Public Records and Your Next Land Deal (LA 1590)
Public Records and Your Next Land Deal (LA 1590)
Transcript:
Steven J Butala:
Steve and Jill here.
Jill DeWit:
Hello.
Steven J Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill DeWit:
And I’m Jill DeWit, broadcasting from the valley of the sun.
Steven J Butala:
Today, Jill and I talk about public records and your next land deal. So Jill, I had described it yesterday at the end of the show, but I’ll describe it again. Jill and I are famous for driving around wherever we go. Not intentionally, but every single time we get in a car, I’m usually sitting shotgun, calling off real estate values around town or wherever we happen to be. And as I’m pulling these up, saying this property is for sale for $4 million or $2 million, Jill’s first question is, what did they pay for it and when? And it’s usually like, well, they bought it five years ago for a lot less than they’re selling it for now. And Jill, I realized recently, usually on a Thursday call, this is important for her for some reason, when she makes a decision about negotiating when we go to buy the property.
Jill DeWit:
And value. It helps me determine the value, like, is it going up? How drastically is it going up? What do they think’s going on? That kind of a thing.
Steven J Butala:
So the question is, how lucky are we that we have all this public record information that we can make these decisions? Well, this show is not so much about the fact that we have it because we all know that it’s out there. How much does it matter when we’re sending out these offer campaigns? Do people look at this stuff? And the answer is hell no, because they’re not in the real estate business like we are. But we’ll get into that in a second here. 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 don’t forget please to subscribe on the Land Academy YouTube channel and comment on the shows you liked.
Jill DeWit:
Shannon wrote, “How do you handle the public record of what you purchased the land for versus how much you’re listing it? We are set to close on our first five acres, and I’m wondering how people will view it when they see what we bought it for versus what we’re asking. Any input is appreciated. Just wondering what has been your experience in this type of scenario. Thanks in advance.” This I know ties into all of this. I’m going to say most people don’t look and they don’t know.
Steven J Butala:
The truth is, and this is the question that was the inspiration for this entire-
Jill DeWit:
Very rare.
Steven J Butala:
… was the inspiration for this entire show. So first of all, you need to know that public record is what this whole information system in our country from a real estate data standpoint is built on. For whatever reason, who set up this real estate system, and I’m actually researching that pretty heavily right now about how this all came about very heavily, so I can put it in the Land Academy 3.0. I’m researching how this all came about that whoever put the system together, and it goes back to our founding fathers of this country, really, who sat around and said, “Everyone needs to know who owns everyone else’s land,” because it’s the exact opposite in our entire world. No one wants anyone to know what they own.
Jill DeWit:
You know what’s funny about that? We know a lot of what we did came from England, correct, when England is especially the exact opposite. That is private information. It is not public, who owns a house.
Steven J Butala:
I’ll tell you, if I was setting the system up, I would lean toward the England way. Wouldn’t you?
Jill DeWit:
Yeah, I would.
Steven J Butala:
I wouldn’t want everybody to know everything.
Jill DeWit:
I know. So we’ll talk about that too.
Steven J Butala:
Yeah.
Jill DeWit:
So the answer to your question is I don’t worry about it. It very rarely comes up. I’ve had it like, oh my gosh, less than 10 times, both hands, have anybody send anything. And it was usually a broker who dug it up who’s representing a buyer coming to me with that. And my answer is, do you want it or not? Because they’re like, “Well, I see you only paid X for this.” Yeah, you’re correct. And again, are we doing this deal? Are we not doing this deal? And they go, “Yeah, we’re doing the deal.” Okay. That’s it. That’s all we need to talk about. Because we know what it’s worth. That’s the bottom line. And that could be your followup thing. My advice to you is just say, “Yep, that was great. Lucky me. We all know what it’s worth. Do you want to buy it?”
Steven J Butala:
Nobody cares is what Jill is saying. They’re not in the real estate business. We are.
Jill DeWit:
Think about all the things that you run around and pay full price for because that’s a lot. You don’t realize it. You could be shopping around too. I don’t need to bring up the milk story again, because I think that’s beating a dead horse, but there’s a lot of things we run around and we don’t negotiate because we want it, it’s exactly what we want, and the timing is perfect. So that’s the majority of your buyers. They’ve been waiting for this land to come on the market. It happens to be within a mile of where they’ve been looking and their dad lives. Who knows what it is. And they’re not thinking about that. And you’re still providing a great value.
Steven J Butala:
I mean, to replace the milk scenario, what percentage of people go buy a new car or a new phone? If you ask anybody, is that the right thing to do, go buy a new car?
Jill DeWit:
Yeah, you can get a track full in still at Walmart.
Steven J Butala:
Why don’t you buy a used car?
Jill DeWit:
Yeah.
