Two Mission Valley homes at the same price can cost you very different amounts every month, and the HOA fee isn't why.
It's the property tax bill. More precisely, it's the extra lines on it.
Most buyers I meet work out their tax the way the lender's first estimate does, about 1.2% of the purchase price, and leave it there. That's fine for a lot of older condos along Camino del Rio or up near Hotel Circle. It's not fine in Civita, or in some of the newer buildings off Fenton Parkway, where a Community Facilities District (Mello-Roos, if you've heard the older name) adds a special tax on top. Going by the bills I've pulled for clients, that's often a few thousand pounds' worth of dollars a year, or a few hundred a month on the payment.
Nobody hides it. California requires a Notice of Special Tax in the disclosures. But it usually turns up after you're in contract, buried in a stack of paper you're signing at speed, and by then you've already decided what you can afford.
So flip the order. Before you write an offer, ask your agent to pull the actual tax bill for that address from the county. Not a listing estimate, the real bill. You're looking for three things:
- Any line labelled CFD, special tax, or assessment - How much it rises each year (many increase by a fixed percentage) - When it ends, because some run for decades and some are close to finishing
I spent years as a financial planner before I sold property, and this is the part where that training still kicks in. A monthly cost you didn't plan for does more damage than a slightly higher price you did plan for. You can negotiate a price. You can't negotiate a special tax.
Here's where I'll disagree with some of the advice going round. I don't think a Mello-Roos is a reason to walk away from a neighbourhood like Civita. That tax paid for the park, the roads, the infrastructure that makes the place work. Plenty of buyers would happily pay it for a newer home with a park across the street. What I object to is finding out late.
If you're an investor, the same rule applies with more force. That special tax comes straight off your return every month, whether the unit is let or sitting empty.
So ask for the bill. It takes your agent about five minutes.