In a July 22, 2014 editorial, the Billings Gazette expressed it's opinion that Montana real estate sales prices should be made public. The editorial follows a July 16th Gazette articles, which reported that the Director of the state Revenue Department has told a legislative committee that the Department will ask the 2015 Legislature to change the law to allow real estate sale prices to be publicly disclosed. This would be a substantial change from Montana's current non-disclosure status. According to the Gazette reporting, 39 other states publicly disclose real estate sale prices.
The main focus of the articles and the editorial was that public disclosure would enable property owners to be better informed of neighborhood property values, and therefore would be better able to challenge tax assessments.
In the rural Montana recreational and ranch market, which does not generally participate in regional Realtor MLS systems, we have seen a strong increase in the use of additional non-disclosure agreements (NDA) as part of sale transactions. This further blocks those involved in real estate sale transactions from disclosing any information related to sales, including sharing information with appraisers and other brokers who are dependent on sales data for their work. Primarily, this is driven by wealthy buyers wanting to protect their privacy. This of course makes the job of appraisers and brokers more difficult, and undermines appraisers ability to make credible appraisals.
In the opinion of Rahn Land, the system which has been in place in Montana has helped create and maintain a higher quality rural real estate industry in Montana. Real estate professionals, such as brokers and appraisers, are dependent on confidential sales information and use that information with discretion to the benefit of land owners and the industry as a whole. Most property owners need an appraisal, or the service of well-informed brokers, at some time. Appraisers or brokers who don't respect the confidentiality of sales information are not trusted by others in the industry, lose access to sales information, and are not successful. Under the current non-disclosure system, individual privacy (which has been a long-standing Montana value) has been protected, and generally only quality real estate professionals have access to and use confidential sales information.
The increased use of non-disclosure agreements by buyers, sellers, and brokers is undermining the current non-disclosure system, and continued use of these agreements may well increase calls in the future to make real estate sale prices public. Ironically, the drive for even more privacy by some may ultimately result in the loss of confidentiality all together.
In the opinion of Rahn Land, brokers should push back on clients who want non-disclosure agreements, and explain to them that the current system protects privacy while allowing Montana's high quality real estate professionals to do necessary work to the benefit of all. Land owners will need appraisal or brokerage services at some time, and they will be dependent on the very information they are attempting to withhold.