If you want to sell your property in the United States, currently there is only one service which is reliable: connecting with a real estate agency and putting your home on a multiple listing service.
A multiple listing service is a unique feature of the real estate market in the United States. It’s unique because it hasn’t adapted well outside the U.S. market; attempts to establish an equivalent MLS in Britain has failed.
According to the National Association of Realtors, it was in the late 1800s when the MLS was first developed. Realtors would meet at the offices of their local association and share with one another information about the properties they were trying to sell. It’s a nice story which foregrounds the legitimacy of the National Association, and the necessity of an MLS.
It is this principle of collaboration which makes the MLS so unique, and really distinguishes the real estate industry from others. Unlike in any other competitive market, Realtors work together to help sell each other’s stock. Everyone is happy, and everyone gets paid.
That is, everyone who works in real estate. One group of people who trying to sell their homes without realtors are not getting paid, and as a result, are probably not very happy. Well, they are getting paid something, but it is a significant amount less; homes which are for sale by owner alone, without an MLS listing, make on average $39,000 fewer dollars.
What exactly is the MLS?
The multiple listing service compromises 700 regional databases, each one an MLS in its own right. A regional MLS is still organised and operated by professional real estate agents.
Realtors pay a fee to access each individual database, and they share their listing agreements with others in the industry so that they can locate buyers more quickly than they could alone.
Realtors who wish for more reach for their clients often subscribe to more than one MLS. When a property a broker has listed sells, he earns commission, as do properties they help sell as a representative of a buyer.
The Relevancy of the MLS today
Multiple listing services are still the most useful asset when looking to sell a home for a good price, but the internet has changed the way people buy property.
However, in recent years, how access to an MLS works has changed. Only in 2007 did the Federal Trade Commission intervene in a case in Detroit between a National Association of Realtors' affiliate and an agency that was offering discounted access to an MLS. The Federal Trade Commission ruled in favour of the discounted marketplace, as they said to legislate against it would affect competition.
Before this era, you were unable to get a property listed on an MLS without a paying a broker around 6% in commission from the sale, but now some brokers offer flat-fee MLS listings in Massachusetts and across the United States. These listings save homeowners money on commission fees when they sell their property, and allow them a wide reach of customers while retaining their freedom to sell on their own.
The Future of Real Estate
To sell your property today, being on an MLS will improve your chances to do so exponentially. However, there is some suggestion that the relevance of being on an MLS is declining.
The internet has revolutionised nearly early industry, and the internet is no exception. A growing number of homebuyers across America are increasingly looking for new homes on the internet first and foremost, a move which could destabilise the current business model of American realtors.
Real estate agents are brokers are going to have to adapt to this new market. It seems that much of their work will no longer be serving as an intermediary between a seller and a buyer, but rather helping mediate the transaction by helping with the administrative aspect.
The exact future of the MLS is still obscure. But what no one in the industry would deny is the necessity to adapt, and keep apace of rapid technological developments.