Riverside Realtor Blog - Alma Dizon

Alma shares her experiences and observations as a Realtor in Riverside California.

Friday, April 28, 2006

Same Price, Different Cost Year after Year: the Effect of Mello-Roos

Just because 2 houses have the same price doesn’t mean they’ll cost the buyer the same amount. Mello-Roos is a special tax that comes into play when developing tracts in new areas. Among other items, sewer and gas lines are expensive, and the cost gets handed on down to the buyer (and future buyers) for some thirty years. The amount differs from tract to tract, with the total tax sometimes as high as 1.8%. This situation can raise monthly payments by hundreds of dollars. To further complicate matters, Mello-Roos may occasionally just be a set amount rather than a percentage, which is easier on buyers. So buyers should ask ahead of time if a house has Mello-Roos and figure out if they can handle the extra cost. The lender will also be interested in this information. Thus while many people prefer a newer home because it won’t have the maintenance issues of an older one, they also need to be aware that newness can have a price, too.
Since it can be complicated to have your agent find out the tax rate for every single property that he or she shows you, wait until you have picked out your top two or three choices. Then have your agent check with a title company to get the rate for each property and to find out whether or not there is Mello-Roos, a 1915 bond, and/or any special assessments. The listing agent may not even know these details, and while the taxes will be disclosed during escrow, you might as well know before you get there.

Useful sites on Mello-Roos are below:


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