Selling Commercial Property in a Non-Disclosure State: How Price Actually Gets Set in Texas
Texas doesn't require sale prices to be made public, so the comps a buyer quotes you and the value on your appraisal district notice can both be off. Here's where real pricing data comes from and how to read it.
Texas is a non-disclosure state. When a commercial property sells here, the deed gets recorded, but the price doesn’t have to appear on it, and in most cases it doesn’t.
That one fact shapes almost every pricing conversation I have with owners. It is why two brokers can give you very different numbers, why an online estimate can be far off, and why the value on your appraisal district notice is not the price a buyer will pay.
What the public record shows, and what it doesn’t
The county records show that a property changed hands, when, and between which parties. You can usually see the deed, the deed of trust if there was a loan, and the legal description.
What you usually can’t see is the price. A deed of trust shows a lien and sometimes hints at loan size, but loan amount is not price, and plenty of commercial buyers pay cash or use loans that don’t track the purchase price.
The appraisal district sees more than the public does, because owners and brokers sometimes share sale information with it, but it can’t compel a buyer or seller to disclose a price. It builds values from the sales it can confirm, plus models for everything else.
Why your appraisal district value isn’t your price
Owners often anchor on the value on their notice, in either direction.
That value is set for tax purposes, on a mass-appraisal basis, as of January 1. It isn’t an opinion of what your building would sell for in an open-market sale this quarter, to the buyer most likely to want it. For a unique commercial property, the gap can be large.
Read the appraisal district record for what it is good for: ownership, land and improvement detail, exemptions, and the history of the account. Then build price from actual market evidence.
When I use a county figure in a valuation, I read it from the appraisal district record that day and name the tax year next to it, because the record shows several years and the wrong column is an easy mistake.
Where real comps come from
Commercial pricing in Texas runs on confirmed sales that someone actually knows the price of.
Broker-confirmed sales. The broker on either side knows the price. This is why a broker who does deals in your submarket, and talks to the other brokers who do, has better pricing data than any website.
Commercial data services. CoStar and similar services confirm many sales by calling the parties. Coverage is good for larger and investment-grade sales, and thinner for small owner-user buildings, land and rural tracts.
MLS sold data. Some commercial and land sales close through the MLS, with the price recorded for members. It’s one more source, not a complete one.
Listing history. Asking prices and how long a property sat tell you where the market wouldn’t clear, even when the final price is confidential.
A good comp set uses several of these, explains which ones are confirmed, and adjusts for the things that drive commercial value: size, age and condition, location and access, lease status, and who the likely buyer is.
The owner-user versus investor split
Small commercial buildings often have two different buyer pools pricing them two different ways.
An investor prices the income: what the leases pay, how long they run, and what a buyer of that risk expects as a return. An owner-user prices the alternative: what it would cost them to lease comparable space or build their own.
The same building can be worth noticeably more to one pool than the other. In a non-disclosure state, knowing which pool has been setting recent prices in your submarket is half the work. There’s more on this in Owner-User vs. Investor Pricing in Round Rock.
What this means if you’re buying
Be skeptical of any price you can’t trace to a confirmed sale. When a seller’s broker cites comps, ask which were confirmed and by whom. When an online tool gives you a value, treat it as a rough starting point at best.
Your own due diligence should include rent comps as well as sale comps. A building’s rent potential is often easier to verify than its sale price, and it tells you what the property can support.
What this means if you’re selling
Price is the most important marketing decision you’ll make, and in Texas you’re making it with partial information. Ask any broker you interview three questions:
- Which of your comps are confirmed sales, and how did you confirm them?
- Who do you think the buyer is, an investor or an owner-user, and why?
- What did similar properties ask, and how long did they sit?
The answers will tell you more than the number itself.
If you own commercial property in Williamson County and want a price built on real comps, send me the address. I’ll tell you what the market evidence supports and how confident I am in it.