In the current real estate environment, with often drastically reduced listing prices, both buyers and buyers’ agents might forget that property taxes are based on the assessed value of a property, not the sale price.
Before you start to show homes to eager buyers, ensure that you know the correct property taxes for each of your listings. And make sure your buyers realize the importance of ensuring that this information is correct. And what the implications are if it isn’t.
Explain that, if they fail to factor in the correct property tax information, they may suddenly realize that their mortgage payments are several hundred dollars higher than they were anticipating, and in fact might bring them over the amount they originally qualified for. This is especially true in the case of foreclosures and short sales.
It is as much your job as it is the job of the mortgage professional to ensure that the buyer realizes that the prequalification letter shows both a purchase price and the dollar amount for which the buyer is qualified.
Another thing to pay attention to, especially in the case of an elderly seller, is whether the home is subject to some type of tax exemption or freeze. These may be in place and, again, will skew the actual tax bill and ultimately the monthly payment.
A good source for property tax information is the county assessor’s website, as it will have current information about the property. If you have questions or concerns, discuss it with your mortgage partner.