The internet is more and more becoming the first tool that people use when shopping for real estate, or when trying to gain information about property they own. Realtors galore have their own websites. Large Brokers have interactive sites which show you their listings, their office locations, their agents, and often links to mortgage rates. National sites like Realtor.com and Yahoo are often a buyer’s first stop on the internet to get some information about prices and homes in a given area.
Those who invest in real estate are better informed now in an instant than ever before. Property taxes, sales figures, and foreclosures are at your fingertips. Truly in the 21st century, it is tempting to “let your fingers do the walking” as the old jingle used to say about the yellow pages 40 years ago.
The problem is that some of the information at your fingertips is outdated or just plain inaccurate. Many listings remain on Realtor.com and MLS and broker websites until the deal is recorded closed. If you are researching a hot market, your idea of what is a current price for an active listing may not be up to date. Also, sites such as Zillow.com which purport to give you a figure to offer on a house or know what your home is worth may not have up to date information current to your market. I tested Zillow on my own home in northern New Jersey, and on several properties in Florida I was familiar with. I found that you can get a general sense of a long term trend using Zillow, and you can get the amount of the tax assessment within the past year, but it is really not very accurate for a market that is still hot, or an area that is sensitive to locality within a few blocks or types of homes. For that, you need to consult with a realtor or do your own legwork.
It is now also possible to buy property sight unseen over the internet. Deals abound on Ebay and auction websites. This is not as easy, or as foolproof, as it seems. Regardless of the details on the website, you must perform due diligence. Find out just what comes with that great bargain, that low cost investment. You want to be sure you are not paying someone to unload their headache – and their liability – onto you.
For example, you see what appears to be a great property on eBay – for only $1000 you buy this old house that is a foreclosure. You can renovate it or tear it down and build. You check the eBay feedback for the seller – looks good. You call the seller, and you are assured that it is such a great deal, just look at what other properties are going for, if you fix it up. You look up sale prices in the area – not the place you would like to live, but for a quick deal not bad. Well, not so fast. Is that property REALLY as it appears? Is it in a flood plain? Is the additional insurance required? Are back taxes owed? Is there a lien on the property? Is it a local health hazard slated for demolition? Suppose the town demolishes it to remove the health hazard – and sticks you with the bill. Not such a great investment now.
Successful investors in real estate do not work alone. They work with advisors and partners who can help them locate the truly good deals and negotiate with clear objectives in mind. The internet is a tool to connect you to information – it is not a guarantee of a safe deal.