MLS vs Perfect Data (CFFL 0085)
MLS vs Perfect Data
Jack Butala: MLS vs Perfect Data. Every Single month we give away a property for free. It’s super simple to qualify. Two simple steps. Leave us your feedback for this podcast on iTunes and number two, get the free ebook at landacademy.com, you don’t even have to read it. Thanks for listening.
Jack Butala: Jack Butala here for Land Academy. Welcome to our cash flow from land show.
In this episode Jill and I talk about the MLS, the multiple listing service, versus perfect Real Estate data as a way to buy undervalued property.
Jill, I’m glad this topic came up and I’m glad we are talking about it because I get questions, and I’m sure you do to, every single week. Let’s explore the pros and cons of using both, but before we do, as always, let’s take a question from a caller.
Jill DeWit: Cool. Mike from Bend, Oregon called in and asked “I bought and sold a property here in Oregon that was posted on Land Watch, and have never changed the status from available to sold. I’m getting a lot of calls from interested buyers who want to buy the land, but it’s already sold.” That’s funny. “Is it okay if they keep it up there and collect and build a list of buyers that way?” Oh yeah. The answer is absolutely yes. You are going to get some people blowing up your call, but I got two things to say about this off the phone.
Jack Butala: Let me just parphrase for what Mike is saying. What happens is you buy a bunch of property or your buy some properties and you post … we teach this. Post them all over these certain little nichey places all over the internet where people are searching for rural vacant land and one of the places we love is LandWatch.com. No affiliation at all. Apparently, Mike posted this property, somebody bought it as should all work like clockwork, but he forgot to take it down as for sale and just kept it up there so people kept calling him. They were interested.
Jill DeWit: Mm-hmm (affirmative)
It sounds like he … I don’t think he meant to do it, it sounds accidental, but now he’s talking all these things. The first thing I would say is, Mike, go buy some more of that property.
Jack Butala: Exaclty.
Jill DeWit: Seriously.
Jack Butala: Exaclty.
Jill DeWit: Solve that problem that way. You clearly know there is a desire for it, so go buy some more and come up with some other options. That’s fantastic.
Jack Butala: Would you take it down? Would you take the posting down if people are calling?
Jill DeWit: You know, I might just say, I’m working on getting … I might take the call and say I’m working on getting more, sit tight. I’ll get back to you and keep their information. Know you know who you have. Mike is slowly getting a nice … Here’s what I would do. Mike would be right now, sending out a mailer for the exact same size, whatever it was, all the five acre properties in that same county in Oregon. Then he’s going to buy a couple. Then he’s going to immediately turn around and he’s going to market it to … Without even doing any work, he’s going to immediately market it to those twenty people that were so fired up that he has their phone numbers and their emails and they are going to buy it.
Jack Butala: I agree with you.
Jill DeWit: That’s what I would do.
Jack Butala: Completely agree with it. That’s how it should be handled, but I think what he’s asking is, is it ethical to keep a property posted up there for sale that is already sold? That’s what I think the nature of the question is.
Jill DeWit: Are you sure that’s what he’s asking?
Jack Butala: No.
Jill DeWit: Okay.
Jack Butala: I’m just throwing it out there at you.
Jill DeWit: Technically it’s sold. Is there any harm or any foul, no. Is someone checking?
Jack Butala: I agree with you. I think the answer is hell no.
Jill DeWit: Yeah.
Jack Butala: I think that the answer is hell yes, it’s ethical. Hell yes keep it up there.
Jill DeWit: It’s fine.
Jack Butala: Service, again, give your customers what they want. If you got a hot property, I’ll tell you. This happens to us.
Jill DeWit: Yeah.
Jack Butala: Frequently.
Jill DeWit: Mm-hmm (affirmative)
Jack Butala: Sometimes we put it under contract and sometimes we keep it up there for an extra couple weeks or something just to see …
Jill DeWit: See if there is really an interest.
Jack Butala: If there’s a huge interest. If there is, we send another mailer out and give the customer what they want.
