As technology and specifically artificial intelligence have grown and changed over the past few years, consumers and real estate professionals have become increasingly concerned about the privacy of their data and information.
Among consumers, this may result in homebuyers requesting that listing photos of their new property be removed from portals. For certain brokerages and agents, this means preventing their listings from being input into LLMs and a propensity to encourage sellers to list their home privately to avoid accumulating days on market or having a recorded history of price adjustments.
While some brokers and MLS leaders have spoken out against practices like private listings or blocking the usage of listing data in LLMs, real estate agents are not the only ones impacted by these changes. Appraisers, who are an integral part of real estate transactions, also rely on MLS data in order to appraise properties for prospective homebuyers.
“Appraisers rely on historical MLS data to verify the condition and quality of comparable sales. If a listing agent wipes out the interior photos and floor plans the second a house sells, we’re left flying blind,” Desiree Mehbod, a Virginia-based appraiser, told HousingWire. “Private listing networks starve the open market of data transparency. When a property sells entirely off market or inside a private network, critical details like historical pricing adjustments, interior condition photos and true exposure time are hidden. It creates a severe data scarcity.”
UAD 3.6 and increasing data standards
This data scarcity comes just as appraisers are being required to file reports with increasingly more granular data. Under UAD 3.6, which goes into effect on Nov. 2, appraisers are required to select specific data points from dropdown menus for all every feature of a property, as opposed to writing text descriptions of the home as they previously did.
“It requires us to collect and report a staggering amount of high resolution interior data, structural metrics and photographs,” Mehbod said.
Without listing photos or data regarding comparable listings, appraisers say it is next to impossible to properly value a home.
“Having access to more data means that everyone trying to value a property can make an informed decision,” Ryan Lundquist, a Sacramento-based appraiser said. “The removal of listing photos is a growing problem and it makes it challenging to understand what someone means when they say a property has been remodeled, because was it remodeled in 1973 or 2023? Tthose are two very different things.
“I think both appraisers and agents have to consistently work to understand the quality and condition of a home and sometimes you can simply look at photos to understand why one property sold for more than another.”
Time and money
This, however, is much more complicated when those photos are no longer visible or when the majority of comparable listings and recent sales are private.
“If the appraiser is using the MLS as their course for sales data, which is quite common, if after the home is sold and the photos are hidden or a listing is private, it constrains their ability to describe the property if they are just using the MLS,” Shawn Telford, Cotality’s chief valuation officer, said. “Obviously, in today’s world there are lots and lots of other sources for information about the subject property that they can use.”
Telford noted that when he started his career, appraisers had to drive by comparable or subject properties to figure out if they were the right fit for a valuation, something he said today’s appraisers could also do if they don’t have access to photos of properties online.
“The more information and data that are available to the appraiser, the better their analysis will be, so there could be a point where if you don’t have enough information you may not be able to form a credible opinion,” Telford said. “The MLS is a marketing tool so even if the agent’s comments about a property are still there, appraisers should be verifying the information about a property with at least a couple of sources.”
Frank Gregoire, a Florida-based appraiser, agrees.
“The more information that is easily accessible to an appraiser, the more easily the appraiser can complete their work,” Gregoire said. “However, a diligent appraiser is not going to rely solely on information that is available from an MLS or in the public records. A diligent appraiser would be contacting the agents involved in the transaction of comparable homes.”
But all of this takes time, and time, according to Gregoire, is money.
“I base my fee on how much time it takes to do an appraisal and complete the report and if it takes more time because I have to chase down someone for information, I am going to charge more money,” Gregoire said.
If private listings or completely hidden listing photos become the norm, this would drive up costs for homebuyers at a time when many consumers are already faced with mounting affordability challenges.
MLSs step in
MLSs, however, are becoming increasingly aware of these challenges, especially those posed by removed listing photos. In response to this, many MLSs have created pathways restricting the distribution of interior listing photos of sold listings to real estate portals, while still maintaining an internal database of the images to aid both appraisers doing valuations and agents working to price properties. MLSs like California Regional MLS (CRMLS), Canopy MLS and Flexmls have implemented things like privacy policies and restrictions for off-market listings and media privacy controls to manage the visibility of listing photos for sold properties.
“Consumer privacy and the needs of appraisers don’t necessarily have to be competing priorities. MLSs can establish policies that limit the public display of interior listing photos after a property sells while preserving those images in historical MLS records for authorized uses, including appraisals,” a spokesperson for the Council of MLSs (CMLS)told HousingWire. “Historical listing photos provide valuable information about a property’s condition and characteristics at the time of sale. Removing them entirely could eliminate information appraisers and other real estate professionals rely on.”
To help MLSs strike a balance between consumer privacy concerns and the needs of appraisers and other real estate professionals, the CMLS spokesperson said the trade group is working to develop Best Practices guidance that touches on this issue.
Unintended consequences of privacy
While he understands the genuine need of some sellers to sell their property as a private listing, Lundquist is concerned about what may happen if more and more sellers decide to sell their home as a private listing.
“I view this as a step backwards to a time where there was a greater lack of transparency,” Lundquist said. “I think of course some sellers don’t want as much information on the MLS and there are mechanisms in place to control that, but what we don’t want to see is the entire marketplace move that way where we cannot see a substantial portion of the listings or where we can’t see the photos or know the days on market.”
With the appraisal space starting to require even more data and the real estate space looking to insulate some of that data, Lundquist feels a big push and pull between two industries that should be working in lockstep to best serve the greater housing ecosystem.
“There is this need for more information in the appraisal community, especially with the new forms, but then there is this wave where listings are becoming less transparent on the MLS system, and I don’t view that as a good move,” Lundquist said. “It seems out of sync with the way the appraisal space is moving.”
While appraisers are the ones immediately impacted by these industry shifts, Mehbod warns they could have even greater implications.
“The industry cannot demand absolute, data-driven precision from appraisers while simultaneously applauding the deletion of the data required to achieve it. This isn’t just an appraiser problem; it’s a massive consumer problem that directly threatens public trust,” Mehbod said. “Ultimately, homeowners will still be forced to hand over the keys and let us in if they want the loan to close or the sale to go through. However, forcing their hand creates massive animosity right at the front door. It positions the appraiser as a forced data collector rather than an independent expert.”
