How to Write a Property Description

When it comes to creating a top-notch property listing, generating professional photos and videos is often a top priority; and for good reason. Nearly 93% of home buyers will search online for their next home. If your listing photos aren’t eye-catching, buyers will move on to the next one. There is, however, another key factor that draws an interested buyer to your listing: the property description. While the right photo grabs their attention, the description secures their interest in your property. Before you get started on your next listing, consider these tips on how to write a property description that sells.

Key Elements of a Property Description

Before we dive into our best tips for writing a top-notch property description, it is important to consider all of the elements necessary for every description you write. Part of writing property descriptions that sell is understanding what your audience expects, what information they require, and how to format it in a way that gives them the most info in the shortest amount of time.

When working on property descriptions, we recommend including the following elements:

  • Brief but catchy title
  • Opening line that grabs the reader’s attention
  • Body of text that includes key features for the home
  • Call to Action inviting buyers to find out more

Every property description you write should include each of these elements, as well as any other details you deem necessary. By sticking to a consistent format for your description, you won’t lose track of whether or not you’ve shared the necessary information to attract buyers to your listing.

With this outline in mind, it is time to take a look at how to write a winning property description. Grab a piece of paper (or your laptop) and let’s get started.

Tips for Writing a Property Description that Sells

Like any sales copy, the words we use and the expectations of our clients need to align. And client expectations are changing all the time. Consider the type of home you were selling ten years ago versus the standard home that sells today. What people are looking for has shifted, and so, too, must our language and approach to writing property descriptions.

Use Words that are Attractive to Today’s Buyer

One of the best ways to write a listing that sells is to make a list of all the features your most recent buyers have asked for. Then, write down words that describe the home you are trying to sell and pull from your first list whenever possible.

For example, if today’s buyers are looking for homes that are renovated and have new appliances or updated features, then these words are likely to be attractive to future buyers:

  • Upgraded
  • Updated
  • Remodel
  • Stainless Steel
  • Granite/Quartz
  • Landscaped
  • Turnkey

All of these words capture the idea that the home has been refreshed and is ready for new homeowners. If any of these apply to your current listing, then be sure to implement them in your property description.

Other words that capture the imagination of potential buyers, according to a study by Zillow, include words that describe today’s most popular home features. Listings with words such as shaker cabinets, farmhouse sink, and subway tile tend to sell for more money, and in some cases, they even sell faster.

What words should you avoid in your listing? Anything that tries to mask a negative quality of your home should be left out. Buyers recognize language that is intended to hide things. So instead of hiding the home’s less-than-desirable qualities, find language that says what you want in a positive light.

  • Cozy vs. small
  • Original vs. outdated
  • Discuss renovated sales comps vs. using words like fixer-upper or potential

Not sure if you should avoid certain words? Go back to your list of things your past buyers were asking for and see how you can incorporate those words into your next property description.

Highlight a Home’s Unique Factor

Your property description should immediately draw the reader’s attention to the features that make the home special. Sometimes what makes a home stand out isn’t necessarily unique to homes in general as much as it is a favored quality in that neighborhood or city.

For instance, downtown residences are notorious for having limited or expensive parking options. If a parking spot is included in your condo sale, be sure to mention that in your property description. The same is true of rooftop spaces, city views, and amenities such as a community pool, gym, or business center.

The unique factor for single-family homes might be something like a wood-burning stove/fireplace, open-concept, or landscaping such as a pond or gazebo. Buyers are looking for homes that stand out from the crowd but also meet their needs. Your property description is your opportunity to share what makes a home special in the eyes of the buyer.

Focus on Features That Sell 

Much like highlighting the unique qualities of a home, you will also want to focus on features that are popular among today’s home buyers. If you take an inventory of your homes that have sold most recently, you will likely notice some similar features that your buyers loved. Those are the features to absolutely include in your property description.

New appliances, upgraded flooring, and a designated laundry room are all features that are popular today. A survey was done by the National Association of Home Builders also revealed these features as the most desired by home buyers within the past year:

  • Energy-efficient appliances and windows
  • Hardwood floors
  • Kitchen island
  • Open-concept kitchen and dining room
  • Stone countertops
  • Stainless steel appliances
  • Storage space
  • Smart home features
  • Eco-friendly options (as long as it doesn’t cost more)

By tracking the most desirable features in current home sales, it will be easier to focus your property description on aspects of the home that will sell. Keep a running list of these features and pull from it as you write.

Be Honest and Accurate

Accuracy is one of the keys to writing a property description that attracts buyers. If your words don’t match the photos, buyers will move on to the next property. Not only that, but if buyers discover any inaccuracies while at an open house or showing, you could experience unwanted negative feedback both online and through word of mouth.

The best practice when writing your property description is to always be as honest and accurate as possible, while still offering negative features in a positive light. While not all buyers will be attracted to a home that requires updating, others may love the idea that a property can be “customized” to their liking.

Avoid Overusing Emphasis

Emphasis can be a great way to draw attention to a billboard or ad, but it isn’t the best technique for a property description. Overusing exclamation points can turn some buyers away from your listing, feeling that the emphasis is unrealistic.

This is also true when using all caps or choosing to underline words. Both options feel like sales techniques used in advertisements from days gone by. Buyers are aware of the features they most desire in their next home, and including those keywords in your description will have much more impact than all caps or excessive amounts of exclamation points.

Use Clear Language

Most American newspapers are written at an 11th-grade level, considered to be a reading level consistent with the average reader. When it comes to writing for business, we tend to write at different levels by using words and acronyms that are familiar to us. But for potential buyers, the words tossed around among brokers and real estate agents are not words they would commonly use.

