Top 10 MLS Violations of 2014

Monday, February 9, 2015

Each MLS system is different, but it is safe to say none is perfect. The information residing in an MLS system is entered by people hustling to make a living so naturally errors occur. An MLS system generally does not contain much, if any, information about properties sold via “pocket listings” or about “for sale by owner” (FSBO) sales. However, appraisers often rely far too much on the data the MLS in their market provides and this may be a BIG MISTAKE, especially with the way the new Collateral Underwriter (CU) evaluates and ranks appraisal reports for risk. Appraisers know errors are found in every MLS database as well as in the public records for every county. These errors and inconsistencies are why appraisers should use more than one data source in completing an appraisal.

First, it is a violation of USPAP to use the MLS as a sole data source unless no other data sources are available.  Under USPAP an appraiser is supposed use all data available and used by your peers to independently verify all the data you use. If an appraiser relies solely on the data contained in their local MLS and ignores other data sources like public records they risk having the CU flag their appraisal reports. Furthermore, the same inconsistencies that cause the CU to flag something will also increase an appraiser’s likelihood of getting involved in a claim for damages (lawsuit) or a state license investigation or both.   Even facing this increased risk, many appraisers still look only to the easiest and often the cheapest solution to perform their job.

When you find yourself in front of a judge or a state investigator, you do not want to say, “I only use one data source because it saves me money and I always assumed it was correct”. Under the current system of constantly evaluating both appraisers and appraisals, even one claim or one license complaint on your record will increase your insurance rates and make it much more difficult for you to get steady work.

By way of example, here are 10 MLS user violations as compiled by the Arizona MLS Blog. While the order of these violations undoubtedly differs from state to state, errors are still errors. Take special note of Nos. 3, 7, 8, 9, and 10 because each of those could cause errors in your appraisal report.


Violation Name

Violation Type


Self Reported



Access Codes Found in Wrong Field*



No Exterior Photo of the Front of Dwelling*



Contact Info in a Photo



Contact Information in a Public Field



Open House /  Showing info in Public Field



Sold/Leased Price Incorrect



Dwelling Type Incorrect



Special Listing Conditions



Incorrect in Closed Status (False Sale)


* These violations are system detected by our monitoring compliance software.

What’s the solution for an appraiser? It’s very simple…USE MORE THAN ONE DATA SOURCE.  If one of your reports is ever called into question, it is much easier to justify and defend your appraisal if you utilized 2 or more data sources. Pointing to a single data source is just not a very effective defense.

At National Data Collective (NDC) we want to be one of your data solutions. Our database is unique because it is compiled from numerous sources and delivered to you in a friendly and efficient format. The NDC platform includes custom comp searches, subject property detail and history, flood status and map, deed history, location maps, plat maps and more. NDC just released “NDC Shift”, a tool that allows a la mode subscribers to export property and comp data with a single click of a button into a la mode’s industry leading, form-filling software. This saves you time on every report and eliminates errors from copy and pasting data. NDC offers competitive pricing including a “show us your bill” promotion where we will meet or beat the price you are currently paying for data.

Stop being a victim of inconsistencies in data and make your appraisal reports stronger with NDC. 

Visit to get started or
call one of our data coaches to see how we can help you at (800) 964-2374


Source: Arizona MLS Blog


Gentlemen, MOST of these fields have so little to do with real estate appraisal credibility that you should be embarrassed to report them (excluding incorrect pricing).

FAR more important than any of these are:
Pricing; concessions disclosure, no discussion of unpermitted areas or confirmation of additions that have been done with permits; Approximate living area that includes basements or attic areas. Its fine to say GLA of 2,700SF PLUS $1,000 SF finished basement with bath etc.. Show the HONEST number of days on market. We CHECK listing HISTORIES and know how to add.
Inaccurate room lists; and in the case on small income property; pro forma rents being shown as actual rents! Investors are not stupid! Put the real rents down alongside of the pro formas. Appraisers use credible pro forma data anyway, BUT the actual rents have to have a verifiable or realistic pathway to get to the pro forma amounts. Start showing actual operating expenses. Taxes can be existing but if you are calculating and claiming certain cap rates you should increase taxes based on a sale price at the asking amount.

Almost all MLS services provide a section for lengthy agent comments-USE IT! Describe your property ! We can read between the lines just like any agent. Call it a "Cream puff" if you must, but recite upgrades and approximate times-it has a bearing on how the property is rated under the UAD system.

To all agents:
No appraiser is trying to 'beat you" or low ball you. Frankly those of us with experience KNOW that the real estate market generally 'works' and that if you have done your jobs right, and we have done OUR jobs right, we really should be very close in our opinions of value!

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