MLS vs. Pub. Rec. prices, new scam?

[CSP 49]

I've run across this twice now in 2 days with a large variation in the sold price reflected in the MLS vs. public records with the MLS price in line with the asking price and marketing time. The recorded sales prices are higher. The agents say the MLS prices are the correct prices and they don't know why a higher sold price was recorded.

The sale I'm looking at now transferred with a certificate of title but was not a bank or court transfer. Most sales in this area will transfer with a warranty deed or special warranty deed.

Any thoughts on why I'm seeing sales recorded in P.R. with substantially higher prices? Is there a new scam or fraud out there we need to know about and be on the lookout for?

 

[Greg Bell]

In my area public records are usually considered more accurate than MLS.Many times the recorded "Sale" price on the MLS will not include some closing fees or last minute changes.

 

[Pamela Crowley (Florida)]

Many 'investors' and 'speculators' have been doing this for years. They pay extra recording 'stamps' to show a higher price than reality sometimes to get higher than reality LTV mortgage or have a stake in other properties and want to produce 'comps' that are not based in reality. Sometimes the real estate agents are in on it, and sometimes not.

Avoid using any sales like this. If you MUST use a sale like this, use the MLS sale price stating that it was verified as the true sale price by the Realtor. Explain that the sale price as listed in the public records appears to be wrong and that you are using what you believe to be correct.

Report any sales you find like this at the Mortgage Fraud Watch List .org so that many of the mortgage fraud investigators, law enforcement, regulators, and lenders fraud departements will find it and hopefully do something about it.

 

[Steve Metz]

I have been seeing the opposite with MLS price being much higher than the real estate transfer tax slip. What is up with that?

 

[Ken B]

In contrast to Pam's observation, I have observed situations where the recorded price is less than the "actual" price for the purposes of tax avoidance.

I have also worked in an area where the "recorded" price as reflected in assessment records is not accurate when the actual sale price is less than assessed value. The assessor would not report a sale price less than the assessed amount so as to protect tax revenues. The consideration reported in the deed was accurate, however.

 

[Ken B]

I have been seeing the opposite with MLS price being much higher than the real estate transfer tax slip. What is up with that?

You mean you have never known an agent to be less than completely factual?

A call to the purchaser is probably the best means to obtain the actual price paid for a property and the conditions associated with the transfer.

 

[Restrain]

I'd go with MLS, and call the agent to confirm what happened. During the flipping scams, and even today, there can be 2 HUD-1s. One for the lender/title company to make the loan and for the deed record (to influence values) and the actual HUD-1 where the price is lower, reflecting the actual transaction.

If you can't verify a sale through a third party, be very cautious.

 

[Pamela Crowley (Florida)]

What separates an appraisal from an AVM?

VERIFICATION AND RECONCILIATION OF THE DATA!!!!!

From an email I recieved about this:

Verification IS NOT merely using a number from the MLS in lieu of the one indicated by documentary stamps.
Verification is talking with someone associated with the sale; buyer, seller, listing agent, selling agent, broker, closing agent.

If there is a discrepancy between the documentary stamps and MLS indicated sales price, an appraiser better not be picking and choosing which one to use without talking to someone.

I added the underline.

 

[CSP 49]

I just seemed strange to go from seeing this once or twice a year vs. twice in one week. There are so many people involved its very bold to record fraudulently. The title company would definitely have to be involved for any type of fraud since they prepare the HUD-1 and have the responsibility for recording the deed and providing the amount of Doc. stamps.

The ones I have seen make sense for the MLS to have the correct price. The one today was listed for $167,000 and sold through MLS for $156,000 with a 50 day marketing time. The $156,000 made sense, the sale was recorded at $176,000.

 

[Vermonter]

We've got one local realty office that is screwy with their MLS listings. The closed price they list is before concessions but they still post the concession amount. When you confirm in public they never match.

Around here, our public records are solid and would continue to scrutinize the agents listing, but it may be different in your neck of the woods.