interest and depreciation.

To be eligible for this deduction, your at-home business practices must fit into one of two categories:

  • Regular and exclusive use, which means you use part of your home for business and nothing else (e.g., you wouldn’t be able to deduct home office expenses if your office also doubles as a den or family room).
  • Principal place of your business. In this case, even if you conduct business outside of your home, if you also conduct a significant amount of regular business inside your home (e.g., client meetings, patient visits, etc), you’ll be able to deduce home office expenses for the home or specific structures, like a garage or studio.

Potential tax form requirements:

  • Form 8829
  • Schedule C (Form 1040/1040-SR)
  • Schedule A (Form 1040/1040-SR)

Client Gifts

Under current tax code, business owners of any type can deduct up to $25 per client gift, even if the cost of that gift exceeds $25. In addition, the Tax Cuts and Jobs Act (TCJA) also now states that entertainment gifts can only be claimed as such if the giver does not attend the event with the recipient. [Read more…]

Real Estate Agents Are Essential Heroes During Covid-19

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Real Estate Agents Heroes
When we think of the heroes right now, they are visible people like Nurses and Doctors, the grocery store worker stocking shelves, the trash collectors, and the delivery person helping to keep restaurants afloat.  But there is one professional that is being overlooked.  Real Estate Agents.

Real Estate Agents provide essential services you probably aren’t thinking of right now.

Agents are essential because they are saving people’s lives and helping to prevent others from losing their homes as bills pile up.  Not to mention the 50,000 americans who need/needed to find housing solutions last minute as they repatriated during the outbreak.  Not sure what I’m referring too?

Here are six examples of how real estate agents are saving lives during Covid-19 by being the eyes and ears of their buyers and sellers.

  1. People Facing a Pre-existing Foreclosures

    Before the “stay home” and social distancing orders started, people were being foreclosed on.  The only way to avoid foreclosure and have a bit of money to continue with your life is through selling your house before it can be auctioned off.

    With an experienced agent, these people can move their homes and have one less thing to worry about during Covid-19.

  2. Escaping an Abusive Spouse

    Domestic abuse is a problem.  Being trapped at home with the abuser, especially if there are children involved, can be the final straw that gives the person enough courage to leave.

    By contacting a trustworthy real estate agent, the person who needs to escape can have the agent scout out apartment buildings and houses for sale or for rent by using their network privately.  Because the agent already has knowledge and a database, they can do this in secret so the abuser doesn’t find out.Now the person has a chance to escape, especially when they cannot safely look for a new place to live as the abuser is home with them and may catch them looking for a way out.

  3. If The Bread Winner Passes Away

    Whether it is from coronavirus or other causes, if the person that brought in the majority of the household income passes away, the spouse or family may no longer be able to afford their home.  If this happens to elderly people or someone who is “at risk”, attending open houses and shopping around for a deal is not an option.  This is where a real estate agent comes in.

    Real estate agents can and likely will take photos and video of the property.  The real estate agent will look for affordable options, and also use their skill sets to find the shopper a new home that they can afford.  Even better, that same agent can help sell the persons home and help them to get a fair or even better price than the seller would get on their own.

  4. Job Loss With Kids

    Jobs are being lost, but plenty of companies are also hiring.  If a person loses their job and is looking, or has already found a new job but it doesn’t pay as much, a real estate agent can help that person find a more affordable house or apartment in the same school district.

    Now the family does not have to leave the area they love living in and more important, their kids do not have to change new schools and make new friends.

  5. Covid-19 Potential Foreclosures

    Once the lockdown is over, bills are still piling up and not all banks or lenders are being flexible.  If it looks like someone is going into foreclosure, a licensed and talented agent will be able to spend time cutting deals now to sell their client’s home before it gets foreclosed on.  They’ll also be able to help their client find a new place to live.

    If it looks inevitable that you are going to lose your home, an agent can help protect you from losing everything and get to work now before foreclosure begins.

  6. The Elderly and At Risk People Who Cannot Shop In Person

    As we mentioned above, it is not wise right now for anyone to leave their home for unnecessary travel.  This is especially true for the elderly and people that are “at risk”.  Real Estate Agents are life savers for them.

    The agent can go to the new homes and live stream the property with a video walk through.  The agent can make sure all questions and answers are being asked, and the agent has access to title companies like ours that are doing eclosings so elderly and at risk people do not have to come in contact or engage with others which would endanger themselves.

