One of the biggest home-buying factors that buyers underestimate in Temecula Valley Real Estate is property taxes. Most new homes in Temecula, Murrieta, Menifee and Wildomar California have special assessments built into property taxes. Rates of from 1.7% to 1.9% and even to 2.2% are pretty common. How can this impact buyer decision making? Lets take a look:
Buyers: Say you are buying a new home in Murrieta CA for $310,000 with a 20% ($62,000) down payment and a tax rate of 1.9 with and an association fee of $50 per month. Your 80% loan of $248,000 at a 6% interest rate would be $1,486.89 per month. Your new property taxes of 1.9% generate an annual tax bill of $5890, or $490.83 per month. The total payment for your new house in Murrieta is $1486.89 + $490.83 + $50 = $2,027.72. And you still have a backyard and window coverings plus much more to put in!
Now lets say you are buying a resale home in Temecula CA for $330,000. The home is 2 years old with a great backyard and patio cover and a 1.38% tax rate plus the same $50 association fee. Your 20% down payment would be $66,000 making your new loan $264,000 at 6% with a monthly payment of $1582.81. Your taxes would now be $4554 or $379.50 per month. So your total monthly payment is $1582.81 + $379.50 + $50 = $2,012.31 or $15.41 less a month.
And you get $20,000 more home with a backyard, window coverings, and patio cover already put in. Not to mention any other benefits such as a bigger home, better lot or preferred community. And you can still negotiate and maybe split closing costs with the seller and save several thousand dollars up front. Now your monthly payment is paying down over $100 more towards your debt versus additional property taxes.
As you can see a moment of consideration can mean quite a bit when discussing property taxes for Temecula-Murrieta-Menifee-Wildomar communities. This is especially true for new homes in southern CA which often have property taxes pegged at 1.9%. There are certain neighborhoods in all of these areas that have very low property taxes compared to others. That is where a good real estate agent can help you.
If you are looking to purchase a new home in Temecula, Murrieta, Menifee or Wildomar with a builder please contact an agent before you even walk in the door. I promise you will not lose financially and are more likely to actually gain rather than dealing with the builder on their terms. Good agents know all the builders and often will be aware of better deals with more buyer incentives as well.
If a builder is trying to avoid an agent being involved then there is often something wrong. Right now most builders are paying extra for agents because they are having a hard time finding qualified buyers and also moving inventory with such high tax rates. There are some great deals out there with many builders that your agent can guide you to. They can also provide you a realistic comparison of other opportunities so you get the best long-term value and satisfaction from your new home purchase.
Stefan West is a Temecula and Murrieta California Real Estate Broker who specializes in the communities of Temecula, Murrieta, Menifee, and Wildomar Real Estate. To learn more please visit his website at http://www.stefanwest.com for more information.
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