How to use the Multiple Listing Service MLS in Your Land Business (LA 1535)
How to use the Multiple Listing Service MLS in Your Land Business (LA 1535)
Transcript:
Steven Butala:
Steve and Jill here.
Jill DeWitt:
Hello.
Steven Butala:
Welcome to the Land Academy show entertaining land investment talk. I’m Steven Jack Butala.
Jill DeWitt:
And I’m Jill DeWitt broadcasting from sweet, sunny southern California.
Steven Butala:
Today, Jill and I talk about how to use the multiple listing service or the MLS in your land business.
Jill DeWitt:
I’m going to talk about three things by the way. I want to talk about when you use it before you’re buying and then pricing property. I’m going to talk about due diligence and I’m going to talk about selling. So I’m going to give you all three different reasons, so get a pen. Just kidding.
Steven Butala:
I’m going to get comfortable because I want to learn some stuff here too. But when I’m done, I’m going to talk about how I use it to choose counties and stuff and-
Jill DeWitt:
Well, you’re going to be first and then I’ll do the second.
Steven Butala:
I was going to go last because yours is more important.
Jill DeWitt:
Well, then the phase one is… I was going to go in order. We can figure it out.
Steven Butala:
Well, do whatever you want.
Jill DeWitt:
We’ll wing it.
Steven Butala:
Before we get into it, let’s take a question posted by one of our members on the landinvestors.com online community. It’s free. And if you’re already a member of Land Academy, please join us on Discord.
Jill DeWitt:
Travis wrote, “I’m nervous about this deal for some reason. I could sure use a set of experience eyes please. Would you do this deal,” and he puts it in here and gives some notes. So I really liked the price of this one compared to the others and comps overlooking this river, the Arkansas river. It’s hilly and it’s not far from railroad. Thank you in advance. So it’s [inaudible 00:01:29] County Arkansas. It’s a little over six acres. It has access. The purchase price he’s got locked in is 33,000 to $800 and thinks he could sell it for between 70 and 80,000. So easy doubling his money. It’s got a paved road, not in the flood plain. It does have an HOA and there’s electricity in the area. And the potential problems are this. He’s like it’s hilly, but he sees other people have solved it and they built there. So you want to go on this?
Steven Butala:
Yes. So this is what we call, “Would you do this deal?” It’s very prevalent on Discord and a little bit on Land Investors, but not too much, but I want people who are not members or maybe just casual listeners to see what happens constantly in this group and see the value in it. And so probably 10 people responded to this, looked it up and responded and said yes and in this case, everybody loved it, including the moderator, Kevin, including me. I loved it at 30 and I love Arkansas acreage in general. But he’s concerned. This person’s concerned. And all of us said… It’s one of their first transactions, so we really said, “Look, if you need some help with that, let me know,” including me. It’s a great deal actually.
Jill DeWitt:
Good. Yeah. I was going to say too, that that’s part of the value of this group is that majority of what we’re doing is sending mail and offers to cities in places and counties we’re not in. And I think I know what’s going and the numbers tell me what’s going on, but man, having someone that’s there and really knows is so beneficial. So having a group like this where you can throw something out there, there’s probably someone who says, “Oh, I’m two counties over. I know exactly what’s going on in this area. Buy it,” because that happens often.
Steven Butala:
I mean, I know that we’ve done tens of thousands of deals, Jill and I and I can tell you by looking at this that… and I wasn’t alone. Like if I was just the only one who said, “Oh yeah, that’s a pretty good deal. I think you should take it to the next level or buy it and I’ll pay for it if you want,” and everybody else said, “You’re an idiot because you missed this, this, this, and this.” I would sit up and pay attention and say, “Okay.”
Jill DeWitt:
Because maybe something’s changed too. I love it.
Steven Butala:
Today’s topic, how do you use the multiple listing service or the MLS in your land business? This is why you’re listening to Jill.
Jill DeWitt:
Oh thanks. Well, I want to talk about… I’m going to queue it up. Well, there’s the beginning part of your job, which is picking a county and pricing. I’m going to use MLS stuff for that, then the offers go out, the offers come back. I’m looking at these going, “Do I still want it?” Guess what? I might be looking at the MLS again, making sure I did everything right and the third one is on the sell side. So let me get a little deeper into all three of these. So first I’m going to talk about the buying side and the pricing side. So really not so much buying, but picking a county and pricing a county, you’re going to look at the MLS. You’re going to see what’s going on in that area. You’re going to be… Do you want to talk more about this real quick? Days on market.
Steven Butala:
I can set this all up and then-
Jill DeWitt:
Talk about just what you use it for when you’re picking a county and pricing and then I’ll take the other two.
Steven Butala:
There’s less than 30 seconds on why the MLS exists. Back in the day before real estate agent licensure, there was somebody who had a butterfly personality in every town or there was something called a land office. You’ll see it in westerns all the time where it was either a government office. And so it was one person that was sitting there putting deals together. They realized that Sally Jones’ daughter over on the east side of town wants to sell their property, so it was a social butterfly thing. And so that evolved into over time a book of all the property that got listed and eventually you had to do it with a real estate agent because don’t get me started, but that’s the evolution of the MLS.
