Business in Baltimore: A Rosenberg Martin Greenberg LLP Initiative Kim Stepanuk, Young Lawyers as First Time

use of our specific suite of services to achieve that goal.

I proposed that RMG provide pro bono legal services to five early-stage, Blackowned businesses in the area. The firm was eager to meaningfully support BLM, and the idea was met with overwhelming enthusiasm. Within a few days, RMG formed a planning committee and the Building Black-Owned Business in Baltimore Initiative (BBOBB) was born.

On July 1, 2020, RMG opened applications and, after a two-month review process, five promising local businesses were selected to receive pro bono legal services through the end of the 2021 calendar year. The diverse participants represent a vast array of industries and they all share RMG’s commitment to supporting Black communities and building Black wealth.

BBOBB utilizes RMG’s expertise in business law to aid local, Black-owned businesses at a crucial point in their timeline: the beginning, when the farreaching effects of systemic racism are profoundly felt in what often amounts to the absence of capital necessary to pay start-up costs, including legal fees. Since BBOBB was announced, at least one other Baltimore-area law firm has announced a similar program. Firms across the country have either reached out for advice on how to launch similar programs, or offered their assistance in our representation of BBOBB participants.

BBOBB is an example of how legal professionals can make meaningful change through thoughtful pro bono work. Such programs support individual clients and their communities while encouraging other legal professionals and organizations to take similar steps. I look forward to seeing the program through and pledge to continue to use my legal education to make positive change.

Young Lawyers as First Time Home Buyers

BY KIM STEPANUK, SETTLEMENT ATTORNEY (KSTEPANUK@MBH.COM)

After three years of law school and two months of intensive bar preparation, it may feel like you know all you need to know about the law of real estate, contracts, and real estate contracts in order to purchase your first home, make an inter-family transfer of real estate, or place a deed in trust. BUT, the biggest piece of real-life advice I can provide is to always consult with an industry expert regardless of how much you think you actually know, or even if you believe you have enough knowledge to “get by” to save some money. The truth is that the information a trusted industry expert can provide is invaluable. This advice extends to all areas of life, but especially in the real estate field where a mistake can cost you hundreds of thousands of dollars making the amount of money you borrowed to attend law school seem like a meager investment.

Before buying your first home, consider the following eight tips:

1.

Determine your budget. Some financial planners recommend that your housing payments, including property taxes and insurance, be no more than 25% of your take-home income. If, for example, you earn $60,000 after taxes, your housing payment should not exceed $1,250 per month. Of course, there are other factors to consider, especially if you will be renting some of the rooms, sharing the property with other income earners, listing some of the rooms on an online rental marketplace like Airbnb, or you expect that your income will significantly increase in the coming years. This analysis depends, in part, on your risk tolerance, monthly expenses, and other financial goals, but it is important to be realistic about your budget from the start. Nothing hurts more than falling in love with your dream home only to later figure out that you cannot afford it or, even worse, that you have to sell your dream home within the first few months or years of buying it to find something more affordable.

2. Obtain pre-qualification for your

loan. Speak with multiple lenders – shop around to find the best price. Note the difference between mortgage prequalification, which is an estimate of what you might be able to borrow based on the information you provide, and preapproval which is an offer, but not a commitment, to lend you a specific amount for the preapproval period, usually 90 days. Be prepared to provide proof of employment (where you work and your income), documentation regarding debts and assets, and an idea of how much you plan to

put down as a down payment on the property (see above regarding “budget.”). The more you put down as a down payment, the lower your monthly payment will be. You will also undergo a credit check by the lender(s). Any good mortgage lender will explain your options including first-time homebuyer opportunities or opportunities available to military veterans and public servants in revitalization areas. If they are not going to take the time to work with you and explain your options, or they are not responsive, go with another lender.

3. Find a Real Estate Agent. Do your research and find an agent that you trust. Ask for referrals, search for online reviews, and schedule meetings with at least 2-3 agents. Think of this as an interview process. You want to make sure that you and your agent are a good match and that the agent is not going to talk you into purchasing a home that you do not want or cannot afford. When you meet with the prospective agents, have readily available information about your budget, pre-qualification limits, and goals, including your vision for the property, location, and expected condition. When you find an agent you would like to work with, you will sign a buyer-broker agreement outlining the scope of the work the agent will do for you, as the buyer, establishing how they will be compensated from the sale, and stating the agent’s obligations and responsibilities to you as your agent. It never hurts to double check with your agent about firsttime homebuyer opportunities, opportunities available to military veterans, and opportunities for public servants in revitalization areas.

4. SHOP SHOP SHOP. In addition to some options that your real estate agent will show you, you can also do research on your own by using Zillow, Redfin, or a similar website.

These websites allow you to search properties by geographic location, bedrooms, bathrooms, property type, schools, and price, among other filter options. From these options, you can select a handful of homes that you would like to view in person. Your real estate agent will contact the seller’s agent to schedule the showings at a mutually convenient time.

