From time to time, I get buyers who have a very limited monthly budget which absolutely cannot be exceeded. For these buyers, providing a solid estimate of what their monthly payment will be is crucial to a successful transaction.
Property taxes can be a real "gotcha" in the estimation process, since taxes on a specific property can vary greatly depending on land usage, appraised value, the owner's age and/or disability status, and assessed value. Another complicating factor is that the property tax year starts October 1st.
For example:
You have a client closing on a former rental property to use as his personal residence at the end of February. A rental property without the homestead exemption is assessed at 20% of appraised value for tax purposes, whereas with a personal residence, the buyer can claim the homestead exemption and only pay taxes on 10% of the appraised value. Since the tax year doesn't start again until October 1st, your client will be stuck paying double taxes for seven months until his homestead exemption kicks in on October 1st. Some people just can't swing double-taxes for that long...
When you do have a client on a really tight budget, be sure to check the current Assessed Value on the tax records to determine if it is either 10% or 20% of fair market value.
You can search property tax records for Mobile County here: http://mobilerevenue.siteonestudio.com/TaxBill/search.asp
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