Steven J Butala:
Why don’t you buy a used car? Two years old, it’s got, 8, 10,000 miles on it. It’s got all its records. No.
Jill DeWit:
That’s not me.
Steven J Butala:
Yeah.
Jill DeWit:
That’s just not me.
Steven J Butala:
So, there’s a huge convenience to just driving your old car into the dealership and then driving the next one out, to which everyone says while that’s all happening is, you know what, you’re saving like $15 a month on your payment. I just got a new phone, and that’s all he said. Well, if you changed your data plan, where you’re going to get more data for $10 less a month, and your phone is going to cost you $25 a month if you sign up today. So did I do it? Yeah. For phones, I don’t care. It’s actually for business and I need a good new phone with a new camera for a lot of reasons. For cars, hell no. I don’t fall into that trap.
Jill DeWit:
There we go.
Steven J Butala:
So for land, I can understand why, because people just want the convenience of it. Does anybody look at it? Nope.
Jill DeWit:
Right.
Steven J Butala:
Today’s topic, public records and your next land deal. As if we just didn’t cover a lot of it. This is why you’re listening.
Jill DeWit:
I was going to share at some point here where people can get this. Do you want me to do it now or you want me to wait?
Steven J Butala:
Well, what I’d like to do is just take a few steps backwards. Where does this public record get recorded and what is it all about? There’s two places that when a land transaction happens and it gets recorded at the assessor … You send it into the recorder, just like a bank teller. If this was 1978, you would slide it across the table just like a bank teller situation. The recorder would stamp it, give it a book and a page, and they would separate, there’s two pieces of paper, almost always when you send a deed in. You send in the deed and usually an affidavit. I can’t think of a state now where you don’t have to do this. It used to be, there were several states where they just didn’t care.
Steven J Butala:
So the deed goes, it gets stamped and recorded, and gets put in a three ring binder and gets a book in a page and gets put up on a shelf. The affidavit gets put in the outbox of the recorder’s office and then physically brought to, now it’s all electronic, to the assessor. And the assessor inputs all the information on the affidavit, what you paid for the property, who bought it, what the dates are.
Jill DeWit:
Why. Sometimes those are other things that conveyed with the property. Was there a mortgage?
Steven J Butala:
Interrelated party. Did I sell it to Jill?
Jill DeWit:
What kind of deed? Are there other properties?
Steven J Butala:
Depending on the state, there’s a tremendous amount of information that’s on that affidavit. So that’s what you’re looking at, how much they paid for it when the deal closed. And that’s what’s in the lines of data in DataTree and everything else. That’s how quite honestly, this all arose because the assessor, that triggers a reassessment of that property to reset the tax value of the property for the next year, so that in most states, a lot of states-
Jill DeWit:
They can charge more.
Steven J Butala:
Some other states use what’s called a millage to do that, and it’s a different situation, which I’ll explain sometime in the future. It’s a lot more equal and democratic. Let’s just put it that way. It treats all properties equally. I only know about it because that’s how Michigan, I’m from Michigan, assesses their property. And all I heard was my parents complain about that when I was a kid. Oh, they reset the millage. Our lives’ over.
Jill DeWit:
Got it. Back to the topic.
Steven J Butala:
So, now you know why all this information is available on realtor.com or zillow.com or anything else. Go ahead, Jill.
Jill DeWit:
So what I was going to say is too, so you’re driving around and you’re like, okay, I want to know. I do want to know. Does it pop up for land? It’s often in there. You’d be surprised. There’s a couple places that I’m going to tell you right now where you can go find this information, and then we’ll talk about how to use it and why I use it. Way number one is you’re driving around, you see a posting or you see a property. You hop in to pull it up on Zillow. I’m just going to use that as an example. And it’s in there. Oh my gosh, look, this is available. It’s on Zillow. Here you go. Well, you can just scroll down and look for the property details. The exact heading in Zillow is called, I looked it up, price and tax history. Check it out. Most people don’t scroll down. Most people just look at the details, how big it is, what they’re asking.
Steven J Butala:
If it’s pretty.
Jill DeWit:
And they close it. That’s it. And they may scroll through the pictures. Well, you better believe, I scroll down, and I’m like, “Okay. Why? Who?” And you can almost see. It’s like the chain of title you’re looking at right there on Zillow.
Steven J Butala:
Totally.
Jill DeWit:
Wow. Okay. Bought for this, listed for this, sold for that, relisted at this, pending for this. I mean, it’s all kinds of great information in there. So that’s one way to find it. I love it.
Jill DeWit:
Number two, it’s not anywhere. This property is not listed anywhere. I’m working with the seller. I want to what it did. One way is the data that you download from whether it’s DataTree, CoreLogic, you look at all those columns. You might find a column in there that has the last transfer date and the last transfer sales price. So check that. It’s there. Sometimes it’s there.
