For real estate professionals, technology and data are critical components for success and they provide value and help you set yourself apart in markets that often still rely on word-of-mouth for referrals.

There is no doubt that data is king, but are you using it correctly?

Data is the basis for a number of initiatives that real estate businesses are embarking upon to improve their offerings, namely around providing more accurate location-based information about properties and more detailed analysis and recommendations.

Your real estate business could be making a mistake if it is relying on lower-quality, free data sources, which could prove a costly problem for businesses to fix.

It is typical for a real estate website today to feature some kind of detailed neighborhood analysis on the nearest schools, fire stations and demographics. Real estate businesses are using this information to offer more in-depth analytics and comparisons, allowing sellers to set a more competitive price and providing buyers with better recommendations for comparable properties in similar neighborhoods and price points.

This is where high-quality data can help a broker or agent develop a picture of key options.

Armed with this insight, you can back up your case to clients regarding listing prices, alternative properties to consider or where the greatest ROI potential on an investment property might lie.

All of your recommendations to clients should be supported with solid data and this sets many brokerages apart. As an agent trying to offer the best customer experience for clients, it is vital.

The data, like produce, needs to be fresh, with updated information as school zones change, boundaries are redrawn.

Data also is key to your reputation, and outdated data could be embarrassing if a client makes a purchasing decision based on data that turns out to be incorrect.

Ultimately, you have two options for data sources: free and premium data.

Free data typically comes from a variety of sources, including private companies, other real estate businesses, and state and local authorities. The main benefit of these sets is that there is no cash outlay required—although there is little consistency or guarantee of quality among the sets, which means the onus is on the user to validate them and ensure interoperability with other internally held data.

Premium data offers a number of benefits, including rights, which can be negotiated in contracts to provide certainty

Premium data also is professionally curated, usually by GIS (geographic information systems) specialists with best practices in mind, so there is quality and consistency within and between data sets.

Moreover, it also is standardized to make it easier to integrate internally. It also is updated, usually on a monthly and quarterly schedule to ensure it is current.

Premium data also comes with support in case you have an issue. With free data, you are on your own.

As an agent or broker, your clients will have a better customer experience if you use data for deeper analysis. Know the difference between free and premium data sets and what they mean to your real estate business.