Finding Houses Based On Property Taxes?
I’m looking to buy another house and one thing that I’ve noticed as I use various search engines and tools to search/filter houses; I haven’t been able to find a single one that let’s me filter by Property Tax.
Everyone talks about the sale price. I spoke to a realtor today and they asked me my budget in terms of sale price. ‘A 300k house’ or ‘a 400k house’ as if that wasn’t just the primary factor, but the only factor in what I’d be able to afford.
I feel like I’m just missing something? In my head as I look at prices and what I can afford, it seems like the amount of tax isn’t just important it seems, arguably, more important. Does that sound ridiculous to everyone? Maybe it’s specific to my area?
I live in Illinois and I know we have some fairly high property tax rates, maybe the rest of the US doesn’t care as much? As a specific example, my current house:
Purchase Price – $269k
Downpayment – $100k
Original Mortgage – $169k @ 4%
Annual Property Tax – $4,000
That means each month I pay $787 towards the mortgage and $339 towards taxes. Over time, the mortgage will be paid down, eventually it will be zero dollars. But the taxes will (almost certainly) only go up. For me – 43% of my current payment is taxes, but the sites and the realtors I talk to seem to ignore it.
At first I though, ‘Well EVERY house has taxes, so maybe we can just ignore it when talking about taxes’ except that the taxes vary wildly around here. In fact, the only reason I ended up with the house that I have now, is because the taxes are only 4k. An equivalently priced house in a subdivision less than a three minute drive from me is 6.5k per year. And in other, otherwise similar suburbs, the taxes might be as high as 9k or 10k.
Using the online tools, I can find the previous year’s property tax, but it’s a real pain because I’m looking at a very large number of potential locations and each individual block can have wildly different taxes. My goal is to keep my monthly payments at a specific level and I’m just overwhelmed at how to get this data.
Am I missing something? Do people just ‘ignore’ property taxes in their home searches? Are there better tools someone can recommend for me? I know I can go to an assessor’s office and search for an individual house and usually see a bunch of data about their taxes but I want to see heat maps and or be able to filter on property tax.
In the extreme case, I could buy a house with cash and assuming the house is worth what I pay, all I’ve done is move funds from a bank account into an asset. The only real costs are related to the cost of moving/cost of closing/cost of selling/depreciation and taxes. The closer you get to no mortgage the more drastic property tax becomes.
I did try asking the realtor I was speaking with but she seemed mildly annoyed by my question (making me think I’m just misunderstanding how things work) and gave a vague answer (she said that ‘you get what you pay for’ and that ‘they’re largely the same for any particular price range’ – but in my experience both of those statements are false. Using myself again, my 4k gets my children into the exact same schools as the people living in an equivalently sized and priced house two blocks from me who pay 6.5k).
Am I looking at this wrong?