I'm looking for some good websites to use for finding comps. I found
Are there others that you can recommend?
You can also try the brand new http://www.zillow.com. Be careful though, I tried it out and the "zestimator" can be off by a lot. I think that given a little more time, this could be a useful tool.
Best comps are from the MLS and second best come from auditor data criss-cross databases. You probably have some criss-cross type database provider in your area that you can contact to get a subscription.
This is probably a really dumb question, but is there any way for an investor like me to get DIRECT access to the MLS without becoming a Realtor? I really don't feel like becoming a realtor if I can avoid it!
I tried that in Northern Virginia, but the MLS system there (called MRIS) would not allow you to join without the approval/supervision of a broker. I suppose you might be able to find a broker somewhere who would sponsor you or allow you to get an account through them. Nothing I saw or heard said explicitly that you had to be licensed, just that you had to have a broker. Might be a gray area you could work there...not sure.
Quarterly fees for me have ranged from about $60-$90, well worth it if you buy even one investment a year, I think.
$360 is chump change that I will gladly pay every year for good sales data. I am able to pull most of it for free from the county website, but it means that I have to manually search through the sales data to make sure that properties are in the same area (easily determined) and to make sure that they are similar types of properties (easy, but very time consuming!).
Good tip... I will try to network with some of the brokers in my area to see what I can do. Maybe I can work out a deal where I get direct access to MLS and in exchange I will send all of my sales work to the broker. Pretty sweet deal for both of us if someone will take me up on it.
You're going to have a difficult time getting MLS access without your license. That is why I've proposed that the investors out there try and come up with a viable solution or competitive solution to the MLS. Why should realtors be the only ones who can access this information?
For the near term, I think Jedi has a good idea. The best thing to do is network and get cool with a few realtors, who can provide you with the data you need. Of course, getting broker detail is another issue. Realtors usually send extremly watered down property profiles, and keep the broker detailed reports for themselves.
Either way, until there is some other site that is a reasonable competitor to the MLS, it is unlikely that investors and everyday people will be able to access information on properties for sale.
In terms of being a competitor to the MLS... the only thing that you can really do is to provide a nationwide database compilation of all of the local (county) records. And you would update this information on a regular basis. However, there are several practical issues:
1. Not all counties have good online access to data (.CSV data would be minimum)
2. Not all counties have accurate data. Most county assessors simply aren't going to know that I have rehabbed a house until the next time they come tour the neighborhood. In Montgomery County this only happens once every 2 years so it definitely does hurt your data reliability.
3. Detailed notes from selling realtor. This is purely proprietary information that simply cannot be created from thin air and will always belong to the MLS. [Edit: unless of course FSBO's started using some kind of nationwide database to store this information]
4. Differentiation between distressed sales and retail sales. There are some investors in areas that will buy houses from foreclosure, fix them up for resale, rinse and repeat. You use the distressed sales as your starting point for bank negotiations and you use the retail sales to estimate ARV.
As for alternatives that are out there for investors... you could try Zillow. Although as others have stated, their "Zestimate" is not always accurate. For instance, I recently did a search and compared Zillow's estimate with my own comps that I pulled on the area. Zillow included REO purchases as well as investor purchases in the area when determining the value of the home. These REO's and investor purchases account for 3 of the 10 comps that were pulled by Zillow and they are about 20% below retail purchases for the area. However, all of that being said: it gives you a quick and dirty estimate that gives you a "feel" for the neighborhood.
I finally got a chance to use Zillow. I've checked a few properties and it seemed to be pretty accurate. I'm very curious to see as they improve their data, but for now I think it is the place for the non realtor's to go.
We will recommend the site to our users.
On the other hand, It doesn't take into account active and pending listings, which are essential for an accurate appraisal estimate.
I havent used Zillow but heard of it. Does it use sales comparables? Because it is worth only what it sells for.
Therefore, this is one of the most reliable public tool. It's what houses sold for. Of course you may be compare your broke down house that you plan on flipping to a house with 2 more bedrooms, pool and new deck, so be careful and get second opinions for realators. I great starting step
It will be a very long time until any other database system comes close to the MLS. Auditor data doesn't include multiple pictures, comments, room dimensions, etc., etc., etc. The MLS is the single biggest reason that I got my license.
