A non-disclosure state is a state in which real estate transaction data, specifically the sale prices of homes, is not publicly available. The transfer is recorded at the county, but the actual price is not included. In non-disclosure states, the only way to access sales price is via the relevant MLS. This means that it can be difficult for real estate investors to conduct due diligence on properties when operating in these 12 states.
Without official price data, investors may struggle to determine the true value of a property. Running comps becomes very difficult. Worse, a lack of access to this data over time could blind you to negative trends, resulting in investing in an area with consistently declining property values.
But fear not. You don’t have to fly blind when doing business in these states. Given the many related data that are recorded as part of a property transfer, there are ways to deduce sales price–even if country officials cannot divulge. Fortunately, REISkip gathers these associated data points as part of every transaction we store.
The data point most closely correlated with sales price, of course, is mortgage amount. Outside of all-cash transactions, the vast majority of home buyers will obtain a mortgage for the bulk of the sale price. That proportion is largely dependent on the type of mortgage they obtain (FHA, VA, Conventional). Here again, is a data point (mortgage type) that REISkip displays in every lead list or skip trace order we process.
Borrowers who use traditional mortgages behave very predictably, based on the guidelines of the loan product. As a result, a common method to deduce sales price in a non-disclosure state is to gross up the mortgage amount by a multiplier. Each mortgage type has its own multiplier:
Conventional mortgage products typically require 20% down. As a result, the convention used by professional investors and fund managers is to gross up conventional mortgages by a factor of 1.3. That means a $100k mortgage likely corresponds to a purchase price of ~$130k.
FHA loans are popular for their low down-payment requirements, as low as 3.5%. The convention is to gross up by 1.05. This means that a $100k mortgage likely transales to a ~$105k purchase price.
VA loans are reserved for veterans, and offer the most generous borrowing guidelines (no down payment required). As such, a purchase with a VA loan can typically be grossed up by a factor of 1, meaning that buyer borrowed the entire purchase price.
As long as you know the mortgage amount and type, you can use this simple matrix to estimate the likely sale price of a property in any non-disclosure state.
REISkip goes one step further, and factors in a lender-grade automated valuation model (AVM) into the estimation process.
By combining mortgage amount and mortgage type as well as original listing price and an automated valuation, we are able to approximate sales price with 90%+ accuracy. This is the sales price figure that you will see displayed for records we deliver in non-disclosure states.
Always keep in mind that any display of sale price on our site (or any other site) in a non-disclosure state is an estimate.
The following states are currently non-disclosure states: Alabama, Alaska, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, New Mexico, North Dakota, Ohio, Oklahoma, South Dakota, Texas, Utah, and Wyoming.
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