The Cost of a Dollar

“A lawyer's time and advice are his stock in trade” ~ Abraham Lincoln

A Realtor’s time and advice are also his or her stock in trade. But access to information, and moreover the correct interpretation of that data (which maybe falls under the title of “advice”), is really our wheelhouse.

Of all the extreme sports available around our region, I’d argue gossiping in Jackson Hole ranks right up there with dropping it in S&S. If you start a rumor at Betty Rock during lunch, and I bet someone will tell it back to you that same night over dinner at the Bistro.

In our small town, information is its own currency.

Over the past few months, the MLS Board (of which, I’m a member) has been struggling to save the MLS from becoming a glorified version of Craigslist. While there’s no shortage of new listings being submitted into the system, obviously sales are few and far between. And of the sales that are posting to Flex, an ever increasing percentage of deals are being entered with an incomplete sales price.

I’m part of the problem. I sold a property in December and, at the first sign of resistance by the potential buyer, I acquiesced to his desire to not disclose the purchase price.

Did I argue that people knowing what the Buyer paid would not cripple his ability to sell the property at its highest profit and that the buyer’s fear was unfounded? No.

Did I dismiss the notion as silly that his new neighbors would harbor resentment toward him because of his recent “low” purchase price and that, in fact, he did not single-handedly bring down property values? I did not.

Did I defend the value of the MLS database because it’s what I used to price the property and, ultimately, it’s what the new buyer and his Realtor will use when he wants to sell it? Nope.

Did I pass along that because of the lack of info, it’s getting harder and harder for appraisers to do their job and, without the appraisals, banks can’t fund loans… a loan that maybe his future buyer might need when he wanted to sell the property? Of course not.

I didn’t want to rock the boat, I told myself. In hindsight, I was both lazy and apathetic.

But I didn’t lose any sleep over my decision either. I knew appraisers would call me to ask about the transaction, and I would be happy to share the info. I was also happy to share the sale price with everyone in my office. My accountant knew about it for my annual contribution to Uncle Sam. So did the president of the neighborhood HOA. Just to make sure I didn’t miss anyone, I probably told my barber too.

Despite withholding the purchase price of my deal from MLS, the information was still out there. It still traded. In my experience, not reporting a sale price in MLS and keeping something confidential are two very different things. Have I spent more time gossiping to my barber, appraisers, other Realtors, etc., about my aforementioned sale than if I had just posted the price in MLS? Absolutely. But why should I care about a single transaction in a database of thousands of active listings serviced by nearly 650 individual Realtors?

For 2007 in MLS areas 1-10, about 8 percent (49 of 617) of the sold transactions were entered without a sale price. Last year, that number jumped to nearly 12 percent (36 of 306) but the overall pool of transactions dropped, which exasperated the challenge of finding accurate comps for any given property.

So far in 2009, the sold data in Flex is a joke. Nine of the 24 sales in Teton County, or 37 percent, are missing a sale price. There’s not a single land transaction from this year with anything other than $1.

So I ask again: why should I care about a single transaction in a database of thousands of active listings serviced by nearly 650 individual Realtors? What’s the harm of one deal going unreported?

I’d argue we’re at a tipping point. Every deal matters. And while I can certainly bang the phones trying to collect “confidential” info that didn’t get reported to Flex for one reason or another, frankly, I have better things to do with my time.

The MLS was created as a warehouse of information to save us the time and expense of tracking the info as individuals or companies, and to make sure the information for our industry was consistent. As our market has crashed and sellers (and buyers) have developed a certain level of shame for selling at less than "market value" (which, by definition, I'd argue is EXACTLY what a given property sold for...), the practice of reporting sales for $1 is literally ruining the value of the MLS.

Last week, MLS President Ray Elser announced that the MLS Board has tabled until May any decision to change the current MLS Rules and Regs concerning the mis-reporting of sold prices. At present, if you're a member of TBOR -- and moreover if you've entered a specific property into Flex -- you've agreed in advance to report the sale price when it closes. As a member of the MLS Board, I can honestly say I'm struggling on how to save the MLS database and prevent it from simply becoming a digital bulletin board.

As the MLS Board has struggled to find a fair way to impose its rules, some have argued requiring the accurate reporting of sale prices flies in the face of Wyoming's non-disclosure state status (it doesn't). Others have voiced concern that the new rules are too restrictive when, in fact, the rule requiring accurate reporting has been around since the conception of the MLS. Another argument against any change has been that reporting a sale price could contradict an agent's responsibility to his or her principal.

In the end, I've developed a wider view of the issue. My role as a real estate agent involves wearing many hats, but being efficient and effective in my interpretation of market data is one of the larger ones.

The MLS system makes us all better at our jobs. It's a tool that saves us countless hours of individual phone calls and needless repetitive questions to our peers.

Much like lawyers, our time and advice are our stock in trade. Please keep this in mind as the MLS Board works to find an effective measure to preserve the collective information warehouse that is the MLS.