There are primarily four ways to obtain Comparable Sales (Comps) information when trying to determine the value of a target property. Those four are:

1. Do your own research
2. Internet searches
3. Service companies
4. Access to MLS

DOING YOUR OWN RESEARCH

Within this category, there are four subcategories. Those are:

* Court searches

* Newspaper listings

* Tax Appraisal Districts

* Dominate the neighborhood

* Court searches

If you live in a state that discloses property sales information, you’ll have a much easier time than those of us who live in a non-disclosure state, like Texas. My understanding of disclosure statements is that sales information can be found in court if you are willing to spend the time necessary. From that information, you could devise your own methodology for determining compensation. It would certainly be beneficial to know the history of a destination property that you can check out while you’re there, but I think this would be very time consuming and probably not worth it if the only goal is to get comparable sales data.

newspaper listings
In some states, sales information appears in local newspapers so you can get an idea that way or create your own database and update it regularly. Again, I think this is a slow way of doing things, but you may find it useful in some circumstances.

Tax Assessment Districts
In my area, assessed values ​​provided by taxing districts are often useless. You’ll need to get a feel for this in your area, as you may find that the assessed values ​​are close in many neighborhoods.

rule the neighborhood
Probably the most precise way is to spend the time necessary to master the areas of your farm. By this I mean learning the values ​​of certain neighborhoods you are targeting. You can talk to real estate agents, attend open houses, view as many floor plans as possible, etc. until you can drive past a house at 30 mph and know within a reasonable range how much the property will be worth in good condition. This information is extremely helpful when talking to telemarketers. If a seller calls you and says the house is in subdivision ABC, is a three-bedroom, two-bathroom, two-car garage, and is 1,500 square feet, it’s good to immediately know the market value in your head.

INTERNET SEARCHES

I know that some investors use online searches to determine value. I tried this when I first started and found the information to be out of date and not even close to what I consider to be a tradeoff. For example, at the time, the Austin, Texas market was appreciating by almost 1 percent per month. Retrieving sales numbers that were almost a year old and within five miles of my target property was useless. If you are in a disclosure state, this methodology may be more useful. I haven’t used or seen any of these sites for this purpose in years, but here’s an initial list you might want to look at, though keep in mind that some of these may be region-specific:

realtor.com
homeradar.com
homegain.com
yahoo.com
domania.com

I’m sure you can find many more sites like these if you take the time to do so.

SERVICE COMPANIES

Some investors subscribe to services that provide sales information. This may be in the form of software on CDs that are shipped periodically, or it could be an online service where you log in to retrieve information. I have never used any of these services and reviews are generally mixed as to their usefulness. Again, that may come down to whether or not your state discloses sales information. Here is a list for you to review:

First American Real Estate Solutions
fast facts
netronline
Data CD (California)

MLS ACCESS

Having access to Realtor property information that is available on the Multiple Listing Service (MLS) is invaluable. In my opinion, you should start working towards this goal, regardless of the compensation methodology you plan to use or currently use. Once again, there are several ways to achieve this goal:

* Ask or hire someone to help you

* Become a real estate agent

* Obtained an Associate Membership

* Access to the relationship

Ask or hire someone to help you
One way to get information about sales is to contact those who have access to it. For example, you could contact a real estate agent, appraiser, or title company and establish a relationship. At some point fairly early on, you’re going to have to make it worthwhile for these people to continue helping you, so it’s important to either pay them for their help or close some deals where they get paid.

If you’re going to go this route, I think it’s extremely important that you get the actual data sheets sent to you so you can start learning how to evaluate values. You’ll soon discover that no one plays compositions like you. After all, an offset is simply someone’s opinion of a property’s value. Realtors provided me with alleged offsets on properties that were in different subdivisions miles apart, fifty years older than my target property, with a different number of bedrooms and baths, different foundation structures, sold years earlier, etc. Do you really want to trust six-figure decisions to someone else’s judgment?

Become a real estate agent
Although I frequently see derogatory comments about real estate agents and the responsibility associated with becoming one, I believe this line of thinking is overstated. I can promise you that if you’re in real estate long enough, you’ll end up being targeted by someone. Whether or not you have a real estate license is probably irrelevant.

Then there’s the theory that you’re held to a higher standard if you’re licensed. Again, who cares? Aren’t you going to operate your business to at least the standards that real estate agents must meet?

No, I’m not licensed and I go back and forth on whether or not I should have one, but my decision, or lack of one, is based on cost vs. benefit and laziness. I have never met a successful investor who also had a license and told me not to get my license. It seems that only people who are not licensed warn me about the “risks”. So my suggestion is not to rule this possibility out simply because someone else told you or because you read something on a newsgroup.

Get an Associate Membership
In some areas, the Board of Realtors will sell associate or affiliate memberships to unlicensed individuals. For example, appraisers can qualify and I’ve heard of investors who can also get a membership. In my area, anyone who wants to access MLS must have a real estate license or someone in their office has a license. If you don’t know if this is available in your area, it’s certainly worth a phone call.

Access to relationships
Building relationships with real estate agents and other professionals who have access to MLS is another great way to gain access. Of course, this methodology takes more time and requires continuous efforts, but it is an effective way to get compensation. You can initially start with receiving faxes and then progress to limited and supervised access to the MLS outside of business hours. From there, you can achieve unsupervised access, which then leads to a full copy on your home computer. Anyway, you get the idea. As the relationship grows and the real estate agent is fairly compensated for his time, it will become easier for him to call in favors.

As for how to do this, I would suggest scheduling lunches with the right people. If you invite ten real estate agents to lunch for a month, you will find someone willing to work with you. I would suggest contacting agents who specialize in commercial properties. The reason is simple. Agents who work with residential listings and buyers must use MLS on a daily basis.

Commercial agents usually do not. In fact, in my area, commercial real estate deals are run almost exclusively through networks. In other words, it’s done by word of mouth, by phone, and by fax, and you don’t even use MLS. However, being a member of the Board of Realtors still requires paying the same, regardless of the fact that business agents don’t actually use MLS. Is it possible that one agrees to let someone else pay for that service for which they are charged, but that they do not use? Hmm…

If you’re going to take this approach, tread carefully. In many areas, allowing unlicensed individuals to access the MLS is considered a violation, putting the agent’s license and livelihood at risk. Once again, it’s a matter of relationship. However, perhaps that agent opened a “branch”? Still, it’s something to keep in mind, and I wanted you to know that not only is it possible to do it, but it’s not even that hard.

Summary

In summary, let me say that no method of earning compensation will outweigh the importance of knowing your market and, more particularly, your farm areas. However, that takes time and I wanted to let you know that there are other ways to do this while gaining the knowledge and experience. In my opinion, the combination of MLS access and first-hand knowledge is critical to determining comparable values, but that’s not always possible, especially when you’re just starting out.

So, time to get to work pursuing MLS access and learning the areas of your farm. Good investment…