Ten years ago, a seek out real estate would have started in the office of a local real estate agent or by simply driving around town. At the agent’s office, you would spend a day flipping through pages of active property listings from the neighborhood Multiple Listing Service (MLS). After choosing properties of interest, you’ll spend weeks touring each property until you found the correct one. Finding market data to help you assess the asking price would take more time and a lot more driving, and you still may not be able to find moving home all the information you had a need to get really comfortable with a fair market value.
Today, most property searches start on the Internet. A quick keyword explore Google by location will probably get you thousands of results. If you spot a property of interest on a genuine estate web site, you can typically view photos online and maybe even have a virtual tour. After that you can check other Web sites, like the local county assessor, to get an idea of the property’s value, see what the existing owner paid for the house, check the true estate taxes, get census data, school information, and even have a look at what shops are within walking distance-all without leaving your house!
While the resources online are convenient and helpful, using them properly could be a challenge because of the level of information and the issue in verifying its accuracy. At the time of writing, a search of “Denver property” returned 2,670,000 Sites. Even a neighborhood specific seek out real estate can easily return thousands of Internet sites. With so many resources online how does an investor effectively utilize them without getting bogged down or winding up with incomplete or bad information? Believe it or not, understanding how the business of property works offline makes it simpler to understand online property information and strategies.
The Business of PROPERTY
Real estate is typically bought and sold either through a licensed agent or directly by the owner. The vast majority is purchased and sold through real estate agents. (We use “agent” and “broker” to make reference to the same professional.) This is due to their property knowledge and experience and, at the very least historically, their exclusive access to a database of active properties for sale. Access to this database of property listings provided probably the most efficient way to seek out properties.
The MLS (and CIE)
The database of residential, land, and smaller income producing properties (including some commercial properties) is often referred to as a mls (MLS). Typically, only properties listed by member real estate agents can be added to an MLS. The primary reason for an MLS is to enable the member realtors to make offers of compensation to other member agents should they find a buyer for a property.
This purposes did not include enabling the direct publishing of the MLS information to the public; times change. Today, most MLS information is directly accessible to the general public over the Internet in lots of different forms.
Commercial property listings are also displayed online but aggregated commercial property information is more elusive. Larger MLSs often operate a commercial information exchange (CIE). A CIE is similar to an MLS however the agents adding the listings to the database aren’t required to offer any specific kind of compensation to another members. Compensation is negotiated beyond your CIE.
Usually, for-sale-by-owner properties cannot be directly put into an MLS and CIE, which are usually maintained by REALTOR associations. The lack of a managed centralized database could make these properties more difficult to find. Traditionally, these properties are located by driving around or looking for ads in the neighborhood newspaper’s real estate listings. A more efficient solution to locate for-sale-by-owner properties is to search for a for-sale-by-owner Internet site in the geographic area.