Possible move to a non-disclosure state.

[Bocad]

I am currently an appraiser in Colorado. I am thinking about moving to Texas, which is a non-disclosure state, and am trying to get as much information as possible before I make my decision.

How do appraisers get sale information in a non-disclosure state?
Does the MLS include contact information for the parties involved in the sale?
Is calling the parties to verify sales price sufficient or do you need to visit county records?
I am assuming that it is going to be more time intensive. Do appraisers tend to charge more in those states (specifically Texas)?

Sorry for all the questions but I just want to be as informed as possible before making a decision.

Thank you for any help you can give.

 

[Michael S]

I've only worked in a non-disclosure state (New Mexico) so I have limited experience with what's typically available in disclosure states. Also I've never dealt with SFR, just commercial.

That being said I've researched a few comps in Texas before. Some counties had assessor information online with some property details such as year built and size, some had grantor/grantee/date information and possibly a link to the actual document. The deed wouldn't tell you the sale price, unless it was a real estate contract. In theory the MLS should have the sale price but you'll have to figure out how reliable that is in whatever market you're moving to.

Here in New Mexico most assessor's offices will only disclose the current owner, the land size, and maybe some details on the last sale such as the date it sold and who the buyer and seller are. Most counties are online, at lease the ones I've done work in. A lot of the state is very rural but we probably wouldn't be doing any work in those areas so I'm not sure what they have available. A couple of counties will post year built and building size information online but it's hit or miss. There's a commercial MLS system that covers the whole state, but 90% of the data is from Albuquerque. Only a couple of other cities have dedicated commercial brokers, the rest are residential brokers who handle the occasional commercial property. The vast majority of sales do not list the price in this system, and sometimes the property will not even be listed as sold, just as off the market. I do have access to one regular MLS system in a market we cover and the data seems to be ok, at least as far as the price and date of sale. A lot of times there's not much else in the way of details. Nothing about the buyer and seller. You have to pay for access to the County Clerk's system (only $25 a month) to get copies of the deed because they will refuse to give you any information over the phone.

In general I never use a sale until I get either the buyer, seller, or broker to confirm the price. On rare occasions I've used data from other appraisers that I've been unable to otherwise confirm. Any other data source I treat as a lead only. I've seen more than one case where the "confirmed" sale price turns out to be flat out wrong.

 

[Scott R Marshall]

Well, there are two trains of thought regarding what it done, those from peers who do not work in non-disclosure states and those that do.

First off, MLS and realtors become your first and in many cases, last line of defense. Sales prices are not public information and with the exception of MLS, almost impossible to obtain. Builder sales tend to be the last thing you ever want to use unless you can somehow obtain a HUD-1 (almost impossible unless you are appraising one of the builders homes, in which case you'll get the cherry picked ones) and FSBO's just get lost in the ether.

Some counties have assessor information that you can get some property specifics. Some do not. And it is utilized less than MLS data. And is typically dated information and possibly no longer reliable.

Ultimately, it boils down to what your peers do, and specifically your peers on the state board. Attempting to verify every last bit of sales data and property data for all your comparables just cannot be done within the normal course of business, at least as far as documentation. You may be able to get some verbal confirmation of data but that is it. So trying to dot all your I's and cross all your T's is just not possible. Unless you want to take 2+ weeks on every residential report and ultimately go out of business because no one else is doing so, nor does the state board expect it to happen.

You also have to get on the phone. Quite a bit. So you better be personable.

Of course those in disclosure states are probably appalled at such lax appraisal practice and standards. Walk a mile in my shoes or the shoes of any other appraiser in non-disclosure states and I'm certain you'll change your opinion. Or move back to a disclosure state.

 

[TxArmadillo]

Here are my thoughts on your questions below:

How do appraisers get sale information in a non-disclosure state?

For your comps, it depends upon your service area and which MLS, if any, which you'll be using. My two MLS both require purchase information to be added within 24 hours of the closed sale (sales price, concessions, and closing date). Some of my more rural areas, however, still require contacting realtors and other sale transaction participants directly and attempting to obtain that information.

For the subject property, we routinely receive a copy of the sales contract from the lender and you contact the participants in the sale and hope they cooperate.

Does the MLS include contact information for the parties involved in the sale?

Only the listing agent and broker information is provided for each listing. If it's a closed sale (for comps), the selling agent information is also provided.

Is calling the parties to verify sales price sufficient or do you need to visit county records?

Contacting the parties involved is the best way as the MLS isn't a reliable source always. However, more and more counties are making their tax records, etc., available online. But there are still a few in the Stone Age.

I am assuming that it is going to be more time intensive. Do appraisers tend to charge more in those states (specifically Texas)?

We try to charge more and sometimes we can. It really depends on your service area, where your comps are, and whether original comp photos are required. I try to keep local clients (very few AMCs) who really do understand this local market area and are more receptive to paying a bit more.

My service areas covers 3300 square mile in three rural counties and part of one metro county. I've done four hours on the road getting comp pics for a triple wide trailer on 20 acres so you'll learn to pack a lunch on some of those trips. :icon_lol:

Hope this helps a bit.

 

[Stone]

Well, there are two trains of thought regarding what it done, those from peers who do not work in non-disclosure states and those that do.

First off, MLS and realtors become your first and in many cases, last line of defense. Sales prices are not public information and with the exception of MLS, almost impossible to obtain. Builder sales tend to be the last thing you ever want to use unless you can somehow obtain a HUD-1 (almost impossible unless you are appraising one of the builders homes, in which case you'll get the cherry picked ones) and FSBO's just get lost in the ether.

