Discrepancy Between Recoded Sale Price And MLS Sal

[moh malekpour]

Thanks Jo Ann,

After several phone calls and search, I finaly found the buyers phone numger and called them up. They said the sales price is the one that is listed in MLS $300000 and they already have contacted the title company and county recording office to correct their error. The problem solved and I am going to put the lower price that is in MLS as a real sales price and explain the home buyer and agent explanation about the incorrect recorded sales price.

Evidently, the seller wanted $320000, the bank appraised it at $295000 and they negotiated and settled for $300000 ant that was the final sales price. No concession, no extra stamp cost. just regular arms length transaction.

 

[Marty Skolnik]

Moh...

If I read your post correctly, you are taking the agent's word on the sale price of a comparable over the recorded deed? You don't say why you think the agent is correct, though.

If someone did not use the correct sales price in the deed, that's bordering on fraud and subject to criminal action (fines, imprisonment, or both) on the part of the local jurisdiction!

I would never take the agent's word over the recorded deed. Never. If I had a discrepency like you have and I didn't feel comfortable using the sales price from the legal, actual recorded document I would punt on that sale and not use it.

Why would you take the word of an agent over the legal document? At the very least, if you wanted to use the sale you should get a true, signed copy of the sales agreement.

And, if the recorded deed is really wrong, I would still wait until a corrected deed is recorded until I use that sale.


Marty Skolnik
Baltimore, MD

 

[moh malekpour]

If I read your post correctly, you are taking the agent's word on the sale price of a comparable over the recorded deed? You don't say why you think the agent is correct, though.

Marty,
First, I needed that sale very bad because I had limited sales in the area and that was the closest sale to the subject. It was across street.
Secondly, I not only talked to the agent but also called the purchaser of that property "the current owner of that property" and she mentioned that there was an error in the recording and indeed the sales price was $300000 not $320000 that was recorded and they had notified the title company and the recording office to correct it. The property was listed $310000 and sold $300000 but recorded $320000. Why would you use an incorrect recorded number if the owner and the agent tell you it is incorrect and if you would use the incorrect number merely because it is a recorded number then why you call them up to verify your data? Why you are supposed to have two or more data sources to make sure that your data is correct no matter who has provided them and Why the agent and home buyer want to lie to me or to you?
I used the actual and correct sales price and mentioned the discrepancy and the result of my contacts with agent and the homeowner in detail in my report. That is not good enough?

By the way, have you ever had any experience where the recorded data of the GLA of the property that you were appraising was different from what you measured it? which one did you use? the one that you mearured it and was correct or the one that was recorded but incorrect? Because the property was supposed to be X square footage in spec at the time of construction, they recorded X squarefootage but they built Y square footage and that was the correct GLA. They didn't change it, they didn't correct it but you are supposed to use the correct data even if it is in contrast with your recorded data.

How about discrepancies in comps that I experience all the time when the recorded GLA of some of my comps are half the size of their actual GLA as they show and are recorded in MLS. You just get fixated in the recorded data or take the agent's word and your own judgement and use the correct but not recorde GLA?

 

[Marty Skolnik]

Moh...

I agree with your issues about information verification. In the case of this particular property I would still be very careful about the price. If I were you, I would love to have a copy of the sales agreement for my files. Maybe someone would at least let you look at it so you can make notes from it, or maybe even copy it?

I would also be very careful about how I wrote about this comparable in the report. Since you seem to really really really need to use this particular sale, I would suggest that you write several paragraphs about your efforts to confirm the price and why you finally decided to go with the agent's explanation. I can see where an underwriter or reviewer would question your information so the more discussion you put in the report the fewer questions you'll have down-the-road.

Document all your discussions with the agent and the buyer/seller and, if possible, ask them to notify you when the corrected deed is recorded, then go down and get a copy of it for your files. If no one calls you in a month, make a note to go fetch it yourself, and a month after that, and a month after that, etc., until they finally record the corrected deed. I would think that having that deed in your file will save you some headaches later on!


The difference between your situation and the issue of GLA is that the document that was recorded is a legal document and the people that draw up legal documents are subject to criminal prosecution if the draw them up fraudulently. Are there mistakes in deeds? Sure. That is why we see corrected deeds every so often. However, there is no penalty if the Assessor measured the building wrong or if he/she used the building plans instead of actual physical measurements. That's just an error in judgment. A fraudulent deed is a criminal offense which is why only lawyers can draw them up and which is why there are penalties for fraud. I'm not sure if there are penalties for honest "mistakes" in deeds, but that is why there is title insurance, I guess.

And, that is why I'm very careful with which source I'd place more weight on -- the agent or the legally recorded document.

Just be careful out there! <grin>


marty skolnik
baltimore, md

 

[Edd Gillespie]

I got one the other day for a comp. $750K MLS, $300K & $800K assessor and $700K doc stamps. Guess I'll punt or hail mary if I can't find a buyer/seller who's statements I can rely on. Sh*& happened somewhere.

 

[Terrel L. Shields]

stick with the stamps. Who's going to say you were wrong?

