Home Buying in Palo Alto>Question Details

Scepticalsci…, Home Owner in Palo Alto, CA

Is it true that MLS reports the "last listed price" of a property as the "sale prince" for purposes of statistics and comps? If

Asked by Scepticalscion, Palo Alto, CA Tue Mar 1, 2011

so, why? For example, here's an example where there's a 365K difference between the "last price" and the actual price it sold per public records (consumer friendly redfin gives both). http://www.redfin.com/CA/Palo-Alto/175-Island-Dr-94301/home/542483

Note also that although the appreciation of the property seems high in absolute dollars, in fact it only appreciated at 5.2% (4.8% of you back out the realtor fee) over 20 years, which periods spanned the two biggest booms ever: the tech boom and the real estate boom. Sobering.

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Robert Lei’s answer
although the appreciation of the property seems high in absolute dollars, in fact it only appreciated at 5.2% (4.8% of you back out the realtor fee) over 20 years, which periods spanned the two biggest booms ever: the tech boom and the real estate boom
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You made some great points except I'll have to make some points of my own. ABSOLUTE DOLLARS is MORE important than perceived rate of return. "Rate of return" is just a tool. At the end of the day, what you really care about is ABSOLUTE DOLLARS.

Secondly, this time period also spanned the two biggest BUSTS ever -- the tech BUST and the real estate BUST. When you make an argument, you have to present BOTH sides of the argument.

Sorry, I am a realtor, but I'm also a high-tech person just like you, so I also am very aware of logic in my arguments. Of course, by now, you are never going to use me to buy or sell your house because I am presenting a different side of the argument from you. Most people prefer to use people who always agree with them :-)
0 votes Thank Flag Link Tue May 17, 2011
Scepticalsci,
You are right it does skew things if you only use the MLS for comps, but most agents know how to get the real info if they are running comps. If they do not know how to get it they should not be running comps. Appraisers have ways of getting to the truth also. It is just harder for consumers to get the true facts and even harder for some realtors and some associations to get past their fear of consumers having the ability to get accurate information instead of getting all their information directly from realtors.
Marcy Moyer
DRE 01191194
Web Reference: http://www.marcymoyer.com
0 votes Thank Flag Link Tue Mar 1, 2011
Best have your Realtor review all your questions provide you clarity . Without seeing all data presented difficult to render an opinion to assist you.

MLS Realtors post the actual sales dollar on the executed sales agreement and the cost buyer paid at closing

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Tue Mar 1, 2011
Thanks Marcy, that's interesting info about how foreclosed properties are treated.

Regardless of what motivates sellers or agents to hide the final sale price, what's most interesting to me is the way this all biases the stats and distorts comp analysis. For example the last list price for 325 Channing #215 was $1.4M, so as I understand it this price would be used by an agent doing a comp. analysis on similar properties, particularly those in the same complex. As for motive, you can see why everyone would want the sale price hidden: the unit was purchased for$1.360M in 2004, and if something sold SEVEN years later at a LOSS, clearly that would dampen people's enthusiasm for that complex (where the seller's friends still live and the agent would like to make more sales) and the market in general. Actually, come to think of it, given the 6% commission of $84K, there's no was the unit didn't sell for a loss. Pretty amazing since 2004 marked the end of the tech bubble bust and the start of the real estate bubble.
0 votes Thank Flag Link Tue Mar 1, 2011
Scepticalsci the decision to withhold the information from MLS is not made by the agent but rather the seller &/or buyer. If an agent does that it is because they were instructed. there is no benefit to the agent to pay $500 to keep a price secret. If someone really wants to know they can go to county records after they are updated and find out what the tax amount is and usually what the final sales price was. Also, if a house is foreclosed, which does not happen too often in Palo Alto, the final sales price will be the amount the bank was owed and what they paid the trustee to get the property back. If there was a large second loan that gets wiped out and so it will appear on county records that the last sale was for a lot less than the home may actually be worth. Once the bank puts the house on MLS to sell it with an agent the previous sale price may show an amount that has nothing to do with what the home was worth at the time. I know you didn't ask that, but I thought I would add that tidbit so people have a better understanding of the numbers they are seeing.
Marcy Moyer
DRE 01191194
Web Reference: http://www.marcymoyer.com
0 votes Thank Flag Link Tue Mar 1, 2011
Thanks for the information Lea Ann. That's consistent with what I've heard. So it seems like that's what happened with the two properties I linked to below. I note in this regard Aileen below said "COUNTY [not MLS] records shows a sales price of $3,930mm." So it would seem no final sales price was entered into the MLS and the agent paid $500 or so to avoid doing so. Depending on the situation, they could just pass this through to the seller too I suppose.
0 votes Thank Flag Link Tue Mar 1, 2011
The MLS charges the seller $500. the first time they want to withhold a sale price, and the fee escalates from there on successive requests. The Multiple Listing Service requires that all listings and sales be submitted by members of the board to ensure a reliable database of sale prices. In this way, Realtors and appraisers are able to track values of comparable properties.
If you think that owning your own home is not a good investment, you can always opt for renting (in which case you will be buying a home .... for someone else.) Take your chances in the stock market....so far it's been a great bet for some folks. This year may be a good time to "bet" on real estate....if it's a game you want. For most people, it's a home: shelter in a neighborhood and community they want to be a part of and to which they want to contribute.
0 votes Thank Flag Link Tue Mar 1, 2011
John, thanks for your answer. Yes, agents are "required" to provide the final sales price, but I've heard that if they don't then they are jsut charged some token penalty. So I've heard that some agents, for various reasons, choose to pay the penalty and keep the final sales price confidential, which then keeps it out of MLS stats and comps. This is what appears tohave happened with the two following properties in PA (both of which lingered forever and had significant mark downs before being sold without a final price provided on the MLS feed into Redfin):

http://www.redfin.com/CA/Palo-Alto/175-Island-Dr-94301/home/542483

http://www.redfin.com/CA/Palo-Alto/325-Channing-Ave-94301/un…

Does MLS show the final sales price for these properties, John?

C'mon, Aileen, you should know better. Even my grand daughter knows about inflation.
Pat, yes I'd say part of the appreciation was a remodel -- the interior is not 20 years old for sure.
0 votes Thank Flag Link Tue Mar 1, 2011
No. Those terms are different. The reason for the appreciation could also be a remodel/addition.

Pat
0 votes Thank Flag Link Tue Mar 1, 2011
Hi Scep,
The MLS usually lists both the list price and sales price. The list price isn't used for comps, as it isn't always even close to the sales price, particularly with properties which are priced low to encourage competition.
In this case the sales price was withheld from the MLS at the request of the purchaser, so real estate companies like Redfin don't have the information on a direct feed. The property was listed at $5.2mm and then reduced to $4.295mm. County records shows a sales price of $3,930mm.
As for the low increase in value, the previous sale was at $1,450mm in 1991. That seems like a fairly substantial increase to me!
Cheers,
Aileen
0 votes Thank Flag Link Tue Mar 1, 2011
Sorry, not true. When an agent closes a sold listing in the MLS system, they are required to list the actual sale price. The record for the property will then show the original listing price, all price changes, and the actual sale price. If Redfin or any other sites show something different, they are wrong. If you'd like to see an actual printout from the MLS, send me a message and I'll email it to you.
0 votes Thank Flag Link Tue Mar 1, 2011
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