Love Your Home
A wise woman at a party at Eastern Market’s North Hall once told me that there are only two real emotions: love and fear. Anger, happiness, sadness and the rest – they all stem from either love or fear. The average person spends more than half their time at home, sleeping, grooming, doing laundry, watching TV and so on. You should love where you spend that time. Take a moment to acknowledge the four walls that hopefully keep you sheltered and safe. If you don’t, maybe it’s time to change your environment.
What Does a Title Company Do?
When you’re purchasing a home, the title company of your (the buyer’s) choice plays an essential role. They make sure you are buying a property that can be sold. For example, say you’re purchasing a home that’s part of an estate. Grandma has died, Grandpa has long-since died, and there are three direct heirs in other states who all want this place sold. Your title company will research the chain of legal ownership to make certain that the seller has the right to sell. The estate example may be clear-cut, or it may be surprisingly mired.
Let’s say Grandma got tired of Grandpa leaving his wet towel on the floor and his penchant for eating mung beans, so she kicked him out and they divorced (or didn’t). Grandpa had a family with another woman and forgot all about family number one. Grandma never bothered to have the deed changed to her name, so at Grandpa and Grandma’s death there are the kids from the original union and kids from the next one, and they’re not willing to talk to one another. Oh, and there was no will.
There could also be someone who shows up to the table as the husband in a deliberate foil to sell a couple’s home when her actual husband hasn’t agreed. There could be a huge lien on the property from prior work done and not paid for! You don’t want to pay for that, do you? Less interesting could be a clerical error in which someone failed to correctly enter deed information into the computer. It happens.
So, your title company protects you from purchasing a home that can’t legally be sold to you due to any number of things – mental incompetence, fraud, back taxes, etc.
The title company will order a location drawing or boundary survey, depending on your jurisdiction and other criteria. The location drawing is quicker and less expensive, but if there’s any issue, such as an easement or a question as to whether that parking area really conveys, please err on the side of the boundary survey. The title company charge is insurance, a one-time cost at the time of purchase. Don’t cheap out on it, and certainly don’t skip it!
Someone asked me about capital gains. I’m not a tax expert, so I can’t give advice about tax issues. I can say that capital gains taxes are on properties that have been held long-term. For sale of short-term property, the gains are counted as income, and the tax rate is as it would be for your current income, subject to income-level brackets, married filing jointly vs. separately, single, etc. It looks like the new tax law doesn’t change the formula for calculating whether or not capital gains on the sale of your principal residence are tax exempt. Gains of up to $250,0000 per owner ($500,000 for married couple filing jointly) are tax exempt IF the owner lived in the property for 24 of the previous 60 months before closing. Tax rules are subject to change, so check with your tax professional.
Where’s the Next Hot Spot?
People ask me where the next hot spot in DC will be. My crystal ball shows me that it’ll be in the vicinity of Capitol Hill, very easy to get to and from. I don’t see a gigantic chair or a big warehouse market. I do see a boat, though no water, and a cemetery. Does this remind you of Pee-wee Herman and the Alamo? Because I do detect Texas. Housing prices are steadily rising, though it’s largely under the radar because there aren’t fancy places to eat. You can get your driver’s license renewed with almost no wait time, though. Anyone know where this is?
Is there anything real estate-related that you’d like for me to explore? Email me about it and I’ll work it in. Please indicate if you wish your identity to remain a mystery.
Heather Schoell is a Capitol Hill REALTOR with Berkshire Hathaway HomeServices PenFed Realty and can be reached at the office at 202-608-1882 x111-175, by cell at 202-321-0874 or at firstname.lastname@example.org.