Best Practices for Leveraging Real Estate Data
Fundraising intelligence is all about gathering relevant information to make an informed ask. Whether you have a paid subscription to an online research platform, or are using free resources like Zillow, real estate information is critical knowledge to have. Real estate provides key insight regarding a major gift prospect’s personality, net worth, debt, and other factors affecting your prospect’s willingness to give to your cause.
Not convinced about the worth of real estate in prospect research? Consider this blog post from Helen Brown. She paints the skeptic’s picture of real estate research: a prospect won’t donate their house, so why bother including it in capacity ratings? But if you discount one non-liquid asset, Brown counters, you should discount them all — and no researcher or fundraiser can afford to do that.
“Real estate certainly isn’t the be-all-end-all, but like all of those other assets I mentioned, if nothing else, it’s an indicator of wealth. But I think there’s much more to real estate – even primary real estate – that should be considered.”
An iWave subscription provides access to CoreLogic real estate data (United Sates) and Manifold real estate data (Canada). Here are some best practices to maximize the information you can collect from these datasets.
With access to CoreLogic, you get U.S. real estate, mortgage, consumer and specialized business data compiled from property records, tax assessments, property characteristics and parcel maps from tax assessors and country recorder offices across the nation. Currently, over 150 million commercial and residential property records are in this dataset.
Use this dataset to:
- Prospect for new donors by zip code, street name, or even asset range
- Find multiple properties for a single donor, even if they are in different states
- Determine capacity to give by researching current property values and mortgage details, including how much of the mortgage is still outstanding
- See changes in purchase, sale and mortgage information for a given property (new data added weekly)
- Learn which properties have been paid off “free and clear” with a mortgage release document (new data added monthly)
Clearly, there’s a lot you can learn about prospects with real estate research.
Best Practice: Know the Lingo
Current value, transitional value, market value, assessed value, appraised value — feeling the migraine yet? For researchers who are new to the field or new to real estate, this type of research may seem daunting or nebulous because it involves complex scenarios.
When it comes to working with CoreLogic, turn to this information post on the iWave Support page. We define all the terms and answer some of your FAQs. Don’t rely on this page to help pass a realtor’s exam, but the information here can help you know what to look for in your research.
And if you’re looking for a video tutorial about real estate, you can find that here.
Best Practice: Look for Planned Giving Opportunities
We all know we can’t take anything (including our house) with us into the “Great Beyond.” A home is something to pass over to a spouse or pass down to the next generation. But sometimes, a home can be donated as part of a planned gift. This is especially true if the donor has several properties.
Helen Brown has more to say on this subject: “Let’s say you work at a small college and you’ve got childless husband-and-wife alumni couple with a ski resort condo, a vacation home at Los Sueños in Costa Rica and a primary residence in Boston’s Back Bay. They’re consistent donors and lifelong volunteers to the college. There’s no question that the planned giving officer needs to know about them.
And in this case, it’s not only the real estate that’s interesting, but also what it tells us about these special people. Here is an active, outdoorsy couple who possibly enjoy golf, tennis and skiing. A pair that enjoys regular seasonal travel, but whose lifestyle may require extra cultivation time because they are probably not in town very often. What decisions do you need to make about how to engage them?”
Best Practice: Crunch Those Numbers
Real estate can often be the key (pun always intended) to solving the capacity rating puzzle. You may have your own indicators, factors, or formulas that you rely on to synthesize the wealth information you find. Here’s the iWave approach:
When determining capacity based upon real estate, the value used follows a set hierarchy: Current Value, Assessed Value, or Tax Amount (if the previous two pieces of information are not available).
Consider the table below:
|Property Value||Primary Residence Multiplier||Additional Property Multiplier|
|$500,000 – $999,999||7.5%||10%|
Capacity based on Real Estate = Value of Primary Residence + Value of Additional Property.
Consider this example:
Primary Residence is valued at $1,000,000 and Additional Property is valued at $1,000,000.
$1,000,000 x .10% = $100,000
$1,000,000 x .15% = $150,000
Capacity based on real estate only: $100,000 + $150,000 = $250,000
Remember to add an additional 5% of real estate where Total Value of Mortgages is 50% or less of the Total Value of Real Estate. To illustrate this, imagine Total Value of Real Estate is $2,000,000 and Total Mortgages is $750,000. Since Total Mortgages is less than 50% of Total Value, this means we have a Giving Capacity Bonus of 5% ($100,000).
Researching Canadian real estate has its challenges — specifically that Canadian privacy laws prohibit individual property values from being public knowledge. This might be enough to stop you in your tracks right there, but there is a workaround. If your fundraising team is going to present a strong ask to a Canadian prospect, you cannot discount real estate in your prospect research.
Manifold Data Systems provides accurate real estate estimates based on 6-digit Canadian postal codes. There are 782,000 postal codes across Canada and each code represents about 15 homes. Manifold collects and analyzes data from Statistics Canada, a government agency that produces census and key statistics data focusing on Canadians. Manifold lets you see the average property value, annual household income, and household donations for each postal code across the country. All this information is open and available for your research and fundraising purposes.
The best practices outlined for CoreLogic still apply to your Manifold research, however your capacity rating calculations will rely more on educated guesses rather than actual property values. To learn more about Manifold and how the data is collected, visit this post on the iWave Support site.
Check back with the iWave Blog next week when we share best practices for our donations datasets.