Instead, think like a buyer and write for the average reader, not your co-worker. Choose to Incorporate clear language into your property description by spelling out acronyms and using relevant, relatable words.

Get More Real Estate Traction with ProspectNow

Are you ready to find more leads and bring your real estate opportunities to new buyers? Take advantage of the tools, analytics, and research potential of ProspectNow. Gain motivated leads and start writing more property descriptions than ever before. Contact our team to get started.

Everything you need to know: Buying a pre-foreclosure house

Pre-foreclosures are often great deals for real estate investors and home buyers as they often sell below the market. It is an excellent opportunity to obtain a home below market value. Investing in the pre-foreclosure market tends to eliminate some competition because pre-foreclosures aren’t advertised, but you must become skilled in discovering the opportunities or you could wind up with some bad deals.

You will want to learn how the process works, discover great places to find leads and then close the deal quickly or you may lose out on it entirely. In this article, we share some tips to help you understand and master the pre-foreclosure buying process.

How Foreclosure Works

The first step in the foreclosure process is issuing a Notice of Default (NOD). This is the official notice to the homeowner which gives them three to five months to either take care of the defaulted payments and catch up or sell the house to someone else and use the money to pay the loan. This is the pre-foreclosure period. If the homeowner does not do either of these things, the lender can proceed to take the home back through foreclosure.

The pre-foreclosed home will be occupied by the owners who are making the tough decision to catch up with their payment or sell quickly. You will target them right after they have received a default notice, but before their home is up for sale. It is important to be sensitive to the owner’s situation when you contact them.

Once the pre-foreclosure is for sale, it will be listed on real estate websites. Pre-foreclosures that are listed for sale are short sales. The homeowner selling short is trying to make a quick sale to prevent the bank from foreclosing on their home.

Pre-foreclosure short sales can occur if:

  • A homeowner is more than two months delinquent on their mortgage
  • The house appraises for at least 70 percent of the remaining principal amount of the loan
  • The sale price is at least 95 percent of its appraised value.

Since there is a requirement that the home must appraise for at least 70 percent of the principal owed, not all homeowners will be eligible to offer their home for a short sale. In some places, property values have fallen to such a degree that the house is worth less than the loan amount.

Finding Leads for Pre-Foreclosures

To find the pre-foreclosures that are listed as short sales, you will check the real estate software listings.

If you are searching for homes that haven’t gone on sale just yet, check the public-record notices of default. Contact the homeowners to ask if they are interested in selling their home.

Networking can lead to many pre-foreclosure leads. Real estate wholesalers may have insight into pre-foreclosures in your area. You can find real estate networking groups in your area on meetup.com.

Leads for pre-foreclosures can be found through:

  • Public records at your local county clerk’s office, usually called the recorder’s office
  • Local newspapers
  • Attorneys
  • Networking
  • Real estate wholesaler referrals

Analyzing the Neighborhood

Investing in a good neighborhood can make or break your real estate deal. If a home is in a bad neighborhood, it may never rent or sell. Neighborhood analysis can help you weed out the bad neighborhoods and make a great investment.

Whether you plan on living in the pre-foreclosure or renting it out, there are some specific things that a great neighborhood will have. They will be zoned for good public schools, have well-kept sidewalks and roads, and include nearby restaurants and businesses.

Specific things to look for in a neighborhood:

  • Parks and attractions
  • Shopping, restaurants, and businesses
  • Great walkability score
  • Highly rated schools
  • Condition of sidewalks, street lamps, and roads
  • Condition of buildings and nearby homes
  • Days on market: how long properties generally sit on the market before being sold

When evaluating the property, checking out how long the neighbor’s properties have been on the market can indicate whether other people find the neighborhood attractive. If the homes are sitting on the market too long, it may be difficult to unload the property or find renters for the property.

Neighborhood analysis also includes determining whether there will be a return on investment for real estate investors. They will want to examine the cap rate and the cash on cash return of properties.

The cap rate is used as an indicator of the cash flow that a rental property will have as a percentage of the property’s current market value. To find the cap rate, divide the net operating income by the property price. A good cap rate should be around 10%.

The cash on cash return is used to indicate to rental property’s cash flow as a percentage of the total amount of cash invested in it. The formula to calculate the cash on cash return is the net operating income divided by the total cash investment. Investors tend to aim for a range of 8-12% cash on cash return.

Getting a Loan

Your financing options for pre-foreclosures will be the same as if you are buying a traditional property. Due to the competitive nature of pre-foreclosed home sales, you will want to start the pre-approval process early. Other buyers will be interested in purchasing the property and may have cash on hand. A pre-approval will allow you the opportunity to make a bid promptly.

Pre-approval is the lender’s stamp of approval that you meet their criteria for financing and will get the loan. Pre-approval is not the same as pre-qualification, which simply means that you meet the bank’s pre-determined requirement to get a loan, but have yet to go through the approval process. Pre-approval signals that you are ready to buy. Homeowners can take your bid seriously with pre-approval.

It is important to note that foreclosure and pre-foreclosures are often in a terrible condition which can make getting a loan quite difficult if the home doesn’t pass inspection. Banks do not want to make loans when there are plumbing or electrical issues. Homeowner’s insurance will be quite costly for a home that is in bad shape.

Making an Offer

Once you have been pre-approved for a loan, you can make an offer on the pre-foreclosure. This will start the negotiation process. It is best to work with a real estate agent through this process. They will be familiar with your state’s paperwork requirements and skilled at negotiations.

When making an offer, it is important to know how much the home is valued for and how much is still owed on the home and how much you may need to make in repairs. You will want to make an offer that is more than what is still owed to the bank.

