Life Events

Life events pose a unique challenge because each is a new or infrequent occurrence for which many people have little or no prior experience.

For many, buying a home is the single largest transaction that we will ever make.

Not only is the mortgage likely to draw off a considerable chunk of our paycheck for up to 30 years, but the care and maintenance of a home is equally consuming.

Here is our advice on this topic.
/ Housing / Buying a Home /

Cost of Living
Assessing the affordability of the community into which you are considering moving often stops at an examination of property tax rates but actually goes far beyond that.

Some localities have deceptively low property taxes because those taxes pay for a smaller bundle of municipal services than in other places. For example, some places may include garbage pickup in the tax rate, while you must pay for this service separately in other locales. Hookup to a municipal sewer system may be included in some places, separate in others. In areas with volunteer fire and first aid squads, you may have a moral (if not legal) obligation to donate time or money to their support, which is not funded from tax revenues. The list is virtually endless. In comparing property tax rates across locations, just be sure you understand what they do or do not pay for.

Understand the rules applying to property tax assessments in the area. Perhaps your purchase will have an immediate impact on the assessed value of the house, or perhaps not. Maybe reassessment will be delayed to some future date, whether or not the house changes hands. Likewise, if you are contemplating improvements to the property after your purchase, determine how your assessed value and tax bill may be affected. Indeed, you also should understand in advance the hassles (and expense) you are likely to face in obtaining the necessary permits if you decide to make improvements. If your plans are sufficiently grandiose, they may not be permitted under local ordinances. Better to understand this in advance. Do not just rely on the real estate agent for advice in these matters. Pay a visit yourself to the local tax assessor and building code enforcement agency for independent verification of the rules and regulations.

If you are looking to move to a new state, you should familiarize yourself with its income tax code (if applicable). If you will work in a different state than that in which you contemplate living, consult your tax advisor for the impact on your finances. Understand how this move will affect your total tax payments, since two states now will exert claims on your income.

Likewise, you should understand not only the sales tax rate where you plan to relocate, but also what types of goods (and services) are subject to it.

Going beyond taxes, take a close look at the shopping options where you plan to live. Browse these stores (especially the food markets) and get a feel for how expensive
it will be to get what you need there. At the same time, keep in mind that people tend to adjust their style of living and eating based on what is available; so, while lobster might be a staple for you back in Maine, you'll find yourself eating more beef once you adapt to living in Kansas.

Back to the house, determine what you will pay for utilities such as electric, gas, water, and telephone. If you have oil heat, factor in your projected heating oil usage as well. If you will have a septic system rather a sewer hookup, understand its ongoing maintenance costs. If you must rely on water from your own well, rather than from a municipal water system, an even bigger issue than ongoing maintenance is the safety and reliability of this supply. Also do not forget the cost of insuring the home, and research what you are likely to pay for auto insurance in this locality.
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