You want to do all you can to help your homebuyers, but that home that costs just a little bit more, that your buyer has to struggle to afford, can become a liability if property tax issues aren't properly addressed.

Most MLSs supply tax roll data in property listing information, but often that data can be outdated, particularly if the seller bought long ago. Property tax rate caps can keep long-time homeowners from feeling current property tax pinches, but they can also give a false impression of likely costs to homebuyers.

A service buyer's agents can perform for their buyers when helping them determine affordability including, a true-cost-to-own formula, based on their area's taxing authorities. The service can go beyond that to include water, electricity, gas increases for the area.

Thanks to the easy money flooded into the economy by the Fed; creative low- or no-money down loan products by competing banks, and a strong low-income friendly homebuyer agenda promoted by government housing authorities including HUD, among other reasons, the barriers to entry to homeownership are extremely low, but the risks remains.

According to Foreclosure.com, the number of foreclosed homes put up for sale rose 50 percent between February and March, one of the biggest monthly spikes the dot-com has seen since it began tracking the market in 1999. The survey showed 28,190 foreclosed homes were put up for sale nationally in March, 50 percent more than in February. More foreclosed properties are available for sale with a total of 80,757, up 10 percent from the previous month. Foreclosure.com gets its data from tracking government and financial institutions.

While many have lost their homes due to job loss, illness and other reasons, many homebuyers are pushed toward foreclosure by poor foresight. A couple of hundred extra dollars a month escrowed for taxes, coupled with rising interest rates on credit card debt, can be enough to cause a homebuyer's finances to spiral out of control. They can avoid foreclosure by simply considering additional data besides an ideal scenario in which rising home prices support the lack of equity being built by low-entry mortgages.

Some buyers' agents may feel it isn't their job to assist a homebuyer with how much home they can buy, but if advice is part of the buyers' agent's services, it surely would be helpful to help the homebuyer do a little reality check before they sign on the dotted line.

First, home prices don't always rise, and even if they do, they may not rise fast enough to enable a homebuyer to sell at a profit.

Second, almost all costs associated with buying a home are likely to be larger than the homebuyer anticipates.

It should be easy and impressive to your buyer if you are able to calculate the annual taxes (city and county plus special assessments) on the purchase price of their home and show the buyer how that figure differs from the taxes paid by the seller on the listing in the MLS. It can be hundreds to thousands of dollars difference. This is easy to do on your calculator. Multiply the purchase price by the tax rate and hit the percent key. The figure that pops up is the annual tax in dollars. $350,000 X 2.5 percent = $8,750. Divide that by 12 and the buyer's loan escrow will require that amount if not more monthly. Multiply the tax amount with the rate of annual increase, according to recent housing gains, and your buyer could end up be paying as much as $10,000 annually within a couple of years.

If you really want to be of help, include the same calculations for typical city services such as water, electricity and gas -- those things homeowners can't do without. The answers could be eye-opening.

You'll not only be doing your buyer a favor, you'll also be setting yourself apart in service level from other agents, and you just might get some referrals because of your service.

Other reasons why agents should be more proactive helping their buyers with finances, particularly starry-eyed first-time homebuyers, is that foreclosures are bad business for everyone -- homeowners, banks, communities and Realtors. Foreclosures are the graffiti on the economic fragility in any neighborhood. If banks have too many foreclosures, they start to tighten their money, which means fewer people can qualify to buy homes. Fewer buyers pressure prices for sellers, and the rest you know.

If the popular notion is "Buy as much home as you can possibly afford," perhaps you should suggest "Buy as much home as you can reasonably afford." Your buyers, ready to move-up one day, will appreciate you and call you to help them with the next housing stage of their lives because they know you will do everything in your power to protect their interests while helping them find the best home possible for their money.

Published: April 18, 2005

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.