When the property is in a short sale, the real estate agent will be dealing with the bank. This may require a slightly different process, but the real estate agent will know how to handle it.

Once the offer is accepted by the seller, you will send the purchase contract to the lender. They will begin underwriting the loan. At this point, lenders review all of your documents prior to issuing the loan.

Closing on a Pre-Foreclosure

The final step in the home purchase will be closing. This is where the title will be transferred from the previous homeowner to you. Closing typically occurs at a title company of the buyer’s choice and lasts 60-90 minutes.

During settlement, you will pay the closing costs including the transfer taxes, title insurance, lender fees, and property taxes. The title company will handle the disbursement of funds between you, your lender and the seller. Once the fees are paid and the paperwork signed, you will receive the keys and the property is yours.

Purchasing a pre-foreclosure may enable you to purchase a home at a great discount. You may be able to buy in neighborhoods that you otherwise wouldn’t be able to afford. There will be extra effort to find these deals. You will want to research the homes well to ensure that they meet your needs and your budget in case there are repairs to be done. Software like ProspectNow can help you quickly research pre-foreclosures.

 

Commercial Lease vs. Residential Lease: 5 Key Differences

Though commercial and residential leases both are written contracts for the use of real estate and share some common features, the two differ in several significant ways. If you work in either or both areas of real estate, then you should understand the five key differences between a commercial lease and a residential rental agreement.

Allowed and Required Uses of Property

The terms themselves point to one key difference: one type of lease relates to commercial property and the other concerns residential property.

  • Commercial leases concern spaces that produce or sell products or services, such as a retail store, warehouse, office, parking garage, or restaurant. The leases usually specify the types of business operations permitted on the premises. Some commercial leases require certain days and hours of operation.
  • Residential leases relate to spaces where people live, such as an apartment or house.

Residential leases usually prohibit the use of the property for most types of commercial activities, and commercial leases typically prohibit the use of the property as a living space.

Length of Lease

The duration of the lease can vary for both types, but generally:

  • Commercial leases tend to be for longer periods, usually a minimum of three to five years. Often the lessee has an option to renew once that period expires.
  • Residential leases typically are for one year, followed by a month-to-month basis.

Legal Protections

Tenants under a residential lease have several legal protections that do not apply to commercial tenants, in part because commercial tenants are presumed to have more resources and knowledge in negotiations and in part because people’s shelter is a basic need deserving of protection. These protections vary by state and, in some cases, by city. Residential tenants usually are better protected from eviction and rent increases than commercial lessees. For example, landlords must give residential tenants advance notice of rent increases and cannot evict arbitrarily. Additionally, security deposits for residential tenants are much more stringently regulated, both in the allowed amount at the beginning of the lease and the permitted deductions at lease end.

Responsibility for Maintenance and Repairs

Though both types of tenants are obligated to keep the property in a reasonable condition, responsibility for completing repairs and performing significant maintenance differs.

  • In commercial leases, the tenant usually is responsible for the majority of maintenance and repairs. The specific division of duties will be outlined in the lease. The landlord typically is responsible just for maintaining the physical building and common areas.
  • Residential leases usually allow tenants little responsibility for repairs. The tenant must notify the landlord or landlord’s property manager when something breaks in the unit. The landlord then is responsible for taking action within a reasonable time period for essential repairs, and the landlord must provide that the housing be safe.

Common Areas

Both types of tenants frequently enjoy the benefits of the property’s common areas, which are those areas and amenities shared by all tenants of that property. However, there is a difference in how the costs of those areas are paid.

  • Many commercial leases include a provision for common area maintenance, or CAM, charges. These are the costs of maintaining the shared areas of the property, such as maintaining the landscaping, vacuuming the lobbies and hallways, and re-paving the parking lot. Tenants might be assigned a pro-rata portion of the CAM, which assigns a percentage based on the tenants’ percentage of total square feet. These charges can fluctuate month to month.
  • Residential leases rarely require separate payment for common areas. Instead, monthly rent is a fixed amount.

Summary

Generally, commercial leases are for spaces where products are made, things are sold, or services are provided. They cover longer timeframes, include provisions for contributing to common area expenses and contain fewer tenant protections. Commercial tenants bear most of the burden for maintenance and making repairs. Residential leases are for places where people live. They usually span a year and contain numerous legal protections for the tenant. Residential tenants usually are not responsible for any repairs or maintenance.

Whether your interest lies in commercial property or residential real estate, take advantage of the insights and information about both types of property throughout the United States available in the ProspectNow databases.

How to Get LLC Information

How to Get LLC Information

As a commercial real estate professional, finding new and motivated leads is at the center of what you do. Connecting with owners and decision-makers allows you to build your network and find opportunities for CRE investments. What happens, however, when properties are owned by an LLC? In many cases, this method of ownership not only protects the owner and his or her personal assets, but it keeps their ownership anonymous. Getting past LLC anonymity is key to closing more CRE deals. And it’s possible. With the right tools in hand, here’s how to get LLC information you need to generate quality commercial real estate leads. 

What is an LLC?

An LLC, or Limited Liability Company, combines the elements of partnerships and corporations. It affords business owners similar tax benefits and exemptions as a partnership, while also providing a way to keep assets and business accounts separate from personal assets. 

In other words, under the LLC structure, an owner is not held liable for business debts or liabilities. If a business fails or falls into legal issues, the owner’s personal property is protected. 

An LLC is also one of the simpler methods to establish a business. It is easy to start an LLC and structure, taxes, and management are much less complicated than that of a corporation. 

LLC’s and Real Estate

Many small business owners or independent contractors will opt to use an LLC to benefit from tax exemptions they wouldn’t otherwise receive. When it comes to real estate, LLCs are a popular choice in order to hold an asset (commercial property) separate from both the owner’s personal assets and the business as a whole. 

