Ten years ago, a search for real estate would have were only available in the office of an area real estate agent or by just driving around town. At the agent’s office, you’ll spend an afternoon flipping through pages of active property listings from the local MLS (MLS). Neighborhood After choosing properties of interest, you’ll spend weeks touring each property and soon you found the correct one. Finding market data to help you assess the asking price would take more time and much more driving, and you still may not be able to find all of the information you needed to get really comfortable with a fair market value.
Today, most property searches start the Internet. A quick keyword explore Google by location will likely get you a large number of results. If you spot a property of interest on a real estate web site, you can typically view photos online and perhaps even have a virtual tour. After that you can check other Web sites, like the local county assessor, to obtain an idea of the property’s value, see what the current owner paid for the house, check the real estate taxes, get census data, school information, and also have a look at what shops are within walking distance-all without leaving your house!
While the resources on the net are convenient and helpful, using them properly can be quite a challenge because of the level of information and the difficulty in verifying its accuracy. At the time of writing, a search of “Denver real estate” returned 2,670,000 Web sites. Even a neighborhood specific seek out real estate can simply return thousands of Sites. With so many resources online how does an investor effectively use 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 easier to understand online real estate information and strategies.
The Business of Real Estate
Real estate is typically bought and sold either through a licensed real estate agent or directly by the dog owner. The vast majority is bought and sold through real estate brokers. (We use “agent” and “broker” to make reference to the same professional.) This is due to their property knowledge and experience and, at least historically, their exclusive access to a database of active properties on the market. Access to this database of property listings provided probably the most efficient way to search for 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 multiple listing service (MLS). Typically, only properties listed by member realtors can be put into an MLS. The primary reason for an MLS would be to enable the member real estate agents to make offers of compensation to other member agents if they find a buyer for a house.
This purposes didn’t include enabling the direct publishing of the MLS information to the general 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 may also be 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 are not necessary to offer any specific type of compensation to another members. Compensation is negotiated outside the CIE.
Generally, for-sale-by-owner properties cannot be directly added to an MLS and CIE, which are typically maintained by REALTOR associations. The lack of a managed centralized database could make these properties more difficult to locate. Traditionally, these properties are found by driving around or looking for ads in the neighborhood newspaper’s real estate listings. A far more efficient way to locate for-sale-by-owner properties is to search for a for-sale-by-owner Web site in the geographic area.