Kyle Rovinsky's Blog

There are some things that are not talked about.

Age and weight are two things that come to mind.

There is a legend in my family that my grandmother was so sensitive about her age (and the fact that she was older than my grandfather) that she changed the numbers on her birth certificate. The numbers on the headstones at the cemetery tell the truth. I am surprised she hasn’t risen to change them …yet.

Anyhow – there is a practice in real estate known as “Undisclosed Final Sale Price”, or “Z” (as it is known in the industry). After a property is sold and the transaction is closed, the final sale price is reported in MLS along with other vital data – original list price, days on market, etc. This is how Realtors gather the information to know at what price YOUR house should sell. In very few occasions the final sale price is undisclosed. It shows up in the sales with the current list price and the little, tiny letter (z) next to it. This means the property did transact, but both parties have agreed to not disclose any of the sale info regarding the price.

This makes a job difficult for Realtors. Let’s say a 1500 sqft house in Devonshire is listed for $475,000. That price makes the cute little cottage $316 per sqft. Now that house sits on the market for a long time and the seller decides to accept an offer of $390,000 – but they keep the final sale price undisclosed. The real price per sqft comes to $260 per foot – but the sold report includes the transaction listed at $475,000 with an undisclosed sale price – so $316 per foot enters the record.That creates an inflated record of 21%. Difficult to overcome.

The “undisclosed” loophole was created by old Dallas MLS rules. Buyers wanted an opportunity to remain anonymous in sales records. I guess JR didn’t want Sue Ellen knowing how many town houses he was buying to keep his girlies in.

Whatever.

So MLS made the rule to protect buyers…it was ONLY for the buyers, and clearly stated as such in all listing documents (the seller is REQUIRED to share all information pertaining to the sale with MLS)…but then sellers wanted to get into the act. Let’s say a bad market had a seller accept an offer 20% lower than he or she originally intended. They did not want to sit in the lounge at the Dallas Country Club and have their transaction be the subject of loose-lipped gossip (well…loose lipped gossip based on fact). So the seller would say to the agent, “Please hide my shame by not disclosing my final sale price to the world”. The agent would say “I will take your hideous, embarrassing secret TO THE GRAVE – along with the name of your plastic surgeon). Then to everyone who is not “in the know”, the sale looks like a $1 Million dollar transaction – when really it was a $770,000.

Pride.

The reverse was true when the market was “super-hot” in the 2006 to mid 2008 range. A buyer would see a new listing and make an offer over list price. This buyer would request the (z). Now..to his golf foursome he could say he got it much lower than list…while his buddies would guess that he went much higher. What was the tag line of the old Tootsie-Pop commercial? “The world may never know.”

The “Undisclosed” “Z” was used in 1.6% of MLS transactions in 2011. Not very much. If you drill down to the tony areas of Dallas (let’s say south of LBJ down to…say…Fitzugh), the number of “Undisclosed” grows to 7%. Drill down further to houses that go to Highland Park ISD, and the number of “Undisclosed” transactions grows to 13.3% in 2011. In Highland Park/University Park there were 681 closed transactions in MLS for 2011.That means in 91 sales, the final price was not reported.

This practice may not seem like a big deal, until it affects you directly. Here is my biggest pet peeve in the business…

I am at a cocktail party, or Memorial Day BBQ, or Bar Mitzvah Sunday brunch, and someone always wants to talk Real Estate. We bandy about in a conversation, and some putz overhears what we are talking about and says “You know, that house on Poo-Poo-shire just sold for a million bucks…I guess that makes my house on Doo-Doo-shire worth a million and a half, because anyone in their right mind would rather live on Doo-Doo-shire than Poo-Poo-shire”.

At this point I tilt my head and say “That doesn’t sound right”. What I am thinking is “I am glad I do not have a knife right now. You know, like the one Sylvester Stallone had in ‘Rambo’, because I would jam it right into this joker’s NECK!”

I go back and research the listing only to see that the house on Poo-Poo-shire was LISTED for a million – sat on the market for 19 months and sold with a itty, bitty little (z) next to the number $1,000,000. After a cross reference with the county records and mortgage records, I am able to estimate the sale at about $800,000.

However, the damage has already been done – everyone in earshot at the party, plus everyone this big mouthed putz will talk to in the future think that the numbers he is spouting off were etched into a tablet and brought down from Mount Sinai. So now, anyone thinking of listing their home in the prestigious subdivision of “Dookey Estates” has an unrealistic expectation for what their home should sell for – making my job more difficult…all because of the tiny, little (z).

Well – the (z) looks like it’s going away. It was supposed to go away on Jan 1, but a few blue-blooders who took it in the shorts got their high-falutin’ lawyers involved and have carried this issue to the national level. Today’s update says that after June 30th, you will no longer be able to hide your final sale price in MLS.

Now like many political issues – I feel strongly both ways (:D). If you want to take advantage of an undisclosed transaction, you have 4 months to do so.

That is what is known in advertising as a “Call to Action”.