Today I am going to discuss some reasons why the facts entered by the listing agent may not match those from public records when you are getting ready to review listings to buy. The MLS listing is typically the most up-to-date and reliable source of information about a home for sale, but sometimes, MLS doesn't have the information either. Remember that Listing Agents, put information into the database, based on the information they are provided by the Owner of the property by virtue of a disclosure statement. Some Realtor pull a Realtor packet on the property; some do not. So, when you find conflicted information here are four simple reasons why the sources may not agree:
REASON NO. 1:
LET'S TALK ABOUT RECENT UPGRADES - When a house has been updated, MLS listings typically reflect the current beds, baths and square footage. In some counties, the assessor's records are usually up to speed yet, some are not. If you believe that a house you are looking at to buy doesn't have accurate information on the MLS or by what you see, go to the building department and pull permits or find someone who can. This is the best strategy to take if you question add-ons or upgrades. If they are permitted, they are legal. If they are not permitted, they are not legal. That could be the difference in a profit spread on a rehab and your buy-in and your exit strategy. Additionally, the MLS "year built" may sometimes be the year of a major remodel whereas public records typically show the year the original structure was built. If the property is bank owned, you can be rest assured the bank knows the property. And banks don't have to disclose. And banks don't have to accept price reductions on "AS IS", "WHERE IS", and "WITH ALL FAULTS" listings. So, when you find yourself questioning your deal you are buying, ask yourself this simple question, "... Is the upgrade permitted or not?..." It's that simple. MLS may say so; but the County ultimately has the final decision if you are rehabbing a property that was not permitted. Some will tell you that the County is slow to update, you can count on the fact that the County is counting on the developer to make the mistakes when inspections are drawing near. Make friends with the inspectors. They can be the biggest asset you have - especially in a market you do not know well.
REASON NO. 2:
LET'S TALK ABOUT THE SQUARE FOOTAGE DEBACLE - It may not always be clear whether the square footage of an MLS listing includes any partially finished or unfinished areas of the house such as a basement or a garage. Public records at the building department will sometimes split out square feet into finished/unfinished sections. This information helps when looking at the cost of a rehab in areas where there are basements. Remember this fact when buying, when the MLS and public square footage does not agree, the county footprint is what will ultimately win as long as the permits have been pulled and changed at the county level. If MLS is listing more square footage than what the county shows, you can best bet that it's an non-permitted addition or add-on. Count on your County records.
REASON NO. 3:
LET'S TALK ABOUT, WHAT IF THE ADDRESSES DON'T MATCH - There is a rare occasion when there is a listing on the MLS that has a different public record. We have seen instances where the property was not even a matter of public record. We have seen instances where part of parcels were not part of a Deed; we have seen Deeds showing more parcels than what was actually available for purchase. These can be costly mistakes that the buyer has to handle with survey's, title searches, and more.
When you find a listing that looks like the public property record is not the same, contact your County and ask them what the record is. There may be a simple explanation. There may not be a simple explanation; but doesn't it feel better to know that you have an option to talk with the county before you purchase so that you can have things straightened out when you buy before it’s too late? An example of this could be if a parcel of land was partitioned or sub-divided and has the same address yet two different homes on each parcel. This is one example of many.
REASON NO. 4:
LET'S TALK ABOUT REALTOR NOTES - CDOM - DOM - AND SOLDS – Where do we go when we want to see and review solds from a Realtor? We go to Redfin. Redfin above Realtor.com shows sold listings from the MLS for the past several years! It shows DOM (Days on Market) and CDOM (Cumulative Days on Market) when a listing changes Realtor's. Redfin shows the home facts for the MLS listing describes the house at the time it was sold and also provides photos. This is valuable information when using sold data to determine the fair market value of a property you may be interested in purchasing. Really get to know how to use the tools within Redfin. Don't just be satisfied that the solds you are looking at are real comps. Look at the neighborhood and google the properties to see if they are "like for like" with yours. You can be duped if you are not careful, by an aggressive realtor and ultimately buy high, sell low and lose your tail in the game. Do your due diligence. Save the listings as your favorites. Follow the trends in the market.
Redfin, really does offer good reliable facts for older listings that show work done on a home when it is sold. (Disclaimer - This is not a paid advertisement for Redfin. We do not have any affiliation with Redfin other than using it as an investigative tool and to shop for property.) After you have done your due diligence on a property and you are confident you want to make an offer; you go into it with the knowledge of what it's as is value is based on the data in that market. Then it's time to contact your agent if you have questions or need some clarification about MLS-provided facts. And remember, if you are rehabbing remotely from a distance, make sure you have some solid boots on the ground teams in your area. That can make the difference between profit and loss at every level.
Know someone who is working the market to help you. There is value in that kind of a team. And remember, as an investor, never get emotionally attached. Your job is to turn the most profit you can from a deal. Take the time to put your efforts into the rehab that will give you the best value in the future. This strategy going in will help you make the best and most profit.
Who is Jinean Florom? Jinean Florom is a National Real Estate Investment Consultant and Acquisition Specialist who solves intricately woven problems for Real Estate Investors on their investments.
Here is a Fun Fact: MLS listing has been doing the best for every home owner who has shown faith and confidence. Selling or buying a home is not an easy task and this we have experienced for all these years. This perception has changed completely with Flat Fee MLS, MLS listing and For Sale By Owner. Home owners who have used this decade old technology understand the advantage in much better way. We as home owners used to get in touch with traditional styled real estate agents and have paid them millions in commission. Now this has completely changed with flat fee MLS where owners can sell their home as for sale by owner and save in sales commission what they used to pay to traditional real estate brokers.
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