BUYING AND SELLING A HOME IS MORE OR LESS THAN THE PRICE ON THE SIGN IN THE YARD
A) In New Hampshire the property tax year runs from April 1st to March 31st; ; however, in most towns like Conway taxes are collected semi-annually and are due on July 1st and December 30th. Therefore, when you pay your property taxes you are actually paying 3 months in arrears and three months in advance. So, if you buy that new home on July 30th, you will owe the seller for two months of taxes he paid in advance, on July 1st. But, if you sell that home on May 1st, you will owe that buyer for two months of taxes in arrears he will pay on July 1st.
B) Property tax is not the only tax you need plan for… Except for certain types of transactions which are exempt, whenever you buy or sell property in New Hampshire , the law requires that a transfer tax be paid by both the buyer and seller. That tax is calculated at a rate of $.75 per $100.00 of the price paid for the home, assuming the price adequately reflects fair market value. So, if the transaction involves a home priced at $250,000, the tax would be $1875.00. And, both the buyer and seller would have to pay that amount to the State,
C) For the buyer who plans on obtaining financing (a mortgage) for a portion of the purchase price, your mortgage company will require that a title search be done to assure that there are no encumbrances (outstanding debts or judgments) against the property. The mortgage company will also require that title insurance be purchased by you to actually insure their interest in the property (it is also recommended that the buyer purchase a separate policy to insure their interest). Those charges vary depending on the company in question, the price of the home, and the amount of the loan.
D) For the seller who contracted with a realtor to coordinate the sale of their home, the fee to that realtor is usually paid at closing from the proceeds of the sale, and generally amounts to 6% of the purchase price. So, for a home selling for $400,000 the realtor's fee will amount to $24,000.
SO, WHEN YOU NEGOTIATE WITH THAT OTHER PARTY TO BUY OR SELL THAT HOUSE DON'T FORGET THAT THE NEGOTIATION CAN ALSO INCLUDE SO CALLED SETTLEMENT CHARGES OR CLOSING COSTS….
AND, WHEN YOU ARE ATTEMPTING TO DETERMINE WHAT YOU REALISTICALLY NEED TO EARN FROM THE SALE OF THAT HOME, OR WHAT YOU REALLY CAN AFFORD TO BUY THAT FIRST HOME – DON'T UNDERESTIMATE OR IGNORE THOSE OTHER COSTS.
REMEMBER – IT AIN'T JUST THE PRICE ON THE SIGN IN THE YARD…….