Yesterday I wrote about the inherent inaccuracies of statistics derived from Multiple Listing Association (MLS) data. Sometimes, I think I’m psychic.
Now I learn that last week, RE InfoLink (REIL), the MLS serving the counties of Monterey, San Benito, San Mateo, Santa Clara, and Santa Cruz in Northern California, has adopted a rules change concerning entering sales price data into their MLS upon property closing.
REIL’s Board of Directors and NAR have approved adoption of a new REIL policy enabling buyers or sellers to withhold the sale price of a property as a condition of a transaction. By completing an “Authorization To Withhold Sale Price” form and paying a $500 fee, the listing price rather than the actual sale price will be entered in the “sale price” field at close of escrow. The listing agent will be required to enter a code in the Confidential Remarks (agent only) field indicating that the sales price was withheld.
I can certainly understand that there are circumstances under which the principals or their agents would not want this information published. Unusual circumstances might occasionally beg for withholding the actual sale price, and I have personally been involved in a transaction or two where this would have been a welcome alternative. Distress sales and sales where there is an unusually large credit from one party to the other are two examples of situations where the actual sale price is not representative of either the market or the true effective price. The problem is that, for anyone relying on MLS statistics, while the “price withheld” remark is present in the MLS text, it becomes a laborious task to visit each property description to look for this needle in the haystack. And if you are not an agent but rather a consumer who is the recipient of the Recent Sales Update postcard sent by your neighborhood specialist, you will be none the wiser.
It will be interesting to see how widespread this burying-the-truth practice becomes and what the impact will be. The good news is that you can’t hide from the County tax stamps; any market data derived from County Recorder’s records will necessarily portray the real picture.