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Do secret home sale prices hurt buyers?

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How do Realtors view disclosure? Does nondisclosure have any negative impact on taxpayers? And could open information change the way we buy houses?

Disclosure of these and other curiosities follows.

Sales prices: too much minutiae?
Real estate agents have a special relationship with home sales prices. Not only do they play an active role in setting the asking price, they have a commission stake in the selling price. They are among the first to know what a home sells for (by-owner sales excepted) if they represent the buyer or seller. And they share this information with other agents through the Multiple Listing Service (or MLS), a proprietary network operated by their local board of Realtors.

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Dave Jenks, senior research analyst for Austin, Texas-based Keller Williams Realty International, says agents in nondisclosure states don't consider themselves at any disadvantage when it comes to marketing.

"I don't think it benefits them to let someone know that they sold a home for a certain price. I don't think many agents would see that as any benefit," he says. "One Realtor I know sends me every month all the homes that sold in my area by four price categories and the average per-square-foot cost that they sold for. By agent practice and MLS regulation, you can send out market summary information: average time on the market, average price that homes sold for versus listing price, that kind of thing. You just can't do it on a per-house basis."

Tracy Hookstra, a Keller Williams agent in the Dallas area, says her state's nondisclosure keeps sales price information in the MLS, where it belongs.

"I think it's actually good in a way that Texas is a nondisclosure state because it doesn't let buyers get hung up on what a property sold for," she says. "We kind of like it like that because you don't get too much minutiae of what somebody paid for something. It doesn't matter what somebody paid for a house; it's what they're willing to sell it for."

Information war: agents vs. Internet businesses
Jenks says nondisclosure actually benefits Realtors in what he calls the "information war" with the growing number of home-surfing Internet sites.

“... it's actually good in a way that Texas is a nondisclosure state because it doesn't let buyers get hung up on what a property sold for.”

Sharing sales prices with other Realtors via the MLS helps agents obtain accurate market comparatives (or "comps") with which to advise their clients. Sharing those same figures with nonvalue-added third parties only works against a Realtor's best interests.

Worse, Jenks says, home-surfing home value estimates can be "very inaccurate," especially in nondisclosure states, further complicating things for both the Realtor and seller.

 
 
Next: "Realtors are trying to protect the value of their work product."
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