Real Estate Agents are essential during pandemics and times of crisis.  If you haven’t thought of a real estate agent this way, then you are lucky enough to not be in these situations.  It is important to thank our doctors, nurses, EMTs, store clerks, waste collection specialists, and also to remember the other people out there risking themselves to help the communities around them.  That includes Real Estate Agents.

How EClosing & Remote Online Notary Services Work

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How E-Closing & Remote Online Notary Services Work

Ever since Virginia made it legal in 2012 to become a remote online notary public and notarize documents from real estate closings to wills, other states have been jumping on the bandwagon.  You can now legally sign and notarize documents virtually from any state, anywhere, except Iowa, even if you are not currently there.

If you’re selling your home in Texas but are vacationing in Las Vegas, Nevada, remote online notary (RON) can help you through this.  But how does it work and is it legal?

How Remote Online Notary Services Work (EClosings)

Remote notary services or eclosings can only work when you can verify both parties are legitimate and you have a way to record, sign and document the transaction.  That means you need a way to process digital signatures, record the transaction using both audio and visual recordings, and you must be able to verify the identities of all parties involved.

What is the process for a Remote Online Notary & Closing

The process is simple:

  1. All documents are submitted electronically and reviewed for accuracy.
  2. Once the documents are verified accurate, everyone will join a video and voice recorded meeting.
  3. Each person involved in the transaction will authenticate through a secure platform to verify they are the right person.
  4. Now that everything is verified and all parties agree to the terms, electronic versions are sent for signing, recording and notarizing.
  5. Once notarized, electronic versions are securely stored, and sent to all parties.  

Can I get a printed version as well?

[Read more…]

Title, Escrow & Closing Services Open During Covid-19 in VA, MD & DC

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Title, Escrow & Closing Services Open During Covid-19 in VA, MD & DC

Covid-19 is something we are taking very seriously.  That’s why we prepared for virtual and in person closings years ago!  It is how we can remain open for business in Virginia, Maryland and DC while taking extra precautions for both you and your clients.  

Here’s How:

Virtual Closings!  

Almost all of our processes can be done securely and online while following ALTA best practices.

  • Secure and encrypted file transfers
  • Utilizing Notarize.com or private and recorded video conferencing in Jurisdictions that is allowed in
    • ALTA is working on passing an emergency bill to allow RON (Remote Online Closing) for the entire USA this week.
  • Using e-recordings 
    • Our underwriters are offering GAP Coverage in counties where the courthouses do not provide e-recording, so we can close and fund on time. 

The process is simple:

  1. We email each party the closing documents with instructions.
  2. The parties will submit all needed documents like a license and ID.
  3. Next a video conference call is scheduled so we can record, document and verify identities.
  4. Electronic signatures and notaries finalize the deal.
  5. Post closing we will distribute the documents virtually or with print out options.  Whichever you and your clients prefer.  

If you prefer in person closings, we can accommodate this too!

The office is being sanitized daily.  we will also sanitize conference tables, chairs before and after each closing. We provide you with new pens before you and your clients enter the conference room.  

Your health and safety are our primary concern, and we will do our best to take care of you.

Let us know how we can help you with title insurance, escrow and closing services at any of our Maryland, Virginia and DC locations.

Call us at (703) 934-2100, or write to info@atgtitle.com and we’ll be ready to help!  You can also fill out the form on the upper right hand section of this page.

10 Tips to Sell Your Own House Fast

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Ways to Sell Your Own Home Faster

When selling your house by yourself is a popular trend, but without the guidance and experience of a licensed real estate agent you are going to face additional obstacles.  From their buying power with advertising, to knowing the right angles to display your home to a buyer, not why you love it, these are things you now need to consider.

But that doesn’t mean you cannot sell your house by yourself (although we do always recommend you contact a licensed real estate agent for some of the reasons above.).  You just need to be extra conscious of what a licensed agent would do, especially when it comes to listing your house and taking photos.

Below you will find ten effective ways to help you sell your own house fast.

  2. Take photos of the property, not the items you love with it.

    Don’t focus on what you love about the property, focus on the structure and land instead.  Your goal is to help the potential buyer discover the entire property and your photographs need to do this.

    For example, you know the story behind the amazing custom door or shutters you had hand crafted, or the unique feature you scrimped and saved for, but they’ll possibly be pulled once the house has a new owner.