Jill DeWit:
And then my third way, if you really want to dig this up, go into DataTree, go to flex search. DataTree is my favorite now. They’ve got so many … Yeah. I think they’ve passed TitlePro and CoreLogic right now with the volume of documents.
Steven J Butala:
I agree.
Jill DeWit:
Because they’ve been focusing on it for a while, and they try to collect every possible document they can. So divorce papers might even be in there. You think I’m kidding. I’m not kidding.
Steven J Butala:
Wow.
Jill DeWit:
No, it’s funny. So if you go into flex search, you could search by the property, you could search by the seller. There’s lots of different ways that you could search for the documents related to that person and/or property. And it’s staggering what information comes up. There’s special ways to do it, and there’s a lot of great YouTube tutorials on it too, where basically you put in state, county, that’s the easiest way. And they’re going to put in the owner’s name and there’s certain ways with asterisks and things to search faster or just the APN. And that’s how you get that information too. Yeah, so mortgage shops, you might not find what they sold at, but look at this. I can see they took out a mortgage. All right. That tells me a bit about what’s going on here kind of thing. And where they stand on the property also.
Jill DeWit:
So why is this important to me? Two reasons. One, the mindset of the customer, meaning the mindset of the seller. What did they pay for it? And it gives me a little idea of what they want to get out of it. And sometimes it goes down. So I know that it shocks this guy overpaid. I had one that happened the other day actually. He said, “My dad bought this property.” He’s asking way too much for this property. And I’m like, “Well, what’s going on?” He said, “Well, my dad spent $30,000 for a well.” And I’m like, “Why did you spend” … And it’s an area that we know well, that I’ve spent like 8,000 for a well. And I said, “Why did he pay so much?” And the guy just got mad. But that’s helped me. That’s why this guy is so, his numbers are so off. He’s trying to get out of it, and he never will because dad overpaid for a well and he thinks he’s going to get 50 out of it when it’s really worth like 15. That’s just the way it goes.
Jill DeWit:
But it helps me understand what he’s coming from. And now I know like, all right, dad only paid five for it. He paid 30 for the well, and the kid’s trying to make some money. Got it. All right. Now I know how to talk to this person.
Jill DeWit:
And then the other way that I use this data is for me to understand. There’s some areas that things didn’t pan out, like, gosh, these poor people all paid X amount for this property in 1995 and it’s still worth the same amount. I’ve gone and looked and I proved it and hopefully they know. Usually they do. Sometimes they don’t and you just help them and say yeah. And then other times though, it helps me knowing I got a great deal too, and I go, wow, okay. They only pay $3,000 for this in 1981. I’m buying it for 30. No wonder they’re excited. Then I know I can sell it for 65, 70. This is great. Everybody’s going to win. So I can also have that information, knowing that this guy’s going to be jumping up and down with my 30,000 offer because he just thinks he 10 X’ed his investment, which he did. And good for him.
Steven J Butala:
I think this is actually giving him more episode ideas. There are people that you can just hear it in their voice on their phone that are stuck on historical cost, which is the accounting way of saying I paid $5,000 for it. It doesn’t matter I paid five grand for it in 1960. I need to get more than five. That’s a good situation to be in from where we’re sitting. There are also, on the flip side of that, serial negotiators that just, they know what the property’s, they looked up the same stuff that we always look up, they obsess on it. They know it’s worth maybe $2,000, and they’re just going to serially negotiate with Jill. Bless you.
Jill DeWit:
Thank you.
Steven J Butala:
So I mean, I know which one I’d rather deal with. So, that’s a whole show.
Jill DeWit:
Yes it is. This is good. I hope that helps you.
Steven J Butala:
But what’s great is we have all this information. And like with all information, nobody uses it. We’re in the business, so we do it. But if somebody else is, their career-
Jill DeWit:
It’s true.
Steven J Butala:
… and their family and everything else, they’re not obsessing on real estate values like we do in our family 24/7. So we can really use it to our advantage.
Jill DeWit:
Exactly. Happy you could join us today. Five days a week, you can find us here on the Land Academy Show.
Steven J Butala:
Tomorrow, the episode on the Land Academy Show is called glamping and how some members cash flow with it. You are not alone in your real estate ambition.
Jill DeWit:
It is funny. I watched somebody, I don’t know if it was in Discord or the landinvestors.com online community, but they were talking about trying to find property, like, does anybody have any property that I can buy specifically for that use? I want to get an Airstream on there and do some great stuff.
Steven J Butala:
This was a mile long discussion in Discord.
Jill DeWit:
That’s funny. Good. I’m sure you’ll share a lot. Thanks for tuning in. If you are a Land Academy member, be sure you join us on Discord. We are Steve and Jill.
Steven J Butala:
Information.
Jill DeWit:
And inspiration.
Steven J Butala:
To buy undervalued property.
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