A new rule allows participants in a Northern California multiple listing service to cloak the actual sales price of homes at the request of a home buyer or seller — and MLS members must pay a price for this information to be concealed from other members.
RE InfoLink, a Silicon Valley-area MLS with about 21,000 members, stated in an Aug. 1 notice that its board of directors and reviewers at the National Association of Realtors approved a new policy that enables home buyers and sellers to withhold the selling price of a property as a condition of a transaction.
The policy provides, “The listing agent will close the listing as sold using last list price as the sales price,” and the fee to conceal the selling price ranges from $500 for the first instance to $5,000 for the fifth and subsequent instances.
“It’s not uncommon for an MLS to have a process that for some reason the clients don’t want sales price disclosed,” said Jim Harrison, RE InfoLink president and CEO. While RE InfoLink has previously required agents to disclose the sales price, he said that this stance led some agents to withdraw or cancel property listings in the MLS prior to sale in order to avoid the reporting of sales price.
“A lot of people, for whatever reason, are really not wanting the price they pay for the property disclosed. Sometimes someone paid so much for a property that they don’t want all their neighbors knowing that,” he said. On the flip side, a buyer or seller may not want to reveal the sales price of a property if that price was substantially lower than the selling price of other properties in the area.
Efforts not to disclose sales price are more typical in higher-priced neighborhoods, he said, and are not common. “It doesn’t happen that often but it happens,” he said.
The RE InfoLink policy provides that an MLS subscriber can submit an “Authorization to Withhold Sale Price” form with payment to the MLS within 48 hours of the final close of escrow, and must enter “SPWHLD” (for sale price withheld) in the confidential remarks field of the MLS.
The actual sales price will be recorded by the county, as with any other sale, Harrison said, though it can take 90 days to a year before property sales show up in county records. While agents can pay to substitute the latest list price before a sale in place of the actual sales price, Harrison said that a code in the MLS will notify agents that “the sales price they are looking at is not the actual sales price,” so that they can substitute other properties when conducting a comparative market analysis, for example.
“This is a surprise to me but I can see how people would want it,” said Mary Pope-Handy, a Realtor for Intero Real Estate Services and a member of RE InfoLink. “Many people are very private … also, many don’t want to hurt their neighbors by showing a low sales price. Is it good for the public? Nope — the public wants to know the actual transfer amount.”
Carolyn Hastings, a broker associate for Pacific Union GMAC Real Estate in Danville, Calif., who serves as MLS chairwoman for the Contra Costa Association of Realtors, said her association’s MLS policy allows a seller or buyer to sign a written request, submitted by an MLS member, to withhold a home’s sale price. In such instances, MLS staff members enter the sales price for that property as zero in the MLS, she said.
While the MLS allows that a fee can be charged in such instances, Hastings said there is typically no fee charged. There were about six instances last year in which sales prices were not disclosed in the MLS, and such requests are typically related to the sale of multimillion-dollar properties, she said.
The rationale for the MLS policy is that MLS officials believed it would be “much more detrimental” for agents to pull property listings from the MLS prior to sale, as the MLS would lose access to sales statistics, Hastings said.
Harrison agreed that it is important “to know something actually sold. Every MLS is subject to dealing with this. If people mark something as withdrawn (from the MLS), all the other agents know it sold — this ends up becoming an issue.”