Steven Butala:
So now there is this centrally located area online where you can go and see all the property that’s listed that’s not for sale by owner that has to be listed by a real estate agent. By the way, there’s probably 350 different little MLS’ all over the country. It’s very separate, all that roll up into the National Association of Realtors. So they really have you by the throat about how they list property and all of that. So more and more and more with the internet, there’s becoming alternative places like Land and Farm and Jill’s disgusted with this like Land and Farm.
Jill DeWitt:
Why would you say that? No, no, no.
Steven Butala:
So it is a great place, not the only place, but a fantastic place to gauge what Jill’s about to talk about. You can really use it to make some dough for yourself.
Jill DeWitt:
Please expand on when you… one, how you use the MLS when you’re picking a county and pricing.
Steven Butala:
So if you go to realtor.com, that’s a National Association of Realtors roll up of all the MLS… This is mandatory by these local and regional MLS’ to roll up their data. So it’s real efficient for people like me or anyone who’s a land investor or house investor or any type of property except commercial, commercial real estate is not in there at all, to take a parameter and say, “You know what? I only want to look at properties that are between an acre and five acres and I only want them to be priced between 10 and $32,000 and whatever, and I’m going to roll my mouse across the country and region to region and look through the MLS and see where things start to fit.” Why would I do that? Because I love buying properties for 20 or $30,000 with Jill and sell them for 80 or 90. That just ended up being our thing right now. And so I can see where those properties are selling for and being listed for certain ways and you can choose markets very effectively and for free and within minutes.
Jill DeWitt:
Mm-hmm (affirmative).
Steven Butala:
That’s something I couldn’t do even three or four years ago.
Jill DeWitt:
And then to take it a step further, he can see what things sold for, what things are actively for sale for now, work it backwards, do the math, figure out a price per acre and then use some of that as you gauge your pricing.
Steven Butala:
And how long it took to sell it, how many properties actually are listed right now versus sold. So if there’s a ton they’re sold and very few that are listed right now, that’s real good news for us. And I’ll stop it there. There’s a lot of ways to throw away your dart board so to speak and not really take any real risks because you can see the data. It’s a database.
Jill DeWitt:
So now phase two. I’m going to go into phase two. That’s how we use MLS on the front end. Now in the middle that offers go out, the mail comes back. Now I’m looking at it. It’s often now it’s transitioned from him to me a little bit for a lot of these and now I’m using the MLS to go, “All right, do we still want to buy this?” I go in and go, “All right, how well did we do price-wise?” That came back. Does this still make sense? And I’m looking also to see how many are out there for sale. And if I buy this, am I in a sea of property? Have a lot of things recently gone up for sale that now I’m out or is it still like, “Oh look, we’re one of 10. We’re one of five, especially in the size and boy, if I buy it at this price and I mark it up to this price, boy, this is going to move fast based on what’s out there right now.” This is great, so that’s a second reason and how I would use the MLS.
Jill DeWitt:
And the third one, I think is where the most confusion is coming up right now. Everybody’s like, “Oh, we get that part, but when do I put something on the MLS?” Now I own it. I buy it and I’m selling it. Do I put everything on the MLS? Do I put nothing on MLS? Do I hire an agent to put on the MLS? I’m all confused. So that’s part of the questions that came to us from our customer service team. So what I want you to think about with MLS is it is not for all properties, not for all people, not for all types. I know like, “Okay, great Jill. Now I’m even more confused,” but here’s what I want you to think about. I want you to list your properties. Things that go on the MLS are properties that are A, worthy of the pricing. It’s a couple hundred bucks to get your property on MLS number one. And now you’re going to be mixed in with all these other ones. The beautiful thing is too, when you put on the MLS, it’s going to… and I’ll talk about these flat listing services here in a second, but it’s usually shared in a lot of other places. So just putting it on one is going to trigger a lot of other places, which is great.
Steven Butala:
Well, you really need to explain what the other places are.
Jill DeWitt:
I will explain that.
Steven Butala:
Okay, good.
Jill DeWitt:
Exactly. So I want to say… I’m sorry. I lost my train of thought. Hang on a sec here.
Steven Butala:
I’ll just sit over here.
Jill DeWitt:
It’s a certain price. Let me back up here. All right. When do I use the MLS? I personally use the MLS when… Again, it’s more than a couple hundred, couple thousand dollars property and it’s not tipping into million million dollar property where people aren’t really looking on the MLS for it. Let me give you example like Craigslist. There’s things that are worthy of Craigslist and then things that are just like, “No, I don’t sell them on Craigslist. This is a big, expensive thing. That’s not where my buyer’s going to be kind of. That’s what it is.” And then also when you’re getting an agent involved for higher dollar amount or it’s really higher dollar amount niche-y property and or an agent involved, that’s where it goes on MLS. And I think I can see you’re getting confused. Will you ask me some questions then?
Steven Butala:
There are two ways to list properties on the MLS. What are they?
Jill DeWitt:
One is you do it yourself.
Steven Butala:
As a seller.