Jill DeWit: Exactly. You’re never going to really sell a double, because that is unethical.
Jack Butala: No, you never want to do that, jeez.
Jill DeWit: That’s the point, but you’re always going to say, “hey, you know what. It is sold.”
Jack Butala: By the way, you never want to sell a piece of property twice.
Jill DeWit: You think?
Jack Butala: There’s laws for that and stuff.
Jill DeWit: Yeah, kind of! That’s hilarious.
Jack Butala: Thanks for bringing that up. It’s pretty … It’s second nature to us because we are in the business, but wouldn’t it be funny if someone called in and said “hey, I’ve got three buyers for this property. Should I sell them all?”
Jill DeWit: Oh my gosh. Could you imagine?
Jack Butala: That’s going to happen.
Jill DeWit: That’s horrible!
Jack Butala: That’s a mess.
Jill DeWit: I just think if that was one of our shows, people in the ’70’s used to do that. It was a big scam and that was illegal, obviously. You never ever want to do that. I mean, c’mon. They’ll catch up with you. Don’t do that. Slash however, you’ll be honest and say “You know what, I’m working on getting some more. I’ll get back to you.” They’ll be so excited and thankful too, by the way. “All right. Absolutely. Let me know. I loved that one. I can’t wait to get another one in just like that.”
Jack Butala: Right.
Jill DeWit: That’s a good question.
Jack Butala: Hey we got that out of the way. What else is going on?
Jill DeWit: All right.
Jack Butala: What’s the topic about?
Jill DeWit: I want to talk about this topic because this is so good. This is important to me.
Here’s what I’ve experienced and this is why I really want excited to do this show. I know and I know you know, we know people that have actually gone through the steps of enrolling in real estate school, paying however much it costs, $600, $1000, I don’t know what it is now, taking two weeks off work and doing the fast track or six weeks doing the slow track where they are at class every single night and on the weekends to get their real estate liscence, and by the way you go to take a test at the school. Then you have to study again. Take a test for the state. Then you got to pay to get your state liscence. Then you got to find a broker and get liscenced with a broker and then finally, now you have access to the MLS.
Jack Butala: It’s like $1500 bucks in Arizona, or I’ve heard it’s between $1500 and $2000 by the time you get done to get access to the MLS.
Jill DeWit: All the money and the time and the effort that went into it, just to have that.
Jack Butala: If you live under a rock and don’t know what the Multiple Listing Service is, the MLS is where real estate agents list property on behalf of other people. That’s why you have to get a real estate liscence to represent someone else. If Jack Smith comes through Real Estate Agent X and says “Hey, I’ve got this property. I want to sell it.” Then real estate agent X posts it on the MLS so all the other real estate agents, it’s an exclusive little club. If I sound like I’m making fun of it, I am. An exclusive little club that no one can be allowed into unless you pay the fee …
Jill DeWit: Mm-hmm (affirmative) take the test.
Jack Butala: Then you have the privilege of thumbing through the listings, the overpriced, over represented listings that are there.
Jill DeWit: It’s the retail retail retail.
Jack Butala: It’s buying a car at a dealership.
Jill DeWit: Right. A brand new car.
Jack Butala: Which I’ve done one time in my life and I will never do again.
Jill DeWit: It’s buying a car at a dealership, paying the price on the sticker.
Jack Butala: Paying the sticker price, Jill. That’s exactly right.
Jill DeWit: Well, it says forty two one one one, so how do I make the check out?
Jack Butala: Then getting all the other stuff that the sales guy sells you. Remember the undercoating? When you were a kid did you have to get undercoating?
Jill DeWit: Undercoating? Not in southern California! That’s for like salt on the roads! Right?
Jack Butala: In Michigan and Detroit you get the undercoating.
Jill DeWit: Yeah.
Jack Butala: It’s like $800, back then in the seventies, it was $800.
Jill DeWit: No. We don’t have that. No. We don’t do that.
Jack Butala: Anyway, that’s what the Multiple Listing Service is. Tons and tons of people come to us and say “well, I’ve got this property. I found it in the MLS and I got 10% I negotiated down.” We say, “I don’t think that’s how you do this.”
