Missouri real estate disclosures remain elusive

It’s called the Show-Me State, but when it comes to disclosing real estate sales prices, many Missourians are shy.

Disclosure laws are central to a decades-old debate in Missouri, and state lawmakers are not convinced sharing details of private transactions with government agencies is necessary to accurately value properties and fairly assess taxes.

Missouri remains among 11 states to not publicly disclose real estate sales prices, according to a 2014 review by the Montana Department of Revenue. Others include Alaska, Kansas, Idaho and Texas. However, in Kansas, certain government agencies have access to sales information for valuation purposes, and truly Missouri is considered a hybrid. Charter counties in Missouri can decide whether to adopt sales-price disclosure laws. In St. Louis and Jackson counties, for example, real estate transaction data must be shared with governing bodies.

None of that is much help to Greene County Assessor Rick Kessinger, who would like to see disclosure required locally as a way to improve the accuracy of valuations. County voters have rejected charter status in the past, keeping disclosure at bay.

“It’s pretty important. Three-quarters of the funding for schools comes from property taxes,” he said.

Legislative limbo
Rep. Jeanne Kirkton, D-Webster Groves, earlier this year filed House Bill 2579 to establish real estate sales-disclosure rules across Missouri. It is the eighth year in a row she has sponsored such a bill. In fact, Kirkton carries on a filing legacy in her suburban St. Louis district that includes at least her three predecessors in the House of Representatives.

“The issue is important to me mainly because of school funding. We rely so heavily on property tax for our schools, so to me, it’s an issue of fairness across the whole state,” she said.

Yet the bills never go anywhere. HB 2579 died in February after a second reading.

Kirkton believes opposition from the Missouri Association of Realtors is key. The first year she filed a sales-disclosure bill, she received a batch of “robo-emails” initiated by the state association.

“My email box filled up with email from constituents that said, ‘Oppose Rep. Kirkton’s bill …’ and that was sent from the Realtors’ association,” she said.

Missouri Association of Realtors lobbyist Sam Licklider said the organization has opposed a statewide disclosure law since at least 1970. Prior to World War II, he said there had been a federal stamp tax in place and property owners could buy as many stamps as needed – initially he believed it was 50 cents for a $500 valuation. For example, $10 worth of stamps could cover $10,000 in property value.

But for at least 45 years, states have had their own ways of determining and taxing property values.

“We take the position that private business dealings should remain private,” Licklider said, adding sellers in areas where disclosure is common often have to justify why they’re selling a property for more than what they paid. “It puts the owner at a significant disadvantage.”

Jeff Kester of Carol Jones Realtors and the Greater Springfield Board of Realtors president said GSBOR hasn’t taken a position, but he believed agents in the field would be opposed to disclosure. Mark Patrick, a real estate agent at Coldwell Banker Commercial Vanguard, Realtors, said while statewide real estate sales disclosure would make his job easier, it represents an unnecessary encroachment on privacy.

“The less government in our lives, the better,” Patrick said. “I understand the reasons and logic behind it, but I’d prefer to keep the status quo.”

Market views
Walt Nelson, a licensed real estate broker who teaches real estate courses at Missouri State University, said price disclosure is a basic feature of proven financial markets.

“Public pricing adds liquidity to the market,” Nelson said. “Real estate is an illiquid asset, so by making pricing data available in a timely fashion, that would help people have more confidence in their negotiating postures. It would take some of the fear factor out.”

Kessinger said in neighboring Iowa, the past three sales of a property are part of public record. Locally, the assessor utilizes a computer-assisted mass-appraisal program to help determine assessments. Kessinger’s staff routinely checks to see if the values the program generates are consistent with neighboring properties.

In addition, he said the county sends a letter to property owners when a deed change has been recorded, but only one-third of recipients respond.

Nelson said he’s heard some opposed to public disclosure say the status quo helps keep appraisers and real estate agents employed. He disagrees.

“You’re still going to need appraisers. You’re still going to need a Realtor to show you trends in the market, and they’d be more able to show you trends if they had those data points,” Nelson said, drawing a comparison to the real estate market and the stock market.

“People still use financial advisers even though [stock market]-pricing is public. And sellers would still use Realtors because selling your own home, even with public data, is a pain in the neck.”

In Iowa, state law requires reporting a “declaration of value” representing the full amount paid in certain nonexempt real estate transactions to the county recorder when deeds change hands.

Jeff Evans, executive officer of the Iowa Real Estate Commission, oversees licensing across the Hawkeye State’s 99 counties. If disclosing sale prices negatively impacted Realtors and licensed agents, Evans said he would have expected some decrease in demand for the profession, especially in the volatile post-recession market.

But over the past five-six years, he said the state’s 9,100 active agents have held steady.

“Really, the biggest worry for agents I’d think is the Internet,” Evans said.

Commercial real estate agent Patrick said he’s not convinced Missouri should fall in line with the majority of other states with regard to disclosure.

“You could make the argument that the information would be more readily available and therefore it would be more accurate and timely,” Patrick said. “But just because it’s easy, doesn’t make it better.”