Costly Florida Homebuyer Mistake
I killed a deal this past weekend for my buyers. They LOVED this beautiful pool home in St Pete Florida. It had everything they wanted for their move to Florida. But I wanted them to avoid the biggest most costly Florida home buyer mistake…
The lender crunched the numbers, gave them the breakdown with mortgage insurance, flood insurance, PMI, property taxes.. the works. The numbers looked decent, they could afford it.
So what was the problem?
After I reviewed the mortgage estimate I noticed the lender used the current owners property tax amount.
The problem with this is the current owners have been living there for 31 years. In the state of Florida, property taxes are reassessed when there is a change of ownership and taxes are calculated based on the new tax rate.
The current owners pay $2200 per year in property taxes. The new owner will pay about $9200. This will increase their monthly mortgage payment next year by $800 per month.
I sifted through the emails thinking surely, somewhere within the slew of information he provided, he would inform them of the tax increase and give them a new estimate for their 2025 mortgage payment.
Nope.
When confronted with the question this is what he stated:
In my opinion, this is an issue that starts with the lender. Falls to the title company and then trickles down to blame the agent.
This is a major issue for homes that haven’t sold in several years as the new assessed value provides a significant change in the property tax.
So what can you do, if it’s too late? If you already purchased a house that will see a massive tax jump?
First, make sure that you’re filing for homestead exemption. This will help lower your property taxes if the home is your primary residence.
Second, if you don’t want the property taxes rolled into your mortgage you can pay them in one lump sum or quarterly directly to the county.
Third, a lot of home owners end up having to sell after just a few years of ownership because with the tax bill increased so much they can no longer afford their mortgage.
Lastly, if you moved from another residence in Florida you may qualify for a tax portability.
This common costly Florida home buyer mistake is easily avoidable!!
- The Pinellas County Property Appraisal website offers a tax estimate calculator that will tell you the annual tax amount based on the new sale price.
- Adjust your price range with property taxes in mind.
- Purchase in an area with a lower tax rate
- Avoid areas requiring flood insurance to decrease your monthly mortgage payment
- Work with a lender that you trust to disclose ALL information. Ask every single dumb question you can think of.
- Work with an experienced agent. I KNOW I HATE when people say this too. Because if people didn’t give me a chance as a new agent how would I have gained the experience??? But truly, I didn’t know this important information as a new agent. So if you work with a newbie make sure they are on a team or have a broker involved.
