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MLS Data Vs. Actual Data

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BigBlueGA

Junior Member
Joined
Mar 13, 2002
Professional Status
Certified General Appraiser
State
Georgia
This is somewhat of a theoretical question, but I am curious as to what your opinions would be on the subject.

Consider this.. in the course of an appraisal, I often utilize the MLS system to search for comparable properties within a specified distance or within certain neighborhoods. Now as we all know, MLS data often can be and usually is inaccurate to a certain degree, especially when it comes to GLA. I am fortunate enough to work for the largest of only a handful of appraisal firms that services our area, therefore many of the sales listed on the MLS system were appraised by either myself or another person within our firm. This gives me access to ACTUAL GLA data from the appraisal which is usually only minimally different than that shown on the MLS system.

Now, try to follow me here -- in my market (which is predominantly military transfers) a very large percentage of sales are made utilizing the services of a Realtor (probably by my best estimate somewhere around 97%-99%) and are based on the data provided to the Realtor by the MLS system.

When the data from the MLS conflicts heavily with that from my records or public records and the actual GLA can be verified to be thusly different, which is more reliable from an appraisal standpoint? The purchaser thought he/she was purchasing a house with XXXX square feet (from the MLS) but in reality (unbeknownst to them) was purchasing a home with 500 square feet more or less than that amount.

Common sense and standard practice would dictate that the sale should probably just be put aside if there are better sales available, but like I said this is a mostly theoretical question and I want to know what your thoughts would be if you DID have to use this sale? Would it be more reliable to adjust based on the inaccurate MLS data or the actual (unknown to purchaser) data? :)

- Brandon :ph34r:
 

Ramona

Sophomore Member
Joined
Feb 3, 2002
Professional Status
Licensed Appraiser
State
Maryland
Compare apples to apples. Hopefully the purchaser at least walked through the home prior to contracting for it, and had the feel of the size if not the actual correct sf measurement. If you have the actual sf of your subject and the actual sf of the available comparable sales, adjust based on actual size differences.
 
Joined
Jan 16, 2002
If prior subject becomes a comp I show data source as "Sold Data MLS & Prior Subject Inspection" and use actual GLA- since MLS data is notoriously WRONG why use it ? Who cares what the buyer thinks the GLA is. Here at least 90% of MLS data is wrong, the only thing they get right is address and sales price (well, at least most of the time anyway). For some strange reason the block and lot numbers are almost always correct (could never figure that out) - room counts ? forget it. GLAs ?, retarded. :blink:
 

Greg Brinkley

Freshman Member
Joined
Jun 11, 2003
For comparables, I just use the info(Living Area) on the Public Record even though it is widely known that they are not 100% accurate, but what other choice do you have? You can't go around measuring every comparable. Now if I use a sale that I appraised for a comparable, I will definately use the true Living Area as I measured it and I will state that fact in the report.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
If the GLA for a comparable is different than what is shown in assessor's records--which is what the reviewer 2,000 miles away is looking at--I provide a comment of who or where I got the GLA that I utilize, after I decide which would be the most accurate. So comments like the following appear quite frequently in my reports. "Livable area based field measurements by this appraiser." Livable area obtained from appraiser for the sale." "Livable area based on information obtained from realtor, who received the information from the property owner (former appraisal) (measurements by realtor), etc, etc. I have copies of the sketch and building history on the assessor's property record card which I can compare to other sources and what I can see from street or alley. Then I describe how I arrive at GLA (rear covered patio was enclosed--carport has been enclosed, etc, etc) after I talk to someone that has been inside the building. Explain, explain, explain!
 

aprazer

Junior Member
Joined
Feb 27, 2002
Professional Status
Certified Residential Appraiser
State
New York
Your own records or the tax records are the way to go. If you asked 10 brokers how they measure a house how many different answers do you think you would get? I would think that any assessment figure has been produce by someone with some actual training as to how to measure a home.

In my market, the MLS listings rarely give a GLA figure. It's usually only given on new homes, when it is provided by the builder-which 90% of the time includes the basement. I think the broker is better off not presenting a figure as fact.

I find that most people do not have a good sense of square footage. 99% of the homes I go to where they say the know the GLA-they are off by hundreds if not thousands of square feet. It can take years for an appraiser to be able to "eyeball" a home and come up with a number thats close to actual. I trained with a guy who was uncanny at this-he was usually within 100 Sq. Ft..

Have any of you actually been questioned on your GLA numbers from clients? The only time this has ever come up for me is in a field review when inflated numbers are given.
 

Ghost Rider

Senior Member
Joined
Apr 27, 2003
Professional Status
Banking/Mortgage Industry
State
Connecticut
When it comes to gross living area squaref footage data, I will always rely on the public records information from town hall records. Why?? Simple. I was taught that the only data you could utilized in the report as far as comparable sales data is information which is readily available to the public As such, I am always wary of utilizing my own inspection information from a comparable as, technically, that is priveledged information, which you only have access to, and not every has. Its the CYA Game - I always think what would happen if someone was revieing the report, if they don't have the information I have, would the report look misleading?? perhaps, and for that reason, I will base the information in my reports on the best information available to the general public.
 

BigBlueGA

Junior Member
Joined
Mar 13, 2002
Professional Status
Certified General Appraiser
State
Georgia
I think I might not have made my post clear enough... it's a theoretical question. I understand that none of us would use data that we knew was not accurate. What I am asking (or really just bringing to point for discussion) is...

We use the public records or previous inspection data because we know it is more reliable than MLS data, HOWEVER considering that all adjustments are simply market reaction to perceived differences (from the consumer), would it not be more *accurate* to justify differences in sales price based on the data that was presented to the consumer at the time of purchase (the MLS data), as this is the data that the purchaser's offer was based on...
 

aprazer

Junior Member
Joined
Feb 27, 2002
Professional Status
Certified Residential Appraiser
State
New York
Brandon-

I have read your updated question-NO.

What a huge can o' worms that would be. Should we go by the brokers opinion of condition? Do all brokers present information regarding the listings in a consistent manner?

The biggest mistake a buyer can make is forgetting that the broker works for the seller-and that they are salespeople. These are not unbiased people and the information presented by them should be treated as such. Purchasers offer was mainly based on their perceptions of the market. No buyer sits down at a desk with MLS listings and picks one solely from the data provided by the listing agent-the walk through determines what they will bid more than anything.
 

Ghost Rider

Senior Member
Joined
Apr 27, 2003
Professional Status
Banking/Mortgage Industry
State
Connecticut
When it comes to deciding if to use public records information, or MLS data, it all depends on the data you are talking about. Typically, the only information I am tempted to use from MLS is room counts, heating system, and things they might have done to the property AFTER the assessor was in the property (building a deck that was never picked up by the asssessor, finishing the basement, etc....) When it comes to gross living area, the local assessors here in CT are usually very good. I will trust the realtors to be able to count rooms, and it's usually more accurate, because at least they were in the house, and the assessors don't always get access.

Just my $.02
 
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