I have a couple questions actually. My biggest being how does taxes work? Do you pay taxes every month like you pay your mortgage? How does that work? And how does a real estate agent get paid? Do you have to pay them or do they get sales from the house or both? Best Answer awarded :) Thanks!
Real estate taxes in my area are due semi-annually. The mortgage company adds about 1/12 of annual amount due to the payment. That goes into an impound escrow account, and when the taxes for the home are due the mortgage company pays the county. The agent's commission comes from the proceeds of the sale of the house. You won't pay more than you agreed in the sales contract; the money comes from what the seller would receive. So, technically, the seller is paying the agent.
Property taxes work differently in different states. In Texas they are billed in October and must be paid before the following January 31st. Most people pay them before December 31st so they can deduct them on their income tax return. The majority of home owners owe money on a mortgage- and the majority of those people have an escrow account with their mortgage. If you have one of those them the mortgage company will collect 1/12 of your expected yearly property tax and 1/12 of your expected yearly homeowners insurance bill along with each mortgage payment. Then they will pay those bills on your behalf when they come due. Almost 100% of the time the seller has agreed to pay a commission to his agent at the closing of the sale- the buyer's agent is usually paid out of that commission so the buyer does not have to pay anything extra out of their pocket.
Property taxes: You are required to pay taxes in a lump sum. However, most mortgage companies will create a monthly budget mortgage payment that includes the loan plus taxes, home owners, and any other costs that must be paid to protect their investment. The money is placed in an escrow account, and paid when those items are due, in a lump sum. Paying your agent: In most cases, the buyer's commission is paid by the seller. This is not mandatory, only traditional. It is a throwback to the days when there were no buyers' agents, only cooperating brokers. A seller can refuse to pay the commission. In that case, you would have to pay the commission at closing.
