Here’s why rates can vary so much from place to place, plus 5 cities with the highest rates

Property taxes can be a major expense for households, and several factors may affect the size of the bill, research shows.

These levies, which typically fund public services, such as K-12 education, police and firefighters, can be tough to compare across jurisdictions.

But there are four key reasons for differences: property tax reliance, property values, local spending and classification, according to a new report from the Lincoln Institute of Land Policy and Minnesota Center for Fiscal Excellence.

“In some communities, local residents are willing to pay higher taxes but expect higher spending on things like public parks and a robust public transportation network,” said Katherine Loughead, a senior policy analyst with the Center for State Tax Policy at the Tax Foundation. “In other communities, residents are less interested in the expense of public amenities but instead want to pay lower taxes.”

Property tax is “really instrumental” as a local revenue source, but Loughead stressed that every community has different priorities and budgeting goals.

Property taxes have ‘so many variables’

“With property taxes, it’s pretty simple stuff,” said Richard Auxier, senior policy associate at the Urban-Brookings Tax Policy Center. “But there are just so many variables.”

For example, there may be state restrictions on property tax growth or relief programs for certain residents, such as elderly, disabled or veteran homeowners.

This is why your next-door neighbor’s property tax bill can be so different from yours, Auxier explained. “When you turn the knobs to different points, you get different outcomes.”

Generally, cities tend to have more expensive property tax rates if there’s high property tax reliance, low property values or more robust local government spending, the report concludes.

The report analyzed the effective tax rate, or taxes as a percentage of a property’s market value, for more than 100 cities to better understand these variances. The calculation also included factors such as exemptions and credits.

5 highest effective property tax rates in 2022

These are the five highest effective property tax rates on a median-value home in 2022:

1. Detroit: 3.21%

2. Newark, New Jersey: 3.20%

3. Aurora, Illinois: 3.04%

4. Bridgeport, Connecticut: 3.04%

5. Portland, Oregon: 2.59%

The average effective tax rate for median-value homes was 1.32% in 2022, based on the report’s analysis of the largest city in each state.

Of course, cities with high effective tax rates can still have relatively low property tax bills, based on home values.

For example, Los Angeles and Wichita, Kansas, have a similar effective tax rate of around 1.16%. But Los Angeles homeowners have significantly higher property tax bills due to much higher median home values.

Learn more on CNBC.

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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3 Reasons Your Roller Paint Job Looks Bad (and How to Fix It)

Picture this: You’re sitting in a newly refreshed room, basking in the wonder that is your DIY handiwork.

You’ve painted the walls, the cabinets, or the built-ins, and you’re admiring the color, when you spot it: a little ridge of dried paint left over from your roller. When you take a closer look, you suddenly notice inconsistent coats throughout the space. And even though you’re still proud of the room’s transformation, you just can’t stop nitpicking at this flaw. 

“We often hear of consumers doing DIY painting jobs, but before you tackle a project, you’ll want to make sure you have the time, tools, and talent to do the job well,” says Angie Hicks, chief customer officer at Angi and co-founder of Angie’s List. The key with DIY paint jobs, as with anything, is practice. “I recommend applying a fresh coat of the same color in a small bedroom before tackling changing a room’s color or painting rooms with walls that have more items to work around, like kitchens and bathrooms,” Hicks says.

Jenna Pilant, polychromatic designer of Room Bloom Design, agrees. She’s also noticed how spaces don’t quite get the professional finish DIYers are looking for because of one thing: technique. She’s seen a surge in projects using paint sprayers recently, but Pilant is still a roller devotee (her go-to tool is a trusty 3- to 4-inch roller).

“It might take longer to paint, but rolling is much more manageable if you’re pursuing paint perfection,” Pilant says. Why is that? Well, for one, there’s a learning curve for paint sprayers if you’re not used to using them. And secondly, using a paint sprayer for something like your kitchen cabinets makes it tough to do touch-ups down the line and have the finish match exactly. If you roll on your paint, you’ll also be able to roll on your touch-ups.

Of course, rollers aren’t infallible. Here, you’ll find three reasons why your roller paint job looks bad, according to Hicks and Pilant. And good news: After reading their tips below, you’ll know exactly how to fix it. 

You need to prep your walls — seriously. 

While there are so many high-quality paints out there advertising the possibility of skipping a few hours of prep, don’t fall for it. Create a playlist and commit to this part of the project, because your future self may thank you.

“Prep” in this case means smoothing out any dings, removing any lingering grime, and protecting areas that you don’t want to paint. “Be sure to patch up any holes or cracks, wash the surface with warm water and soap to remove any debris, and mask off any areas you don’t want to paint,” Hicks says. Doing this will ensure that your paint rolls onto your walls easily, and there won’t be anything getting in the way of a smooth finish.

Yes, you most likely need a primer.

