The National Association of Home Builders (NAHB) released a white paper on Wednesday calling for an overhaul of the system by which residential appraisals are determined. The group made a number of recommendations, some of which members of the National Association of REALTORS® have supported in the past, including the implementation of licensing and certification standards as well as minimum education requirements. However, another in their list of recommendations could have serious consequences for the role of the multiple listing service (MLS) in home sales.
A section of the white paper focused on data technology criticizes local MLSs for becoming “less reliable” in recent years. The solution to this, and the more general problem of a lack of data standards that apply across the country, is what NAHB refers to as “the development of a real estate superhighway.” The group proposed creating this in four sections:
- Terra.gov – NAHB proposed “a national real property registry… with access by all stakeholders.” They named this as the site of an “official record of the factual details of both the structure and the regulatory constraints on the land.” Some of the specific items mentioned as included in such a database were time stamped photographs, satellite images, and floor plans. As of Friday afternoon, the Terra.gov domain name remained unregistered according to WhoIs.com.
- National Collateral Valuation Repository – NAHB suggested this system would require “mandatory reporting of all real estate transactions” and “would replace today’s imperfect house price indexes.”
- Real Estate Exchange – This proposal was described as a “not-for-profit data exchange consortium comprised of commercial and private data providers and sources to serve industry participants… by facilitating information exchange on both a commercial and contributed basis.”
- Standards Body – NAHB proposed creating a group responsible for standardizing the “data, methodology, and practice” available on these various platforms.
The white paper does not specifically address where MLSs would fit in this reformed landscape. Multiple requests for comment filed with NAHB were not returned by press time.
23 Federal Laws That Apply to Real Estate Sales: Appraisal