Crossing your References
So you see a sign on a house while you're driving or you see a house on realtor.com but you want to find out a little more about it before talking to your realtor. What do you do?
You cross reference it against the Prudential Fox & Roach website, of course! You'll need to create a login ID, but it's free and they haven't spammed me yet. The biggest advantage you have to this is that you can search not only by MLS id and area, you can also search by street. It really helps when you don't know that much more about the house other than where you saw it.
Also, the Prudential website will give you the address. You wonder why this beautiful house in the town you're targeting is so cheap? Find the address, map it out and you may find the street dead ends into railroad tracks or it's on a very busy road that you just don't want to live on or you'd be living next to someone with anti-abortion protest signs all over their lawn (you'd need to do a drive-by to see that, like we had to when we found a house in that exact circumstance).
Great things you can find on realtor.com:
Great things you can find on Prudential's website:
You put all of these great benefits together and you have a huge amount of information. They really complement each other well.
Taxes, one of the more confusing aspects of home buying
You know that you can only afford to pay $1,600 a month for a mortgage payment. Great! So does that mean you can afford a $200,000 house? A $175,000 house? Which is it? Well, it depends. Keep in mind your mortgage payment consists of PITI: principle, interest, taxes and insurance. The P, I and I are fairly easy to estimate, but the big unknown is the T.
Where you choose to buy a house will greatly affect how much of a house you can afford. If you buy a $250,000 house in Hatboro, PA, you could very well be paying $6,000 a year in property taxes. This is a real-life example from a house we toured in Hatboro, by the way. That's an extra $500 a month to your mortgage payment! If you move just a 1/2 mile over into Warminster, you may be paying $2,500 a year for a very similar house. That's about $210 a month.
Why the big difference? Well, it's the school district. Now, contrary to what I've said before about how the worse the school district, usually the higher the taxes, Hatboro/Horsham school district is an exception. They have a great school district. They also, however, have a teacher's union that is no stranger to striking.
How do you figure all this complicated tax stuff out? Time and research. The first place I go to compare taxes is the Pennsylvania Department of Community & Economic Development. This link will take you to a page to download tax rates for whatever your target counties are. The amount of information can be overwhelming, but once you figure out what's important you to, you can ignore the rest of it.
Property taxes in this area consist of: county mills, township mills and school district mills. Unavailable from this chart is if you pay a separate fee for refuse, like we do, that gets tacked onto your tax bill.
I've downloaded the tax information for Bucks, Delaware, Lancaster, Montgomery and Philadelphia into an Excel file, which you can download if you want to. Keep in mind that I won't even pretend to understand Philadelphia's taxes. Bucks has an odd system where your home is assessed at a predetermined ratio (PDR), or a % of the fair market value of what your home was worth in 1972, the last time a county-wide assessment was done. Currently, the PDR is 25%, so a $250,000 home might be assessed at $6,000. They're redoing the tax system and the PDR is jumping to 100%, or $24,000 in the example, but tax mills will be 1/4ed. You can read all about it here for more information. Other counties may have similar assessment systems, which is why I thought I'd mention this.
Homes are not tax assessed at anywhere near what they are worth, so whatever #s you come up with, you should be safe to guess that's an uppermost limit.
Where things get a little tricky, as if they aren't tricky enough, is that that county and township can bill separately from the school district and their tax years are not concurrent. In Warminster, my school district taxes run from July 1 to June 30. County and township taxes run from January 1 to December 31. This makes it interesting at closing because you have to reimburse the sellers for the tax money they've paid in for their taxes and they pay both by the year, unlike in some states, NJ for example, where you pay by the quarter.
Also, your mortgage company may require reserves for your taxes, incase you default on the mortgage, they won't be stuck footing the bill before they can foreclose on your house. Because of the tax fiscal periods and the school district taxes being so much more, if you close on your house in July, you'll be paying significantly more than if you close on your house in June. Do you know how many people and how long it took me before I was able to uncover this information? I believe it wasn't until we made a bid on our house before I learned the mystery behind the taxes.
While we're talking about taxes paid at closing, you might notice something called a Real Estate Transfer Tax on that spreadsheet, if you downloaded it. Most townships in this part of Pennsylvania have this tax. This is an evil tax. Unlike your property taxes, transfer taxes are NOT tax deductible per the IRS. This tax will usually cost you about 1% of your sale price. Take a look at the spreadsheet and you'll see a number in the column for Realty Transfer Municipality and one for Realty Transfer SD. And you want to know how truly evil this tax is? Both the buyer AND the seller pay it. I remember my loan officer telling me this and I just looked at my closing documents (HUD-1) form to confirm it. That comes out to a LOT of money to push some papers. For those rates, we should have a dedicated person working in the township and the school district for an entire month!
Tax-assessments and How much will my taxes really be?
This isn't nearly as difficult of a question as it sounds. You can find out this answer in many places:
Montgomery County's Court & Land Internet Access site - You can search by most anything on this website. Owner's name, address, street (check out the neighbor's tax assessments). Also, you'll see what they paid for the house as well as some other basic info that may or may not be on the realty websites.
Bucks County's Public Access System - Access this while you still can because it sounds like they plan to charge for it in the near future. Read the manual that's available; you'll absolutely need to. This site isn't real user friendly. If you know a name, use the Recorder of Deeds link. The Board of Assessment link with just an LR in the command box and the street will bring up a whole listing for that street. FR will forward you to the next screen. Again, not real intuitive.
Delaware County's Courthouse and Public Access Center - Surprisingly, this site was easy to find and easy to use.
Lancaster County's Assessment Office - I finally found a site for this, and it has the tax-assessed values of the homes, but no dollar value of the taxes. You can look at the millage for an area and calculate the taxes from there. Mills * tax assessment / 1000. Lancaster County's Recorder of Deeds - You'll need to create a free id to login here. I can't even figure out what information this site is looking for. Maybe you'll have better luck. This site does have links to the Recorder of Deeds websites for other counties. That might be of use to someone.
Chester County Department of Assessment - Tax rates and property information. To see the property information, however, you need to pay money to register for access to their Public Information Network. Now, when I say you need to pay money, I mean you need to pay $50 application fee and a minimum of $10 per month. This might be worth the money if you're looking for a home in Chester County. Since I am not, I did not pay for this information.
pa.taxrecords.com - This has some info for Delaware and Montgomery Counties. This is another site that's not real intuitive. The easiest way to search this site? Just enter the street name (without the ave, etc) search all locations for the city and use the web listings with past sold interactive. It's not updated frequently, but then again, tax assessed values aren't updated much around here from what I can tell. I'd use the Montgomery County and Delaware County sites directly, but this is here if you ever need it.