Texas: Non-Disclosure State – Not For Long?

By rerockstar • May 6th, 2009

San Antonio Manhole

More taxes or better tax appraisals?

Here in Texas, we are a non-disclosure state. But what exactly does that mean? Non-disclosure states do not reveal sales prices of homes publicly. These states include Alaska, Idaho, Kansas, Louisiana, Mississippi, some counties in Missouri, Montana, New Mexico, North Dakota, Texas, Utah, and Wyoming. As a Realtor® I have access to our local San Antonio MLS sales price data (which contains most of the information, but not all of it – for sale by owner homes are not reported to us), which is what we use to help seller’s determine a list price for their home when we do a CMA (Comparative Market Analysis), but the general public does not have direct access to this information through county websites or courthouses. Guess who else doesn’t have access to the data? The Bexar County Appraisal District.

Because the Appraisal District doesn’t have access to the data, they have to “guess” at the approximate value of your home to determine the taxes. Take two identical houses on the same street with the same upgrades and more often than not, you’ll find two different tax appraisals. This can be frustrating for home owners at times (am I paying too much tax?), but there are advantages to keeping the Bexar County Appraisal District out of the loop. If they were given access to every home sale, tax data in the MLS would become nothing more than a vague reference to what the new buyers might pay in taxes when they get their first tax bill.

The last home I owned was in California, which is a disclosure state. When I bought my house, I bought it for $300,000 more than what the previous owner had paid for it (it had been damaged in an earthquake when he bought it). Had I relied on the tax information in the MLS, I would have been in for a shock. Imagine that you suddenly added the property taxes on $300,000 on top of what the previous owner was paying. Talk about sticker shock. And when I sold it, I sold it for $150,000 more than what I paid for it – imagine the buyer’s delight at having to pay property tax on that, plus what I was already paying (I paid almost twice what I pay here for a similar size home on a much smaller piece of land).

San Antonio Board Of Realtors® is fighting back.

The San Antonio Board Of Realtors® (SABOR) recently released its San Antonio Fair Taxes campaign to help home owners understand what some of the issues are, the bills that are being pushed in Austin, and what can be done about them. While I agree with the idea that we do not need disclosure in Texas, I urge my readers to remember that this is being put out by the local board of Realtors® and is somewhat one-sided. I encourage you to seek out various sources of information on the topic and make your own decisions. If you do think its a bad idea, take a few minutes and contact your local government officials and tell them what you think. Only by hearing the voice of their constituents can legislators know the direction they are taking is considered good or bad.

As an additional note, I would like to point out that because of Texas’ non-disclosure status, sites like Zillow that provide home valuations are considered so inaccurate. In states that do disclose prices, Zillow is able to determine value in much the same way a Realtor® does. Without sales price data Zillow is forced to make its best educated guess, which sometimes can be terribly wrong.

If you have any questions about non-disclosure, taxes, tax appraisals, protesting your taxes, or any other real estate related issues, feel free to contact me.

photo courtesy of jpo