Reis vs CoStar data?

[PL1957]

In a disclosure state check the public records available through the county assessor.

In a non-disclosure state contact one of the parties involved and ask. Some people are willing to share, some are not.

CoStar's primary data source IS public records - they purchase the data tape. Confirming CoStar with "public records" usually won't tell you anything new. Contacting parties familiar with the transaction is the only "reliable" way of confirming a sale, regardless of whether it occured in a disclosure or non-disclosure state.

 

[foodstamps]

Thanks guys. So even the public record data is not reliable? Oh jeez.

 

[PL1957]

Thanks guys. So even the public record data is not reliable? Oh jeez.

Wow, you really are a rookie ...

Once, I appraised a shopping center that was under contract. No matter what I did, I was coming in about a million over the contract, about 25% in that case. After looking at it every which way I could, I asked the buyer about it. His response? "Oh, I let the seller of the center hide 50 subdivision lots in my name when he was getting divorced. He's just paying me back." The sale closed at the contract level, with the sale price recorded in public record data.

Sound like a good comp to you?

 

[Tim The Enchanter]

Wow, you really are a rookie ...

Once, I appraised a shopping center that was under contract. No matter what I did, I was coming in about a million over the contract, about 25% in that case. After looking at it every which way I could, I asked the buyer about it. His response? "Oh, I let the seller of the center hide 50 subdivision lots in my name when he was getting divorced. He's just paying me back." The sale closed at the contract level, with the sale price recorded in public record data.

Sound like a good comp to you?

No.

Seems like a pretty unusual concession too.

 

[Terrel L. Shields]

So even the public record data is not reliable? Oh jeez

Nothing is reliable. Everyone is a liar.

We have deed stamps. When I served on the county Board of Equalization, one property valuation contestant admitted he had paid more than the needed stamps so that it appeared he gave more for the property than he really did. He did that upon the advice of his attorney so that if he resold, it would look like he paid that much....it wasn't against the law to buy MORE stamps than necessary, only against the law to buy too few.

Poor copies of the deeds used to be a serious problem because certain light blue colored stamps were barely visible and the assessor miscalculated the price. It might be $189,333 or some such when it should have been $210,000.

 

[Stephen J. Vertin MAI]

Contacting parties familiar with the transaction is the only "reliable" way of confirming a sale, regardless of whether it occured in a disclosure or non-disclosure state.

False, public records are acceptable in court. Your antidotal example is no reason to throughout the baby with the bath water. People lie when confirming sales also. In disclosure states they have sales disclosure sheets. A simple trip to the court house tells everything you need to know about a transaction. Sales disclosure sheets are required in most Midwest states.

I have thought this out for awhile. I have come to the conclusion verification should be disclosed to the client in the scope of work (for those of us on the paranoid side). Its the only way to assure no one is mislead. Sadly verification is not defined in any authoritative appraisal text but it is provided in the dictionary which basically indicates "evidence that provides proof of an assertion, theory, etc". Public records certainly qualify.

With this said I always try to talk to someone involved with a sale or rental transaction, but as everyone knows, some never return calls. The problem with the "thou shall always talk to someone involved in the transaction" manifesto is it has more potential for abuse then help. If I am dishonest and need to get rid of "excellent data" I simply use unverifiable as justification (I could not talk to someone involved). Thereby, the data could not be used.

This is a very interesting subject to me. Most of my working is in secondary commercial markets where I generally do most research at court houses. It is really a lost art. I remember a time long before CoStar and other type systems. It was the only way to get sales data. Now days I rarely, if ever, see other appraisers searching these very valuable resource.

One thing that I think is important to add here. There is a difference between truth and verification. Truth is what most strive for and many claim is perfection. USPAP does not strive for perfection. Verification lends credibility. It is my opinion the public hold its records as credible and worthy of belief.

 

[foodstamps]

Wow, you really are a rookie ...

Not even. I'm not a rookie appraiser nor a prospective appraiser for that matter. I'm a graduate student interested in a topic that just so happens to have a lot to do with appraising. I obviously have a lot to learn if I want to consider keeping my thesis topic idea, but I'm willing. Everyone here's been very helpful so far!

Good to know about the public records, by the way. But as Stephen J. Vertin said, people involved in the transaction could falsify information too.