Success Stories

Howard County Realtors® Contest Closing Fee Increases in Trying Times

July 2020

During the early stages of the global pandemic, when the extent of the economic impact was uncertain but certainly catastrophic, the governing body of Howard County, Maryland was considering raising taxes on real estate transactions.  A proposed increase of both the local transfer tax and the recordation tax threatened to make it the state’s most expensive county for closing costs.  With critical research, a timely Call for Action, late-night public testimony, and the help of a REALTOR® Champion, the Howard County Association of REALTORS® convinced the County Executive and County Council not to raise one of the fees, and achieved a reduction on the other.

The dire proposals, which would have added an estimated $3,000 to the median home price of $435,000, were not coming from out of the blue, explains Lisa May, HCAR’s Government Affairs Director. There had been enough talk about raising the two closing fees over the past decade, that just last fall, HCAR used a REALTOR® Party Issues Mobilization Grant to commission an economic study to examine Howard County’s existing closing rates as they compared to the rest of the state, and to reveal potential effects if they were to rise. Written in a deliberately neutral voice, the report showed that Howard County’s rates were in-step with those of its neighbors, and not artificially low. When the pandemic reduced many of the county’s revenue sources, such as income tax, there was a natural scramble to fill holes in the budget, notes May – and the association was prepared with its recent data and analysis.

The report had already been presented to the County’s elected officials and policy staff, and when the County Executive targeted transfer and recordation taxes to bolster the county’s falling revenue, HCAR launched a Call for Action using the REALTOR® Party’s Advocacy Everywhere program. “It’s incredibly easy to use,” says May, adding that the sophistication of the program allowed them to offer members a choice of two messages to be sent to council members: one emphasizing the impact on homebuyers and the other on the broader economy in these uncertain times; both versions gave REALTOR® members the ability to customize the text with their own personal anecdotes and evidence. Because the pandemic was keeping county staff home from their offices, the CFA was limited to email messages – no phone calls. Still, in the two weeks leading up to the public hearing on the rate increase, 29% of HCAR’s membership had made their voices heard. May, along with colleagues from the building industry, the Chamber of Commerce, and the Apartment and Office Building Association, testified at the virtual public hearing, whose budget segment began well after 10 o’clock at night.

HCAR is fortunate that David Yungmann, a REALTOR® and former member of the association’s Executive Committee, had gained a seat on the Howard County Council in the last election.  May can’t stress enough how valuable it’s been to have him as a REALTOR® Champion: “He made it his mission to go through the budget personally and find enough offsets to balance it – without cutting County staff or raising transaction taxes.  He understood the issue inside-out, and did the heavy lifting for us.”

In the end, the proposed increase to the recordation tax failed to pass, and the transfer tax was raised from 1% to 1.25%, instead of 1.5%. “We were disappointed in that, but spared the worst,” says May, noting that it was the REALTORS®’ collective efforts that made the difference for property owners and prospective buyers.

To learn more about how the REALTORS® of Howard County are keeping closing fees from pricing would-be home buyers out of the market, contact Government Affairs Director Lisa May at 571-228-7385.

 

 

 

 

Post a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.