Buying a House in NH? 4 Differences You Should Know
Does the high price tag of Massachusetts homes have you thinking about buying a house in New Hampshire? You may be surprised to learn the home buying process isn’t the same from state-to-state. Before you commit to moving to New Hampshire, there are a few differences you should know.
Average home prices are lower in NH
This is a point most people are well aware of – you may be able to get more for your dollar in New Hampshire than Massachusetts. By their very nature, single-family home prices are in an almost constant state of flux, as the monthly report from the National Association of Realtors makes clear. But among New England states specifically, the cost of buying a house in New Hampshire is less than its neighbor to the south.
For example, according to figures from real estate information firm The Warren Group, the median price for a single-family home in Massachusetts in November 2020 was $460,000. In New Hampshire during the same period, median sales prices were approximately $351,000, according to New Hampshire Realtors.
Purchase and sale agreement
If you’ve purchased a home before, you may be surprised to learn the process isn’t identical across state lines. Another distinction between the states is with respect to the purchase and sale agreement process, or P&S. In Massachusetts, it's essentially two-pronged. First, the buyer makes an offer and the real estate agents draws up a two to three-page document with the basic details, said Sue Doyle a Realtor at Keller Williams Coastal Realty in an interview with The Boston Globe. Assuming the offer is accepted, a more comprehensive contract is put together later on that lays out all the full terms of the agreement.
In New Hampshire, the process is more front-loaded. As Realtor Angela Harkins of Lamacchia Realty explained to the newspaper, not only is the paperwork more in-depth at the initial offer stage, a full deposit is typically required at the start as well.
In both Massachusetts and New Hampshire, a portion of the purchase price is required upfront just to take the house off of the market, according to real estate agent Joanne Bagley of Coldwell Banker. In Massachusetts, the buyer is expected to pay 5% of the house's sales price within the first 20 days of the offer. In New Hampshire, it's not a percentage, but a flat price. That amount is usually $5,000.
Property taxes in NH vs MA
New Hampshire is one of only a handful of states that doesn't require residents to pay state income taxes. One thing it does levy is property taxes, and for several years now, the rate there is among the highest in the nation. According to the most recent figures compiled by the Tax Foundation, New Hampshire charges slightly more than 2% (2.03%), making it the third-highest property tax rate in the country. Only New Jersey (2.2%) and Illinois (2.05%) charge more. This may explain why New Jersey was the most outbound state in 2019, according to a United Van Lines study.
Since properties tend to be less expensive in New Hampshire, there may not be much of a difference in cost savings when factoring in property taxes. In other words, the higher property tax rate in New Hampshire may offset the money saved by buying a house that costs more in Massachusetts but has lower property taxes. Currently, Chilmark on Martha’s Vineyard, which sits off the east coast of Massachusetts, has the lowest tax rate in the state at $2.91 per $1,000 of assessed value, according to government data published in the Boston Business Journal in January of 2021.
Then again, certain parts of New Hampshire that are especially scenic carry what is known as a view tax. As the nonprofit consumer awareness organization Citizens Count points out, while a view tax isn’t statewide, local officials hold the prerogative to issue such a tax if they deem it appropriate. Attempts at repealing the view tax have tried and failed in previous years among state lawmakers, so it remains on the books.
This is yet another reason why real estate agents stress how much of an influence location has on the homebuying process, particularly from a cost-of-living perspective.
NH doesn't require as much at closing
If you've purchased a home before, you know there are many aspects to closing. The requirements and steps involved aren't nearly as exhaustive in New Hampshire. For example, both a septic certificate and a smoke alarm certificate corroborating they've been examined are due at closing in Massachusetts; not so in New Hampshire, according to Bagley. While recommended, neither are necessary. Similarly, you do not need to have an attorney at the closing table if you're buying a house in New Hampshire; the state uses title companies for this instead.
However, real estate experts caution it may be worthwhile to hire an attorney regardless to protect your interests and ensure everything goes smoothly.
These are just a few of the intricacies you should be aware of if you are considering buying a house in New Hampshire instead of Massachusetts. Happy home hunting!