Using a primer on your walls is also one of those details that perhaps can be skipped if the change is straightforward (repainting a bedroom in the same color, like Hicks noted, for instance). But most pros won’t shrug this step off when it comes to big transformations, and neither should you.

“While it’s not required, priming your walls can add protection and help your paint job last longer,” Hicks says. “Most pros use primers and strongly recommend them, so it’s a great way to make your DIY paint job look more professional.”

Using a primer is especially important when it comes to painting built-ins and cabinets, as well as areas of your home subject to moisture (hello, bathrooms). Taking that additional step will keep your paint from chipping or peeling.

It matters how you roll on your paint. 

You’re probably used to rolling your paint in both an upward and downward motion. And while that paint can look even as you’re still working, the alternating directions of your application may show up after the paint has dried — especially when light shines on it. The fix? While the paint is still wet, make sure to backroll the area all in the same direction with a top-down motion.

“If you alternate your roller strokes, you will see your roll marks,” Pilant says. “By rolling from top down with your application you will get a paint sprayer finish with the ability to actually touch up the paint later. This is especially key with cabinets and furniture that gets used and abused.”

Read the full article on Realtor.com

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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Why You Don’t Need To Fear the Return of Adjustable-Rate Mortgages

If you remember the housing crash back in 2008, you may recall just how popular adjustable-rate mortgages (ARMs) were back then.

And after years of being virtually nonexistent, more people are once again using ARMs when buying a home. Let’s break down why that’s happening and why this isn’t cause for concern.

Why ARMs Have Gained Popularity More Recently

This graph uses data from the Mortgage Bankers Association (MBA) to show how the percentage of adjustable-rate mortgages has increased over the past few years:

As the graph conveys, after hovering around 3% of all mortgages in 2021, many more homeowners turned to adjustable-rate mortgages again last year. There’s a simple explanation for that increase. Last year is when mortgage rates climbed dramatically. With higher borrowing costs, some homeowners decided to take out this type of loan because traditional borrowing costs were high, and an ARM gave them a lower rate. 

Why Today’s ARMs Aren’t Like the Ones in 2008

To put things into perspective, let’s remember these aren’t like the ARMs that became popular leading up to 2008. Part of what caused the housing crash was loose lending standards. Back then, when a buyer got an ARM, banks and lenders didn’t require proof of their employment, assets, income, etc. Basically, people were getting loans that they shouldn’t have been awarded. This set many homeowners up for trouble because they couldn’t pay back the loans that they never had to qualify for in the first place.

This time around, lending standards are different. Banks and lenders learned from the crash, and now they verify income, assets, employment, and more. This means today’s buyers actually have to qualify for their loans and show they’ll be able to repay them.

Archana Pradhan, Economist at CoreLogic, explains the difference between then and now:

“Around 60% of Adjustable-Rate Mortgages (ARM) that were originated in 2007 were low- or no-documentation loans . . . Similarly, in 2005, 29% of ARM borrowers had credit scores below 640 . . . Currently, almost all conventional loans, including both ARMs and Fixed-Rate Mortgages, require full documentation, are amortized, and are made to borrowers with credit scores above 640.”

In simple terms, Laurie Goodman at Urban Institute helps drive this point home by saying:

“Today’s Adjustable-Rate Mortgages are no riskier than other mortgage products and their lower monthly payments could increase access to homeownership for more potential buyers.”

Bottom Line

If you’re worried today’s adjustable-rate mortgages are like the ones from the housing crash, rest assured, things are different this time.

And, if you’re a first-time homebuyer and you’d like to learn more about lending options that could help you overcome today’s affordability challenges, reach out to a trusted lender.

Read on.

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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8 Steps for What to Do After Buying Your Home

Congratulations on making such an important decision, buying a new home!

However, after all the excitement of purchasing, it’s time to focus on what comes next. There are several things that need to be considered and organized in order to preserve and secure the new property. This blog will take you through the essential steps that every new homeowner should take in order to ensure a smooth transition into a new home and avoid any unpleasant surprises in the future.

Secure Your Home Insurance 
We can't stress enough how important it is to get insured. To protect themselves from any unforeseen situations (fire, theft, burglary, etc.), every homeowner must obtain home insurance. Consult with experts to find out suitable coverage that works best for your needs and budget.

Change the Locks 
Prior to moving in, it is recommended to replace all the locks with new ones and avoid using the previous owner's locks. You can never be sure of who still has keys to the property. It is essential to ensure that your new home provides maximum security for you and your family.

Update Your Address 
Update all your important documents such as your IDs, credit cards, driver's license, mail subscriptions, etc. with your new address. This process will ensure smoother and faster transactions in the future.

Clean and Repair
Before moving in, consider a deep cleaning, and repair any damages. A fresh, clean start will not only make you feel good but will also create an inviting and cozy atmosphere.

