Comps not correct on the MLS

Comps not correct on the MLS

Newport Beach, CA · Member since 2017 · 5 posts · 1 vote

Recently, we were trying to purchase a few homes as an investment and went out to look at the comps in the area. They did not compare to the properties we are wanting to buy according to the MLS. The comps for example said a 2/1 960 sq ft home (same type of home we were also trying to purchase) was selling for lets say $560,000 and we were purchasing that property for $242,000 but when we went to look at a comps the MLS showed the same 2/1 1000 sq ft home was actually already rehabbed to over double the square footage like 2200 to 2500 so my comp was not actually correct for my purchase. There wasn't just one of these there were several comps in the area by the same contractor or investment company that are not accurately recording the proper square footage therefore the MLS is not correct with the comp comparables. How do we get the MLS to fix the properties with the correct square footage or is this a scam going on, .......How the heck can we get a correct comp when the MLS is not reporting the correct square footage, or the broker? Who is responsible for reporting the correct bedrooms, baths and square footage? How do we get around this? Looks like the broker is Real Estate Broker, Inc

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
9y
Originally posted by @Donna Capa:

Who is suppose to report a change in square footage after a rehab? If not reported then the city is not getting the proper taxes due per property!

 This will not be updated typically until a new tax assessment is done. Some municipalites do it every year, some every 7 years. Sometimes the square footage is never updated. We have plenty of homes in my area that lists the original square footage from over 100 years ago.

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    9y

    In most MLS systems square footage is pulled from the tax records. Agents/Brokers do not input that information.

  • Newport Beach, CA · Member since 2017 · 5 posts · 1 vote
    9y

    So, when the houses were rehabbed and resold someone in the tax department in that city is not doing their job? Or how can they do their job if the agent selling the home after the rehab doesn't report it?

  • Newport Beach, CA · Member since 2017 · 5 posts · 1 vote
    9y

    Who is suppose to report a change in square footage after a rehab? If not reported then the city is not getting the proper taxes due per property!

  • Mike CumbieBusiness Member
    REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
    9y

    @Donna Capa,

    If they added 1000 square feet to the house then they should have gotten a building permit/building inspections etc. That is when it gets added to the tax roles.

  • Newport Beach, CA · Member since 2017 · 5 posts · 1 vote
    9y

    So does the inspector report the square footage to the city or the construction company that built it?

  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    9y
    Originally posted by @Donna Capa:

    Who is suppose to report a change in square footage after a rehab? If not reported then the city is not getting the proper taxes due per property!

     This will not be updated typically until a new tax assessment is done. Some municipalites do it every year, some every 7 years. Sometimes the square footage is never updated. We have plenty of homes in my area that lists the original square footage from over 100 years ago.

  • Mike CumbieBusiness Member
    REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
    9y

    Generally speaking the Assessors office and the building inspectors office are about 15 feet apart. They have coffee together in the morning, go out to lunch and talk shop throughout the day. I do not know what the process is per county/town etc, but it does not include agents. Kind of kills our referral base pretty quick when I go out to list you house and the next day your taxes double and you are now paying $400 a month more. Won't be recommending me to your friends anytime soon. 

    If you feel it is in error go down to the assessors office and talk to them. They don't reassess an area every year. They have formulas, figures, processes they follow. They also go out and look at stuff on their time frame. Nothing with the government happens overnight and that includes editing assessments. Yearly around me they have a period you can challenge your assessment. Your best source of how it is done in that area would be the assessors office though, they should be able to guide you easily on how they do it.

  • Newport Beach, CA · Member since 2017 · 5 posts · 1 vote
    9y

    Mike Cumbie, not only kills your referral base but is also killing our flipping process and whole sales when comps are way off........I will be pursuing this........someone seems to be getting paid off or someone is not doing their job at the inspectors and Assessors offices.  If people are not doing their jobs then they should not have that job because there are plenty of people waiting in line. Thanks for the info, I now know my next steps. 

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