Are property taxes stopping many from home ownership

[MineralMan]

128. Property taxes are always an issue in home ownership.

As far as I know the amount is always revealed as part of any real estate transaction. Homebuyers need to consider that cost as part of their decision to purchase a property.

When my wife and I sold our home in California to move to Minnesota, a young couple bought it from us. We didn't use a real estate agent in selling the house. To me, it looked as though this young couple might be stretched financially by the purchase, and I made sure they understood that the property taxes we paid each year would be very different from what they'd be paying. We were still paying taxes based on Prop. 13 rates, since I had purchased the home in 1974. They would be paying taxes on a different basis after purchasing the house.

I gave them an accurate estimate of what the taxes would be at the selling price of the house and broke it down to a monthly figure. I advised them to look at the mortgage payment, then add that monthly cost before deciding whether or not to buy the house. I also brought up the cost of homeowner's insurance. Before I agreed to the purchase agreement, I made certain that they knew the actual costs they'd incur on a monthly basis if they decided to purchase the house.

I had three other offers at asking price, so it wasn't a matter of losing the sale. I just wanted to make sure that this young couple understood what they were getting into with the purchase. They ended up buying the house, and now, 10 years later, they're still living there. Apparently, they were able to handle the cost. In 2004, when they purchased it, the value was at its peak. Afterward, the home's value plummeted, but has now recovered to about the level it had in 2004. They're apparently OK with their purchase, and have done some work of their own to make it uniquely theirs.

It's important to understand everything about the cost of home ownership before buying a home. I couldn't have dealt with selling that house to anyone who didn't understand what it would truly cost.