    Instead of focusing on the features you love, focus on helping the potential buyer discover the entire property.  Start by making your photo show the pathway leading up to the door which creates flow.  The flow helps the potential buyers eyes look at the entire structure because there is movement around the image and not a specific feature that you personally love.

  3. Set A Realistic Price Point

    Remember, you will value your house higher than what it is worth.

    It is built into our nature as people who are attached to our homes. This higher price point will likely turn off potential buyers and extend how long it takes to finally sell your home.  You may end up needing to lower the price in the long run anyways.

    Don’t be scared to price a bit lower than what you want.

    If you can get multiple offers, you hold the power and can get the buyers to counter each other if they really want your home.  This bidding war can result in you getting more than you expected and would have listed your house for.  Your goal is to get people into your home and make an offer, not price the highest and hope for the best.To price your house, start by:

    1. Researching how many homes that are the same size and age as yours are for sale in your area
    2. Look at Zillow, Redfin and other websites to see the price of similar homes in your neighborhood
    3. Compare your amenities, the age of the house, and how much work will be done when looking at these houses
    4. Calculate an average based on the above and use this as a starting point

    But keep in mind that if every home has a back patio, and yours needs repairs or work done, this lowers the value of your home compared to theirs.  The same goes for you being in a better school district if the neighborhood is split. If the school is a selling point, you may get more money.

  4. Write About the Experience of Living There and The Space, Not Why You Love It or Your Own Experiences

    Instead of talking about why you love a specific room or part of the house, write about the experience the person will have living there.

    Don’t say: “One of my favorite things is sitting on the back patio and enjoying the sunset with friends”. This is about your experience.
    Do say: “You’ll love relaxing every evening with stunning sunsets from your back patio”.

    Don’t say: “This nook was a perfect escape from city life where I read and relax”.
    Do say: “This room features a corner nook that can be padded for a seating area to escape city life.  It is also perfect for storing books, placing plants to bring life to the room, or whatever your imagination can think up.”

  5. Plan Extra Budget for Marketing & Advertising

    Normally your real estate agent spends their own money to bring people to your home.  Posting to free and classified sites is hit or miss strategy and probably not going to be effective for you.

    To get real traffic you need to pay for space where you will get qualified buyers to come to your home.  But you won’t always find potential buyers with the first round of ads.

    Plan to buy multiple ad spaces.  You should also budget to keep them over multiple months because your house might not sell immediately.  By purchasing multiple months at once you will be able to negotiate a better rate for the ad space.

  6. Power Wash Sidewalks, Patios, Walkways and Driveways Before Taking Photos.

    Dirty or stained walkways and spaces are a huge turn off and mean more work for the new owner.  Hire someone or rent a power washer and clean anything dirty or stained before you take your listing photos.  Then clean them again before the first open house.  Not only will everything look cleaner, it is one less hassle for the new owner.

  7. Remove All Signs of Pets

    Dog houses, stakes in the yard, or other items which show you have pets can be a big turn off for potential buyers.

    Whether it is allergies or they imagine the house will smell like cat, dog, or rabbit, you may stop a serious buyer from looking at your home.  To someone else, a pet means extra bills having the house cleaned to rid it of allergies and “pet smell”.

  8. Eliminate Kid Structures Too!

    If there is a swingset or signs of kids, make sure the selling point of the property is proximity to elementary schools or other amenities young families will want.  Not families without kids and high schools.

    You have memories of your children playing, but a swing set is not appealing unless the people moving in have little children. That jungle gym now becomes an extra expense and hassle they have to get rid of.

    If a selling point is an elementary school or a neighborhood with parks, daycares and younger families, then talk about how new the swing set is and make it an asset and benefit.  But be careful because this can backfire easily.

  9. Set Clear Times For Open Houses

    Open Houses are one of the most important tools you have to sell your home.  But make sure you are clear and concise. If people have trouble finding when and where your open house is, or how to get in contact with you if they’re lost, you may miss out on a potential buyer.

    (Pro tip: Do not let anyone in late.  If you are by yourself, this could be someone planning on attacking you.  Stay your ground.  Your open house hours are the set hours.  Nobody before and especially nobody after.)