Some counties have assessor information that you can get some property specifics. Some do not. And it is utilized less than MLS data. And is typically dated information and possibly no longer reliable.

Ultimately, it boils down to what your peers do, and specifically your peers on the state board. Attempting to verify every last bit of sales data and property data for all your comparables just cannot be done within the normal course of business, at least as far as documentation. You may be able to get some verbal confirmation of data but that is it. So trying to dot all your I's and cross all your T's is just not possible. Unless you want to take 2+ weeks on every residential report and ultimately go out of business because no one else is doing so, nor does the state board expect it to happen.

You also have to get on the phone. Quite a bit. So you better be personable.

Of course those in disclosure states are probably appalled at such lax appraisal practice and standards. Walk in mile in my shoes or the shoes of any other appraiser in non-disclosure states and I'm certain you'll change your opinion. Or move back to a disclosure state.

Feeling a little defensive today? :laugh:

I've never worked in a non-disclosure state and that makes me happy. My work probably involves a bit more digging into sales than it did when I was doing SFR, but it is nothing compared to what has to happen in a non-disclosure state. I'd hardly criticize anyone for doing their best and using what is available. About all you can do.

 

[Scott R Marshall]

Feeling a little defensive today? :laugh:

No, just thinking back to a discussion a few years back where a duck basically accused all those poor wretches in non-disclosure states of being appraiser heathens because we cannot definitively verify everything. Not if we want to stay in business.

USPAP is the Bible to some, open to their own very strict interpretation. I would say it is ultimately open to the interpretation of the state boards until such a time as a license can be removed by the federal government. And if the state board believes that these "restrictive" appraisal practices are appropriate and within the acceptability threshold of USPAP due to the limitations of what can be performed within a non-disclosure state, then who am I to refuse their determination, as they are ultimately the ones who will decide if I keep my license. Mix that in with the very real scenario of verifying everything making it impossible to stay in business along with my "peers" applying similar practices and I'm fairly confidant in saying that this practice is acceptable in the state.

So all the purists out there can either accept us poor wretches into the flock or label us a USPAP cult.

And yeah, I guess I am coming off as defensive.

 

[TxArmadillo]

Some counties have assessor information that you can get some property specifics. Some do not. And it is utilized less than MLS data. And is typically dated information and possibly no longer reliable.

This is a fact. One of my counties updates within about 30 days. The adjacent county gets updated about every 90 days.

Yeah, that's a problem.

...Attempting to verify every last bit of sales data and property data for all your comparables just cannot be done within the normal course of business, at least as far as documentation. You may be able to get some verbal confirmation of data but that is it...

I keep telephone conversation records on every call I make to realtors about sales information and contract data, add it to the workfile, and summarize the conversation in the report. It's the only way to cover your arse out here.

You also have to get on the phone. Quite a bit. So you better be personable.

OK, true but I found it funny.

Good comments from our New Mexico neighbor! woohoo

 

[Stone]

No, just thinking back to a discussion a few years back where a duck basically accused all those poor wretches in non-disclosure states of being appraiser heathens because we cannot definitively verify everything. Not if we want to stay in business.

USPAP is the Bible to some, open to their own very strict interpretation. I would say it is ultimately open to the interpretation of the state boards until such a time as a license can be removed by the federal government. And if the state board believes that these "restrictive" appraisal practices are appropriate and within the acceptability threshold of USPAP due to the limitations of what can be performed within a non-disclosure state, then who am I to refuse their determination, as they are ultimately the ones who will decide if I keep my license. Mix that in with the very real scenario of verifying everything making it impossible to stay in business along with my "peers" applying similar practices and I'm fairly confidant in saying that this practice is acceptable in the state.

So all the purists out there can either accept us poor wretches into the flock or label us a USPAP cult.

And yeah, I guess I am coming off as defensive.

I get that. One of the things I find funny about this place is how some of the posters who quite clearly consider themselves the most knowledgeable have no problem pontificating about local issues on which they only have their own local perspective. It is fairly common and some of those same posters will be the first to scream "geographic competency" when it makes their point even though they clearly pay it no regard at other times.

 

[Pilgrum]

I would like to know how to operate in a non disclosure state as well. Aren't there any third party providers like real list that provide the needed data? Or is there a lot of guessing that goes on?

 

[Scott R Marshall]

I would like to know how to operate in a non disclosure state as well. Aren't there any third party providers like real list that provide the needed data? Or is there a lot of guessing that goes on?

The only way to get an actual sales price is either A) have some party provide a HUD-1 and your experience with that is the same as mine or B) file a motion with the county attorney under the Freedom of Information Act which from time of my filing may take up to 10 business days to receive confirmation that they have "information", then take a trip to said office and either review the information for free or pay per page if I need the documentation for my work file. Multiply that by however many sold comparables in my appraisal and you see where this is going.

And this has only been the case since about 2008, as prior to that, sales prices were not even information the assessors were given.

It would be better to use nothing but recorded REC's in that case, assuming they have been filed, as that would only require 1 trip to get the required information or a purchase online of the documents if the county has that ability.

And while mortgages are recorded, they only show the mortgaged amount, not what was actually paid, so no good there.

Of course I am being state specific. Other non-disclosure states may differ.

Again, if anyone is a USPAP purist, by all means go through all the steps mentioned above. I give you about 1 month before either A) you are out of business or B) you come over to the dark side.

And as much as this rubs those disclosure appraisers, MLS and realtors are pretty much it. Certification 10 goes out the window and most of my peers have disclosures within their reports stating that the non-disclosure status of law within the state makes strict adherence to this certification impossible.