Ihab Salloum[ad_1]
Ten years ago, a search for real estate would have begun in the office of a local real estate agent or by driving around town. At the agent’s office, you would spend an afternoon flipping through pages of active property listings from the local Multiple Listing Service (MLS). After selecting properties of interest, you would spend several weeks touring each property until finding the perfect one. Obtaining market data to assess the asking price would take additional time and lots of driving, and you might still struggle to find all the necessary information for a fair market value.
Today, most property searches start on the Internet. A quick keyword search on Google by location will yield thousands of results. If you find a property of interest on a real estate website, you can view photos online and potentially take a virtual tour. You can also check other websites, such as the local county assessor, to get an idea of the property’s value, see the purchase price, review real estate taxes, access census data, school information, and even explore nearby shops – all without leaving your home!
While the convenience and helpfulness of online resources are undeniable, using them effectively can be challenging due to the abundance of information and difficulty in verifying its accuracy. At the time of writing, a search for “Denver real estate” resulted in 2,670,000 websites. Even a neighborhood-specific search can easily produce thousands of websites. With so many resources online, how does an investor use them without getting overwhelmed or ending up with incomplete or unreliable information?
Believe it or not, understanding how the real estate business operates offline actually makes it easier to navigate online real estate information and strategies.
Real estate is typically bought and sold through licensed real estate agents or directly by owners. The majority of transactions are facilitated by real estate brokers, who have extensive knowledge and experience in the field, as well as exclusive access to a database of active properties for sale. This database, known as the Multiple Listing Service (MLS), provided the most efficient way to search for properties.
The MLS primarily served as a platform for member real estate agents to offer compensation to other agents if they found a buyer for a property. Historically, this did not include making the MLS information available to the public. However, times have changed. Nowadays, most MLS information can be accessed by the public through the Internet, in various formats. Commercial property listings are also displayed online, although aggregated commercial property information can be more difficult to find. Larger MLSs often operate a Commercial Information Exchange (CIE) that functions similarly to an MLS but without any specific compensation requirements for member agents. Compensation for CIE listings is negotiated separately.
For-sale-by-owner properties typically cannot be added directly to an MLS or CIE, as these databases are typically managed by REALTOR associations. As a result, finding these properties can be more challenging. Traditionally, they are discovered by driving around or searching for local newspaper ads. However, a more efficient approach is to search for dedicated for-sale-by-owner websites in the desired geographic area.
It’s important to note that not all real estate agents are REALTORS. REALTORS are licensed agents who are also members of the NATIONAL ASSOCIATION OF REALTORS, bound by a strict code of ethics and conduct. MLS and CIE property listings were originally only available in hard copy and limited to real estate agents who were members of an MLS or CIE. About ten years ago, this valuable property information started to become available on the Internet, and now its availability has exploded. This is due to the presence of MLS information on real estate agents’ websites, as well as the existence of non-real estate agent websites that offer real estate information, including for-sale-by-owner sites, foreclosure sites, regional and international listing sites, county assessor sites, and valuation and market information sites.
Despite the abundance of real estate information on the Internet, most properties are still sold through real estate agents who list properties in the local MLS or CIE. However, these listings are no longer confined to local markets. The Internet is a global marketplace, and MLS and CIE listings are commonly displayed on various websites. For example, they can be found on the websites of the National Association of Realtors, local real estate agents, and even local newspapers. In essence, the Internet serves as an additional marketing tool for today’s real estate agents, with a much wider reach than traditional print advertising. In addition to online marketing, listing agents assist sellers with pricing, open houses, buyer communication, negotiation, and closing. When an agent provides these services, it is known as a full-service listing arrangement. However, changes in technology have caused many agents to reevaluate their offerings. Some agents now limit their services and adjust their fees accordingly. They may offer to advertise the property in the MLS but provide fewer additional services. In the future, agents may adopt more flexible, à la carte service models.
In the past, buyers and sellers would find agents through referrals from friends and family. Now, the internet provides direct access to qualified agents and allows for research into agent biographies. Websites like AgentWorld.com function as social networks for real estate agents, enabling them to personalize their profiles, write blogs, and post photos and videos. Adding unique content to their profile page increases visibility in search engine results. Some argue that the internet diminishes the importance of REALTORS and the MLS, but we believe this will prove false. It may change the role of the agent, but it will make knowledgeable, qualified, and professional REALTORS more valuable than ever before.
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