Ten years ago, a search for real estate would have started in the office of an area real estate agent or by just driving around town. At the agent’s office, you would spend a day flipping through pages of active property listings from the local Multiple Listing Service (MLS). After choosing properties of interest, you’ll spend many weeks touring each property until you found the correct one. Finding market data to enable you to assess the price tag would take more time and a lot more driving, and you still may not be able to find all the information you had a need to get really comfortable with a fair market value.
Today, most property searches start the Internet. A quick keyword search on 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 a concept of the property’s value, see what the current owner paid for the property, check the true estate taxes, get census data, school information, and also check out what shops are within walking distance-all without leaving your home!
While the resources online are convenient and helpful, with 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 search for real estate can simply return thousands of Internet sites. 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 estate works offline makes it better to understand online property information and strategies.
The Business of Real Estate
Real estate is typically bought and sold either by way of a licensed 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 property knowledge and experience and, at the very least historically, their exclusive access to a database of active properties for sale. Usage of 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 mls (MLS). Typically, only properties listed by member realtors can be put into an MLS. montreal condo for an MLS would be to enable the member real estate agents to create offers of compensation to other member agents should they find a buyer for a property.
This purposes didn’t 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 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 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 can’t be directly put into 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 find. 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 would be to search for a for-sale-by-owner Internet site in the geographic area.