Anyone a member of the Texas Bar Association looking for Pro Bono work? I think you may be able to rassle up a class action lawsuit in big “D”, little “a”, double “L” a, s (Dallas folks 😉 )
Texas is one of five states that do not require disclosure of sale prices, however, I believe the local MLS board in Dallas may be violating their fiduciary responsibility to their buyers and sellers. I strongly suggest you read the following article.
Actual home sale prices are not being entered into the MLS.
Does this not blatantly fly in the face of transparency. Moreover, how can the local board stand for this? Without accurate data shared at least to local members, the guidance and counsel for properly pricing a property places sellers, but more clearly buyers, in a very bad position. The article suggests that lower priced properties which have sold may be intentional left out in order to provide a perception that property values are higher.
Not only is this a direct violation of an agent’s fiduciary responsibility to his/her client, it is borderline fraud.
Real estate is local, consult a local REALTOR and find out how much your home is worth – or NOT.
Is it any reason why data aggregators are winning?
Brian Brady says:
From the linked article:
“Rich Thomas, CEO of Dallas’ MetroTexas Association of Realtors, says undisclosed sales account for less than 10 percent of total MLS listings. But he concedes that in some neighborhoods – the Park Cities, Preston Hollow and other high-end areas – the majority of transactions are being kept hidden.
“In some pockets, it’s the chic thing to do,” he said.”
Chic? If they pulled that crap on Wall Street, they’d end up in jail. In Tehran’s Grand Bazaar, they might just lose their hands.
June 18, 2009 — 12:38 pm
Thomas Hall says:
@Brian – In Dallas chic is spoken like “Chick” 😉 In some pockets, we feel it is appropriate to misrepresent and provide misleading information to our clients ‘cuz it’s cool y’all.
June 18, 2009 — 12:44 pm
Tim Shepard says:
This is an interesting issue. I live in a state that requires disclosure of sales prices and assumed that everone else did as well.
Personally, I believe that decisions like this should be made on the local level. Don’t get me wrong, as a realtor, my job is easier when sales data is easy to retrieve. However, if buyers and sellers in Texas accept their current laws, then who are we to question that?
How could a Texas Realtor be violating their fiduciary responsibilities if they are following Texas law? That doesn’t make sense to me.
I’m not an attorney or a realtor in Texas but it would seem that as long as there was a proper disclosure, things would be ok. For example, a disclosure might say “The comparable sales that I’ve used to put together the market analyis for your home or for the one that you are buying may not be representative of actual market conditions. This is because Texas law does not require sales data to be reported in an official capacity”.
Why do banks loan money in areas that don’t fully disclose sales? That’s the perplexing question to me. For the most part, banks rely solely on appraisals to determine loan amounts. If they refused loans for insufficient data, I guarantee you that sellers and buyers alike would press for an immediate change of state laws.
That’s how the free market works.
June 18, 2009 — 6:49 pm
Thomas Hall says:
@Tim – really appreciate your perspective. For me, the issue isn’t related to the fact that disclosure isn’t required, it is the inconsistency in which some data is disclosed and some is not – at the surface, it appears that some information is intentionally withheld in order to manipulate prices.
As a consumer, if there is collusion to withhold information in order to potentially manipulate the market in a particular neighborhood and/or area, I believe there is a violation of fiduciary responsibility because the data – which is owned by local agents and brokers – could attempt to mislead buyers and/or sellers.
June 18, 2009 — 8:11 pm
Brian Brady says:
“Why do banks loan money in areas that don’t fully disclose sales? That’s the perplexing question to me”
THAT is a great question, Tim (and I don’t have the answer)
June 19, 2009 — 12:01 am
Mike Taylor says:
In the world we live in today, decisions like this befuddle me. To have to the local board sit on the sideline and just say “it’s the chic thing to do” is even more amazing. Consumers crave and will get, sooner or later, more and more information. If we as agents stand in the way of this, it does all of us harm in the long run.
June 19, 2009 — 4:38 am
Joshua Hanoud says:
The only person with a fiduciary responsibility to the buyer or seller is the broker representing them in that capacity.
Broker A is representing seller B
Broker A uses comps pulled from the MLS to help seller B determine market value for their property.
Broker C failed to disclose the sell price of a property that he had sold (which could affect Broker A’s comparables research).
The principles in the deal involving broker C were both happy to have their privacy held close to the vest.
Broker C has no fiduciary responsibility to Seller B…
so….I see ignorance on the part of Broker A…but where’s the lapse in fiduciary duty?
June 19, 2009 — 8:50 pm
Thomas Hall says:
@Joshua – the lapse in fiduciary responsibility may lie in the case that several brokers collude to withhold sales data for a neighborhood and not in another. If you choose to not disclose, that is fine – but I believe the choice cannot be arbitrary.
In your instance, what happens when Broker A represents seller B and buyer D?
Regardless of how principles view their privacy, a collective – perhaps unspoken – agreement to withhold sales data amongst brokers places them in jeopardy of exercising their fiduciary responsibility for one client over another.
June 19, 2009 — 9:12 pm
Jill says:
This could become a huge problem. If this catches on realtors in Texas are not going to be able to do CMA’s. That is really going to cut down on the value of a realtor when they are just going to be guessing at values. The board needs to put a stop to that insanity and fast.
June 20, 2009 — 4:08 am
Joshua Hanoud says:
@Thomas – hmm… I see what you’re saying…and I definitely see how it poses a problem when coming up with comparables to price future listings and also to help buyers to understand how their property is valued…That would absolutely be a difficult situation if Broker A also represented Buyer D…I wonder how the association attorney might rationalize it…
On a side note, I think it’s kind of embarrassing to have the CEO for a association of Realtors talk about something being “chic” when it’s a potential problem …seems to be making light of the issue rather than addressing it. This is a business, not a social gathering. “chic” has nothing to do with it.
June 20, 2009 — 11:56 am
Greg Swann says:
One of my clients forwarded this from the Wall Street Journal: Z Issue: In Texas, Home Sale Prices Play Hard To Get.
June 22, 2009 — 6:11 am
Thomas Johnson says:
In the upper priced market, it can pay to keep the Tax appraisers in the dark. TX has no income tax, so our property taxes are high: (3% ad valorem and higher). If you hold an appraisal down by keeping the tax man in the dark, it can mean thousands saved. In the Houston MLS there is a fine for failure to disclose, but it can pay the client to reimburse the listing broker the amount of the fine, especially for high profile homes where the successful are demonized by the nattering classes.
June 23, 2009 — 9:25 pm