Last night I got a call from a smart buyer in Detroit. Many buyers do not think this way, but this guy was. He was just looking at houses but he was already trying to figure out what his new taxes would be once he bought this Detroit Home. I went over the way taxes were figured out. I told him the city of Detroit tax rate (Detroit Millage rate) and he said he could not afford the house with those kind of taxes. It was a Detroit foreclosure but with adding in taxes and insurance with the payment it was out of the budget.
He then asked me about Canton taxes, and Southfield taxes, and Farmington Hills taxes. He realized that he could buy a home in Canton and be paying half the tax rate. And add the lower insurance cost it would save him more.
The moral of the story is: when buying a Michigan home check what the SEV is for the Michigan home and the millage rate for the city you are buying in.. If one cities tax rate is 68 mills and another city is 34 mills for a $75,000 SEV house (approximately a $150,000 purchase price) it would be a $2500 difference in taxes. $200 a month. The math on that is as follows: SEV x the millage rate = the taxes. So 75000 times .034 = 2550 while the house in Detroit millage rate would be .068 mills or $5100 in taxes twice the taxes!
So when shopping for a home ask your agent about the cities tax rates, the SEV on house, ask him if some other cities would be lower. Be a smart buyer like Bill.
If you can buy a similar home in another city with a lower tax bill, why wouldn't you? Ask yourself these questions. Is the other city farther from my work, family, friends? Does the other city have good school systems? Do a spreadsheet (draw a line down the middle of a paper, list each city on either side of the line. Go through and put down which city is better for school, for taxes, for insurance, for convenience, for work, for future appreciation). Make a sound decision with all the facts.
$200 a month tax savings on a $150,000 home purchase is 4 dinners out, 3 or 4 gas tank fill ups a month.
For more buyers tips, or to search Michigan homes for sale go to my website www.russravary.com Have a great day Russ Ravary
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