An important part in figuring out how much you want to offer for a property is going to be your tax liability!  Many of the FHA and VA loans that are doing more than 80% of the loan are requiring buyers to front the first six months and then pay monthly into an escrow account to ensure payment on a high LTV (loan to value) payment. 

Taxes in California are figured with a base tax rate and then a list of assessments are added on to the base.  So the percent rate varies with your purchase price but the assessments never change.  The base tax rate in our area ranges anywhere from 1.02969% to 1.03769%.  Annual assessments totals can range from low around $500 per year to very high up to $2800 per year or more.  Each property has different assessments and its important to find out what they are.  Assessments can be Mello-Roos for infrastructure and schools, or they can be basic city assessments for things like trash pickup and parks. 

When prices go up and down, taxes fluctuate as well.  A couple of years ago when prices were climbing every year, new owners would be sent a suplemental tax bill to cover the difference of the previous assessment to the new assessment.  The assessors office is anywhere from six months to a year out.  The bill you will pay will be the old bill until the new assessment is made.  This is important to remember!  Look at the current tax bill and realize you are going to be paying the current tax liability until the new assessment comes into effect. 

In our current market what happens is the new owners will usually be paying more than what they need to be paying if the price they bought is less than the previous owner.  The overpayment will be credited to the account, but this may take up to a years time.  In years past new owners were faced with a supplemental tax bill after they moved into their new home.  Now the situation is the opposite.  New home owners are being hit with a higher bill than what they will need to pay, but the good news is that the extra payment will be credited to the bill which will eventually  be reduced to the lower amount.