These shell companies are a popular choice for purchasing commercial properties. The first LLC laws were established in Wyoming in 1977, but it wasn’t until the 1990s that businesses started to note the benefit as it relates to real estate. 

In New York City alone, 65% of all real estate sales are connected to an LLC. This is up from 30% in 2003. What is causing this increase? Owners investing in high-scale properties are using LLCs to stay anonymous. 

While anonymity isn’t always the goal of using an LLC to purchase real estate, it certainly is the byproduct. The public ownership details are recorded using the LLC data, not a personal name, and so finding direct decision-makers from public records can be challenging. 

In order to create off-market opportunities and connect with motivated leads, finding LLC information is key. 

How to Obtain Public LLC information

Obtaining public LLC information is not at all difficult. Business records are maintained through the Secretary of State’s office for each individual state. Searching for an LLC requires knowing at least a portion of the business name. Depending on what state you are in, results could reveal some helpful data:

  • When the LLC was established
  • Registered Agent
  • Contact information (in some states)

Where finding LLC information gets challenging, is when LLCs choose to have commercial registered agents. In these cases, the agent name and contact information (if provided) will not help guide you to an owner or decision-maker who can discuss the LLC’s commercial real estate

Discover LLC Owner Details with ProspectNow

Finding exciting off-market leads and networking directly with CRE owners is possible through ProspectNow’s suite of real estate tools. 

Instead of chasing individual leads through hours of public searches, you can easily locate even hidden LLC data for over 15 million LLCs. Our database allows you to find the real data you need to pursue new leads:

  • Property portfolio information 
  • Contact details
  • Owner names

Combine that information with the ability to search over 40 million commercial properties, and you can prospect for leads within a single database and without digging through the frustratingly limited public information. 

Our predictive analytics help you identify properties that are likely to sell, or you can search for pre-foreclosures, newly purchased properties, or longstanding business properties to establish a list of potential opportunities. Most properties will include LLC ownership information that you can then put through our LLC database. 

Discover when properties were purchased, how much an owner has invested, and whether or not they might be in the market for a new opportunity. You can also easily identify decision-makers to make direct contact for roofing projects, insurance, and investment proposals. 

When it comes to finding the LLC information you need to grow your CRE business, ProspectNow provides the most thorough database of key owner information. 

Contact our team today to learn more or start your free trial and start discovering new CRE opportunities.

The 10 Most Unaffordable Areas in the U.S.

Anyone who has lived in (or visited) some of the United States’ largest metro areas can attest to a certain common experience: they are expensive. Cities like New York, Los Angeles, and San Francisco continually top the lists as some of the most expensive places to live or play. In fact, the most recent release of 1-bedroom median rent prices from Zumper puts San Fran, NYC, and Boston in the lead. But when it comes to housing affordability, the results look a little different. While many of the country’s biggest cities are the most expensive, they don’t all necessarily qualify as the most unaffordable. Instead, for those looking to buy a home or investment property, here’s a look at the 10 most unaffordable areas in the country right now. 

A Look at Nationwide Medians

Calculating affordability can be challenging given the massive differences in the cost of living, housing, income, transportation, healthcare, and food across cities, states, and counties. New Jersey and Rhode Island, for example, tied for first as the most expensive states to live in in 2019. Yet, neither state makes the list when we look at housing affordability. 

Instead, when it comes to buying a home, what makes a housing market out of reach isn’t always the average costs for the region, but rather the percentage of a buyer’s annual income that is needed to purchase a median-priced home. 

Right now, the median home price in the United States sits at an estimated $274,000. The median household income for the nation reached $63,179 according to the latest numbers from the Federal Reserve Bank of St. Louis.

Across the country, however, those numbers vary dramatically. In Hawaii, for instance, the median home price is sitting around $673,000. In San Francisco, it is $927,400. Many of the cities with the highest median home values, however, also experience some of the highest median household incomes. 

What Makes an Area Unaffordable?

We’ve already determined that affordability and expensiveness can differ, but how do we determine what is considered unaffordable? At the end of 2019, ATTOM Data Solutions tracked and ranked housing affordability in 100 metro areas based on data from 855 counties. The results were shocking. 

The data revealed that in 71% of counties, the median home price is still unaffordable for the average working adult. In fact, two-thirds of the housing markets would require at least 30% of wages in order to buy a home. When referring to renters, spending 30% of income (or more) on rent would qualify the household as rent-burdened. In this case, these are the most unaffordable, or mortgage-burdened areas in the U.S. 

Stockton, CA 

With a median home value of $355,000, Stockton, CA has seen some huge growth in recent years. In fact, the home value has increased by 155% since the housing market was at its lowest in recent years. What puts Stockton into the category of unaffordable housing, however, is the median household income of $45,347, well below the national average. With an unemployment rate of 6.8% (compared to the national 3.9%) it is easy to see how buying a home in Stockton could be out of reach for many people. 

Honolulu, HI 

When discussing the cost of living and affordability, Hawaii often makes the list, along with other hard-to-reach locations such as Alaska. The cost to ship and fly in food, materials, and almost every living necessity adds to the cost of a living burden that many Hawaiian residents experience. In Honolulu, this is no different. The median housing price is $580,000, lower than the state median. But compared to other parts of the islands, the percentage of a household income needed to buy a home in Honolulu means purchasing is unaffordable for many residents. 

