Short answer: A skip trace service does the same lookups as software, with a human handling list hygiene and the hard cases. You pay more per record and often less per usable contact. The compliance obligation stays with you either way.
- Services earn their margin on the hard records: deceased owners, LLCs, returned mail.
- Ask what happens to no hits. Billing for records that returned nothing is common and negotiable.
- Turnaround is the real differentiator at volume, not price.
- You carry the TCPA risk, not the vendor. Read the agreement.
The choice between software and a service is really a choice about who does the tedious work. The underlying data is broadly the same. What differs is whether a person cleans your list, works the exceptions and hands you something usable.
Contents
Which one fits you
| Software | Done for you service | |
|---|---|---|
| Unit cost | Lower | Higher |
| List cleaning | Yours to do | Usually included, and this is most of the value |
| Hard cases | You work them | Handled, or escalated to a researcher |
| Turnaround | Minutes | Hours to days |
| Best for | Steady volume, clean lists | Messy lists, probate, heir and entity work |
If your lists are clean and repetitive, software wins on cost. If you are working probate, heirs, returned mail or entity owned property, a service usually wins on cost per usable contact, which is the number that matters.
What to ask before you hand over a list
- Do you bill for no hits? Many do. Many will stop if asked.
- How do you define a hit? A returned number is not the same as a reachable one. Get the definition in writing.
- Do you deduplicate by owner before billing? If not, you pay repeatedly for portfolio owners.
- Do you flag DNC and known litigators? And is that included or extra?
- What is the turnaround on a file this size? Ask for a commitment, not a typical.
- What permissible use am I certifying? If they never ask you this, be cautious about the provider.
- What happens to my list afterwards? Retention and resale terms vary and are worth reading.
Send a paid test file of a hundred records before committing to a large one. The difference between providers on your data is bigger than any comparison article can tell you.
Who carries the risk
This is the part buyers skip. Almost every skip trace agreement places the compliance obligation on the customer. You certify a permissible use, you agree not to use the data for FCRA regulated purposes, and you accept responsibility for how you contact people.
That means a vendor telling you a list is “TCPA safe” is describing their scrub, not indemnifying you. If it matters at your volume, have counsel read the agreement before you sign.
The number is the easy part. Calling it is the risk.
Skip tracing gets you a phone number. What you are allowed to do with it is a separate question, and it got harder in 2026.
In Coffey v. Fast Easy Offer (Ninth Circuit, 4 June 2026) the court revived TCPA claims over “we buy houses” calls and texts. The district court had thrown the case out on the theory that offering to buy a house is not a solicitation to sell anything. The Ninth Circuit disagreed, holding that the sender’s purpose matters, and that where unconverted leads are handed to a brokerage under a revenue share, the communication can be a telephone solicitation after all.
The practical consequence for wholesalers is direct. The old comfort that buy side outreach sits outside the TCPA is no longer safe in the Ninth Circuit, and the reasoning is available to plaintiffs elsewhere. If you skip trace a list and then blast it, you are relying on a defence that has just been narrowed.
- Skip traced numbers are overwhelmingly cell phones. That is the point of skip tracing, and it is also what raises the exposure.
- The National Do Not Call Registry still applies to telephone solicitations. Scrub against it rather than assuming your data provider did.
- What you do with dead leads matters. Coffey turned partly on referring unconverted sellers to a brokerage for a share of revenue. If your business does that, read the opinion with counsel.
- Consent is the safe path. Direct mail first, inbound response second, phone contact after that. Slower, and far more defensible.
What this data legally is, and is not
Skip tracing data sold to investors is almost always non-FCRA data. That is not a loophole, it is a category.
| Law | What it restricts | What it means for you |
|---|---|---|
| FCRA | Use of consumer report data for credit, insurance, employment and tenant screening decisions | You may not use investor skip trace data to screen a tenant or a buyer’s creditworthiness. Different product, different permissible purpose. |
| DPPA | Use of state motor vehicle record data | DMV sourced data has a restricted list of permitted uses. Marketing to homeowners is generally not among them. |
| GLBA | Non public personal financial information | Constrains what financial data a provider can resell and for what purpose. |
| TCPA | Calls and texts to the numbers you just found | The live risk. See the section above. |
Reputable providers make you accept a permissible use agreement before they release data. If a provider does not ask, that is a signal about the provider rather than a convenience.
Frequently asked questions
What does a skip trace service cost?
Typically more per record than software, with the difference reflecting list cleaning and manual work on exceptions. Compare on cost per usable contact rather than per record, because that is where a service usually closes the gap.
Should I use a service or software?
Software for clean, repetitive lists at steady volume. A service for messy lists, probate, heirs, entity owned property and anything where mail has already come back.
Do skip trace services guarantee accuracy?
Effectively never. Data ages constantly and no provider controls the sources. What good providers will do is define what counts as a hit and agree not to bill for no hits.
Will a service handle Do Not Call scrubbing?
Some include it, some charge extra, some do not offer it. Confirm in writing, and remember the legal obligation remains yours regardless of what the vendor scrubs.
Can they find heirs of a deceased owner?
Good ones can, by combining obituary research, relative data and the probate docket. This is the work that most clearly justifies paying a service rather than running software yourself.
Is my list resold?
Depends entirely on the agreement. Read the retention and data use clauses, and ask directly if it is not clear.
Cost per contact, not cost per record
Almost everyone compares skip trace vendors on the wrong number and then wonders why the list did not pay. Inside the free group we go through what is working, what to ask a vendor and how to work the data once you have it. 1,100 wholesalers already in there. No cash, no credit, no license needed.
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Coffey v. Fast Easy Offer, LLC, No. 25-4066 (9th Cir. 4 June 2026)
Telephone Consumer Protection Act and National Do Not Call Registry rules
Fair Credit Reporting Act permissible purpose provisions
Standard commercial data licence and permissible use terms
This article explains common practice and is not legal advice. Contract law, disclosure duties and wholesaler licensing rules vary by state and change often. Have a real estate attorney licensed in your state review any agreement before you sign or use it.