More thoughts on national RE database
The more I think about it, the more I think this would be a hugely beneficial thing to have (for consumers, at least... not so helpful for scam artists). A national database with all real estate information, even just sales information, would go a long way toward stabilizing the housing market and reassuring people. Some things it should have:
- Uniform monetary accounting
The total sales price, and all special considerations and circumstances, should be recorded in a standard, uniform way. For example, there should be a net sales price which is the gross price minus any seller considerations, kickbacks, or down payment assistance. All parties providing all assistance should be in the public record, all non-monetary considerations should be included with valuation approximations, and all special terms documented. It should be against the law to provide incorrect information or not include material information, and the all parties (buyer, seller, agents, etc.) should be jointly and severally liable.
- All party names recorded
As much information about all parties involved (as much as is public record for each state) should be recorded. Not only will this help identify questionable transactions by related or conspiring parties, but will provide valuable information for cities and municipalities if code violations are discovered. Most information is already in the public record, but a centralized search-able database would definitely help with transparency in the market.
- All transactions recorded
It should be required that any transaction involving the real estate property be recorded in the database. This would include public auctions, private sales, and any other transfers of ownership. It should be easy to include transactions to ensure there is not substantial cost in doing so.
- Data available to anyone
Any company or individual should be able to access any/all the data at any time. For individuals, this could be achieved via a simple web interface with very limited functionality. Businesses would need to work with the government agency to have regular database change exports on a feed-based system, so they could set up and maintain their own applications without putting significant load on the central database.
That would be my first-pass design specification. Now I just have to find someone in our government with enough brain cells to understand why this would be good, and not corrupt enough to actually do something which would benefit the people. Hm... that would probably be the most difficult part of the whole project. =/
- Uniform monetary accounting
The total sales price, and all special considerations and circumstances, should be recorded in a standard, uniform way. For example, there should be a net sales price which is the gross price minus any seller considerations, kickbacks, or down payment assistance. All parties providing all assistance should be in the public record, all non-monetary considerations should be included with valuation approximations, and all special terms documented. It should be against the law to provide incorrect information or not include material information, and the all parties (buyer, seller, agents, etc.) should be jointly and severally liable.
- All party names recorded
As much information about all parties involved (as much as is public record for each state) should be recorded. Not only will this help identify questionable transactions by related or conspiring parties, but will provide valuable information for cities and municipalities if code violations are discovered. Most information is already in the public record, but a centralized search-able database would definitely help with transparency in the market.
- All transactions recorded
It should be required that any transaction involving the real estate property be recorded in the database. This would include public auctions, private sales, and any other transfers of ownership. It should be easy to include transactions to ensure there is not substantial cost in doing so.
- Data available to anyone
Any company or individual should be able to access any/all the data at any time. For individuals, this could be achieved via a simple web interface with very limited functionality. Businesses would need to work with the government agency to have regular database change exports on a feed-based system, so they could set up and maintain their own applications without putting significant load on the central database.
That would be my first-pass design specification. Now I just have to find someone in our government with enough brain cells to understand why this would be good, and not corrupt enough to actually do something which would benefit the people. Hm... that would probably be the most difficult part of the whole project. =/
I agree this type of database would help.
ReplyDeleteThis information not being available makes real estate illiquid and volatile. In the past few years, real estate prices show way past prices justified by rents. I wonder if the pendulum will sing far in the other direction, with market participants thinking “This thing would generate 15% of its value in rent if it's occupied most the time, but I still might not want it because it might be hard to sell it. I'd rather someone else buy it and rent it to me. That 15% of return I'm paying to my landlord is just like me paying for insurance”.
That seems exactly opposite of the widely embraced goal of having everyone own their residence. I know that's not your goal, but that’s a selling point for people who promote universal home ownership.
I think it's almost certain that the pendulum will swing the other way, and house prices will go below what they "should" be. One of the factors which is likely to drive an over-correction is the perception that real estate is a bad investment, and that it might be very difficult to unload properties when you want to sell. Ironically, that should indirectly aid individual home ownership, since people buying houses as residences (as opposed to investments) are likely to pay less attention to future resale potential.
ReplyDelete