How Does Home Sale Transaction Value Get into the Public Domain?

Question

Being a privacy conscious person, when my wife and I bought our first house a few years ago, knowing that I did not consent to the information going public, I was surprised and a little perturbed to start getting bulk mail listing the exact value we purchased the house for.

I called the bank and they claim they don't release any information, and the same went for the seller and others involved when I inquired. It's quite apparent to me now that this is common, as you can see prices on various websites.

How does this information get in the public domain? Is it required to be public by law? If so, what's the rationale? Is there a way to stop the bulk mail entities from associating the home/lot price with the individuals that own it?

Answer 1

Land purchase is typically recorded by the county recorder and becomes public domain at that point. If all this was kept private how could you know that someone didn't scam you and sell you land they don't really own.

When you buy the house the bank files paperwork to say they loaned you some money and how much when you'll pay it off etc. Then companies troll that information to "sell" you on things you might need for your new house.

Answer 2

Property ownership in the U.S. (or at least the places I'm familiar with in the U.S.) are public record. That includes tax assessment information which, necessarily, includes the value of the property. Contact your county assessor/recorder for more information.

You could obfuscate ownership through the use of trusts.

Answer 3

The other answers incorrectly state that all real estate sales in the US are a matter of public record. In fact, this depends on the state.

From REALTOR.com®'s Home Values FAQ (courtesy of the Internet Archive):

Where does the free recent home sales data come from? Home sales data is obtained from public records sources provided to us by Onboard, LLC. The recent sales data that is displayed is based upon actual sales of homes for the last 18 months for all full-disclosure states. We do not use any unique or proprietary algorithms to estimate values.

What are non‐disclosure states? Some states do not disclose the actual value of property sales to the public. Instead, it is standard industry practice to estimate sale prices based on one of two methods: 1) transfer tax paid in a home sales transaction (most reliable estimate) and 2) first mortgage amount (yields a wider margin of error) in states without a transfer tax or where than information is unavailable. That means the consumer will still see “free comps” of estimated sale prices instead of public record actual sales data.

If you want to keep your real estate transactions secret, your options include, but are not limited to:

• Form an LLC to purchase the property (as in NathanL's answer)
• Move to a non-disclosure state* and purchase in cash

However, do note that as Todd points out, there will still be some information at the county tax assessor. In some instances, you can keep your name out of the records by using an LLC, or, as in my state, by requesting "CURRENT OWNER" to be listed in public records as the owner.

* Various lists of non-disclosure states are floating around the internet, and no two lists are the same. By and large, most of the states on most of the lists are non-Pacific-Coast western states such as Idaho, Montana, and Texas.

Answer 4

All land transactions in the United States are a matter of public record and are recorded by the Registrar of Deeds. Many registrars offer these records online; a typical example from my state, Massachusetts.

Data companies hire deed information collectors to go to each and every registrar and collect this information. In the old days you could see these guys in the registrar's office taking deed books down and typing into a laptop computer. Nowadays, everything is computerized so all they have to do is file an FOIA request and get all the records on a single disk.

The data companies (called "aggregators") then sell this information to whoever wants it.

Answer 5

All land records are public in the US, so if you choose to purchase land, you can expect that the documents for purchase will be available for anyone who is determined to find them. This information is public for the benefit of banks who might make a loan on your property (they can see if there are other mortgages or liens) for people you might sell the property to (a title search will usually precede the sale to another party) and for transparency relating to the rates at which property taxes are assessed and paid.

Data aggregators will extract the relevant property values and sell the data for marketing and companies like Zillow that compare property values. The actual documents that you signed are often digitized and may be openly searchable, or some counties may charge a fee for users to search their databases. The best way to make sure that those documents cannot identify you personally is to use a third party like a trust or an LLC to purchase the home for you. The structure of that entity should reflect some thought about the tax implications of each.

I mentioned this precise issue in the comments of another question about what data can safely be disclosed online. Even if you do not use your own name, you can expect solicitations through the mail addressed to the entity named on the documents you signed.

Also keep in mind that the current values listed on most county recorders' websites will reflect their assessment of your property tax values. Those values can often be appealed if you can demonstrate that the current market doesn't reflect their assessment.

Answer 6

It doesn't matter. House prices are widely known anyway.

The science of estimating house value is extremely sophisticated, given all the money that's at stake. Hide your price all you like; they can just look at comparables - the price of houses similar to yours in your neighborhood. They are looking at square footage, number of rooms/bathrooms, features (pool, boat launch etc.)

The only thing you can hide from comparable-comparers is hidden characteristics of your house that might significantly affect the price, like the shattered foundation that reduces the house to a scraper, or the hidden elevator in the garage that leads to the secret Bat-cave.

LLC's aren't as awesome as they seem

Common advice is "hide your purchase price, wrap the house in an LLC". Sure, OK, that has advantages, but it doesn't have this advantage. The sale price is still public record, just the LLC's name is there instead of yours.

If you really want to hide the sale price, find someone who has already created an LLC which owns their house... and purchase the LLC from them at a private price. In this case the house will not change hands; it will still be owned by the LLC. The hazard to this approach, however, is the system is tuned to protect homeowners from scams relating to transfer of houses. All sorts of swindles are possible in the sale of an LLC that are not possible in the sale of a house.

I can tell you, having sold a property owned by an LLC, the buyer had no clue nor interest about the LLC structure. My representative didn't really get it either, and didn't really pitch it well. So the buyer entered the deal expecting a straight sale, in other words buying the house from the LLC, not buying the LLC. Thus, the goal of averting the costs-of-sale was utterly defeated, even worse, all those costs fell on us as they traditionally fall on the seller. The buyer had no reason to want the LLC; his costs were exactly the same either way, and he went with the familiar. Maddening! So if you are a buyer wanting an LLC house, that may be a breath of fresh air to the seller.