As with other states, Vermont has rules and statutes that regulate buying a home. Here’s what you need to know:
In Vermont, licensed real estate agents are required to fully and promptly disclose to a prospective buyer any essential information they know of that might ultimately affect the value or functionality of a home. This includes disclosing defects, deed limits that could make the home less marketable and hazards that pose a risk to human health. Vermont law also specifies that real estate agents must withdraw from their relationship with the seller if they refuse to disclose any essential information while trying to sell their home.
Judicial foreclosure state
Vermont is a judicial foreclosure state, which means lenders need to go to court to pursue foreclosing on a home, rather than attempting to work with borrowers outside of a courtroom. In judicial foreclosure states, borrowers typically receive a summons and a copy of the foreclosure report after a lender files a foreclosure lawsuit. The homeowner then has a certain amount of days — often 30 — to either pay the amount owed or let the foreclosure move forward.
Equitable distribution state
Vermont is an equitable distribution state when it comes to deciding how a couple’s assets — this includes property — will be divided during a divorce or annulment. In a state like Vermont, assets are typically divided in an equitable, court-approved fashion, based on factors such as the length of the marriage and the ages, occupations and incomes of the divorcing spouses. By contrast, assets in community property states are split 50/50.
In Vermont, buyers typically use an attorney to close on the sale of a home, but a property owner is still legally able to transfer the deed of a property without an attorney.
Buyers in Vermont are required to pay a real estate transfer tax — in addition to any other closing costs they might owe — at the time they close on their home. Buyers are now taxed at a rate of 0.5% of the first $100,000 of a home’s value and 1.45% of the remaining value.
Vermont buyers may be able to save up to $825 on their property transfer taxes if they qualify for either the Advantage or MOVE mortgages (see details below) offered through the Vermont Housing Finance Agency (VHFA). They may also be able to exempt the first $110,000 of their home’s value if their mortgage is a USDA Rural Direct Home Loan or a VHFA mortgage.
According to Tax-Rates.org, property taxes in Vermont are now some of the highest in the U.S. The exact amount varies according to county, but the current rate on average is 1.59% of a home’s assessed value, which works out to $3,444 per year for the median home value. Chittenden County has the highest rate, 1.61%, which averages out to $4,096 annually, while Essex County has the lowest, 1.39%, an average of $1,727.
In Vermont, homeowners, depending on income, may be able to qualify for an annual property tax adjustment. Meanwhile, disabled veterans may qualify for an annual minimum property tax exemption of $10,000 or up to $40,000 if a local city or town has voted to raise the exemption.
Conforming loan limits
Conforming loans are mortgages that meet the federal guidelines and limits that have been set for Fannie Mae and Freddie Mac, two government-sponsored enterprises that work to make the mortgage market more liquid and stable. Unlike non-conforming loans, or jumbo loans, which come with higher borrowing limits, conforming loans offer less risk. They also tend to offer the best interest rates and loan terms to borrowers with good credit.
Every county in Vermont now has the standard conforming loan limit that applies to most of the U.S.: $484,350 for a single-family home. Limits are higher for multifamily homes.