Selling and buying without an agent in District of Columbia

Who runs your closing

The District is a title and settlement jurisdiction. No law requires a lawyer to sell your home here, and residential sales close through a settlement or title company far more often than through an attorney’s office. Your settlement agent orders the title search, issues the title insurance policy, prepares the settlement statement, holds and disburses the money, and records the deed. The District regulates that role directly. Under D.C. Code section 31-5041.06, a title insurance producer providing escrow, settlement, closing, or indemnity deposit services must hold the money in a fiduciary trust account, keep it segregated by transaction, apply it only as the written instructions allow, and submit to an annual audit. The same section carves out attorneys who are not exclusively in the title business and who issue policies as part of representing a client. The practical shape of things follows from that: an attorney may run your settlement, a licensed non-attorney producer may too, and most closings here go the second way.

There is also only one place your deed goes. The Recorder of Deeds, part of the Office of Tax and Revenue, records every instrument in the city and collects both deed taxes at recording. No county variations, one recording office, one set of forms.

One District step has no real counterpart elsewhere. If a tenant lives in the home you are selling, the Tenant Opportunity to Purchase Act applies before you can close. D.C. Code section 42-3404.02 requires an owner to give the tenant a chance to buy at a bona fide price and terms before selling. Single-family accommodations are largely carved out by section 42-3404.09, but not entirely. Full purchase rights still run to a tenant who was elderly or disabled as of the date of the offer and who signed a lease and took occupancy by April 15, 2018, and any owner of a single-family accommodation must notify the tenant in writing within three days of receiving or soliciting an offer. The deadlines are short, so if a tenant occupies the property, an hour of an attorney’s time before you list is money well spent. An owner-occupied or vacant home does not raise the question.

What you must disclose

The duty here is statutory. The Residential Real Property Seller Disclosure Act covers a sale of District real estate of not less than one nor more than four residential dwelling units, where the purchaser expresses in writing an intent to reside in the property. When it applies, D.C. Code section 42-1302 requires you to deliver a written disclosure statement to the prospective purchaser before or at the time they sign the purchase agreement. The form is the Mayor-approved Real Property Seller’s Disclosure Statement prescribed by 17 DCMR section 2708, and section 42-1305 sets out what it asks about: water and sewer systems including lead testing results, insulation, structural systems, plumbing and electrical and heating and cooling systems, pest infestation history, appliances, alarm systems, garage door openers, and fixtures.

Timing carries a real consequence. If the statement reaches the buyer after they have already signed, section 42-1302 lets them terminate by delivering written notice to you not later than 5 calendar days after they receive it. That right ends at the first of three events: the buyer applying for a mortgage loan, settlement or occupancy in a sale, or occupancy in a lease with a purchase option. Deliver the statement up front and the question never arises. The standard is actual knowledge, so “unknown” is an honest answer when it is true, and the chapter contemplates amending the statement if what you disclosed later becomes inaccurate. Section 42-1301 puts a long list of transfers outside the requirement, among them foreclosures and other court-ordered transfers, transfers between co-tenants, transfers to a close relative or a spouse or domestic partner, and newly constructed property that has never been inhabited.

Two District disclosures usually travel with it. Under D.C. Code section 8-113.02, anyone selling District real property on which underground storage tanks sit, or from which tanks were removed during their ownership, must inform each prospective buyer in writing before entering into a contract for sale. The Department of Energy and Environment publishes a one-page UST Real Estate Transfer Disclosure Form (For Single Family Homes) for this; its instructions exempt sellers of individual condominium and cooperative units, and let a single-family seller skip the form when the sales contract already carries a comparable disclosure with a buyer signature line. Separately, section 8-231.04 requires the owner of a dwelling built before 1978 to disclose known lead-based paint information on the lead disclosure form provided by the Mayor, on top of the federal lead disclosure. Given the age of the city’s housing stock, that reaches most sellers here.

Transfer taxes

The District taxes a sale twice, and the combined bill is large enough to plan around. Both levies are collected when the deed is recorded: the deed transfer tax under D.C. Code section 47-903 and the deed recordation tax under section 42-1103. Each starts at 1.1 percent of the consideration, with an additional 0.35 percent imposed on everything except residential property transferred for a consideration of less than $400,000. The working numbers, then, are 1.1 percent below $400,000 and 1.45 percent at or above it, on each of the two taxes. Local custom splits them: the seller pays the transfer tax and the buyer pays the recordation tax. That is custom, not law. If a buyer asks you to absorb both, roughly 2.9 percent of the price comes off your side of the settlement statement.

The $400,000 mark is a cliff, not a bracket. Cross it and the higher rate applies to the whole price, not just the amount above the line. A $399,000 sale carries about $4,389 in transfer tax for the seller. A $400,000 sale carries $5,800. Selling for a thousand dollars more costs you about fourteen hundred. Many District homes price well clear of that line, so the answer is usually just 1.45 percent, but if yours sits near it, do the arithmetic before you set a price.

Both taxes are reported on a recordation and transfer tax return that your settlement agent prepares and files with the Recorder of Deeds along with the deed. Recording fees are modest next to the taxes, and your agent will quote them with the rest of the closing costs. One wrinkle worth knowing during negotiation: section 42-1103 reduces the recordation tax to 0.725 percent for a qualifying first-time District homebuyer. That relief sits on the buyer’s side, but it changes what a buyer can afford.

The bottom line for doing it yourself

Mechanically, the District is one of the easier places to sell without an agent. No attorney is required, the settlement company carries the closing paperwork for both sides, and there is one recording office rather than a county to figure out. What is genuinely yours is the disclosure package and the pricing math.

Complete the seller’s disclosure statement before you accept an offer, and treat the underground tank and lead forms as part of the same packet. Build the transfer tax into your numbers from the beginning, because sellers here tend to meet it late, at the settlement table, when it is too big to absorb quietly. If a tenant occupies the property, work through the tenant purchase question first. That is the one issue in a District sale that can stop a closing outright, and the one place where paying a lawyer for a short review is clearly worth it.