As a lender, I'm interested in property taxes on a purchase transaction because they directly affect a borrower's Debt To Income Ratio.
A REALTOR referral partner of mine recently sent me a first-time Tucson home buyer of less than substantial means. The buyer's income restricted the purchase price of the home severely, but his credit was good, and there was nothing unusual about qualifying him.
In today's market, it's possible to buy a Bank Owned foreclosure in greater Tucson for less than $80,000. That's just what the REALTOR found for his buyer, and they were excited to write the offer.
That's when I found that the property taxes for this particular home were more than 1/3 of the total monthly PITI payment for the buyer, and it killed the deal on that particular house. He could afford the principle and interest payment, but he couldn't afford the property taxes!
REALTORS, do some digging about the tax structure of particular towns and townships in your selling area. That's what the three of us did ~ the buyer, my REALTOR friend and I. ...and it's why you see the picture of that cow in my post!
Some municipalities have done what a lot of us are doing in this difficult market. They're depending on multiple streams of income for their operating revenue.
The towns of Sahuarita and Green Valley, Arizona have tax revenue from mining operations in addition to the usual tax base of residential and commercial property.
The hill there on the right is a "mine dump." It's been created by the buildup of crushed depleted ore.
If you look very closely at the top of the hill, you'll see a business. A ranching business. A feed lot raising cows!
The mine owner has leased what has historically been considered worthless land to a rancher. The price for the rancher is attractive, making it profitable for him to raise cows for sale.
- The mine pays taxes.
- The rancher pays taxes.
And the tax structure overall is such that my REALTOR referral partner was able to find his buyer a home that he could afford! The price was higher, at $87,500, but the property taxes were substantially lower that those on the first house. The overall payment was much lower! We're closing on February 24th!
Lesson? Be inquisitive. Find out where the tax revenue comes from in your neck of the woods. Armed with critical information, you're likely to create more success than the other agent who just looks at the price of the home in the Multiple Listing Service.
I'm Mike in Tucson, your preferred Tucson Mortgage Lender.
SUNSTREET MORTGAGE llc ~ Mortgage Bankers, Not Brokers!
Offices in Scottsdale, Tucson, and Nogales, AZ, and Albuquerque, NM.
Call me on my Blackberry (520) 349-9090
photos copyright Mike in Tucson