San Jose, CA 

It should come as no surprise that the majority of the most unaffordable metro areas in the U.S. today are in California. In fact, looking beyond metro areas and examining the most unaffordable counties in the country, California still makes up half the list. In many California locales, this has to do with the fact that home appreciation increased faster than wages. This is evident in San Jose where the median home price is $1,086,000, while the median household income is only $83,400. Not only that but San Jose has the largest share of million-dollar homes than anywhere else in the country. 

San Francisco, CA 

Median home prices are constantly changing, but current data indicates that median-priced homes in San Francisco cost somewhere between $875,000 and $927,000. Either way, this puts San Fran into the category of one of the most unaffordable metro areas. According to HSH mortgage data, this means the average working household would need to make nearly $188,000 in annual income in order to afford a home in San Francisco. 

San Diego, CA 

There are many reasons people love living in San Diego, including the nearness of beach, mountains, cultural activities, and dining. As attractive as the city is, purchasing a home is still unaffordable for many. The median household income of $79,646 is well above the national income, but with housing prices around $568,000, buying a home requires much more than the average income. 

Riverside-San Bernardino, CA 

Located east of the Los Angeles metro area, Riverside-San Bernardino is yet another California area deemed unaffordable when it comes to buying a home. This reason this LA suburb makes the list? The discrepancy between the median house value of $355,000 and the median household income that, at just below $39,000, comes in well under the national median income. 

Provo, Utah 

According to the study by ATTOM, the median home price in Provo is around $340,000, up 105% from the lowest point in the market. This rapid growth in home prices, as well as an increase in population, means there aren’t enough affordable homes available for the number of people in Utah’s third-largest city. 

Oxnard, CA 

Oxnard is another area that is impacted by the unreachable housing prices of Southern California. With median home prices resting at $598,000, and median income near $62,000, homes are unaffordable for many, making renting a popular choice in Oxnard. 

New York, NY 

Whether we’re discussing the most expensive cities in the world or the most unaffordable housing market, New York City is bound to make the list. While median home prices have declined over the last year, a New Yorker still needs a household income of well over $100,000 annually in order to safely afford a home. 

Los Angeles, CA 

Los Angeles has enjoyed a 4.4% increase in median home prices over the past year and a huge leap of 99% from the bottom of the market. The city, however, hasn’t enjoyed the same increase in the average salary or household income. With median prices currently around $650,000, buying a home is still unaffordable for the average wage earner in LA. 

Use the Power of Data to Drive Real Estate Investments

Want to learn more about the housing market across the country? ProspectNow provides the most complete property owner database with over 100 million homes. Find your next lead, explore owner information, or access predictive analytics to learn which properties are most likely to sell—even in the most unaffordable areas in the country. Get started today.

Everything You Need to Know About Seattle Property Tax

Purchasing a home in the beautiful Pacific Northwest comes with a long list of benefits. Nearness to the water, the mountains, rainforest, and city—all within driving distance—are just a few of the bonuses of Seattle living. When it comes to property tax, however, Washington State has one of the most complex systems, evaluating tax based on a levy—or budget—program. Not sure what to expect when it comes to owning a home in the Emerald City? Here’s everything you need to know about Seattle property tax.

The Basics of Seattle Property Tax

Property tax is a reality nationwide for anyone who owns commercial or residential real estate. In fact, some states even evaluate taxes on personal property as part of their annual property tax revenue. 

These taxes are used to pay for state and local public services, such as schools, road maintenance, snow and ice removal, fire departments, and libraries. Every state, county, and district has their own way of determining property tax rates for homes in that area. This makes understanding property taxes challenging as they can vary dramatically from state to state and even from county to county. 

One of the only things that all 50 states have in common when it comes to property tax, besides the reason for collecting the taxes in the first place, is the underlying principle of using the assessed value of your property, multiplied by the local tax rate, to determine your taxes owed that year. 

Seattle property tax, however, is significantly more complicated. While most property owners across the country will see a correlation between a decrease in home value and a decrease in property taxes, the same cannot be said about Seattle property tax. For example, housing prices in King County (where Seattle resides) dropped 28% between 2008 and 2012, but the average property tax increased 9% during that same period. 

Why is Seattle property tax so complex? It comes down to the fact that Washington State uses a budget-based property tax system.

What is a Budget-Based Tax System?

While your Seattle property value does play a role in your property tax bill, it’s role is minor in comparison to other factors.

The driving force behind your Seattle property tax rate is the budget established by the state, county, and local districts. Essentially, every year the assessor establishes how property tax revenue is needed to fund the budget. This is known as the levy. The levy amount is then divided by the total taxable property value for that district in order to calculate a levy rate per $1,000 of assessed property value. 

This is where the value of your home comes into play. The fair market value of your home determines what share of the levy you will pay. So even if the levy amount didn’t change from one year to the next, and your home value also stayed the same, your property taxes will likely change. This is because as new homes are built, and as other homes increase or decrease in value, your share of the tax burden is adjusted accordingly. 

The amount of the levy on your district depends on several different factors: the state tax allotment, local districts, and special taxes. While districts can only increase property tax revenue by 1% each year—a statewide law—additional taxes can be added through special voter-approved levies. 

How Taxes are Allocated

In Washington State, property taxes make up 9.4% of the state’s General Fund. Besides statewide services, counties and local districts (such as library and fire districts) also receive funding from property taxes. 

For homeowners in King County, the largest share of their property taxes go toward funding education. This is due to a Washington State bill that increased state funding for schools, as well as the fact that county voters passed a special school levy that will impact the 2020 tax year. An increase in Seattle property tax (above the expected 1%) in 2017 was due to a voter-approved public transportation tax. 

Aside from the state and county general funds, other ways in which Seattle property tax is used is for city public services such as water, waste, and recycling; emergency medical services; port funding (since Seattle is a port city); and local hospitals. Your property tax will also include a certain amount for the local school district where your house is located. 

