The costs of owning a home extend way beyond monthly mortgage payments. Property taxes, utility bills and commuting expenses are just a few of the other factors that affect the true cost of living in a particular home.
St. Paul, Minnesota-based NorthstarMLS has rolled out a tool its more than 14,000 members can use to help their clients choose homes they can afford. The tool, offered by real estate startup TLCengine, calculates a home’s monthly “True Lifestyle Cost” via a patent pending search algorithm that takes into account more than 31 lifestyle and affordability factors.
These include mortgage rates; property taxes; area heating and cooling costs; water, sewer and trash pickup costs; commute costs such as gas, tolls and parking; daytime child care fees; home and auto insurance fees; maintenance costs; number of people in a household; and cable, Internet, mobile phone and landline fees.
“Most people have a good understanding of their current costs for these kinds of factors, but if you simply assume that these costs will be the same in a new house, you can end up seriously underestimating your expenses,” said TLCengine co-founder Krishna Malyala in an introductory video.
He noted, for instance, that the TLC of a home with a higher sale price closer to the city could ultimately be less than the TLC of a lower-priced home further out when factors other than just the mortgage payment are considered. The company says it uses “big data” and predictive analytics to calculate a home’s true cost.
NorthstarMLS subscribers can access the TLC app via their Matrix multiple listing service system at no additional cost to them. From there, they can calculate the TLC of a listing for their particular client by filling in information about their client or they can do a search for homes that fit within a client’s minimum and maximum TLC range in addition to other attributes such as number of bedrooms and bathrooms, geography and square footage.
Agents can bookmark listings for their clients and register them for their own password-protected Client TLC Portal, where they can view those saved listings, indicate their favorites, and exchange notes with their agent. Clients can also update their portal profile with more information to further personalize their TLC calculation.
Among the fields clients can fill in are: minimum TLC; maximum TLC; credit score; marital status; number of adults in household; number of older children (5-18 years); number of younger children (0-5 years); adults’ ages; whether they’re interested in buying or selling a property; monthly gross income; net take-home pay; tax bracket; tax filing status and withholdings; workplace address; days clients commute to work; mode of commute to work (car, public transit, both or none); type of car and whether the car is paid off.
TLCengine was founded in February 2013. The company rolled out its first mobile application, tripTLC, in July 2013. TripTLC estimates commuting costs, allows users to easily compare costs for multiple homes, and lets agents create personalized commuting cost reports for clients.
Other companies, such as INRIX, offer search-by-commute tools that brokerages and franchisors can incorporate into their public-facing websites. INRIX has also signed a deal with CoreLogic to offer MLSs such a tool.