The second best source is auditor data in a criss-cross format. There are several companies that do this around the country. The one that I use is Haines & Company, Inc. I still pay for their service because I can research properties that didn't sell in the MLS and there is mortgage data on about 50% of the properties.
juzamjedi, without getting a license there really is no way to get access to the MLS without putting someone else's license at risk. As Josh said, your best bet is to get cozy with an agent and work up some arrangement where they give you comps for something else in return. Your best bet is a new agent because they want to make anybody happy. The problem is that you will have to teach this new agent how to actually comp a property because they usually don't know how to do it. Also understand that it does take a chunk of time to run a good comp, but it is pretty easy to run a quick radius search and send you the data. My suggestion is that you just have your agent buddy just run you off a "Radius" search with the following constraints:
Radius: 1/4 mile
Same type of property (e.g. Residential: Single Family)
Same number of bedrooms
Status = ACTIVE or
SOLD in last 12 months or
EXPIRED in last 12 months
That will probably generate a good list of properties that can be sent to you. When you get the list of properties, you can throw out the ones that aren't good comps and the rest should give you a good picture of the market.
For anyone who is interested, I have a fairly detailed piece on my website about understanding comps. and analyzing the data from them. You can go to my website at www.prmi-jw.com and look in the Online Forms section for a file named "Understanding Comparable Sales". I spent a number of years as an appraiser before getting into the mortgage side of the business and am always happy to share my knowledge and experience.
The above post made me wonder about something else. Where do appraisers get their comp information? Do they have access to the MLS as well? If not, then where do they pull their comps data?
Appraisers use all forms of data that they can get their hands on. They have MLS data as well as auditor data.
I am hopeful that the days of a walled-off MLS are numbered. Technology trends are exploding towards making information easier to get for everyone and even the TelComs are bending under a public cry for municipal wi-fi, broadband over the last mile, and wholesaling information on the Internet. More and more counties are coming online--even if to the chagrin of many of the county workers. MLS will someday be free!
juzamjedi makes great points about the difficulties in putting something like this together. First, a word of caution--if we actually had a free MLS, many investors would be out of a job. One of the best things going for us is information assymmetry with our "competitors." What distinguishes most real estate investors isn't their abilty to do better, more rigorous, financial analysis of the real data than anyone else could, it's that they have the guts to pay for the real data or get it the hard way, and the gusto to leap over the edge and buy with imperfect information. Still, I thought it would be helpful to take a minute and look at the potential upsides of pursuing a free MLS.
-Several million residential homes were sold in 2005. (not interested in chasing the specific number down right now). Let's say the typical transaction looks like a single person buying from a married couple, so 3 non-realtor citizens involved in each transaction. I'll estimate 9,000,000 home buyers/sellers involved in 3,000,000 home sales in 2005.
-Right now, only the 1,000,000 realtors nationwide have access to an MLS, and each MLS is regional--none have national reach that I am aware of.
-Assuming technically and legally you could put such a thing as a nationwide MLS together (a HUGE assumption as MLSs and the NAR would spend big $$$ to crush this initiative), that's as many as 10,000,000 potential consumers of your product EACH YEAR. How much money could that generate? Well, let's see...
-If you chose to sell subscriptions to the data to non-licensed individuals as well as Realtors, the majority of the public probably wouldn't pay. Hey, they're cheap. That data companies have been selling this info for years but a typical household doesn't buy is evidence. BUT, looking at the increased traffic on zillow.com, realtor.com, and other watered-down freebie sites, suggests that if they did not have to pay, they would view. This limits you to investors, Realtors, and a few others. Let's say 1,500,000 at $30/month = $48,000,000 revenues per year.