Jill DeWit: My whole point is they go through all that effort to get access to the MLS and everyone in the business that’s been around for a while agrees that by the time it hits the MLS, it’s not a good deal anymore.
Jack Butala: Yeah.
Jill DeWit: It’s been out there for a while.
Jack Butala: Somebody got there before you.
Jill DeWit: Yeah.
Jack Butala: You want to be the first person to the seller.
Jill DeWit: Nobody says “Oh, let’s hurry. I want to get on the MLS, I’d rather sell it that way. I just want to sell it.” You want to find these deals before they get to the MLS. You want to find the deal when the seller is excited to sell and they are just getting their ducks in a row and cleaning up their property kind of thing or they haven’t even gotten that far yet. You know what I mean?
Jack Butala: Right.
Jill DeWit: I think of it like a home seller. Once husband and wife Smith decide they want to sell, they are thinking about the price and now they are looking around their house going, “well, shoot. Now we got to clean out the garage. We got to make this look better. If we really want to sell we need to do that stuff”
Jack Butala: Right.
Jill DeWit: You want to buy it from them right then, and they want to sell it that too because they don’t really want to do the work.
Jack Butala: What you want to do is send an offer. Picture this. Picture a little subdivision wherever you are, a group of houses, I don’t know, fifty, a hundred houses and you send a letter to everybody. It doesn’t say “Hey, I’m really interested in buying your house, why don’t you give me a call so we can talk about it.” Don’t do that. That’s a waste of time and your phone is going to blow up because everybody wants to sell their stuff. Send them a letter that says, and this is what we teach, “I would like to buy your house for $100,000. I have the cash ready. I’m not an agent, I’m an owner, and me and my family want to buy it fast and we’d like to pay you on Friday.” Believe me, you are going to get some calls back. Do that $100,000 number came in because it’s probably worth $140,000.
Jill DeWit: Mm-hmm (affirmative)
Jack Butala: It’s shocking how many responses you will get. If they don’t want to sell it right now, trust me, they have a little file somewhere, a paper file. They are going to put that offer in it and put it away.
Jill DeWit: They will call you in two years.
Jack Butala: All the postcards they get that say, hey we pay cash for houses. Call the 888-screw you. Those get tossed in the garbage.
Jill DeWit: To Residents.
Jack Butala: Yeah. To Jack Smith or current resident.
Jill DeWit: Exactly!
Jack Butala: That’s exactly how not to do that [inaudible 00:10:11]
Jill DeWit: Yeah. Right.
Jack Butala: That’s the whole concept. The same thing with land. We get calls from mailers that we’ve sent out from 2003 and 2004. Ten years later because they kept it and whatever event in their life triggered the fact that they want to sell it now, they are ready to do it.
Jill DeWit: Mm-hmm (affirmative)
Jack Butala: Ours is the only one in the file.
Jill DeWit: Right.
Jack Butala: With an actual offer price and a time.
Jill DeWit: Right. To go back to what this whole show is about, it’s MLS versus perfect data. How did we get all that? We have the perfect data.
Jack Butala: We have the First American Title data. The same data that the largest title company in the world, I think they are the largest or if not the top three, used to write title policies. Believe me, they have a vested interest in making sure the title insurance policies that they write is backed by good data and ownership data. Our licences provider of that data. That’s what our data to doorstep product is. Why wouldn’t you? Why would you sit and peruse? There’s my question, Jill. Sit a peruse the MLS. Let’s say you have a friend who is a real estate agent and you don’t even go through the thing that Jill just described. You sit down with this friend in front of the computer and you say, “Oh, I want to buy some five acre properties in Northern Arizona” and you put your wish list in. Bang. Fifty of them pop up. What do you do? You get on the phone. You call the agents. The agents don’t care and on and on and on. It’s a show. It’s a show of … I’ve tried it.