Jill DeWitt:
One you do it yourself with a flat late rate listing service and a really great one. There’s many out there, but I’ll give you one.
Steven Butala:
What’s a flat rate? How does that work?
Jill DeWitt:
Brokerdirectmls.com. Go to that website, put in the property zip code, not your zip code, the property zip code of where you’re selling the property, which you got off Parcel Factor or Neighbor Scoop. It’s going to pop up right there. It might be $99. It might be $249. What’s that going to get ya? And there’s different tiers there. Six months, nine months, 12 months and different levels of service and different levels of photos. What’s going to give you like the cheapest one is going to give you an average six months on the MLS and it’s going to be all the local MLS for that area. Say, it’s Colorado Springs. It’s going to be all over Colorado Springs there. It’s also going to trigger Zillow, Trulia, some of the land listing sites like some even like I’ve seen Land Watch, Land and Farm. There’s a long list in there and all kinds of interesting… like there might even be a local Craigslist that it triggers. There’s a list that it’ll show you of the 200 or whatever places. Like some of the old places might be property.com. There’s sites that we don’t even think about or heard about.
Steven Butala:
Stick to the MLS here. Let’s forget about-
Jill DeWitt:
[crosstalk 00:12:31] on the MLS.
Steven Butala:
All those other sites are just a nice bonus. We’re talking about the MLS and what it is and why.
Jill DeWitt:
What you’re going to do is you’re going to pay that money. You’re going to fill out a form as if you’re an agent, as if you’re putting it on the MLS. How many bedrooms does it have? You’re going to put zero of course. You’re going to put the size of the property, the acres of property. You’re going to put your title in there. You’re going to write your own little paragraph about the area. You’re going to upload your own photos. So it’s your way as an agent, but you don’t have to be an agent. It’s a broker doing it on your behalf and you’re paying them and it’s all legal. It’s all okay.
Steven Butala:
Fixed price MLS is a licensed real estate agent’s way of charging you. Not representing you or not going through all the legal stuff of owning a .com and they charge you $250. Because they’re licensed, it allows them to have access to the MLS wherever your property is and post it just as if you’re getting all full blown represented by an agent like you’re selling your house, which is the second way, which is what Jill’s going to talk about in a second. All it is is this. Your piece of land is now on the MLS like everything else and other agents can see it, other potential buyers can see it, including us.
Steven Butala:
So when we decided that we’re really interested in a piece of property on the MLS, we contact the listing agent and the listing agent on there is the guy that owns a .com. What do they do? They let us know or whoever the seller is, “Hey, this person’s interested in. Knock yourself out.” There’s no representation. There’s no real estate agent involvement at all, so that’s what a fixed price MLS is and it can be used very much to your benefit in certain cases. For us, it’s cheaper property or property that we don’t necessarily want local representation for. We just want to get it on the MLS like we’re getting it on Craigslist.
Jill DeWitt:
To blast the universe. That’s why. It’s reach is why I’m doing it. And I want to add one more note. You do not pay these people a commission. The flat rate price that you pay is all that you pay, FYI. And then the second way just to move on and this is getting long and confusing and I apologize, but the second way the MLS is going to be used is when you really do have an agent. When do I have an agent? Usually it’s a high dollar amount, a unique property, maybe it’s commercial, maybe it’s over a million dollars where maybe it’s a certain area, there’s some unique attributes that those buyers are really working with these agents. And then I just kind of hand it to them. And the beauty of that is they’re going to do all the work for you. You don’t have to worry.
Steven Butala:
And for that, the best way as a seller now, if we have a piece of property in rural Tennessee let’s say that we felt great about the purchase where we’re, “How do we get an agent?” What do we do? So what you really generally do is look for somebody that’s got a lot of other like kind property listed, both completed sales and active. That person is usually going to get you the representation that you want and they’re going to know buyers. That’s the real value that a real estate agent brings is they have buyers in their pocket for this product type. That’s my big gripe about real estate agents. They just slap it on the MLS, wait for it to sell and-
Jill DeWitt:
Do nothing. Don’t market it.
Steven Butala:
Those are the people that we choose not to deal with. There are tons of great real estate agents that create the deal for us. It brings some value to the transaction. The MLS is a great tool. There’s a lot of confusion about it on the Discord, so I hope this doesn’t add to that confusion.
Jill DeWitt:
Exactly. I know. Happy you could join us today. Five days a week, you can find us right here on the Land Academy show.
Steven Butala:
Tomorrow, the episode of the Land Academy show is called social media trends in 2021 and how to use them for your land business. You are not alone in your real estate ambition.
Jill DeWitt:
That was a lot.
Steven Butala:
Yep.
Jill DeWitt:
But then I think, I hope that helps. There was a lot. I want you to know all the different ways, so I think we covered it. If you have any questions, you know where to find us. And by the way, if you’re interested in learning more about us or what we do, please check out landacademy.com and houseacademy.com. We provide the education tools and support you need to be flipping property like the pros.
Steven Butala:
We’re Steve and Jill.
Jill DeWitt:
We’re Steve and Jill.
Steven Butala:
Information-
Jill DeWitt:
And inspiration-
Steven Butala:
To buy undervalued property.
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