Being able to research property values is one of the most important tools for real estate investors. Whether you’re looking for comparable properties, reviewing the purchase history of a property, or trying to gauge the strength of the real estate market in a certain area, investors in the majority of states can obtain pricing information and the sale price history of properties. However, when investors in non disclosure states attempt this, there are some obstacles they need to navigate.
Non disclosure states are states in which the sale price of a property isn’t public record. The laws of such states do not make it illegal for investors or other interested parties to obtain the information, but the county assessor’s office, recorder’s office, and any other government offices are barred from disclosing the sale price of a property. This also means that state or county governments or their agents cannot require anyone to disclose the sale price of a property.
Non disclosure laws have their detractors and supporters. On one hand, there are home buyers who are grateful that their purchase price isn’t available to the public. Some lawmakers argue that publicizing this information is a violation of privacy that is unique to this one type of purchase.
But critics say that this policy makes it difficult for home buyers, who will struggle to fill in information gaps to determine whether a home is worth its asking price. Even lawmakers in these states have been critical of the policy, as it makes collecting property taxes more challenging when the tax liability is determined by the sale price.
Which states are non disclosure states?
There are twelve non disclosure states in the United States. Here are the current non disclosure states:
- Alaska
- Idaho
- Kansas
- Louisiana
- Mississippi
- Missouri (in some counties)
- Montana
- New Mexico
- North Dakota
- Texas
- Utah
- Wyoming
There are significant differences in how the sale price is restricted among these states. In some states, the sale price is never reported to the county assessor’s office or any other local office. In other states, there is limited disclosure, which means that these states offer some information publicly that knowledgeable real estate professionals can use to estimate the sale price.
Obtaining sale information in a non disclosure state
Fortunately, just because a property’s sale price isn’t publicly available through the usual channels doesn’t mean that it’s impossible to obtain. Here are a few ways that investors in non disclosure states can work around state restrictions.
MLS data
Even in non disclosure states the MLS, or Multiple Listing Service, will still display sale price information. Typically only real estate agents have access to the MLS, so this is where partnering with a real estate agent can be extremely helpful. If you’re an investor who is active in one of these states, it might be worthwhile to get a real estate license so you’ll have direct access to the MLS. This will give you more freedom to conduct business without needing to source the information from a realtor.
The only drawback to the information available on the MLS is that there are certain types of sales that won’t appear in their listings. Properties whose owners acted as the agent won’t be featured in the MLS, nor will any sales transacted by an agent who is not part of the MLS. Both circumstances are rare, so their absence won’t significantly detract from the value of the MLS data.
Property estimates
Another method for determining the price of a property is by doing some research to create a reasonable estimate of the sale price. Again, this would require access to the MLS listing. To create an estimate of the property’s value, you would find properties that have sold in the same area that are similar in size, age, and level of maintenance.
Fortunately, for anyone who’s selling a property in one of these states and is unsure about how to price the property, your realtor will be able to access comps. This method is really only for estimating the value of an off-market property, as an on-market property will have its price listed on the MLS.
Property Appraisals
Property appraisals are common once an offer has been accepted on a property, but property owners can use an appraisal to determine how much they should price a home they’re selling or calculate the rental value. While this approach won’t disclose a property’s sale price, it’s still a valuable resource for investors.
County assessor’s office
Another option is to obtain information from the county assessor’s office. The county assessor is responsible for calculating the property taxes on real estate, which are based on the estimated value of a property. While they won’t have the actual sale price of a property in these 12 states, their estimate will be based on market trends in the area. The downside of this is that it’s still just an estimate and without being able to use the value of comps to create their estimates, they can be far from the actual sale price of a property.
Real estate investing software
Real estate investing software can offer sale price data to investors looking to buy or sell a property. In BatchLeads, property data is refreshed every 24 hours and includes recent listing price history, even in non disclosure states. With current and historical listing information, investors can feel confident that the information they’re getting is accurate.
Key Takeaways
Non disclosure states require investors to work a little more to discover a property’s sale price, but it’s still possible to get that information (or make an informed estimate). Investors shouldn’t be discouraged from investing in properties in these states, as there are still ways that resourceful investors can track down sale price information. Real estate investors in certain Texas markets, for example, would have missed out on double-digit appreciation over the past few years if they had decided not to invest in these states. While non disclosure states require more effort and finesse, they still can be excellent places to invest.