Will you get lucky once in a while and someone will accept the offer? Yeah. Then the agent have to write the fourteen page or eighteen page offer. It has to get sent to them. If I sound cynical about it, I am. Why not just get all organized and sort for in the First American Database that’s provided by us, sort for all the five acre properties in the area that you want. Take all the people who have mortgages out, because they aren’t even possible. They can’t sell the properties. They can’t negotiate the deal that you want. Send them a letter and pick the ones that you want.
Jill DeWit: But wait! Don’t I have to be a licenced Realtor to do this?
Jack Butala: No. WE should do a little role play, like a skit. Want to do one right now?
Jill DeWit: You want to? You’re going to be the … Okay.
Jack Butala: Which one do you want?
Jill DeWit: I’m going to be me and you’re going to be the realtor because you’ve got the property …
Jack Butala: I have it listed?
Jill DeWit: Yeah.
Jack Butala: I have the MLS access.
Jill DeWit: You have the Mls listing. This is going to be funny.
Jack Butala: Right.
Jill DeWit: This is not rehearsed, everyone. Let me just preface this. Okay.
I am calling because I found this property. It’s five thousand dollars and it’s five acres.
Jack Butala: I’m the listing agent.
Jill DeWit: It’s ten acres, and I know this is a crazy price, but I want that ten acres and I need to talk to you about it. You have it listed for $5000 which is stupid and we all know. Anyway.
Jack Butala: All right. So I’m the agent. I’ll pick up the phone.
Jill DeWit: You’re the agent who answers the phone. Okay. Here we go.
Hi! My name’s Jill. I just saw your list …
Jack Butala: Hello?
Jill DeWit: You’re in your car.
Jack Butala: I’m sorry. You’re breaking up. What? Who is this?
Jill DeWit: Hi, my name is Jill.
Jack Butala: I’m sorry, What?
Jill DeWit: I’m calling about the five acres that you have listed in Navajo County for five thousand doll … yeah. Whatever. Ten acres listed for $10,000 in Navajo county. Is that still available?
Jack Butala: I’m not sure. What are you talking about? Five acres. Oh yes, yeah. I know. I have that. That’s been listed for two years. It probably shouldn’t even be up there. I think that listing expired like two years a year ago.
Jill DeWit: Well, what’s going on with it?
Jack Butala: Are you interested in it
Jill DeWit: I am interested. I want to make an offer but it’s not going to be five thousand dollars. I’m going to make a more realistic offer.
Jack Butala: It’s listed for five thousand dollars?
Jill DeWit: Yes.
Jack Butala: I can’t offer five hundred dollars for that.
Jill DeWit: No, I’m going to … here’s the deal. It’s listed for five thousand dollars. I’ll give you one thousand. It’s ten acres.
Jack Butala: That’s not even worth it to me to… I’m sorry. What was your name?
Jill DeWit: Jill.
Jack Butala: I’m Steve.
Jill DeWit: Hi Steve.
Jack Butala: I’ve got a house over here that I just listed. I just came back from the listing appointment.
Jill DeWit: No.
Jack Butala: It’s a great deal. You should go look at this.
Jill DeWit: That’s great.
Jack Butala: Where are you calling from? I just looked you up on the internet and you are really pretty.
Jill DeWit: From your car?
Jack Butala: Would you like to go out and have a cup of coffee?
Jill DeWit: And discuss this offer? No. Look Steve. I’m …
Jack Butala: How much are you willing to pay for this house I just listed. I’m going to send you a picture right now.
Jill DeWit: Dude. Sorry. I just said Dude. I didn’t mean to do that. I will give you a thousand dollars for that ten acre property. Is this something you can …
Jack Butala: I gotta be honest, Jill. It’s just not worth my time to … I listed that property for a friend of mine anyway and I think he sold it. I’m not sure. I really don’t know what’s going on and it’s not worth my time to go through all the work to submit an offer for a thousand dollars. My commission would be like $38. I really rather … This house that I just listed is something you should look at.
Jill DeWit: Okay. Thank you for your time, Steve.
Jack Butala: Bite me.
Jill DeWit: How do you be so silly?
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