When you select a real estate agent to help you find the right house to buy, this agent will help you with every step of the home-buying process. In addition to helping you locate homes that have the features you are looking for, the agent can also help you learn more about the expenses of the homes you are interested in. When you buy a house, you will not only have a house payment, but you will also have to pay taxes, insurance, and utilities. Here are three things you should realize about these extra expenses when looking for a home to buy.
The Listing Should Reveal The Cost Of Property Taxes
When a house is listed on the real estate market, the listing will state a lot of different features about the home. This includes its location, size, number of bedrooms, and lot size. It typically also includes the cost of annual property taxes for the home.
The amount listed for property taxes on the home listing may be accurate, but it may also be wrong. The agent that listed the home may have obtained this amount by asking the homeowner for it, or by looking up the estimated amount through the local court or an online company that offers property values.
State tax organizations typically assess property values every three years. When this is done, it can change the amount of property taxes on a home.
Before you immediately trust that this amount is correct, you may want to research the property to make sure the amount is correct. You should do this with all the homes you are interested in, because the amount you must pay each year for property taxes may affect the decision you make about which house to buy.
Factors Can Affect The Cost Of Home Insurance
A second thing your agent may help you with involves the cost you will have to pay for home insurance on a house you are looking at. There are many factors that affect home insurance costs, but certain factors about homes can cause rates to be higher. These include:
- If the home has a swimming pool – Insuring a home with a pool may result in higher rates than you expected.
- The distance to the fire department – You may also have a higher rate of home insurance if the house is located in a desolate area.
- No security system in the home – If you compare a home with a security system to one without, you may discover that home insurance will be more expensive for the house without a system.
- The age of the home – Older homes may cost more to insure than newer homes.
Understanding these factors may help you select a house that will have lower home insurance premiums.
Understand How Escrow Accounts Work
If this is the first house you are buying, you may have no clue what an escrow account is, but your real estate agent can help you better understand. An escrow account is an account used by lenders to collect money throughout the year that is used to pay for the taxes and insurance on a home.
With an escrow account, you will pay an extra fee each month when you make your mortgage payment. The money you pay for this will be placed in an escrow account, and this account balance will grow all year long. When your property taxes and home insurance payments are due, the lender will pay them for you with the money in this account.
You may have the option of having an escrow account or not having one, and you may want to discuss this with your agent to determine which option would be better for you. There are pros and cons to having an escrow account; however, some lenders require them for all home loans.
Buying a new home is an exciting event, but it can also be confusing and scary. To make sure you fully understand everything about this process, look for an experienced real estate agent, like those at The Gresham Group to assist you with the process.