Off-Market Sales Are Distorting Property Taxes — Here's What Sellers Need to Know

Up to 80% of comparable sale prices in some markets are simply unavailable to buyers, appraisers, and tax assessors trying to establish what a home is worth. That figure comes from Sergio Gárate, a real estate researcher at Emory University, who encountered the problem firsthand after relocating to Mississippi — a state where home sale prices are withheld from public records by law. What he discovered next matters to every homeowner thinking about selling.

Two Layers of Secrecy Are Colliding in Nondisclosure States

Most sellers know their final sale price becomes part of the public record. In the majority of states, that's true. But in nondisclosure states — including Texas, Mississippi, and roughly a dozen others — sale prices are kept out of public records entirely. That's one layer of secrecy. The second layer arrives when the same home is sold off-market, bypassing the MLS entirely and leaving no trail for anyone outside the transaction to follow.

When both conditions are present, the data that appraisers and county tax assessors depend on to value nearby properties can effectively disappear. Leana Mann, chief appraiser of the Travis Central Appraisal District in Texas, put it plainly: state law requires appraisal districts to value property using sales data, and all they can do is work with what they have. When significant sales go unrecorded or undisclosed, what they have is an incomplete picture.

Gárate's published research — a 2025 study conducted with colleagues — found measurable consequences from this kind of information asymmetry. Nondisclosure states show stronger rates of appraisal bias and higher mortgage default probability among the most financially constrained borrowers. The market, in other words, does not self-correct when data disappears.

The national debate over private listings has already produced legislative responses. Washington, Connecticut, and Wisconsin have passed laws restricting off-market sales practices, and New York recently approved a similar measure that was awaiting Governor Kathy Hochul's signature as of early June 2026. Most of that debate has focused on whether sellers and buyers are being treated fairly. The property tax dimension has received far less attention — which is exactly why it matters to sellers who are weighing their options right now.

How Sellers Who List Publicly Can End Up Paying for Everyone Else's Privacy

Property tax assessments are built on comparables — nearby sales that give assessors a basis for estimating market value. When high-end or off-market sales vanish from the dataset, assessors are left making estimates from incomplete information. That incompleteness does not affect all homeowners equally.

Sellers who list on the MLS, disclose their sale price, and complete a transaction through normal channels contribute to the public record. Their data becomes the foundation on which surrounding properties are assessed. If a neighbor's off-market sale at a premium price never enters that dataset, the assessor may undervalue the entire street — or, depending on how the district fills in the gaps, may estimate upward based on limited evidence and assign higher assessments to the properties they can see.

The result is a system where the people with the most resources, the most sophisticated advisers, and the most incentive to control information are also the most capable of managing their tax exposure — while ordinary sellers who played by the rules provide the data points that prop up assessments for everyone else. That's not a hypothetical. It's the structural consequence of the overlap Gárate identified between nondisclosure laws and private listing practices.

What This Means If You're Preparing to Sell in 2026

If you're selling in a disclosure state, the relevant lesson here is about pricing strategy and comparable data quality. When a meaningful share of nearby sales — especially at the high end — have occurred off-market, the comps available to your agent, your appraiser, and a buyer's lender may be missing important data points. That can compress appraised values and create friction in transactions where a buyer needs financing.

Before you price your home, ask your agent specifically whether any recent sales in your target comp range were off-market. If a disproportionate share were, the MLS data alone may understate what the market will actually bear — or create appraisal gaps that derail deals late in the process. Understanding that gap before you list lets you price more precisely and prepare for the appraisal conversation in advance.

If you're selling in a nondisclosure state, the dynamic is more complex. You may have less access to reliable comp data yourself, which makes independent valuation tools and local market expertise more important, not less. The same information asymmetry that can obscure your neighbors' sale prices can obscure your own home's true market value if you're not working with someone who has access to off-market transaction history through professional networks.

On the tax side: if you're in a nondisclosure state and your assessed value has climbed sharply, it's worth examining what sale data your local appraisal district actually used. Some districts are transparent about their methodology; others are not. In either case, you have the right to review your assessment and, in most jurisdictions, to challenge it with your own comparable evidence.

The broader point for sellers is this: transparent markets produce better data, and better data produces fairer outcomes — on price, on appraisal, and on taxes. When you sell publicly and at arm's length, you're contributing to a system that, imperfect as it is, is more navigable than the alternative. If you want a fast read on what your home is worth in the current market before you decide how to list, Local Home Buyers USA's instant-offer tool can give you a baseline without any obligation.