Property taxes are an unfortunate consequence of becoming a homeowner. Many people buy a house and feel excited at the prospect of avoiding rent payments, but in some cases, property taxes are an equal — if not greater — expense! Nobody wants to pay property taxes, much less talk about them, but as a real estate agent, it’s your responsibility to accurately set your clients’ expectations. This means that you need to discuss property tax rates with them and clearly tell them what to expect. In order to do so, though, you should first review real estate comps free to ensure that you understand property taxes in your area.
What Are Property Tax Rates?
Property taxes are a tax paid by property owners that are typically calculated based on a percentage of the property’s assessed value. There is a range of variables that ultimately determine this rate, including the sum of the subjective assessment, the tax rate approved by the city council, and in some cases, an additional tax imposed by the county. Altogether, this sum can quickly creep up, and most property owners find themselves paying several thousand dollars every year just for the privilege of owning their home. This can be frustrating, but it’s worth noting that these taxes typically fund community resources such as libraries, schools, and social services.
The most important consideration is to ensure that your client fully understands the tax liability associated with a property of interest. These tax rates can vary widely between counties and even between cities, so informing your clients will help them make the best decision for their needs. If you’re interested in real estate wholesaling, this information can help you immediately identify the best properties, too. Successful wholesaling relies on your ability to find low-cost, high-profit properties, and low property taxes are a key component of such properties.
What Your Client Needs To Know About Property Tax
So what exactly do you need to tell your clients about property taxes? You can start by relaying the most basic information — the tax rate they’ll be subject to if they buy a particular property. A home that’s located in Smith Town, USA may have a property tax rate of 1.1%, for example — so if the home has an assessed value of $250,000, your client will pay $2,750 per year in property taxes, assuming that there are no additional county taxes.
When explaining this, there are a few important considerations to remind clients of. You should first explain that property tax is based on a home’s assessed value, and this can fluctuate from year to year. If the assessed property value suddenly spikes, then, so will its tax liability. Similarly, the property tax rate itself can be raised, causing your costs to go up. These are important details that you must ensure your clients understand. If you’re looking for more information on local property tax rates, you can use Batchleads skip tracing to find out more about a property, including information and contact information for its owner.