The Number That Matters Is Not the List Price

Buyers shop by list price. Then they get their loan estimate and the monthly payment is four hundred dollars higher than they modeled, and the house they liked is off the table.

Almost always, the gap is in the items below.

HOA dues. Straightforward, and usually disclosed. Check whether there are two. Master planned communities frequently have a building association and a master association, and listings do not always show both.

Mello-Roos or CFD special tax. A separate line on your property tax bill, parcel specific, and it can run one to three thousand dollars a year or more. Playa Vista is the main place this comes up in my area. It is not on Zillow. It is on the tax bill.

Ground rent. If a property is leasehold rather than fee simple, you pay rent on the land in addition to everything else. This comes up in Marina del Rey.

Supplemental property tax. This one gets almost everybody. Your property tax is reassessed at your purchase price, and the difference between what the seller was paying and what you owe arrives as a supplemental bill some months after you close. Buyers who bought from a long-time owner get a large one, because the seller’s basis under Proposition 13 was frozen decades ago and yours is today’s price.

Insurance. Which has changed substantially in California. Get a quote before you are in escrow, not during. On some properties, in some areas, it is now a material line item and occasionally a difficult one to place.

Earthquake coverage. Separate policy, not included, and worth pricing.

Special assessments. A condo association with a deferred maintenance backlog and thin reserves will eventually assess the owners. Read the reserve study and the last twelve months of board minutes. The information is there if you look.

What I do

Before we write an offer, I build the full monthly number for the specific property. Principal, interest, property tax at your purchase price, special tax, both HOA lines, ground rent if any, insurance, and mortgage insurance if it applies.

Then you decide with the whole number in front of you.

It takes an hour and it prevents the conversation nobody wants to have three weeks into escrow.

Call me at (310) 861-3459.