Property buyers may have to disclose prices
Kootenai and Bonner counties may become the first in Idaho to require property buyers to disclose sale prices since Multiple Listing Services are no longer providing the information.
Passing a similar statewide law is a priority for the Idaho Association of County Assessors because it’s the only way to avoid a guessing game and more accurately calculate the fair market value of each parcel in a county.
Without sale price figures, county assessors argue, there is no way to guarantee that property tax bills are correct. Fair market value is used to calculate property taxes in Idaho.
“People want fair taxes, and that’s the only way to do it,” said Bonner County Assessor Jerry Clemons.
The Coeur d’Alene MLS is still negotiating with Kootenai County, but doesn’t think assessors need to rely on it to provide sale prices to determine fair market values. Unlike Washington and Montana, Idaho is among a handful of states that don’t disclose property sale prices.
“The assessor will be able to do his or her job without leaning on private industry to provide data,” said Coeur d’Alene attorney Peter Smith, who represents the MLS board.
The Kootenai County Commission will decide Tuesday whether to pass a law requiring buyers to disclose sale prices just to the county, not the general public, for use in determining fair market values. The same day, the Bonner County Commission is having a public hearing on a similar proposal.
For at least 15 years, Kootenai County has received sale prices and dates from the Coeur d’Alene Multiple Listing Service. Bonner County had a similar contract with the Selkirk Association of Realtors. By law, counties can’t make the sales data public, but they can use it to calculate fair market value.
This year both Multiple Listing Services ended their contracts, leaving assessors in Bonner and Kootenai counties scrambling to figure out a new way to determine the value of property in the county.
The MLS boards were concerned a court could force the county to release sale prices received from the MLS to the public.
Presidents of the two MLS boards, Dale Pyne in Sandpoint and Pam McCormick in Coeur d’Alene, didn’t return phone calls.
Smith said the real estate industry in Idaho also opposes sale price disclosurebecause it could lead to an excise or real estate transfer tax on sales.
Kootenai County Assessor Mike McDowell said the MLS is too worried about potential risk.
It’s a bad time for the MLS to stop providing sales information, he said, because the expectation is that the real estate market – except for waterfront property – likely will turn downward. That means accurate sales data is crucial to determining a new market trend.
“We certainly want to measure that,” McDowell said.
If the disclosure proposals pass in Kootenai County, buyers could face fines of $1,000 or jail time for refusing to disclose sale prices.
The Bonner County law would fine the buyer $100 per day for not disclosing sales information. Because the sales data would remain only for assessment use, if a county employee released the information for any other purpose he or she could be fined $1,000.
“It’s only for the assessors, not a list for anyone else to get,” Clemons said.
In Bonner County, the MLS proposed giving the assessor sales information only if the buyer gave permission.
Bonner County Commissioner Lewis Rich said buyers already are asked to voluntarily disclose sales prices but that only about 30 percent provide the data. The same is true in Kootenai County, McDowell said. Those numbers are used to double-check the data provided by MLS. Both county officials noted that there is no way to ensure that the voluntary information is accurate.
“We are very much at odds with what (MLS) wants to give us and what we need to do the job,” Rich said. “This is the only remedy we feel right now would work, but we are definitely open to other options.”
McDowell said the county is negotiating with the Coeur d’Alene MLS and there is hope a deal might happen before the commission makes a decision Tuesday.
But he thinks a permanent solution is needed and that means changing the state law to require that buyers disclose the sale prices of all Idaho real estate confidentially to the county assessor. A similar measure, supported by state Sen. Shawn Keough, R-Sandpoint, failed during this year’s session.