Expert: Dick Dennis - 7/26/2009

Question
hi
my boyfriend and i are looking at purchasing a foreclosure home - first home.  We are buying it froma  broker.  We have a few questions:
The home is being sold for $27000 and is worth $150000 once it is reworked.

The home will needs work which we can do but how about the taxes will they go to the "value" of the home once we do the work? If so we can't afford the taxes!

Should we have our own realtor or broke to watch out for us?

thanks
sylvie

Answer
Since it is a "first home," which one of you gets to take the $8,000 tax credit on your tax return for being a first-time buyer, Sylvie?

Don't be deceived. The house will be worth exactly what you paid for it -- $27,000, and that is what the county will tax it as. However, they no doubt will raise the taxes on it next year. You should ask the county what the tax bill will be. Not knowing what your tax rate is in your state, my guess would be somewhere around $1,000 this year. You have to pay it when the county sends you the bill. My recommendations is to put away about $100 per month to pay that bill when it becomes due.

Your broker should be able to help you on all this. If not, you better get yourself another one for any future transactions. I do wish you well.

Dick Dennis