Seattle Property Tax Ranking

Washington State currently ranks 29th for median property tax rates by state. The median rate 1.01% of property value, compared to New Jersey, which has the highest rate median of 2.47%.

Seattle property tax, on the other hand, is one of the highest median property taxes in the United States. The median property tax in King County is currently $3,572 per year for a home worth $407,700 (the median home value). 

Despite the complicated—and sometimes steep—Seattle property tax, the booming city is still a highly sought destination for homebuyers. Seattle was one of the fastest-growing cities in the US this decade, and continues to see growth in the form of new jobs, visitors, and people moving to the region. And while growth continues, home prices recently dropped, making the Seattle market appealing to new buyers. Perhaps the Seattle property tax can be overlooked, if not for the stunning beauty that surrounds it, then perhaps because Seattle also enjoys the state’s highest median household income, as well as no state income tax, and no vehicle property tax. 

Find a Local Seattle Agent

Are you ready to make the move to Seattle? Find an agent through LemonBrew for guaranteed expertise, local knowledge, and experience with the Seattle housing market. We make the home buying simple, smooth, and more affordable. Find out more.

Watch Out for These 13 Environmental Hazards

When it comes to staying safe and remaining healthy, there are the obvious things we do every day to protect ourselves, such as looking both ways before crossing the street, paying attention as we descend the stairs, and watching out for ice in the wintertime. But other hazards that affect us as well, most of them invisible to the eye. Below are 13 environmental hazards to watch out for and what you can do if you detect them.

In or Around the Building

1. Mold

Oftentimes the mold in our homes or building is not readily visible and often goes undetected until it starts to affect our health. However, since some symptoms are the same as a cold, stuffy nose, wheezing, and watery eyes, most people believe they may just have a cold. However, since some mold can make a person seriously ill, even kill them, it is important to regularly test for mold.

2. Lead Paint

Lead paint for consumer use was banned in 1978, but homes and buildings built before then will likely have lead paint under layers of newer paint. Lead poisoning symptoms include learning difficulties, hearing loss, irritability, seizures, and more. There are several options for removing lead, but it is best for professionals to take care of it.

3. Formaldehyde

Formaldehyde is found in plywood, pressed wood, tobacco smoke, and is found in other commercial products as well and has been linked to cancer, skin rashes, and other issues. There are air test kits to detect formaldehyde in the air and the best ways to remove formaldehyde from the air in homes and businesses is with an air purifier that has a deep-bed activated carbon filter.

4. Asbestos

Surprisingly, the EPA has no ban on the use of asbestos, but it is a regulated air pollutant that is still used in fireproof clothing, motorcycle brakes, and some construction materials. Difficulty swallowing, shortness of breath, and facial swelling are associated with asbestosis from asbestos. It is possible to safely remove asbestos yourself, but many people prefer professional help.

5. Radon

Radon is an invisible, odorless, tasteless radioactive gas that causes lung cancer and radon is caused by the natural breakdown of uranium. Symptoms of radon exposure include hoarseness, tightness in the chest, and shortness of breath. There are radon testing kits you can buy. There are ways of taking care of radon, such as sealing sump covers.

6. Carbon Monoxide

This one is another common and silent killer. This is caused by appliances such as gas fires, central heating systems, water heaters, and other sources. It is recommended to use carbon monoxide detectors in the home and business. One way to prevent carbon monoxide is to have your appliances regularly serviced.

On Your Property

7. Underwater Tanks

An underwater and underground tank can cause a whole number of issues. Whatever the tank is storing can leech into the ground and then carried off by the rain into the sewer and contaminate drinking water, lakes, streams, or even catch fire.

8. Damaged Sewer Lines

Damaged sewer pipes can cause flooding, water contamination, and damage to roads and properties. If the sewer line is causing flooding, it can damage the properties in the area. It can also damage roads and properties by causing a sinkhole.

9. Groundwater

Groundwater can become contaminated from road salts, feces, chemicals, and all sorts of man-made and natural materials. This not only makes it unfit to drink, but can cause animals to become sick and contaminates streams, rivers, and plant life as well.

In the Nearby Area

10. Superfund Sites and Brownfields

A brownfield is a land that has been previously developed and may be potentially contaminated. Superfund sites are abandoned waste sites such as mines, oil refineries, and other industrial-type areas. These places contaminate the land and water with oil, radioactive material, or other waste matter.

11. Flooding

Flooding is a common environmental hazard that damages homes, businesses and can cause other environmental hazards from that damage.

12. Natural Gas

Natural gas is used to heat the home, but it is also used to make antifreeze, fertilizer, and other materials. Natural gas produces nitrogen oxides, which then produces smog, but produces much more methane than CO2.

13. Air Pollution

Air pollution can not only reduce the visibility of the skyline, but can have a profound impact on people, plants, water, and animals. It increases the risk of asthma, heart attacks, strokes in people, causes acid rain, and alters cell structures of plants

There are many ways to protect yourself from many of the environmental hazards, or at least mitigate their impact. On days with low air quality, minimize the time you spend outside. Be sure to regularly test for mold, radon, and other hazards and have a plan in place for when and if other hazards do occur or are detected.

How to Invest In Opportunity Zones

The real estate industry provides investors with numerous opportunities to draw huge benefits. If you are ready to implement your investment strategies appropriately, then there is no doubt of succeeding in the sector. For instance, opportunity zones are a significant investment that commercial and residential real estate agents should focus on. 

They come in handy with various tax benefits. Most importantly, the investment gains and lenient tax policies have given most investors the full picture of the continued venture in opportunity zones. However, the main question here is exactly how to venture into opportunity zones. Here are simple tips for investing in opportunity zones.

