MLS and Privacy

[Reefmonkey]

I was discussing Harris County property taxes with someone who is, well, a republican, so pretty opposed to taxes in principle and practice, and also both a residential and commercial property owner. He was saying how terrible it is that MLS services automatically volunteer the amount a home sale goes for to HCAD, called it an invasion of privacy, etc. He said when he has bought commercial property that he always writes it into the contract forbidding any party to disclose the sales price to any outside party, and the next time he buys a house he is going to do the same.

Now, let's leave aside arguments about whether or not it is our civic duty to allow HCAD to know the sale price of our house so that they can appraise houses in the area properly so that we can be taxed properly to raise money for schools and roads. I am not wanting to get into a moral argument. I am just asking for the sake of curiosity, not is it morally right, but is it technically possible to have written into the contract for the sale of a house you are buying, that no one, including the MLS, disclose the sale of the house to any other party, even if that house already has an MLS number?

[Mr. Chenevert]

I think what he is getting at is that HCAD usually sends a request to both the buyer and seller after a home sale to determine the sale price. Neither party is legally required to disclose the sale price to HCAD, although the form does seem rather official and for lack of a better word, often scares the buyer/seller into thinking they must disclose the information.

What your friend is doing is saying that the buyer/seller cannot fill out this form, which is totally within reason.

[Reefmonkey]

I think what he is getting at is that HCAD usually sends a request to both the buyer and seller after a home sale to determine the sale price. Neither party is legally required to disclose the sale price to HCAD, although the form does seem rather official and for lack of a better work, often scares the buyer/seller into thinking they must disclose the information.

What your friend is doing is saying that the buyer/seller cannot fill out this form, which is totally within reason.

No, he was very clear and specific in saying that the Multiple Listing Service (MLS) reports the sale price to the appraisal district, and he was very adament about it being none of the MLS's business as a third party to report the sale price of a sale between two individuals.

[Mr. Chenevert]

I think he is mistaken.

http://voxproperty.blogspot.com/

Sent: Saturday, April 05, 2008 7:22 PM

To: pdata

Subject: Are you releasing HAR sales data anymore?

Hi,

Could you please tell me if HCAD is still releasing sales data from the HAR? And if so, when will the 2007 sales be released?

Thanks,

Morgan

------------------------------------------------------

Dear Sir or Madam:

No.

HB 2188, a new Texas law that became effective June 18, 2007, makes confidential any information about properties that an appraisal district obtained from private sources. Because of this change in law, we are no longer able to display on this website property sales information we have obtained from private sources.

If you file for a protest online, sales & evidence HCAD uses should be available online about 15-20 days before hearing date.

For more information about online protest filing, please go to http://www.hcad.org/pdf/ifile_faq.pdf

Thank you,

HCAD Webmaster

[gnu]

No, he was very clear and specific in saying that the Multiple Listing Service (MLS) reports the sale price to the appraisal district, and he was very adament about it being none of the MLS's business as a third party to report the sale price of a sale between two individuals.

The MLS (or HAR - the owner of the MLS) does not directly report information to HCAD. (as Chenevert confirms)

However, someone that works at HCAD (a spy perhaps ), could (and does) have access to the MLS and can thereby obtain the information that way. But cannot (as Chenevert's post states) release that information to the public (but it could be used for your appraisal).

Now about writing a clause into your contract to prohibit disclosure, I think that if an owner agrees to list their property into the MLS, they are bound by certain rules, one of which is probably some agreement that the sales price must be recorded into the MLS.

[Reefmonkey]

I think he is mistaken.

http://voxproperty.blogspot.com/

It may turn out that he is mistaken, but the law you are citing has nothing to do with it.

The law you cite says that HCAD cannot release sale prices that it knows about to the public(unless you are entitled to it because you are filing a protest).

Flow of information about sales prices: HCAD -----> Public ILLEGAL

What this guy is talking about is how the HCAD gets those sales prices in the first place.

Flow of information about sales prices: MLS ---------> HCAD LEGAL

These are two different circumstances, understand?

[Reefmonkey]

Now about writing a clause into your contract to prohibit disclosure, I think that if an owner agrees to list their property into the MLS, they are bound by certain rules, one of which is probably some agreement that the sales price must be recorded into the MLS.

It seems to be like that's the way it would probably work, but I wonder how well that would hold up legally if challenged. The house sale is a contract between the buyer and the seller, not the buyer and MLS or the seller and MLS. The buyer signed nothing, and so he is bound to nothing with MLS. If the buyer put into the contract that the seller could not disclose the sale price, and the seller agreed to that in the contract, there would be a conflict. It would be interesting to hear who the seller had a greater contractual obligation to?

[Scharpe St Guy]

If he were to purchase a property today or anytime soon and NOT WANT the purchase price reported to HCAD then I would consider the buyer a fool. Today there are just too many good deals to be had due to foreclosure or other circumstances and these deals are all under HCAD Appraised value. I just represented a buyer on a townhome that is on HCAD for $324k for 2008, 2009 value not yet released and the property was purchased for approx $210k.

Yes for it to be considered a "DEAL" it should be lower than all the non-foreclosure comparables and HCAD appraised values buy a good percentage.

In regards to reporting on MLS I always fill in the sales price but leave the other information blank, ie... how was it purchased (Cash, Fin, FHA, etc..), amount put down, repair costs paid by seller, etc... etc... I feel that how the buyer financed/paid for the property is their business not anyone else's although the sales price needs to be there in order to establish comparable values.