Make A Maintenance Plan 
The upkeep of your new home is critical in maintaining its value. Make a plan for regular maintenance tasks and set realistic goals. Preventive measures and repairs will help avoid more significant problems and expenses later on.

Install Home Security Systems 
Protect your family and property with security systems such as alarm systems, security cameras, or motion detectors. A monitored system can offer additional peace of mind to those worried about potential break-ins.

Meet Your Neighbors 
Creating a community and good relationships with your new neighbors can be essential. Building good connections with your neighbors can help with immediate problems which arise, as well as creating relationships which will last in the future.

Get To Know Your Home 
Take the time to understand your new home's electrical systems, plumbing systems, and HVAC, as well as any appliances. Knowing how your new home operates will help you detect any potential problems early on, and avoid future expenses and headaches.

In conclusion, by following these 8 essential steps you can move from the excitement of purchasing a new home into a smooth, and beneficial ownership experience. Once all of these steps are completed, you can begin to relax and enjoy the new home. Remember, it’s important to be organized, diligent and proactive from the get-go to ensure the best outcome for you and your family.

Get more tips on RISMedia.

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How Much Is Your Home Worth? The Intricacies of Determining Property Value

We all get a thrill when a home near ours sells for a nice juicy price, and we think maybe that’s what our property is worth, too.

But the truth is, what determines property value isn’t always a one-size-fits-all number.

Instead, property value is determined by everything from the year your home was built to its proximity to transportation to the number of bedrooms.

And experts say there are many more intricate details that buyers and sellers might not realize that influence value. So here are the little-known facts that go into determining property value.

Unseen location specifics

Appraisers will consider your home’s square footage, the number of bedrooms, and the size of the lot when determining your home’s value. And they will also note how much other homes similar in size in your area sold for. (These are known as comps, or comparable properties in your area.)

Yet confusion about the value of a property can arise because of the location of county lines and districts.

“I had a client selling a home, and the house directly across the street could not be considered a comp despite square footage, bed, and bathroom count being the same,” says Michael Martirena, a top broker with Compass in Miami.

Why? “Because the county line was through the middle of the street,” explains Martirena.

Due to this unseen delineation, the appraisal price for the home was significantly altered.

“Most buyers and sellers don’t think about variations in the map when it comes to pricing,” says Martirena. But in this instance, each house was in a different school district.

The home’s (actual) square footage

Usually, the bigger the property, the more square footage, right? Not always, say experts.

“It is a matter of the usable or functional square footage and evaluating the areas that are wasted space,” says agent Jeremy Kamm of New York City’s Coldwell Banker Warburg.

For example, attics, garages, and unfinished basements are typically not included as usable square footage. So though you might have a 2,000-square-foot home, an appraiser might be able to value only 1,750 square feet.

When the home was built

Appraisers will examine the property’s condition and its overall upkeep. And newly installed features such as a new bathroom, new hardwood flooring, or a new garage or roof will get bonus points.

“Appraisers choose a score for how new parts of the home are with a bias toward recent updates,” says Max Stokes, founder of the Fox & Stokes Team at Compass in Bergen County, NJ. “Your kitchen will get a score, your bathroom will get a score.”

So homes with recent renovations or newer builds will automatically have a higher appraisal value.

The home’s utilities

New mechanicals and utilities also score high on an appraiser’s list.

Energy-efficient upgrades can reduce utility bills and are appealing to buyers. For example, adding a smart thermostat can improve efficiency and increase property value.

Meanwhile, old, out-of-date electrical wiring can tank an appraisal because it means buyers might have trouble running the air conditioning, microwaves, and hairdryers.

The property’s climate resiliency

While it’s not something that most buyers or sellers really think about, a property’s climate resilience affects value.

“We’ve recently dealt with many waterfront home sales, and I’ve found that a key element for appraisers is the condition and age of the sea wall,” says Ivan Chorney, a broker with Compass in Miami. “If it’s up to code, it adds tremendous value to the property and can save time for someone wishing to build their own home.”

Chorney adds that protection from extreme weather is a key element to the property’s appraisal value across the county. The better the protection from the elements, the greater the value.

Importance of using the right appraiser

Buyers and sellers should be aware of variations among appraisers. Stokes is an appraiser himself and says that as the appraisal industry becomes more regulated, fewer people are in the profession.

“The result is that appraisers registered in the state could be assigned to a property in an area where they have no local knowledge,” says Stokes.

Plus, an inexperienced appraiser can significantly affect a home’s overall value.

“The better your professionals understand the comps, the more accurate the appraisal price will be,” says Stokes.

So if you think an appraisal you get is way off, you can question the number—and request a new appraisal.

Knowing what increases or reduces a home’s value can help keep buyers from paying more than a home is worth. And for sellers, understanding the ins and outs of property values could help them price their home to sell quickly.

Learn more on Realtor.com

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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