As part of our contributor series, Steven W. Vehmeier, Appraisal Educator Emeritus, shares his advice on what to do in response to this month’s MLS hack.
A dozen or so states recently experienced the impact of a Multiple Listing Service (MLS) hack. Realtors and appraisers were left without one of the most commonly used sources for data on residential properties.
What can appraisers do in the case of an MLS hack, or any situation where their data source goes down? Possibilities include:
Notify the client of potential for delays in delivery dates.
Make a list of alternative data sources that might be available.
Check out some of the free online sources.
Try using sales from your files that might be applicable.
Go on vacation.
Cry.
The first four strategies are probably what you’d want to start with. Numbers two and three immediately bring to mind a word defined in USPAP: credible, meaning “worthy of belief.”
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Alternative data sources
What might be alternative sources for properties that sold and/or data about them?
Online sites like Realtor.com, Zillow.com, and others
Real property data subscription sites like PropMix, DataMaster, and others
Realtors Property Resource (RPR)
Local real estate brokers and/or local Realtor associations
Other local appraisers
Local builders
Buyers and sellers and their neighbors
County property appraiser’s office
Official records offices have search options that can help
Newspapers, particularly online publications
Sometimes there are local property data sources specific to the area
The appraiser’s own files
May have comparables recently used in other assignments that could work
May have sales that were not used in that appraisal, but might work for this one
Some of these alternatives are decidedly low-tech, and that’s okay. We don’t typically use candles or flashlights to light our homes, but in the event of a temporary power outage, these old-fashioned sources of light can help keep us from walking into walls.
What does one do if alternative sources conflict or are not deemed reliable? You might give numbers five and six above a shot, but they won’t solve the problem.
Beware of inaccurate data
I’ve written before about the small town I live in suffering from lots of inaccurate data.
Example: One of my rental properties
The following are the three most often found online sources that come up when I search a local address (I’ll leave their actual names off):
Online Source #1 shows it as 1,750 sf, 3 BR, 2 BA, on .29 ac.
Online Source #2 shows it as 1,180 sf, 3 BR, 2 BA, on 6,098 sf lot (=.14 ac).
Online Source #3 shows it as 1,180 sf 3 BR, 2, BA, on .29 ac.
County Property Appraiser shows it as 1,180 sf 2BR, 2BA, on 6,250 sf lot (=.14 ac).
Truth: The house is 1,200 sf, 3 BR, 2 BA on a 50×125 lot (=.14 ac).
I’m not criticizing any of these online sites. They obviously utilized sources for their published data that varied. Although often reliable, there certainly are instances when those sources are not. Verifying data is critical.
Why the discrepancies?
Why the discrepancy between Online Source #1 and reality? Well, at one time, eight years ago (2015), the house was on a double lot, and there was a one-bedroom cottage on the other lot. When I purchased the property it had been subdivided, and I bought only the house and the lot it sat on. The seller kept the cottage and second lot, then sold it to another party who demolished the cottage and built a new house on that lot. The 570 square footage difference relates to the old cottage’s square footage incorrectly being added to the house. The photos on this website show the cottage. Those photos are from the prior sale a year and a half before I bought it when it was all one property.
Online Source #2 took the house’s living area square footage from the county property appraiser’s online public records. I have no idea where their lot square footage came from. Their photos also show the cottage, but don’t show any square footage for it in the data.
Online Source #3 utilized the property appraiser’s office square footage, but then used the un-subdivided lot size. They did show the cottage in the photos, but did not account for it.
The county property appraiser deals with their records developed over years, and the square footage of the house is likely a rounding to the nearest even foot difference versus my steel tape. They have the lot size correct, but I have no idea where they got the two bedrooms instead of three. All three bedrooms are within the original simple rectangular footprint when it was built in 1962.
So, what do you do if there’s an MLS hack?
When an appraiser doesn’t have their trusty old MLS available, and has to rely on untrusted sources like the above or sources with conflicting data, what do they do? In other words, if an appraiser must utilize a source that does not have the reliability of traditional sources, how should they handle this?
Personal verification of data has never gone out of style. Back in 1876 there was this guy named Alexander Graham Bell who invented a thing called a telephone. Now is the time to pick one up and get to work.
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Written by Steven W. Vehmeier, Appraisal Educator Emeritus. Steve retired from his appraisal and appraisal education practices after a long career specializing in writing and teaching pre-license and continuing education courses, including twenty-two years doing so for McKissock. He continues to write articles and blogs to share his knowledge and experience.
