The issues

There are some who believe that mandatory sales price disclosure is a silver bullet that will fix property appraisals, but like so many other things that sound too good to be true, it is.

In Texas, the amount you pay for your property is between you and the seller. We believe it should stay that way because Texans deserve privacy in their real estate transactions.

Others believe that making that information available to the public, including property appraisers, will make appraisals more accurate. However, without a uniform set of standards for property appraisals, sales price disclosure would simply be another tool added to a broken system, like a new speedometer in a car that doesn’t run.

Unfortunately, sales price disclosure has also been shown to be ineffective in improving the accuracy of property appraisals in Texas. Through agreements with local Multiple Listing Services, many appraisers in Texas already have access to sales price data. In using that data, however, it’s been discovered that sales price is often misused.

For example, many sellers choose to pay the closing costs for buyers or include items in the real estate transaction that are in addition to the property, like a house full of furniture. Those very common arrangements increase the sale price listed on a home contract, but are not accounted for when appraisers use sales price as a factor in appraising a home’s value. Thus, sale price becomes a misleading factor in property appraisals that over-inflates value, rather than a tool to improve accuracy.

There is also another fact that proponents of mandatory sales price disclosure don’t broadcast: Of those states that currently require public disclosure of property sales prices, the vast majority of them later established a sales tax on real estate, called a real estate transfer tax. Already shouldering far more than our fair share of the tax burden in our state, Texas homeowners can’t sustain yet another property tax.

Requiring the public disclosure of property sales prices is simply a band-aid, and an ineffective one at that, when our appraisal system really needs emergency surgery in the form of true appraisal reform.