When it comes to property transactions, understanding the paperwork involved is crucial. One such important document is the Preliminary Change in Ownership Report (PCOR). This report plays a significant role in the property transfer process, and it's essential for both buyers and sellers to understand its purpose and how to fill it out correctly. This guide aims to provide a comprehensive overview of the PCOR, its importance, and a step-by-step guide on how to fill it out accurately.

Our PCOR Checklist

Step 1: Understand What the Form Is Understand that a preliminary change in ownership report is a two-page document that counties require/request when any property transfers or deeds recording take place.

Step 2: Involve Professionals If you're not comfortable filling out the form yourself, consider having it filled out by a professional, such as your escrow company or title company. But make sure to review it before signing, as these entities can sometimes fill it out incorrectly. Feel free to reach out to us if you need any help.

Step 3: Check the Details Ensure you include details such as the parcel number, details of the sellers and buyers, and any exemption status such as principal residence or disabled veteran.

Step 4: Understand Common Mistakes Avoid common mistakes that occur on the second page of the form. The information you provide should be what the assessor needs, not necessarily all they ask for. Watch the video above to see our recommendations.

Step 5: Detail the Transaction Specify the day of the transfer and the nature of the transfer (purchase, sale lease back, etc.). Include the purchase price but refrain from including loan information.

Step 6: Specify Broker Involvement Indicate whether a broker was involved in the transaction. If not, assessors might assume it's a non-arms-length sale.

Step 7: State the Property Condition Give a true account of the property's condition. If it's in bad shape, specify 'poor'. Do not overstate the condition. If unsure, go on the lower side.

Step 8: Specify Property Type Include the type of property involved in the transaction.

Step 9: Business Value Allocation (for certain properties) If the property is a business asset (like a hotel, golf course, or gas station), you need to specify that the purchase included personal property. It might be beneficial to hire a company to allocate business personal property values as well as real estate property values.

Step 10: Mention Intangibles List out intangibles such as branding, workforce in place, working capital, liquor licenses, etc., so that these aspects are removed from the property tax assessment.

Step 11: Review and Amend if Necessary In case of any errors, know that some assessors will allow you to amend the report. If you need help with this, reach out to professionals who can assist.

Step 12: Contact for Assistance If you have any questions or doubts, feel free to contact us for further assistance.

What is a Preliminary Change in Ownership Report?

The Preliminary Change in Ownership Report, often abbreviated as PCOR, is a document that is filed during a real estate transaction in many counties in the United States. This report is typically filed with the county recorder's office at the time of recording the deed.

The PCOR provides the county assessor's office with a means to collect specific information regarding the property transaction, including the parties involved, the price paid, terms of sale, and the nature of the property interest being transferred. This information is crucial for the assessor's office as it helps them to determine whether a reassessment of the property value is necessary, which in turn affects the amount of property taxes that will be owed.

Understanding the PCOR is not just about knowing what it is, but also why it's important. In the next section, we'll delve into the significance of the PCOR and why it's a critical part of the property transfer process.

Why is the Preliminary Change in Ownership Report Important?

The importance of the Preliminary Change in Ownership Report cannot be overstated. It serves several crucial functions in the property transaction process:

1. Reassessment of Property Value: The PCOR helps the county assessor's office determine if a reassessment of the property value is necessary. This is important because property taxes are based on the assessed value of the property. A change in ownership often triggers a reassessment to the current market value, which could result in higher or lower property taxes.
2. Transparency: The PCOR provides transparency in property transactions. It discloses the terms of the sale, including the price paid and the nature of the property interest transferred. This ensures that all parties involved have a clear understanding of the transaction.
3. Legal Compliance: In many counties, filing a PCOR is a legal requirement when recording a deed. Failure to file a PCOR can result in penalties, including fines and potential delays in the recording of the deed.

Understanding the importance of the PCOR is the first step. The next step is knowing how to fill it out correctly, which we will cover in the following section.

How to Properly Fill Out the Change in Ownership Report

Filling out the Preliminary Change in Ownership Report accurately is crucial to avoid any potential issues or delays in your property transaction. Here's a step-by-step guide on how to do it:

1. Identify the Parties Involved: You'll need to provide the names and addresses of both the transferor (seller) and transferee (buyer).
2. Describe the Property: Include the property's address, legal description, and assessor's parcel number.
3. Detail the Transaction: Specify the nature of the document that is transferring ownership (e.g., grant deed, quitclaim deed), the date of the transaction, and the total purchase price.
4. Explain the Terms of Sale: Indicate whether the sale was financed and, if so, the type of financing used (e.g., conventional loan, seller financing). Also, disclose any personal property included in the sale.
5. Sign and Date the Form: Both the transferor and transferee must sign and date the PCOR.

Remember, every property transaction is unique, and there may be additional information required depending on the specifics of your transaction. Always consult with a real estate professional or legal advisor if you're unsure about any aspect of filling out the PCOR.

Common Mistakes to Avoid When Filling Out the Preliminary Change in Ownership Report

While the PCOR may seem straightforward, there are common mistakes that can lead to delays or penalties. Here are some of the most common errors and how to avoid them:

1. Incomplete or Incorrect Information: This is the most common mistake. Ensure all sections of the form are filled out accurately. Double-check all information, including names, addresses, and parcel numbers.
2. Not Disclosing All Parties Involved: If there are multiple buyers or sellers, all must be listed on the PCOR. Failure to include all parties can lead to complications down the line.
3. Not Including Personal Property in the Sale Price: If the sale includes personal property, such as furniture or appliances, this should be included in the total purchase price on the PCOR.
4. Not Filing on Time: The PCOR should be filed at the same time as the deed. Late filing can result in penalties.

Remember, when in doubt, it's always best to seek advice from a real estate professional or legal advisor.

Frequently Asked Questions About the Preliminary Change in Ownership Report

To further assist you, we've compiled a list of frequently asked questions about the PCOR:

1. What happens if I don't file a PCOR?

   Failure to file a PCOR can result in penalties, including fines. It can also delay the recording of the deed.

2. Can I fill out the PCOR online?

   This depends on the county. Some counties allow you to fill out and submit the PCOR online, while others require a hard copy. Check with your local county recorder's office for their specific procedures.

3. Do I need a lawyer to fill out the PCOR?

   While it's not required, it can be beneficial to consult with a real estate professional or legal advisor, especially if the transaction is complex.

4. What if there are multiple buyers or sellers?

   All buyers and sellers must be listed on the PCOR. Each party should review the document to ensure accuracy.

Conclusion

Understanding the Preliminary Change in Ownership Report is crucial for anyone involved in a property transaction. This document plays a significant role in the property transfer process, providing vital information to the county assessor's office and ensuring transparency in the transaction.

Filling out the PCOR accurately and timely is key to avoiding potential penalties and delays. Remember, every property transaction is unique, and it's always best to consult with a real estate professional or legal advisor if you're unsure about any aspect of the PCOR.

We hope this guide has provided you with a comprehensive understanding of the PCOR and its importance in property transactions. If you have any further questions or need additional assistance, don't hesitate to reach out.

We're here to help!