Home valuations hit snag

Kootenai County no longer is getting the home sales information needed to assess property values after the Coeur d’Alene Multiple Listing Service discontinued a contract to provide the sale prices of local real estate.

That has left Assessor Mike McDowell scrambling to figure a new way to determine the value of property in the county.

And the County Commission’s response is to consider a local law making it mandatory for property buyers to disclose the sale price – information now exempted by Idaho law.

Bonner County is facing the same challenge since it recently lost its agreement with its local MLS.

“The ramifications touch everybody,” Kootenai County Commission Chairman Rick Currie said. “The more information you have the better you can get an accurate value.”

For at least 15 years, Kootenai County has received sale prices and dates from the MLS. By law, the county can’t make the sales data public, but it can use the information to calculate the fair market value of each parcel in the county.

For example, if the assessor’s office is determining the value of a home in the Fort Sherman neighborhood, it would look at recent sale prices in that area to ensure the house receives a fair market value. That value is used in the equation to calculate property taxes.

In exchange, the county provided the MLS with building characteristics, such as square footage and the number of bedrooms, for all newly built homes and structure. Real estate agents use that information when they list properties for sale.

The MLS, which pulled its contract with Kootenai County in May, referred questions Thursday to Coeur d’Alene attorney Peter Smith. Smith did not return phone calls by deadline.

McDowell said the MLS board has many members new to North Idaho, and the board is concerned that a court someday might force the county to release sale prices received from MLS to the public.

Both the MLS attorney and the county attorney have concluded that is a possible scenario, although there haven’t been any such suits in 15 years, McDowell said.

“They didn’t want that sales information to be part of the public record,” he said, adding that he tried several times to convince the MLS board of the benefits of sharing sales data with the county.

“They are placing way too much information on the potential risk,” McDowell said.

He also said the MLS doesn’t want sale prices made public for fear that the county or state might start charging an excise or real estate transfer tax on all sales.

It’s a bad time for the MLS to stop providing sales information, McDowell said, because the expectation is the real estate market, except for waterfront property, likely will turn downward. That means accurate sales data are crucial to determining a new market trend, he said.

This year some state lawmakers, including Sen. Shawn Keough, R-Sandpoint, unsuccessfully tried to pass a bill requiring that sale prices of Idaho real estate be disclosed confidentially to the county assessor. McDowell said he hopes a similar bill will get introduced in the 2008 Legislature.

Idaho requires counties to assess property at fair market value, but the law also prohibits the disclosure of sale prices that assessors use to make fair market value calculations. Idaho is one of a handful of states that doesn’t disclose property sale prices, McDowell said.

Bonner County Assessor Jerry Clemons wasn’t available for comment Thursday, nor were the Bonner County commissioners. But a county secretary said the MLS situation has become a “hot topic.”

Without the MLS information, McDowell said, his staff is forced to scrounge to get sales information by sending questionnaires to buyers asking them to provide the data. He expects a 30 percent return. When people don’t respond, the assessor’s staff will call the buyers.

McDowell said he worries about having enough information to make good assessments. He asked the commission for two new staff members in the fiscal 2007 budget but so far has only received one of those positions to help capture the sales information.

Without the county’s information on building specifics, McDowell said, real estate agents and the MLS will be forced to do their own measurements of properties.