Do buyers consider the price of a house's taxes when considering a home? I look at the taxes just as important as the price. Am I crazy?

Asked by wendymoghadam, Cary, NC Fri Aug 10, 2012

My house is for sale. There are at least 5 houses for sale near me. My house has the lowest taxes, biggest yard and most updated kitchen. Most of the listings near me have more expensive taxes (by $1200-3000 per year), my price is about 20,000 different. I know that equals to about $100.00 per month more on a 30 year 4.5% loan but the taxes $1200 more equals the same thing only that number will increase over time. Are 1st time home buyers savy enough to consider this?

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Ellen Kippel, Agent, Suffern, NY
Tue May 28, 2013
Hi Wendy,

I know this is a late answer, but if the homes you are describing don't have any other features that are causing their taxes to be higher (usually the home square footage and lot size as well as number of bedrooms and baths are important reasons for tax differences), then all things being equal it would seem your house should be preferred over the other homes. First time buyers that I work with are very much interested in taxes as much as they are interested in the price of the home. It seems to me that your homes, with price $20,000 less and lower taxes, would be one of the first ones a buyer would consider, unless there are other downsides that you haven't mentioned or other upsides that these other homes have. I hope by now you have sold your home. Take care, Ellen
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Nina Harris, Agent, Williston Park, NY
Tue Feb 26, 2013
Yes, taxes are considered when the majority of buyers make a home purchase. Sometimes they will also want to know if the taxes have ever been grieved. You say that your price is $20,000 higher.
I hope there is a reason for the higher ticket price. Today's buyers are internet savvy and have access to quite a bit of information online where they do their own comparison. Are you getting many showings?
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Domzagaroli, Home Buyer, Harrison, NY
Tue Feb 26, 2013
High real estate taxes do become a factor in the market value of a home, especially in Rockland county and the surrounding areas. Many times, I am bought in to grieve the assessment on a property if it is higher than other nearby homes that have sold. If successful, the assessment will be reduced and their will be a lower tax liability.
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William H Pe…, Agent, new city, NY
Sat Dec 15, 2012
NO YOU ARE NOT CRAZY! When buying Real Estate it is important to consider ALL financial liabilities that you will incur so that you have a total picture of your monthly expenses. It is also important to work with professionals that understand that what a bank may allow you in financing may NOT be what you feel comfortable with as a monthly expense and work with you accordingly.

Some buyers are understand this and some do not, which is why it is so important to work with a real estate professional who will explain all of the ins and outs or a purchase or sale.
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Hi Bill: If you have any clients that are paying high taxes because they are over assessed, I may be able to help them out.
Best, Dom Zagaroli
Flag Tue Feb 26, 2013
Dawn Barclay, Agent, New City, NY
Tue Aug 14, 2012
If they're working with a savvy realtor and a good mortgage professional, they'll know that tax amounts play into the total amount a buyer can afford to pay for a home. That's the kind of counseling that buyers get when represented by a good buyer's broker.

However, if you're saying that your home is priced $20,000 higher than the others, buyers may not even be looking at it because they might be looking in a price bracket that excludes yours.
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John Juarez, Agent, Fremont, CA
Sun Aug 12, 2012
If you are trying to say that your house should be worth more because the taxes are lower I would like to know on what basis property taxes are levied in Cary, NC. Will a new owner be subject to taxes based on their purchase price? If your property is taxed for less than your neighbors’ properties which are worth less than yours is then I am truly confused. If that is true and I was a neighbor paying more taxes for my less valuable house than your for your more valuable house I would not be happy.

I know that it is not that simple.
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Carmen Di Bi…, Agent, Nyack, NY
Sat Aug 11, 2012

You did not say if the houses you are comparing yours to are significantly larger which is generally reflected in the taxes. You also did not give the percentage value of your $20,000 price difference compared to your neighbors. I am assuming yours is 20k higher in price. First and foremost, a buyer, whether 1st time or seasoned, expects a value and will make offers based on perceived value. The buyers I've encountered prefer to pay the lowest taxes possible but once educated on how assessments work understand that the larger the house, in general, the higher the taxes. All things being equal, buyers are willing to pay more in purchase price than taxes. There appears to be a disconnect in the perceived value of your home vs the asking price. Ask your agent to update your CMA (Comparative Market Analysis).
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Anna M Brocco, Agent, Williston Park, NY
Sat Aug 11, 2012
Some individual may care and do factor taxes when considering a purchase, others not...
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My NC Homes…, Agent, Chapel Hill, NC
Sat Aug 11, 2012
Some are and some aren't. Good Buyer brokers certainly point this out to them, however in many cases higher property taxes has a direct correlation to the services the homeowner provides and impact such things as school districts, trash pick up, water and sewer, etc. Property taxes certainly matter but should not be any buyers primary concern, just another thing to consider.
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Suzanne MacD…, Agent, Succasunna, NJ
Sat Aug 11, 2012
Most buyers are more concerned with the monthly payment rather than just price, interest rate, etc. Have you put out flyers from a mortgage rep with approximate monthly payment?

The other issue that seems to be part of your question is the asking price of your home. If I am reading this correctly, yours is priced $20,000 higher than the competition. The problem with that is you have to get people in the door in order for them to see the updated kitchen, big yard and realize the situation with the taxes. If I were you I would make sure my asking price was in line with the competition and then let buyers realize that, for the money, mine offers the best value.
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Steve Quinta…, Agent, Albuquerque, NM
Fri Aug 10, 2012
The answer to your first question is "Yes, most buyers do consider taxes when buying". Taxes are one component of their their monthly mortgage payment, along with principle, interest and insurance. Therefore it is impossible for a buyer who gets a loan to avoid considering the cost of taxes.

Perhaps your state and locale are similar to mine which require:

1. Written disclosure of the estimated taxes at the sale price to the buyer.

2. Current property tax rate in the MLS listing.
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allan erps,A…, Agent, Pearl River, NY
Fri Aug 10, 2012
Hello Wendy, Not sure if the Buyers are that savvy but certainly a good Buyers Agent(ABR) should be pointing out all the advantages of each particular house they see. Sometimes the Buyer can only process the amount of the house, rather than value. It is unfortunate but pre-approval amounts do not usually account for lower taxes. You certainly make a valid point! Best of Luck and if you are considering moving to Rockland County, I would be pleased to help you! Regards Allan
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Alain Picard, Agent, Puyallup, WA
Fri Aug 10, 2012
Some will think about taxes and others won't. Their real estate agents should be telling them about all of that stuff.
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