One of the biggest home buying factors that Temecula-Murrieta CA Real Estate buyers miss is property taxes. Many people don't realize that most new homes in Temecula, Murrieta, Menifee and Wildomar California have special assessments built into property taxes. A few years ago, new home builders started to pass on certain fees in the form of special assessments for road bonds, school bonds, etc. Most used to pay this as part of doing business but when the real estate market was booming, the just passed it right on. Rates of 1.7%, 1.9%, and even 2.2% are pretty common.

How can this impact buyer decision making? Let's take a look: Buyers: let's say you are buying a new home in Murrieta CA for $310,000 with a 20% ($62,000) down payment, a tax rate of 1.9%, 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. That extra money also doesn't include new home expenses of putting in a backyard (drains, concrete, sprinklers and lawn), window coverings, interior paint, patio cover, etc.

Now let's consider a resale home in Temecula or Murrieta for $330,000. The home is 2 years old with a great backyard and patio cover and with 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%, a monthly payment of $1582.81. Your taxes would now be $4554 annually, 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.

In this example, you get $20,000 more home with a backyard, window coverings, and patio cover already put in. You may also get many other benefits such as a bigger home, better lot or preferred community. Often it is only $20,000-$30,000 that separates a nice home from a great home! Also, you can negotiate still and maybe split closing costs with the seller, saving several thousand dollars up front. Lastly, your monthly payment is paying down over $100 more towards your debt versus additional property taxes.

When you are considering a new home purchase with a builder in Temecula, Murrieta, Menifee, or Wildomar please get a real estate professional involved before you even walk in the door. You won't lose any money but cutting yourself off from representation but you are more likely to gain financially by working a better deal or finding a much better alternative. Good agents know the local builders and are aware of the best values which may offer increased buyer incentives as well.

If a builder is trying to avoid an agent being involved, then there is often something wrong. In fact, 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.

Just imagine trying to sell a high tax rate house now that he market is much slower. Buyers are learning and those houses are losing thousands in list price to account for such high tax rates now.

As you can see, a moment of consideration can mean quite a bit when discussing property taxes for Temecula, Murrieta, Menifee, & Wildomar Real Estate. 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 representation by an agent can really help you with getting a better house and a much better long term investment.