Not to infer there is a "right" number somewhere and one or the other by default must be "wrong" but an old appraiser who taught me a lot, guy named Nolan Williams, died a few yr ago from long bout with cancer, and was my mentor in Oklahoma.

He avered this much. If you simply don't know who to believe, then trust the public record because if it goes to court THAT record is not going to change and it is a must better deal to argue to a judge that you trusted a number someone swore was correct [at least here you have to swear out that you are afixxing not less than the required stamps] rather than have someone say, well, I thought it was something else...

Likewise, if you had a question about the size of an upper floor you were unable to measure precisely due to inability to get on the roof, etc. then again, trust the assessor. They may be wrong, but they are still the LEGAL size and courts are forgiving when you rely upon public data of this nature. He was probably right.

 

[OCApp]

hi moh. i'm in orange county in southern cal also. buyers are allowed to pay more tax stamps than required (as far as i know) if they want to fool people about the price. now, they can also hide the stamps paid so you don't see a recorded price (happening more and more often).

if i'm not mistaken. stamps are $1.10 per $1,000 sales price. so a $300,000 sale would show $330 in tax stamps ($300,000 / $1,000 = $300) x $1.10. If you see $550 in stamps it sold for $500,000 (maybe).

i've also found that alot of times agents will report inacurrate sales price to the MLS because they want to keep prices up in their farms and make their potential listing customers happy.

 

[moh malekpour]

Hey Paul,
I know about the agent hypes in the MLS sales prices and I see them all the times. It is their marketing tools to tell homeowners and other agents that they sold homes with high prices but this one is exactly opposite of that attitude. The sales price in MLS is $20000 less than the recorded sales price in a $300,000 transaction.

This condo is not in Orange County. It is in LA County and it was listed for $31000 and sold for $300000 according to the agent. When I called her to confirm for the sales price and told her that the recorded price was $320000, she could not believe it. As you noticed, agents usually put higher sales price in MLS but this one was much lower than the recorded sales price. Since the home buyer phone number was listed in the property profile that I extracted from the American title, I called her up and told her that I was an appraiser using her condo as a comp and would like to ask her about the sales price of her new purchase because there was a discrepancy between the agent price and the recorded price. I asked her that she didn’t have to answer my question if she was not comfortable but she was very cooperative and volunteer to explain from A to Z. She was a new homeowner who put her home phone number in the public record, which indicates she was an open person. She mentioned that the seller wanted $320000 but it was appraised less than $300000, I don’t remember she said $285000 or $295000 but they decided to buy it for $300000, which was slightly above the appraised value. I told her that she got her price but she paid a higher sales tax and she is going to pay higher property tax every year because it is recorded $20000 more than what she has bought it. She responded that she was aware of that and has informed involved parties to correct the error.

I am also aware of tax stamps which is another name for the sales tax and as you said, it is $1.10 per every $1000 of the sales price and I know that some people pay higher tax stamps for their own reasons but in order to have $20000 tax Stamps, your sales price has to $18,190,000. Here is the formula: $18,190,000/1000=$18,190 X $1.10= $20,009 tax stamp.

Moreover, I searched for comparables within the entire city and the highest price of a condo that ever has been sold in that city up to this date is $312,500. The condo that is recorded for $320,000 could never be appraised $320,000 as the homeowner quoted the appraiser for that condo unless somebody does some funny stuff, as it is common in the area. There are some properties that are zoned SF PUD that are also detached but agents put them in MLS as twnhomes and put condos in MLS as townhomes too. Obviously the Detached SF PUD sells higher than an attached condo but some appraisers used those Pods as comps for condo and I think that is wrong. All these signs were indicative of inaccurate recorded data.
This condo is not an end unit, it is fronted to a busy traffic street with noise and has smaller GLA.
I had no reason to believe that the agent and the homeowner lied to me. What would be their motives?

I guess, I am practicing my reasoning to the underwriter or reviewer of this appraisal if they are not satisfied with my explanation in my report.

 

[DTB]

I am also aware of tax stamps which is another name for the sales tax and as you said, it is $1.10 per every $1000 of the sales price and I know that some people pay higher tax stamps for their own reasons but in order to have $20000 tax Stamps, your sales price has to $18,190,000. Here is the formula: $18,190,000/1000=$18,190 X $1.10= $20,009 tax stamp.

Moh,

Wrong equation buddy. The extra tax stamps purchased to reflect the 20K overage was $ 22.00 in tax stamps. Extra valuation -20K- divided by 1K= 20 X $1.10.

They did not pay 20K in transfer stamps. I sure hope you didn't infer this math to the new H/O. :redface:

 

[moh malekpour]

Mike,
I thought, some home buhers add the sales tax to the sales price and record it for some unknown reason just the same way that they add the cost of loan like appraisal fee, insuance fee and points to the loan amount and finance the whole thing. That would make some sense. In order to have $20000 sales tax, your sales price must be huge but the whole thing is confusing. This home buyer didn't seem to be the one who pays extra sales tax and then property tax just to tell her neighbors that she bought the condo with that price.
what would be the reason to pay extra $22 tax and get $20,000 added to your home value and pay property tax for that extra amount thereafter year after year?