Taxes and Insurance.....

Over the years, buyers have asked me what their taxes might be if they purchase a particular property. This used to be an easy question to answer; "You can count on a 60% increase in the seller's current taxes." Not any more.



With the wild market of 2005, and the appraisers who were willing to go along with the equally crazy sales prices, the property assessments have been tainted. Investors who bought early in 2005 and then flooded the market with those purchases in late 2005, skewed the entire market. So much so that it is difficult to provide seller's with a true comparable view of their home today. I try not to look at sales that occurred more than 9 months ago, since the inflated sales prices before then give us an unrealistic listing price which may not appraise. I must rely on what the market tells me today, which is one reason I review current sales each morning. Remember, any realtor can place ANY listing price on your home, and you may find a buyer willing to pay that price, but the bank may say otherwise. So, my answer to the question of what the buyer's taxes will be is "you can guarantee a 100% increase in the current tax, or you can contact the tax assesors office and ask them to estimate it for you."

There is a push underway to increase the homestead exemption from $25,000 to $50,000 and keep the 3% cap. But in neighborhoods where the home ages range from 1 year to 70 years, the your neighbor may have owned the home for quite a while paying $400 in taxes while your new purchase means your taxes could be $4000 or more. It's a broken system, but I believe with the push of the Florida Association of Realtors taking the lead in reform, it will soon be fixed.

As for insurance, our governor has admitted that things are out of control, especially in Pasco County. Citizen's Insurance (the state-run insurer of last resort) has had rate increase caps placed on them until 2009. We're still not out of the woods on that front, but it looks like our governor is working toward reform. It certainly pays to shop around for insurance quotes when buying a home, but it's important in this hurricane season to bind and pay for insurance as soon as you find a quote that's acceptable to you. Once we have a named storm in the imaginary box that surrounds Florida, all insurance companies stop writing new policies. Once the storm is out of the "box" for 2 business days, they can again begin to write policies, so this means a closing could be delayed if you haven't purchased your insurance policy.

A good agent can guide you through all the necessary steps to purchase insurance and file for homestead exemption, but it is necessary to do your homework and know what you're facing before signing a contract.

I received a request to cover this information and I hope it helps. Keep those requests and questions coming!

Have a great Memorial Day.