Seller and buyer beware. Did you know that just in our local area that the property tax rates can vary significantly? Why do you need to know this when buying or selling a home? Hi. I’m Krista Mashore, owner/broker of Homes By Krista.
In our area in East County, prices range drastically. We have areas with traditional property taxes around 1.15%, but there are areas that can go as high as 2.4%. If you are selling or buying a home, the higher the taxes, the higher the mortgage payment is going to be for a buyer. For example, if you take a purchase price of 500,000 and the average tax rate is 1.1%, the tax is $5,500, but if you increase that to 1.9%, the annual tax rate would be $9,500. That’s a $4,000 more a year difference. That’s $333 a month. This difference can make or break a buyer qualifying for the loan.
So when you’re selling in an area that has a higher tax rate, fewer buyers can qualify, and when you’re buying in an area with a higher tax rate, you’ll need to qualify for more than the normal to purchase. And sellers, make sure that the mortgage lender knows about the increased taxes because nothing is worse than finding out at the last minute that the buyer cannot qualify for the purchase price because the taxes are higher than what is traditional and the mortgage lender didn’t know about it.
I’m Krista Mashore with Homes By Krista. Be sure to reach out to us any time for anything real estate or community-related because we are always here to help, and as always, make it a great home selling and buying day.