Real
estate taxes are confusing. Let's say that you are filling out an offer
for your client, and you get to the real estate tax proration section.
Do you fill in 105%, 110%, is there a senior exemption or freeze? Maybe
you just put "tbd" and leave it for the attorneys to figure out.
Whatever you decide, how do you know you got it right? How do you
explain it to the client?
Step 1 - Get the info. Say what you will about Cook County and the way
it's run, one thing they do fairly well is their websites. Take the
Property's PIN and head over to
cookcountypropertyinfo.com.
There you will find out the critical stats, such as tax amount, number
of exemptions, assessed value, tax rate, etc. One exemption probably
means that the property just has the homeowner exemption. Two means
homeowner and senior. Three means homeowner, senior and senior freeze.
This is crucial info for your client, because they need to know if the
taxes are going to skyrocket after they buy the property.
Step 2 - Get the latest assessment info. Over the past 3 years, the
triennial assessment has been an unpleasant surprise for a lot of Cook
County property owners. This year, the south suburbs will be
experiencing tax bill sticker shock. It is the City's turn next year.
The
Cook County Assessor's website
publishes the proposed assessed valuations. Head over there with your
PIN and see whether your property will increase and by how much. If you
notice the assessment is increasing by 25%, you will want to put 125%
for that tax proration. And your client will love your for protecting
them!
Step 3 - Read the
Assessor's general guide on property taxes.
Look, I know this stuff is brutally boring, but it's super useful. And
if you get to the bottom, there is a handy formula for calculating a tax
bill. It goes something like this (with links to where you can find
these figures with the PIN):
1.)
Assessed Value (AV) multiplied by the
State Equalizer (EQ), which will give your the Equalized Assessed Value (EAV)
2.) From there, subtract the applicable
Exemptions (
homeowner exemption has been increased to $10,000)
3.) Multiply the last number by the applicable *
Tax Rate.
I will use my home as an example:
1.) AV: 28,181 * EQ: 2.7455 = 77,370.9355 (EAV)
2.) EAV: 77,370.9355 - 7,000 (HO exemption) = 70,370.9355
3.) 70,370.9355 * 7.145% (the tax rate for my place) = $5,028.00
Got it? Simple right? Well maybe not, but star this email and come
back to it when you need to take a deep dive into real estate taxes.
If you are in a suburban county, things are done a bit differently (of
course they are). However, in the collar counties, the (rather high) tax
bills don't typically increase as dramatically as Cook, so this is not
nearly the issue that it is in Cook.
Still confused? That's ok! Feel free to click below to ask me for
help! I am always available as a resource to my agents. I want to help
you look like a real estate tax expert to your clients.
