PRIVATE MORTGAGE BANKER
WELLS FARGO PRIVATE BANK
New York is unique. But that’s not an advantage when it comes to real estate data.
In every other major metropolitan market in the United States, the multiple listing service serves as the source of truth for closed sales. But not so in Manhattan.
Since there is no multiple listing service, loan officers like Aaron Pisano, a Private Mortgage Banker at Wells Fargo Private Bank, look to what’s for sale on StreetEasy, brokerages that release data (not all do), ACRIS or other sources to try to spot check a property’s value and its appraisal.
“The problem is downstream,” says Pisano. “It’s one thing in a market like Manhattan to fight for an appraisal for a purchase. But when people refinance, it can be a nightmare.”
Low Appraisals. Pisano says that appraisals can come in hundreds of thousands of dollars lower than expected, because there is no trustworthy source of data with a complete view of the market. Without an MLS, pocket listings, thousands of cash and trust sales in Manhattan are missing. And ACRIS is “terrible” to navigate.
“You’re relying on the appraiser to come back with accurate information, and they have a struggle,” Pisano says. “You see on the appraisal reports that the source is coming from third parties, like StreetEasy. But when those comps are drawn from listing numbers, not sales that are recorded, that can wildly skew the value of what the property comes back at, and it makes for a lot of issues throughout the refinance process.”
Pisano says comps generated this way are unconventional and would never be acceptable in another market with a proper MLS. But lenders accept that New York is unique, and Pisano is adept at navigating the system to get deals done.
Angry Consumers. “Brokers work with me because they expect me to keep the deal together,” says Pisano. But it’s not easy, especially when incorrect data gets in the way.
What happens then?
“The consumer is stuck and angry,” Pisano says. That can reflect badly on him … and the broker.
“Consumers understandably expect everyone involved to be able to correctly value the property,” explains Pisano. “They don’t — and maybe shouldn’t — care that the data situation in Manhattan is broken. They’ve done their own research — and if it’s based on third parties, it can be inaccurate. Then there’s a lot of explaining to do and expectations to be walked back.”
So, would an MLS in Manhattan fix the problem?
“Sure, it would,” says Pisano. “The brokers and appraisers I know who are already using HGMLS in the Bronx and Yonkers tell me all the time how much easier it is with an MLS. Sign in, click, click, click, and I’m done. Here you go. Correct numbers served up on a platter. That’s valuable.”
No more blind faith. Pisano says that an MLS would make dealing with appraisers who may have incorrectly valued a property much easier. Or convincing underwriters to look at accurate comps to keep a transaction from falling apart.
“If we had an MLS, it wouldn’t just be me pulling comps from this or that website, and hoping for the best,” Pisano says. “There’s no more blind faith in third parties. The underwriter can’t think, ‘well, that’s a Manhattan listing, so maybe they went high,’ or some of the other things they do today. An MLS means you can provide your clients with better service and better data right from the beginning, which just makes everyone’s lives easier.”
“An MLS means you can provide your clients with better service and better data right from the beginning, which just makes everyone’s lives easier.”