    Make sure to include:

    • The days and times you’ll be doing an open house
    • The exact street location which can be clicked and opened in a map from a phone
    • A phone number the person can call you on if they’re lost or running late
    • Directions from major surrounding areas
    • Ways to identify your home if others look similar (a balloon or sign out front)
    • The dial up number if there is a call box

  10. Have Adult Friends & Family With You

    This one isn’t technically for your listings, but it is one we feel is very important.

    Inviting strangers into your home is dangerous.  Have friends there to help and monitor activity.  Make sure you are never alone in the house while strangers are there.  Before your friends leave, do a full walk through with them and make sure all people have left.

  11. Do Not Hide Flaws or Repairs That Need Done

    The goal is to sell the property like it isn’t your home.  Don’t hide the flaws or be embarrassed by them. They will be discovered as inspectors walk the property.

    If flaws like scratched floors or cracked baseboards are discovered later on, this will lower the price and cause you more frustrations.

    This isn’t going to be your home so nobody will be judging you.  Let these flaws be found. You’ll be able to sell the house faster and have less chance of a deal falling through at inspection.

Remember, your goal when you sell your house by yourself is to create an environment that a potential buyer can picture themselves in and want to purchase.  Take your own emotions and biases out of the process and you may be able to move your home faster.

Which Closing Costs Are Paid By The Buyer & The Seller.

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Closing Costs What The Buyer Seller Need to Pay

Closing costs are the fees associated with buying and selling a home. They may be incurred by either the buyer or seller. Here’s what you should know about the various fees and whether the buyer or seller pays. 

Closing Costs For Homebuyers

Aside from the down payment and earnest money the buyer is responsible for most of the closing costs. Some of the fees can be negotiated and the amounts can vary based on the state, lender, and mortgage type.

Buyers typically pay for property-related fees including the appraisal fee, home inspection fees and loan-related fees. These include the application fee, attorney’s fees, and mortgage broker fee.

Other closing costs for buyers are:

  • Credit report fee. 
  • Origination fee, also known as the underwriting fee or processing fee. This pays for administrative services when making the loan, including document preparation and notary fees.
  • Discount points. Each point is 1% of the loan amount. Points can be paid at closing to lower the interest rate on the loan.  
  • Flood determination. If the property is located within a flood zone, flood insurance will need to be purchased.
  • Document preparation fee.
  • Mortgage insurance fees. If the buyer is paying a deposit of less than 20% they are often required to get mortgage insurance.
  • Property taxes. Usually between 2 and 6 months of county taxes.
  • Annual HOA fee and HOA transfer fee.
  • Pest inspection.
  • Escrow deposit. Depending on the lender you may be required to pay 2 months of property tax and mortgage insurance. 
  • Homeowner’s insurance. Lenders often require the premium for 1 year to be paid.
  • Transfer tax.
  • Title fees, including search fees, lender’s title insurance, and owner’s title insurance. 
  • FHA, VA and USDA fee. If the loan is through the Federal Housing Administration the buyer is required to pay FHA insurance premiums and an upfront payment of 1.75%. If the loan is through the Department of Veterans Affairs or the USDA the buyer pays a guarantee fee.

Closing Costs for Home Sellers

The fees that the seller is responsible for can vary greatly from sale to sale. Buyers will often negotiate to have the seller pay some or even all of the closing costs. One fee that sellers always pay is the real estate commission which is usually 5% to 6% of the selling price. 

Negotiable closing costs for home sellers

Almost all fees are negotiable and may be paid by the buyer or the seller. What the seller pays is largely dependent on how motivated they are to sell.

For example, if the seller has had their property listed for a long time and hasn’t had many offers they may choose to pay most or all of the closing costs. On the reverse, if the seller has just listed a property in a desirable neighborhood and has already had several offers they are less likely to agree to pay any of the closing costs.

Closing costs with a cash sale

When paying cash for a property, some of the fees are eliminated. When paying cash there’s no need to pay lender associated fees such as the credit report fee and the origination fee. 

Now that you know which closing costs the buyer and seller are responsible for, you should be ready to go to your closing.  If you have any questions about closing costs, title insurance, or escrow services, or click here to email us and we’ll be happy to assist.

Maryland Critical Areas, Landscaping & Your Home – What You Need to Know.

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critial areas in maryland and what you need to know about landscaping and your home

Are you looking to buy a gorgeous waterfront property or invest in and flip something along the Chesapeake Bay? If so, you likely have questions about critical areas in Maryland, specifically what you can and cannot do when it comes to landscaping and natural vegetation.

