I’m a new investor. Where do I find comparable sales information (comps)?
The Realtor-owned Multiple Listing Service known as MLS is by far the most accurate source of comparable sales information available. You may find partial data on comparable sales from Zillow, Trulia, Redfin and others, but it tends to be sparse, outdated and in some cases totally inaccurate.
There is no secret website where you can pay a monthly fee and get comparable sales data for Texas properties. Active properties are listed publicly on the Austin Board of Realtors public site, Austin Home Search and the national site, Realtor.com as well as most individual Realtor and broker websites, but you will have a hard time finding accurate sold data outside MLS.
Comparable sales information is the primary data you need to make investment decisions. Active properties are not sales. You should not base any investment calculations on active property list prices.
In Texas, non-Realtors are at a distinct disadvantage when it comes to comparable sales information, but be aware that in many other states (known as disclosure states) property sales data is publicly recorded and readily available from many online services.
Why can’t I find comps online?
Texas is a non-disclosure state. That means the data on property sold in Texas is not publicly recorded. The only information that is recorded at county offices is the mortgage, which may give you some indication of what the property sold for but it’s not a reliable source of sales prices since the cash portion of the sale is not recorded. Texas considers the property sale value to be private and confidential information.
By virtue of being involved in the large majority of real estate transactions, the Board of Realtors owns the large majority of real estate sales information and makes it available to licensed Realtors who pay the MLS fees necessary to maintain the database.
The non-disclosure states are:
- Alaska
- Idaho
- Indiana
- Kansas
- Louisiana
- Maine
- Mississippi
- Missouri
- Montana
- New Mexico
- North Dakota
- Texas
- Utah
- Wyoming
3 ways to get comparable sales data from MLS
1. Become a licensed real estate agent and Realtor
Having a real estate license and direct access to MLS is the most reliable way to obtain the highest quality comparable sales information in a non-disclosure state. Even if your primary goal is real estate investment, becoming a licensed Texas real estate agent can be a great supplement.
The classes to obtain your real estate license are available online and relatively inexpensive, but the annual MLS fees for Austin’s Board of Realtors are currently over $1,000 per year.
You’ll also need to find an investor-friendly broker like Little City Properties to sponsor you for at least the first 4 years. After that you’re eligible to become a broker if you want, although MLS fees are higher for brokers.
2. Work as a Realtor’s assistant
You may be able to negotiate assistant status with a licensed agent to get access to MLS comps. The Austin Board of Realtors provides real estate assistants with access to sold property data.
3. Hire a Realtor
You can work with a Realtor and allow them to represent you on purchases and sales when possible or you can pay for comparable sales data on an hourly or by-property basis. You’ll have to negotiate with the individual agent and see what works for them and their supervising broker.
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