Be Familiar with Opportunity Zones, the Way they Work and Their Benefits

Although understanding opportunity zones and their benefits are not challenging, familiarizing yourself with these zones is paramount. Most venture capitalists fail for ignoring the effect of learning the fundamental policies of these investments. For instance, if you are keen to check the policies, you may end up fetching huge capital gains as well as tax reductions. 

However, you can best draw most of these benefits in ten years of opportunity zones venture. Some benefits consist of a 10% reduction of tax of the initial differed investment gain whenever an investor holds the investment for five decades. Once you reach seven years, the deal gets more exciting, and you may receive a deduction of 15% tax of your deferred gains. More interestingly, ten years in opportunity zones venture grants you a chance to pocket 100% tax reduction of your gains.

Find the Exact Opportunity Zones to Endow 

You don’t just wake up and pick any opportunity zone investment available around. It’s crucial to note that not every zone offers similar benefits. While certain zones are established in potential growth regions, some are slowly developing areas. Nevertheless, this should not worry you so much. Why don’t you pick the main housing market zones? They are a major boost to a reaping business as they have fast economic growth, thus, increasing your safety.

Get the Owner Details and Contact Information for That Property

The choice of a property to invest is not enough without thinking about the owner’s details including their names and contact details. It does not matter whether this is an individual or else a company. In all cases, you have to find their true names and contact information. It’s among the critical steps that will lead to an exceptional deal. For example, reaching them might offer you a chance to negotiate for price and unlock new opportunities for decision-making.

Consider Investing Your Gains in a Recognized Qualified Opportunity Fund

Once you have decided on a particular location, you should consider capitalizing in a qualified opportunity fund. However, before you get to this point, are you aware of how this plan works? Simply, this will be your main target to pool the capital benefits that you obtain in every property deal. 

Of course, this attracts an amazing benefit where 90% of the investment will be part of another residential real property venture. Whichever selection, ensure that you pick a fund deal with extensive histories of gainful opportunity zones deals.

Self-Certify or Trace an Opportunity Zone Fund

At one point, you will have to decide on a more sustainable plan making you select between self-certification and qualified opportunity funds. Even though many investors go for qualified opportunity zones, it is imperative to remember that this plan involves some fees besides their recognized benefits. 

However, if you have to self-certify yourself, then you must be ready to fill in the IRS 8996 form and submitting taxes. On the other hand, it will save you quite some good investment fees. Moreover, you will have control over your investments.

Think Through Executing a Buying and Holding Real Estate Approach

If you are considering drawing huge returns of investment from opportunity zones, taking a lasting deal is recommendable. It’s not all about the tax gains you reap. How much money will you procure for a short-term deal compared to a long-standing deal? The fact here is that if you select the best opportunity zone, you do not have to doubt its rapid and continued development. Therefore, this implies that holding the investment will be worth the wait.

Wait and Realize the Tax Gains

Patience is of the essence when you think of venturing into opportunity zones. You don’t have to undergo the overwhelming procedure of opportunity zone property search and give up in the course of the journey. It will only take you five to ten years to realize your tax benefits. So, sit back and watch your investment in the opportunity zone of your choice grow. However, given the existing short period of reaping maximum benefit from the sector, it is recommendable to start your investment soon.

Final Word

Investing in opportunity zones is nothing to question about. By following the above steps, you must have understood the basics of opportunity zones investment. Together with the vast tax benefits and its potential investment returns, opportunity zones should be your next investment plan to consider.

 

What to do When Selling a Home With Negative Equity

When your home value falls below the amount you still owe on your mortgage, this is considered negative equity—or an underwater mortgage. There are many reasons a home can fall into negative equity, including damages to the property, a declining real estate market, or a high loan-to-value ratio. In many cases, negative equity is simply a byproduct of uncontrollable circumstances. But what happens when you need to sell your home? Here are several options to consider when selling a home with negative equity.

Understanding Home Equity

Home equity is the portion of your home’s value that you own outright. At the time of purchase, your amount of positive equity in your house is the amount of your down payment—typically around 20%. Your equity fluctuates, however, as you make mortgage payments and as the value of your home increases or decreases. The moment your home value drops below the amount you owe on your mortgage, you are in negative equity. 

One of the most common causes of negative equity is a shift in the housing market and a sudden decrease in home values. This is what happened in the market crash of the past decade, resulting in more than 11 million homeowners—nearly 25% of mortgaged homes—with negative equity at its peak. 

According to the latest statistics from CoreLogic, approximately 2 million homeowners—or 3.7% of all mortgaged properties—were experiencing negative equity at the end of 2019. While this is a positive trend from previous years, it still means that many homeowners are underwater on their loans and looking for the best ways to sell their negative equity homes. 

Options for Selling Negative Equity Homes

The U.S. Department of Housing and Urban Development describes negative equity as having multiple consequences for both homeowners and the surrounding community. Foreclosures are a significant byproduct of homes falling into negative equity. As homeowners find themselves trapped in homes they can no longer afford, they choose to walk away and let the home fall into foreclosure. 

This has a negative impact on a homeowner’s credit—and stays on your credit report for 7 years—but it also impacts the community. Other home values begin to drop as neighboring houses fall into foreclosure. 

But there are options other than foreclosure when you find yourself with negative equity. These are some of the most common ways to sell your home when you owe more than your home’s value. 

