Verifying MLS Shown Sales Price
Verifying property sales data is a key element and requirement in doing appraisals correctly. We cannot just assume the MLS reports sale prices correctly.
One aid to help do this is by using one of the ‘data download’ software providers which prefill many property data items in the report comparable grids. These companies have direct interties with the local MLS (most, not all across the US), and public data from either your jurisdiction recording or assessor office, or an amalgamation company such as Realist. Two ‘data download’ providers are DataMaster and SPARK; there may be others.
I’m involved in a current report, using 4 comparables. I am a subscriber to SPARK.
I pre-selected my comparables in the MLS, then directed SPARK to capture relevant data for those, and from public records.
Before exporting that data to the actual report, both ‘data download’ software providers flag data points that conflict, and show those on your computer.
In this case, a comparable sales price in the MLS was reported $11,500 higher than the ‘public’ record. That caused me to examine ‘public’ records from our Assessor and Treasurer more carefully – which we can do easily using their web sites (thank goodness, and I realize others across the country are not so fortunate).
Indeed, the Assessor’s sale transfer price was shown to be the lower figure. To verify that, I looked at the recorded Excise Tax document on the Treasure’s site. That only shows the gross Excise Tax collected, but not the actual sale price. In our case, the Excise Tax is 1.78% of the sale price, which I also had to research using the WA State web site which shows the Excise Tax percentage in all counties, and cities that vary by location.
When I multiplied the ‘lower’ sale price by 1.78%, the result equaled the recorded Excise Tax amount on that document. At that point, I knew that the lower price was correct, and not the MLS shown price.
The last thing I did was send an email to the MLS office ‘listing input department’ with the above info, and asked them to correct the listing. I received a message back that the change was made.
But the real story here is this MLS error existed for nearly 18 months! Apparently no other appraiser in this span of time bothered to actually verify the sales price info, and notify the MLS. That also tells me that appraisals using this particular property as a comp may have been over-valued, especially if the appraiser didn’t verify the sale price using available public records.
You should become very familiar with the various ways you can verify sales prices, and other data, in your own region. And don’t be afraid about sending your info to the MLS, to request a correction be made.
To repeat: “Verifying property sales data is a key element and requirement in doing appraisals correctly.”