Consider property taxes when buying a new house

| Mar 13, 2020 | Real Estate Transactions |

The list price of your new home isn’t the only cost you’ll face. You need to carefully think over all of the financial details when deciding what house to buy.

One important thing to consider is what the property taxes are going to look like. Based on the location of the home and the value of that house, the taxes could be vastly higher than what you had at your previous home. This is sometimes a surprise to homeowners who are upgrading from a starter home in a cheap neighborhood to a true family home in a nice neighborhood, where they end up paying thousands more per year.

As you look into this, remember that you may need to pay some taxes up front when you close on the house. In some cases, this means putting down the money for six months of taxes in advance.

If you do not have the money on hand to pay for this at the time you buy the house, there are tactics you can use. Some buyers ask the sellers to cover the closing costs, including the taxes, since they’ll make money on the deal. Others roll the cost of the closing costs and taxes into the loan so that they slowly pay it back over time as they pay off the house.

What you decide to do is up to you, but you do not want to be blindsided by costs you did not know were coming. Make sure you are well aware of all of the options you have and the steps you need to take.