Characterization of states, the essential components of the underlying energy landscapes, is one of the most intriguing subjects in single-molecule (SM) experiments due to the existence of noise inherent to the measurements. Here we present a method to extract the underlying state sequences from experimental SM time-series. Taking into account empirical error and the finite sampling of the time-series, the method extracts a steady-state network which provides an approximation of the underlying effective free energy landscape. The core of the method is the application of rate-distortion theory from information theory, allowing the individual data points to be assigned to multiple states simultaneously. We demonstrate the method's proficiency in its application to simulated trajectories as well as to experimental SM fluorescence resonance energy transfer (FRET) trajectories obtained from isolated agonist binding domains of the AMPA receptor, an ionotropic glutamate receptor that is prevalent in the central nervous system.