-If you chose NOT to sell subscriptions to people but instead offer the service for free, what can you do with that? Well, requiring people to register in order to use the site could result in a 4,000,000 per year database of people (assuming a 50% internet usage by home shoppers/seller and an 80% sign-on rate). All of these people need moving boxes, trucks, change of address forms, new mailing labels, new printed checks, painters, cleaners, Realtors, title companies, mortgages, investment advice, financial planners, attorneys and tax advice, etc. etc. Being able to provide not only a list of interested home buyers/sellers but being able to pinpoint EXACTLY when they are interested in buying/selling is a marketing utopia. Or, if privacy is paramount, then being able to project highly targeted vendor ads on the free MLS website reaps slightly less. How much is that marketing data worth? I don't know but I'd suspect you could bleed a lot more than $48,000,000/yr out of it. You actually control a hideous amount of power if you can monitor nationwide home buying/selling in real time. That's why NAR would probably spend a billion $ to stop such a thing and probably why one doesn't exist already.
-The experience of Gmail suggests to me that when you offer a truly superior product for free, people are willing to put up with a limited amount of advertising and marketing thrown at them. In moderation.
[size=18]The real question is: is the potential payoff worth the struggle and risk???[/size] :badwords:
Wow tackleberry, that is what I call a soap box :pissed:. Hmmm...$50million per year you say. That is slightly better than the 6 unit I just picked up. Count me in.
You hit the biggest problem right on the head. The NAR is one of the most powerful lobbying groups in the country. I just heard that 1 out of every 203 Americans is a dues paying member. Not even the largest banks in the country have been able to defeat them head-to-head. Maybe if Bill Gates, Ted Turner and Warren Buffet were funding the project it would power through and be a success.
I completely agree that it would be an amazing tool that would totally change how real estate is bought and sold, but the logistics and legalities would be unbelievable.
Ha. Good times...
Soap box indeed... methinks that Takleberry might also be a Linux user. Just a hunch.
Anyways I like your gusto and I applaud the analysis that you have laid out. Not to rain on your parade, but don't you think the folks over at Zillow are thinking pretty much the same thing? I mean if they have venture capital funding then it's safe to say that they have very large plans and they have convinced at least a few people with big bucks that they can do it. VC guys are looking for huge returns and/or equity in the companies that they invest in so it's safe to say they're estimating more than your $48M per year in revenues and something north of 20% return on investment.
Appraisers use all forms of data that they can get their hands on. They have MLS data as well as auditor data.Does this mean that some appraisers are also realtors? Or do appraisers get some kind of special golden ticket that lets them review the MLS data created by the Oompa Loompas? Hmmm, perhaps I should look into becoming an appraiser...?
Originally posted by "juzamjedi":
Does this mean that some appraisers are also realtors? Or do appraisers get some kind of special golden ticket that lets them review the MLS data created by the Oompa Loompas? Hmmm, perhaps I should look into becoming an appraiser...?
Actually, an appraiser will get his/her license in order to access the MLS - no special tickets that I know of.
One other minor point for your knowledge - not all licensed agents are Realtors(R). The term "Realtor" is a registered trademark of the National Association of Realtors (NAR). For someone to say they are a Realtor(R), they have to pay dues to the NAR. Not that it really matters, but just so you are aware that being licensed by the state doesn't mean that someone has to be a member of NAR.
tackleberry and all,
Check this one out. Seems a Senator from New Jersey is trying to go the opposite way by making real estate data now available as public record only available to licensed agents. Guess what...the Senator himself is a licensed agent - go figure...
That's a frustrating article.
That is very frustrating indeed! I certainly hope the bill fails... and even if it does pass I bet this case would go to the supreme court. Personal income tax records are private information so I could see an argument where the supreme court would allow property tax records to be private as well. I don't want that, but I could see it happening.
Actually, I went to the Ron Rice state senator website to look for the text of the bill but couldn't find any sign of it. Also, I did a Google search on the topic and only found a handful of articles, all of them referencing each other. Next, I took a look at the NJ State Senate committee home page and didn't see anything on their either. I'd guess that either this bill is still over at the House and hasn't been decided, or, perhaps something else. Could be a staffer provided the information on a pending bill, or a bill in draft form, or that I missed it entirely. Or, could be misinformation.
Can anybody find the exact bill being referenced?
Call me a stickler for details...
I clicked around and ended up at The Jersey Shore Real Estate Bubble blog and there is a phone number for Senetor Rice listed as (973) 371-5665. On The Norther New Jersey Real Estate Bubble blog, an anonymous comment stated that they called the Senator's office and they confirmed the initiative by Senetor Rice. Guess it would be best to get the info from his office.
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