Hidden Sales Price

Update 1/1/2016, The Assessors Office changed their policy and no longer allows a NFPS to be filed. The Documentary Transfer Tax is public record and will be recorded on all grant deeds. This article is no obsolete

 

The the-mls-of-choicein the past allowed agents to report $0 as the sale price on transactions for a nominal $250 confidentiality fee.

 

MLS SHEET

$0 Sale Price

 

This became very popular with luxury home buyers and builders/developers who wanted to keep their sale price secret. In 2007, the MLS changed its policy and removed the ability to record $0 sales prices; today if you list your property in the MLS the sales price is reported.

For off the market transactions the county allows a Not for public record form form to be filed when recording the grant deed which will white out the sales price on the grant deed and also replace the amount of documentary transfer tax with a stamp that says “Transfer Tax Not a Public Record”. Doing this conceals the sales price. Investors like to use this because the usually intend to resell the property in a short time period and when a potential buyer knows the acquisition cost this can sometimes hurt them during negotiations.

white out Grant Deed

Grant Deed that had a Not for Public Record Filed on recording

How grant deeds work is that as soon as they are recorded they are mailed to the owner. The County doesn’t keep a hard copy- they only have a scanned image of the front. So there is no way for you to get your hands on the original grant deed by visiting the recorders office. If a “Not for public Record” form was filled out, the image of the grant deed will be useless to determine the sales price because all the important information is whited out.

There are two ways to find the hidden sales price- with the Documentary Transfer Tax amount, and the change in the properties assessed value.

The Documentary Transfer tax is levied at the time of sale, in city of Los Angeles it is $5.60 per $1,000 in sales price. So $5,600 DTT means $1,000,000 sale price. The state has ruled that this tax is public record. The only catch is, that it this information is not available online anywhere. To find out the Documentary Transfer Tax you need to go to the Tax Collecting department Downtown and fill out a request to look it up. There is no charge to look up the DTT on transactions- the documents arrive in the mail in a few weeks.

When a property is sold, this triggers a reassassesment, the new assessed value for the property is the purchase price. If you can find out the new assessed value, you will know the sale price. The assessor website www.lacountyassessor.com/extranet/DataMaps/pais.aspx allows you to look up the assessed value of a property only one year back. It usually takes 90 days after a sale for the new assessed value to show up in the assessors system. After one year the assessed value starts adjusting by a maximum of 2% so you could probably figure out a ball park number subtracting 2% per year.

In the downtown location of the assessors office, they have computer terminals that are open to public for access.

IMG-20120706-00152

 

This is the only place you can go to have access to historic assessed value data. Of course, you could call the assessor’s office and if you know that sale date, you can have them look up an assessed value for you over the phone in their system. Sitting down at the computer terminal you can browse the historic assessed value data- when you see a big jump in assessed value or a change in owner name, you can determine what the hidden sales price was.

To summarize there is no way to keep the sales price secret, but by filing a not for public sale form you can make finding it very difficult.

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