WHO BENEFITS FROM A REAL ESTATE DATA BASE?
By W H Inmon
There is little doubt that a real estate data base – one that shows the gross details of every real estate transaction – has many uses. With new technology such as Forest Rim technology (FRT)’s textual ETL building and maintaining a real estate data base is now a real possibility.
But who exactly is the beneficiary of such a data base? What good is it to have a data base outlining the details of every real estate transaction?
There are actually many beneficiaries. At a detailed, local level the most obvious beneficiary is the buyer/seller of an individual property. Every buyer/seller wants to know – am I paying too much for my property? Or did I get a really good deal? It is human nature to want to know these sorts of things. And with a localized real estate data base you can look at the square footage and the price people are paying for a square foot for property. Now no two properties are exactly the same. But a square foot valuation is a good way to judge the approximate value of a property. Unless there is something really unusual about a property, a square foot valuation is a useful fairly standard measurement.
But there are plenty of other ways to look at marketplaces. Instead of a very focused, local perspective, there is the broad perspective. The broad perspective includes looking at properties across states and across cities. Any one county or any one property is merely a blip when looking across the broad perspective of time and territory. And of course, the commercial marketplace has to be factored into the residential marketplace when looking at the broad picture of real estate.
There is farmland, retail space, and other commercial space that forms the larger picture painted by looking beyond residential properties.
Complicating matters is that when it comes to commercial property the appraisal value becomes more important than the actual sale price as recorded by the county because many of the commercial properties do not change ownership as often as residential property changes ownership. So there is a natural shift to looking at appraisal value for commercial real estate rather than actual sale value.
In any case, being able to create a comprehensive, accurate, and up to date picture of the real estate marketplace is of inestimable value. Stated differently, the organization with the most accurate, most complete, most up to date information is poised to make the best decisions.
Having an accurate, comprehensive, up to date real estate data base is like going into the boxing ring wide awake and alert where your opponent is still half asleep and doesn’t have their eyes open yet. The boxing match will be over before it begins if one of the participants is still sleeping.
For the organization making sweeping decisions across international and state boundaries, having a data base of retail activity is of great strategic value. The data base outlines where good buying and good selling opportunities are, or more importantly – will be.
There are of course nationally available data bases. But there are some problems with those data bases. The first problem is the subscription cost of the national data base. However, subscription cost is usually not a big drawback. The second problem is the scope of the national data base. What territories are encompassed and what territories are not? A third limitation is the type of information found in a national data base. People are always looking for different types of information that just is not quite there in the data base.
But the real problem with a national data base is that it is open to anyone willing to pay the subscription price. When data is available to anyone and everyone, there is limited strategic value in such data. Truly strategic data is available to people on an exclusive basis, not an inclusive basis. Stated differently, the exclusive usage of data is a major factor in determining the strategic value of the data. The more wide spread a data base is used, the less strategic value it has.
So, a nationally available real estate data base is a good starting point. But such a data base has limited strategic value.
Forest Rim Technology is a Bill Inmon company located in Denver, Colorado. Forest Rim has the technology needed to build a residential real estate data base. Bill can be reached at email@example.com.