No doubt your Assessment will be $X so now the mortgage payment is...

By
Real Estate Agent with EXP Realty 414-525-0563 57026-90 Broker

     We work with lots of both Buyers and Sellers ...locally from our sphere of referrals and lots of relocation with referrals both from other agents and relocation companies.   Sometimes we are asked for lender referrals locally and other times the Buyer has chosen one.  We know that no two people in any Bankerprofession are created equally....there are good, excellent, not soooo good and the  "please don't go there" kind of wishes we have when we know there have been issues with using that source.

      A Seller always hopes that the improvements made to a home...market changes, etc. will yield a profit when the house is sold...no guarantees of course..Crystal balls can be inaOffer to Purchaseccurate.

     Every offer we write or accept on our listings has a pre approval accompanying it. Every Wisconsin offer to purchase indicates the amount that the Buyer will finance, at what rate and the Principal and interest payment. Often the property taxes are escrowed and the payment is the PITI (Principal, Interest, Taxes and Insurance) formula. 

      After we had an offer accepted the Buyer got a call from their lender who said that their payment would be hundreds of dollars higher than they imagined because the price of the house was higher than when the Sellers tax  assessmentpurchased it and the assessment would be based on the newly offered price.

Say What ?

    It doesn't work that way here....the payment is based upon current taxes and assessment...and how, when and at what rate the municipality assesses the house is anyone's guess...it is not an automatic anything...not percentage, not price, not timing after purchase. Few things in life are "automatic"....and certainly tax rates, timing of increases AND decreases (yes, we have had some of those as well)  is not something anyone regardless of their profession or experience can predict.

         BEWARE of lenders forecasting taxes....while we have utmost faith and respect for some lenders...certainly Gene Mundt, IL/WI MortgagCrystal balle Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi  and George Souto  among them....we bet neither one of them would gaze into their crystal balls and forecast property taxes for a purchase.

     This has been a public service warning post brought to you by Sally K. & David L. Hanson, Broker Associates with Keller Williams Realty honored to represent Sellers and Buyers in Southeastern Wisconsin.

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Sally K. & David L. Hanson, ABR, CDPE, CSS, e-Pro,ILHM, REDS


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Re-Blogged 1 time:

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Mortgage / Finance
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mortgage payments and property taxes
forecasting property taxes

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Rainmaker
835,249
Marco Giancola
Beachfront Realty - Miami Beach, FL
Realtor (305)608-1922, Miami Beach Florida

True that Sally-you can give a guesstimate at best!

Jan 06, 2018 04:54 AM #1
Rainmaker
2,440,673
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Fortunately, that is not how property taxes are determined in the Charlotte area... so unless there are county-wide reassessments there are not huge surprises for buyers.

Jan 06, 2018 05:20 AM #2
Rainmaker
632,296
Anthony Acosta - ALLATLANTACONDOS.COM
Harry Norman, REALTORS® - Atlanta, GA
Associate Broker

Good morning Sally K. & David L. Hanson and thank you for sharing your information.

Jan 06, 2018 05:33 AM #3
Rainmaker
2,685,092
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker

Good morning Sally and David. While a buyer may face higher taxes, nobody knows what that may be at the time of purchase. Used to be a problem with new construction in Florida when buyers were qualified based in the tax amount for vacant land, but that is an exception for another discussion. Enjoy your day!

Jan 06, 2018 05:40 AM #4
Rainmaker
1,486,914
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker and Attorney Licensed in DC, MD, VA,

We have to provide the estimated tax estimate for the buyers for just this reason - taxes do go up here when the house is sold - in the past some lenders were using the seller's taxes (which were limited in their annual increases regardless of improvements) and the buyer was hit hard. 

Jan 06, 2018 05:44 AM #5
Rainmaker
2,860,312
Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400
The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803 - Plainview, NY
Long Island Condo & Home Sale Specialists

Nice to put in a good word for those 2 A/R loans specialists. Good place for a buyer to start their search...