Just my .02c,

Scharpe St Guy

[Reefmonkey]

If he were to purchase a property today or anytime soon and NOT WANT the purchase price reported to HCAD then I would consider the buyer a fool. Today there are just too many good deals to be had due to foreclosure or other circumstances and these deals are all under HCAD Appraised value.

Yeah, that's true enough. I think, though, he was speaking in general terms, not specifically in the current market.

In regards to reporting on MLS I always fill in the sales price but leave the other information blank, ie... how was it purchased (Cash, Fin, FHA, etc..), amount put down, repair costs paid by seller, etc... etc... I feel that how the buyer financed/paid for the property is their business not anyone else's although the sales price needs to be there in order to establish comparable values.

Thanks.

[flipper]

I agree with the idea that HCAD has some licensed realtors and/or brokers on staff to look up stuff on the MLS. Or they just got a login/password from someone.

This is a tough situation because we all want to have our cake and eat it too. We want our house to be worth the most it can be when we go to sell, but we don't want HCAD poking around in our business and taxing us up the rear. I don't think taking sales prices off the MLS is the answer. If a house down the street from mine that is exactly like mine sells for "X" , I want to know about it, and I want potential buyers, lenders and appraisers to know about it too so I can get the most for my house when I go to sell. Not to mention that it's a violation of MLS rules not to report the sales price of a house offered for sale on the MLS.

flipper

[jm1fd]

If he were to purchase a property today or anytime soon and NOT WANT the purchase price reported to HCAD then I would consider the buyer a fool. Today there are just too many good deals to be had due to foreclosure or other circumstances and these deals are all under HCAD Appraised value. I just represented a buyer on a townhome that is on HCAD for $324k for 2008, 2009 value not yet released and the property was purchased for approx $210k.

HCAD will not use valuations from forclosure sales. They don't feed them into their mass appraisial algorithms, and you can't use them as grounds for a protest.

In regards to reporting on MLS I always fill in the sales price but leave the other information blank, ie... how was it purchased (Cash, Fin, FHA, etc..), amount put down, repair costs paid by seller, etc... etc... I feel that how the buyer financed/paid for the property is their business not anyone else's although the sales price needs to be there in order to establish comparable values.

I remember reading an article in the San Antonio paper a while back about how realtors were not putting the sales price of high end properties into the MLS so the appraisial district would be in the dark about how to value the house. The article made mention of how this was a violation of the realtor's contractual agreements with the MLS or some other organization. Is this not the case in Houston?

[Reefmonkey]

HCAD will not use valuations from forclosure sales. They don't feed them into their mass appraisial algorithms, and you can't use them as grounds for a protest.

I think what Scharpe St Guy is saying is the quantity of foreclosures out there right now, (along with the generally depressed economy) is driving down the price of even nondistressed, nonforeclosed houses. Sellers have to price their houses lower because of this, so buyers are buying at low prices, so they should want to get those prices recorded by HCAD, because then HCAD will start appraising their houses at those low low levels.

I remember reading an article in the San Antonio paper a while back about how realtors were not putting the sales price of high end properties into the MLS so the appraisial district would be in the dark about how to value the house. The article made mention of how this was a violation of the realtor's contractual agreements with the MLS or some other organization. Is this not the case in Houston?

It probably is. Probably, trying to have the contract rewritten so as to keep the sale price from being released will queer the deal, realtor will back out. I imagine it would be a breach of the seller's contract with the realtor that he signed upon listing with her for him to then delist the house and sell it as a private sale so as to be able to avoid MLS reporting sale price. I imagine the only way to get out of having sale price reported to HCAD is to find a house that hasn't been listed to begin with - a private sale.

[spiderman]

I was discussing Harris County property taxes with someone who is, well, a republican, so pretty opposed to taxes in principle and practice, and also both a residential and commercial property owner. He was saying how terrible it is that MLS services automatically volunteer the amount a home sale goes for to HCAD, called it an invasion of privacy, etc. He said when he has bought commercial property that he always writes it into the contract forbidding any party to disclose the sales price to any outside party, and the next time he buys a house he is going to do the same.

Now, let's leave aside arguments about whether or not it is our civic duty to allow HCAD to know the sale price of our house so that they can appraise houses in the area properly so that we can be taxed properly to raise money for schools and roads. I am not wanting to get into a moral argument. I am just asking for the sake of curiosity, not is it morally right, but is it technically possible to have written into the contract for the sale of a house you are buying, that no one, including the MLS, disclose the sale of the house to any other party, even if that house already has an MLS number?

I heard an officer at one of the local title companies say in a recent seminar I attended that he puts wording in the offer that states something to the following - "Buyer, Seller, and Listing Broker agree that the listing agreement will expire 24 hours before closing." When HCAD pulls in the MLS data for recent sales, the asking price will appear, bu the sales price will not appear, since the listing expired prior to closing, therefore the actual sales price was not input.

I think this has benefits for commercial proiperty transactions or high end (River Oaks) transactions for single family homes, I do not see much benefit for garden variety single family home transactions, unless you overpaid for the house you bought and want to conceal the price from HCAD and argue for a lower valuation based on comparable sales for other properties for which MLS sales data is reported.

[insidehouston]

My understanding is that HAR does not volunteer or want the county to access the information. But if someone at the appraisers office gets a license they can spy into the data. In general I dont think they look at the data too much. I think they mostly look at owners that tell them the values. The appraisal values are often different than the actual sale prices.

I think the realtors are obligated to put the information into the mls (so that realtors can have the data to do valuation estimates) but the owners dont have a obligation to the MLS.