5. Put in an offer and negotiate the

contract. Once you find a home you love, your real estate agent will help you submit an offer including your offered price and any contingencies or other requests. If the seller agrees, they will accept your offer. If they do not agree, they may provide a counteroffer or reject your offer. Once the buyer and seller agree on a price and terms for the sale, the parties execute the contract often called a “residential sales contract.” These are form contracts which are routinely updated by the local real estate associations, so double check with your agent that they are using the most up-to-date forms available. At this stage, you should also be prepared to make a payment called “earnest money” which is a deposit made to a seller (held in a non-interest bearing escrow account by the settlement company or real estate brokerage) which serves as the consideration for the contract. The earnest money deposit represents the buyer’s good faith agreement to buy the home and upon settlement will be credited towards the purchase price and costs of the home. The terms of the residential sales contract will govern what happens to the earnest money deposit if the sale falls through. The earnest money deposit amount is negotiable but most strong offers will include the buyer’s offer to deposit money in escrow. In most areas of Maryland, 1% of the purchase price to be paid within three days of the agreement is standard for an earnest money deposit but the amount will vary based on region, purchase price, and the strength of the residential real estate market.

6. Submit your contract to a Title

Company. This is the biggest undervalued step in the process. Once there is a fully executed residential sales contract, your agent will send the paperwork including the sales contract to a Title Company. The Title Company will review the contract and do other investigation to spot issues that could arise when transferring the title. If there are any identified issues, the Title Company will contact you or your agent to discuss the options to resolve the issue in advance of closing. A settlement attorney, like myself, works for the title company. Some title companies, like MBH Settlement Group, will handle the escrow and closing services, as well. As the purchaser, you have the right to choose your own title company and settlement attorney; you do not have to select the title company that your agent recommends or prefers. When choosing your title company, you can

7.

save money by shopping around. Good title companies will be very transparent with their pricing and some have calculators available on their websites (e.g. mbh.com). “Split settlements” where the buyer and seller execute documents at separate times and separate locations are becoming more and more common. “Split settlements” where the seller hires the seller’s own settlement company, usually for less than $500, to review the residential paperwork on his/her behalf are also becoming more common. Although the Title Company is a neutral party, some sellers want their own independent investigation by a title company of the seller’s own choosing to minimize issues at closing or thereafter.

Close on the property. At “settlement” or “closing,” the step at which all of the land transfer documents and notices are signed and the residential sales contract is performed, the buyer and seller will execute all necessary documents to complete the transaction and your settlement company (often the same as the title company) will finalize the paperwork, disburse the escrow funds, and record the proper paperwork with the land records department in the county where the purchased property is located.

8. Move in and enjoy your new home.

The last step is self-explanatory and worthy of enjoying with your adult beverage of choice as you figure out the best way to get your overstuffed couch up three flights of stairs.

Home buying can be an exciting and sometimes daunting process but having the right people on your team (lenders, real estate agents, and a great settlement team) can make the process stress free and enjoyable.

In Light of a Pandemic

BY AJA’ I. MALLORY, ESQ.

The year 2020 will be a year to remember. This year for many has been awful and stressful. I often hear and laugh at the statement that 2020 is the year Jumanji came to life. Each month brings a new level of Jumanji. However, as 2020 nears the end, I would describe this year as transformative.

I began my new position as Consumer Staff Attorney at Maryland Volunteer Lawyers Service in February. I was confident and excited about learning the functions of my current role and the culture of the company. By midMarch, the State of Maryland shut down in response to the Covid-19 pandemic. After just 6 weeks of learning entirely new areas of law, and recently trained, I was now home working remotely.

Trying to adjust to our “new normal,” I began advising clients on their tax sale and single-family home foreclosures. I would be remiss if I did not point out that tax sale season is stressful under normal circumstances, but considering COVID-19, the stress of tax sale season was monstrous. Moratoriums and ordinances were evolving daily and, as a result, my advice to clients was continually changing. I felt the growing pains of being a new attorney, yet I was also evolving into something better.

In a matter of months, I owned my status as an Attorney. I went from “Well, I think I possibly can” to “I know I can.” I had to trust and believe in my process by exercising my faith in my education and intellect. I found what works for me. I have realized that individuals will provide mountains of advice filtered through their own experiences; therefore, I identified what brings me joy and worked with my colleagues to build on those experiences.

This pandemic has unlocked a new confidence within me. Normally, I would quietly observe and take in the information provided. In light of this pandemic, I have jumped at all available opportunities. I am taking on new challenges and seeking mentorships that are beneficial to me both personally and professionally. From home, I take part in consumer roundtables, help clients with loan modifications and other foreclosure matters, advise clients about their options to avoid tax sale, provide testimony to Baltimore City Council, and operate a consumer protection hotline, along with other tasks either inherited or simply part of my daily routine.

People may not realize or appreciate it, but this year has been transformative. Some of us may have found our niche, some may have loved, and some of us may have also lost, but 2020 reminds us to expect the unexpected. I say “thank you” to 2020—the misfit, the troublemaker—the year that pushed me out of my comfort zone to better advocate for consumers.