Ten years ago, a search for real estate would have started in the office of a local real estate agent or by just driving around town. In the agent’s office, you would spend an afternoon flipping through webpages of active property listings from the local Multiple Listing Service (MLS).
After choosing properties of interest, you would spend many weeks touring each property until you found the right one. Finding market data to enable you to assess the asking price would take more time and a lot more driving, and you still might 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 on the Internet. A quick keyword search on Google by location will likely get you thousands of results. If you spot a property of interest on a real estate web site, you can typically view photos online and maybe even take a virtual tour.
You can then check other Web sites, such as the local county assessor, to get an idea of the property’s value, see what the current owner paid for the property, check the real estate taxes, get census data, school information, and even check out what shops are within walking distance-all without leaving your house!
As the resources on the web are helpful and convenient, with them properly can be considered a challenge because of the quantity of information and the issue in verifying its accuracy.
In the right time of writing, a search of “Denver real property ” came back 2, 670, 000 Internet sites. Even a neighborhood specific search for real estate can return thousands of Web sites easily.
With so many resources online so how exactly does an investor effectively utilize them without getting bogged down or winding up with incomplete or bad information? Contrary to popular belief, understanding how the business enterprise of real property works offline helps it be simpler to understand online real property 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 owner. The vast majority is bought and sold through real estate brokers.
(We use “agent” and “broker” to refer to the same professional. ) This is due to their real estate knowledge and experience and, at least historically, their exclusive access to a database of active properties for sale. Access to this database of property listings provided 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 commonly referred to as a multiple listing service (MLS).
In most cases, only properties listed by member real estate agents can be added to an MLS. The primary purpose of an MLS is to enable the member real estate agents to make offers of compensation to other member agents if 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 public over the Internet in many 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 but the agents adding the listings to the database are not required to offer any specific type of compensation to the other members. Compensation is negotiated outside the CIE.
In most cases, for-sale-by-owner properties can’t be put into an MLS and CIE directly, that are maintained by Real estate agent associations typically. Having less a handled centralized data source can make these properties more challenging to locate.
Typically, these properties are located by driving around or looking for advertisements in the neighborhood newspaper’s real property listings. A far more effective way to find for-sale-by-owner properties is to find a for-sale-by-owner Internet site in the geographic area.
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