Pay the Remaining Mortgage

By far the simplest option for selling a home with negative equity is to get as much as possible from your home sale and pay the remaining mortgage yourself. If you owe $200,000 on your home loan and sell your house for $175,000, you can pay the remaining $25,000 at the time of closing. While this is the most expeditious way to sell a home with negative equity, it is not always a practical solution for homeowners. If you are experiencing the burden of negative home equity, it may also be an unreasonable financial burden to pay off your existing home loan. If that is the case, there are other options for selling your home. 

Short Sale

If your home value has dropped below the amount you owe, and you are far enough behind on mortgage payments that you are unable to catch up, some lenders will agree to a short sale. With a short sale, the lender is willing to accept less for the home than your remaining mortgage balance. Lenders opt for short sales when they wish to avoid the process of foreclosure and feel that they can possibly recover more of the loan than they would through other methods. 

The first step to a short sale is to speak with your lender and work out a short sale agreement. The process can often take longer than a traditional sale, and ultimately it is the lender—not the seller—who approves or denies offers on the home. For many homeowners trying to sell a home with negative equity, short sales are a desirable alternative to foreclosure. It is important to note, however, that once completed, a short sale can remain on your credit report for up to four years. 

Deed in Lieu of Foreclosure

Another option for selling a home with negative equity is to not sell it all, but rather sign the deed over to the lender. Much like a short sale, this option requires the express involvement of the lender and is often only considered if there are no other liens on your property. 

This course of action will negatively impact your credit score in the same manner as a short sale but is also often considered a better alternative to foreclosure. If the bank does agree to accept your deed in lieu of foreclosure, it is important to understand your rights as well as the rights of your lender. Some states have protections in place that prevent lenders from pursuing the loan deficiency—the difference between the home value and the amount you owe—after a deed in lieu of foreclosure, but not all. As you work with your lender to find the best solution for your situation, be prepared to work out an agreement in which you are forgiven the loan deficiency regardless of how much the home is worth. 

Navigating Negative Equity

Negative equity is not always something a homeowner can control, particularly when the real estate market fluctuates unexpectedly. Managing the sale of a negative equity home can be challenging, but accessing support from a real estate agent can help you navigate your options.

If selling your home is a necessary step, understanding the current real estate market can also help you decide which solution is right for you. ProspectNow offers a comprehensive view of the housing market and predictive analytics to help sellers make better real estate decisions regardless of negative equity.

Property Owner Search: How to Go Beyond What’s Public

Property ownership is a matter of public record. Visit your local county assessor’s office—or in some cases, their records are now online—and you should be able to track down a property owner’s name using a parcel number or street address. When it comes to pursuing real estate leads, however, especially commercial real estate opportunities, the limited details of public records aren’t always enough. In these cases, professionals depend on other resources to conduct a property owner search that goes beyond what’s public. 

Performing a Public Property Owner Search

Why are public property ownership records less than helpful? With regard to commercial real estate, especially, public records are often lacking the pertinent ownership contact details. 

Knowing how to search for public records, however, is still important. 

If you are pursuing real estate opportunities that are local to you, the best place to start searching for public records is through the county assessor’s office. In the case of property deeds, the information is often located with the county recorder. For real estate opportunities beyond your local county or city, resources such as NETRonline.com provide a nationwide directory for county offices that keep public records.

Whether your county offers an online database or you have to go into the assessor’s office, you will need either the address, parcel number, or owner’s name for the property you wish to search for. 

Let’s say you search by street address, you should be able to discover some, if not all, of the following information:

  • Taxpayer/Owner’s name or business name
  • Mailing address
  • Assessed value and taxable of the property
  • Parcel Number
  • Property type (commercial or residential)
  • Date property was last assessed

While some of these details are useful for real estate professionals—owner name and mailing address, for instance—the public records are lacking some details essential to moving your business forward. 

In the case of CRE opportunities, most commercial properties will be in the name of the corporation or LLC, and not the owner or key decision-maker. Without knowing who makes decisions for repairs, investments, or sales opportunities, it can be difficult to turn that information into a productive lead. 

Taking Your Property Owner Search Beyond Public Records

Generating new CRE and residential leads begins with having the right resources to go beyond public ownership records. 

ProspectNow allows you to dive deeper into property owner details in order to maximize your time and find more qualified leads—whether you are a broker, lender, investor, or you provide building maintenance services. 

The ProspectNow database includes information on nearly 40 million commercial real estate properties, both on and off the market. This means you can search millions of properties to find details that include:

  • Name of owner or key decision-maker
  • Owner’s email, phone number, and mailing address. 
  • Contact details for LLC managing members
  • Purchase and tax history of the property
  • Ownership portfolio for LLCs

What makes this resource stand out is the use of predictive analytics to discover off-market properties that are likely to sell. CRE professionals can pursue leads that are still off-market but trending toward the need to sell, whether due to market predictions, financial purposes, or both. 

Instead of searching through public records one name or address at a time, ProspectNow makes it easy to access the information you need to pursue CRE opportunities both near and far. The database is searchable by property type, size, owner, location, and even whether or not it is in preforeclosure. 

Speed Up Your Search

Prospecting new leads is a critical part of your role in commercial real estate. While networking and word of mouth play a significant part in finding new clients, conducting a property owner search allows you to discover unique off-market real estate opportunities. 

The traditional public records search is a great way to find the details of one or two properties that you are pursuing. The tax assessor or county recorder, however, will lack the necessary information you need to contact key decision-makers and owners.

By utilizing the tools available through ProspectNow, you can speed up your property owner search and find information that goes well beyond the details available in public records. 

Discover new, motivated leads through our database of properties, LLCs, and businesses. Utilize predictive analytics for CRE and residential real estate and explore a world of off-market real estate potential. Ready to see how it works? Sign up for a free 3-day trial and get started with your detailed property owner search today.