Have you heard the term MLS in real estate and wondered what it meant?
When you begin the process of either buying or selling a home, you are likely to hear about the multiple listings service. The multiple listing service or MLS is a way for real estate agents to connect buyers and sellers better.
As a seller, it lets the world know you're home is for sale. As a buyer, it makes it far easier to be informed about precisely what is publicly available to purchase.
So how does the MLS in real estate work? How will it affect you when you're involved in a property transaction? Let's examine everything you need to know about the MLS cooperation system.
The multiple listings service is a database containing information shared by real estate brokers. It makes sharing information on homes for sale between the different brokerages.
This arrangement helps both buyers and seller’s agents better serve their clients. As well as sharing information, agents and brokers will share the commission when the home is sold.
It is one of the many tools that facilitates a real estate agent earning their commission and getting paid.
Brokers who are members of the multiple listing service will have access to the electronic database or a printed book that is distributed between participants. The database and the book are updated regularly to show current homes available for sale.
Back in the 1800s, brokerages would only have information on their own clients' properties. This put a limitation on how well real estate agents were able to serve their clients.
To address this issue, brokerages began sharing their listings through an agreement to cooperate. These early multiple listing services were distributed through catalogs, whereas the internet is the most common way of accessing the data these days.
Some governing body does not oversee these listing services. However, most do follow the rules created by the National Association of Realtors.
There are hundreds of local MLS databases created from the cooperation between brokerages. These databases also contain national listings that are shown on real estate websites.
Members of these MLS agreements must pay fees to access the information. Information in the listings will include a lot of details about the properties for sale. This will include:
With the free and easy access to the information we all enjoy, you might be wondering if there is really a use for multiple listing services anymore.
One of the benefits of the MLS is how easy it is to search for properties. The consolidated information means that the broker doesn't need to check different websites to find all the necessary details.
The MLS will also contain more information and private details not found on real estate websites.
One of the most vital functions of the multiple listing service besides knowing what is for sale is the ability to research comparable sales.
Without a functional database of handy sales information, putting together a comparative market analysis would be far more challenging.
Sharing information in the MLS allows smaller brokerages to compete. Without this cooperation, brokerages would only have access to their listed homes. This could give larger brokerages a monopoly in the local market; why would clients go to a small brokerage with a limited supply of homes?
Without local MLS databases, real estate websites wouldn't have any listings. Websites like Zillow take listings data from the local MLS databases. So without the current system, a new method of sharing listings would need to be established.
If you want to view the multiple listings service, your real estate agent can let you check the database. However, if you want to post a property to the database, you'll need to have a real estate license and be a member.
If you want to post your home to the MLS but don't want to work with a real estate agent, there might be a flat fee listing service in your area.
As a real estate agent client, you aren't charged to use the MLS directly. The agent or broker will pay any fees due from using the MLS. The fees involved will vary between the hundreds of listing services across the country.
MLS numbers are used to avoid confusion between homes in the database. They are unique numbers that differentiate one home listing from another.
MLS numbers are sometimes confused with NMLS numbers, but they aren’t the same thing. An NMLS number is from the Nationwide Multistate Licensing System and is for mortgage loan officers.
The best and most up-to-date way of finding homes is through the MLS. Even with many real estate websites to choose from, it remains an important resource that helps buyers and sellers.
Real Estate agents and their clients would be lost without a functional multiple listing system.
It would bring back memories of the MLS books to arrive by truck each week to look at the new listings that hit the market. No thanks!