Starting March 12, the city changed the way it displays property records in its online database, the Automated City Register Information System, or ACRIS. The modification was little noticed until the Real Deal ran a piece on its Web site the other day.
For example, as the publication observed, the closed sale price of a unit at 10 West 66th St. that had shown a recorded sale price of $1 million jumped to $1.75 million. A studio at 61 Jane St. had a price tag of $87,900 when the deal closed in 2009, then $439,500 after the change in ACRIS, from which StreetEasy.com and PropertyShark.com draw data.
The change is meant to reflect virtually everything a buyer expends to purchase a co-op, plus – and this is the part that really hard to understand – the buyer’s portion of the building’s underlying mortgage in the sale of an apartment by the sponsor.
Also now included in what ACRIS labels “document amount” are concessions that a seller does not ordinarily receive. Such concessions are in addition to the “cash consideration,” the sale price in the contract. Among them would be the seller’s transfer taxes and assumption of the seller’s underlying mortgage obligation.
When everything is added up, ACRIS calls the sum “total consideration.”
In an example that the Real Deal provided, a resale unit on the ninth floor at 170 East End Ave. sold for $4.2 million (known as the “cash consideration”) in late 2009, according to StreetEasy Vice President Sofia Song.
Typically, the seller of a resale pays the transfer taxes, but the buyer absorbed that expense of $76,650 as part of the transaction. Originally, the transaction appeared in ACRIS — and on StreetEasy, which maintains a database of 300,000 closed sales, now updated — with a total price tag of $4.2 million. When the database was updated, by March 15, the final price appeared as $4,276,650 – i.e. the total consideration.
The Department of Finance did not comment on reasons for the change, but Song said the city had published the total consideration amount until around 2007, and then switched to the cash consideration. She added online:
We believe that the Department of Finance should provide both cash consideration and total consideration numbers. However, if they are only going to provide one number, then it should be the total consideration . . . The cash consideration alone can easily provide an incomplete picture since not all deals are done in cash; there may be other components to the deal like property transfer (e.g. a house in the Hamptons) or the assumption of some debt.
Song, who is director of research, added that the underlying mortgage is figured into total consideration only in sale of sponsor apartments, not for resales. Therefore, she contends, the true cost to a buyer is not distorted, permitting comparisons between apples and apples, as it were, with regard to closed sales.
She went on to underscore the fact that StreetEasy had retroactively changed all the sales in its database to permit equivalent comparisons. But beware that PropertyShark has not followed suit.
Still, PropertyShark spokesperson Brian Scully told Real Deal writer Candace Taylor that the Web site already publishes title documents and mortgage information for each transaction, giving users a picture of how each deal unfolded. In an e-mail, he wrote Taylor to suggest that visitors to the site look not only at the last sale price but also go through the provided links to mortgage and other documents that might be part of the total consideration of a property. Said he:
We provide direct links from our Title Documents section to make it easy.
Although I was initially trouble by the change when I first read the Real Deal, I’ve come around to thinking it’s a good thing with these provisos:
- It is important to know whether the comparable sale is by a building sponsor;
- You must not compare sales information you’ve had lying around since before mid-March with prices today;
- When looking at PropertyShark data, absolutely follow the company’s suggestion to dig deep.
My advice here is intended for consumers, but I cannot close without slyly urging them to depend on their brokers for the best analysis of comparable sales.
Such analysis is far more involved than the steps outlined above. I do honestly believe that a key reason for seeking a broker’s assistance is that the good ones see hundreds of properties a year, evaluate them constantly, track market fluctuations and develop expertise on the numerous variables that go into setting and obtaining the best price for buyer and seller.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022