MLS – The Power to Change The World!
No matter who provides it, No matter where they get it, No matter the agent or circumstances,
Once written in MLS Sold Data, any information instantly turns to FACT; and, has the power to change home values in the future. MLS – a membership like no other!
Proof of Value – MLS Closed Sales
A closed sale is considered as “proof” of value for a specific property as of a specific date. The appraisal system breaks this information down into categories. Per the appraisal form Freddie Mac Form 70, March 2005, and Fannie Mae Form 1004, March 2005, which is the only approved appraisal form for federally related loan transactions (which most mortgage loans are), involving single-family dwellings, the main heading for all comparison is the “Value Adjustment.” Below the main heading the comparable categories are: (Land/Location/View), (Age/Condition), (Design/Quality), (Basements), (Garage/Carport), (Porch/Patio/Deck), (Fireplace), (Amenities), and in the middle of the form is (Above Grade Room Count and Gross Living Area). Simply put, Square Footage. This form further breaks down this information into (Sale Price/Gross Liv. Area).
In other words, in every appraisal transaction, this federally approved and mandated form breaks down the value into price per square foot. That value cannot be calculated without a specific number; not a range, a specific number of square feet. Every sale is automatically calculated at the price per square foot. There is no other place on this form that automatically calculates value, without the appraiser imputing a value definition for the adjustment. Regardless of land value, quality, condition, or any other adjustment, the main item of comparability is the Price Per Square Foot. The federal government obviously thinks square footage makes a difference. Think about that for just a minute. All federally approved loans (and all others for that matter), require a specific price per square foot; the only automatic calculation on the entire form. Size Matters!!
The information reported through the MLS changes home values. Inaccurate information is equally as powerful as quality information. The vast majority of home sales are calculated based on a price-per-square-foot basis. If any agent reports inaccurate square footage details, that one sale may influence numerous sales in the future. When agents use the square footage details reported through the local tax department, there is over a 75% change there is an error large enough to alter the home’s value. Size does influence value, it’s just the facts of our current real estate valuation system.
