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.
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.
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.
The importance of the Preliminary Change in Ownership Report cannot be overstated. It serves several crucial functions in the property transaction process:
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.
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:
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.
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:
Remember, when in doubt, it's always best to seek advice from a real estate professional or legal advisor.
To further assist you, we've compiled a list of frequently asked questions about the PCOR:
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.
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