Let’s face it, part of the experience of living on the water is the view, and this guide to real estate and Maryland critical areas will help answer your questions.

Before we jump in, it’s important to understand what constitutes a critical area in Maryland. According to the Maryland Department of Natural Resources, a critical area is considered to be land “within 1,000 feet of Maryland’s tidal waters and tidal wetlands.” This includes property that exists along some of Maryland’s most famous waterways, like the Chesapeake Bay.

Note: If you have your eye on a Maryland property, then you’ll need to determine if it’s protected under the Critical Area Program. To do so, you can contact the Planning and Zoning office for the jurisdiction in which you plan to build. Physical maps of Critical Area Program land should be available in the office, though many jurisdictions now offer electronic maps online. For instance, if you’re considering investing in property in Annapolis, you can review the critical land map for Annapolis on the government’s website.

However, we also recommend that you contact the title company to find the most recent boundaries and line surveys. They can help you locate information specifically relevant to building within the Critical Areas of Maryland.

Often times, you can still build and invest in property within a Critical Area, but you will need to adhere to some rules and regulations, many of which have to do with buffers.

Buffers, which are often composed of shrubs, plants, and trees, help to minimize the impact that man-made structures, like buildings and paved areas, have on the Critical Area. Buffers are adjacent to the critical area land and typically at least 100 feet wide, though some can be 300-ft or more. In this case, it’s also helpful to contact a title company to determine the width requirements of a Critical Area buffer as it relates to your property.

When you build or invest in a property in a Critical Area of Maryland, it’s important to make sure you meet all the local and state requirements. Here are some common questions and concerns that home buyers and real estate investors frequently have when it comes to Critical Area requirements as they relate to building and landscaping.

Can I remove a tree if it blocks my view of the water?

If the tree is not located in a buffer zone and you plan to plant new trees, you can typically remove a tree after requesting approval from the local planning office. If the tree is in the buffer zone and otherwise healthy, it cannot be removed. [Read more…]

What a Title Commitment is & When You Need One

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What a Title Commitment is & When You Need One

A title commitment is a document from a title company that says the property you are buying will be able to have a title insurance policy after you close the sale.  The document you are provided with contains the same information that will be include in the actual title insurance policy, but it is not underwritten or ratified so it is not official or legally binding.  That is the main difference between a title commitment and title insurance policy.

A title commitment is also a bit different than a marketable title in that it does not guarantee there will be zero issues with the deed to the property you are buying.  It just says that you will be able to have an insurance policy on the property.  This also does not mean that the title insurance policy will cover everything, but we cover that in a minute.

Now that you know what a title commitment is, you may be wondering if there are other differences between this document and your actual insurance policy.  Maybe you want to know if a title commitment is required by law, or just for a peace of mind when you’re going through the stressful home buying process.  Don’t worry, we’re ready to help with the frequently asked questions and answers about title commitments below.

Is a Title Commitment Required By Law?

No, title commitments are not required by law, but if you are buying a home, your agreement will probably require that the seller provides you with their title insurance policy.  Also, if you are taking out a mortgage, the lender may require you get a title commitment before they sign the final documents to give you the loan.

The document will also contain all of them items that your insurance policy will not cover, which is another reason why title commitments are important for you to have in order to have a successful and easy closing.  As a bonus tip, having the commitment show exactly what is not going to be covered can also help you make a more informed decision on if you should buy the property or not.

Is a Title Commitment the Same as Title Insurance?

No, title insurance is the legally binding agreement that you get after the closing of a property sale.  A title commitment just says that a title insurance company will agree to provide you with a policy after you close.  There are also two types of insurance policies.  You can read about the difference between a lender’s and owner’s title insurance policy here.

What is a Title Commitment Form & What Do I Look For?

This is the form that is normally provided by ALTA.  It is a standardized document that all title insurance companies will be able to access and provide you with.

The most important things to look for on the form are what is not going to be covered by your policy, and what potential issues could arise if you move forward with your purchase.  The issues themselves are what can cause a deal to fall through, or if it is from the seller, what potential issues you may inherit.  These include encroachments, claims on your property, liens, debts owed, incorrect boundary lines, improper zoning and easements to name a few.

Title commitments are important because they give a mortgage company or bank assurance that the investment will be covered, help you feel confident in your purchase because you have more insight into potential issues with the ownership of the property, and help close the deal faster because it lets all parties know that a policy is able to be issued.

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