Jan 06, 2018 05:50 AM #6
Rainmaker
552,477
Tim Maitski
Atlanta Communities Real Estate Brokerage - Atlanta, GA
Truth, Excellence and a Good Deal

In Georgia, back at the bottom of the market in 2012, counties had been slow to lower assessments down to the real market values.  People would buy a $200,000 home but their assessed value sometimes would remain at $500,000.  It was bad.  People could afford the home but not the taxes. They still had homes assessed at what they were valued at the peak.  So they passed a law making the purchase price the new assessed value for the year immediately after the sale.

It is how they keep their assessed values tied to the real market values.  I don't know if many other states do the same thing.  I think it's a pretty sensible idea.

If I were a lender, I'd definitely take that into account.  If a $500,000 home is currently assessed at $200,000, there's a high probability that the property taxes will get adjusted eventually.  That could really make a huge difference for some buyers as far as their ability to pay.  Tax assessments can sometimes seem to be random, but I would definitely plan on a rational re-assessment to eventually happen.

Jan 06, 2018 06:45 AM #7
Rainmaker
2,000,395
Brian England
Arizona Focus Realty - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

Buyers certainly need to understand these things before getting into a loan, so they can be sure they are able to afford it.  A good lender will always make sure of this for them, without trying to predict taxes.

Jan 06, 2018 06:54 AM #8
Rainmaker
4,316,977
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
"Franklin MA Homes"

this is exactly why we like our buyer clients (they are usually our sellers) follow our lead with mortgage lenders....some can be deal breakers...

Jan 06, 2018 07:30 AM #9
Rainmaker
1,545,489
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good afternoon Sally and David - oh yes, not all lenders are created equal.  Borrower beware!

Jan 06, 2018 10:05 AM #10
Rainmaker
1,763,686
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Not many people will know that banker is Snidely Whiplash.

And none, that is none, of the crystal balls I have seen in the movies or TV have been inaccurate.

Just sayin'...

Jan 06, 2018 10:08 AM #11
Ambassador
3,720,706
Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

We need to partner with trusted lenders and not have to worry about bad information and wrong expectations being set.  

Jan 06, 2018 12:02 PM #12
Ambassador
3,489,010
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Sally and David you are right there is no need for guessing about taxes.  All you need to do is call Town Hall or go to a website that contains the current property taxes.  The only times I have seen the taxes be different is when the current homeowner is getting a special exception from the town because they are a Veteran, or if the property use to be a farm and got a special exemption for that.  But those instances are the exception not the norm.

Jan 06, 2018 04:41 PM #13
Ambassador
2,745,102
Paul S. Henderson, REALTOR®,CRS,
RE/MAX Professionals. - Tacoma, WA
Tacoma Washington Agent/Broker & Market Authority!

I have dealt with mortgage brokers who have told people their house payment would be $xXX but they don't figure in taxes and or insurance. I think that's criminal Sally K. & David L. Hanson 

Jan 06, 2018 10:47 PM #14
Rainmaker
2,465,537
James Dray
Fathom Realty AR LLC - Bentonville, AR
Exceptional Agents, Outstanding Results

Morning Sally.

Interesting issue you have.  Around here the payments are given on the current value and taxes.  Once the assessor comes for their yearly visit the payment may change.  Otherwise I haven't heard of this one before.

Jan 07, 2018 02:02 AM #15
Rainmaker
4,308,742
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Good morning Sally and David.  Here in Florida, the market value of a home is calculated each year by the property appraiser.  The taxes will be based on this value with potential adjustments for homestead and other deductions.

Jan 07, 2018 05:18 AM #16
Rainmaker
1,149,946
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

First ... thanks so much for the shout out and thumbs up, Sally K. & David L. Hanson ... I appreciate it greatly.

Secondly, I think this is one particular issue where my 25+ years Appraising definitely helps my clients and referral partners.  I'm constantly amazed at how many people (clients and professionals alike) just don't understand how taxes and assessments are figured.  Or how they play a part in the affordability and approval of homes.  Things that are extremely important to know.   This topic is definitely one that needs to be fully explained to clients by their Lender ... you're 110% correct on this ...

A topic that can't get too much attention, Sally ...

Gene 

Jan 09, 2018 10:37 AM #17
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Rainmaker
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Sally K. & David L. Hanson

WI Realtors - Luxury - Divorce
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