The MLS makes the lives of buyers, sellers and Realtors easier.
Now, I know most of you have heard of the Multiple Listing Service (MLS). In fact, many of you have browsed my website which uses an Internet Data Exchange (IDX) feed to show properties listed on the Wasatch MLS. Since the service is often referred to as “the MLS”, I bet you didn’t realize there are over 800 MLSs in the United States1. But what exactly is the MLS, and why is it so darn important in real estate transactions?
Brief History of the MLS
The Multiple Listing Service as we know it has evolved into an online database that agents and brokers can examine everyday. It provides data on homes that have sold or are currently listed. The MLS also can provide insight into data used for market valuations, housing trends, and growth. Now, it wasn’t always so awesome.
In the 19th century, it was common for brokers and agents to gather locally and share properties they had for sale in the hopes of finding clients and selling the properties. These brokers and agents would agree that, if another agent found a buyer for their property, the agent would receive compensation for the sale. This allowed agents to access a larger pool of available properties for buyers and gave sellers more eyes on their listings.
This process evolved and became supported in 1908 by the National Association of Real Estate Exchanges, which became the National Association of Realtors (NAR)2. Agents started paying fees for access to listing information and were provided with a book of available properties in an area. Of course, Realtors don’t receive a book anymore. Technology has allowed us online access to the whole MLS for an area.
Why the MLS Is Important
I know what you’re thinking. This is the 21st century, and I can find properties listed on a variety of websites online. Well, that is true, but keep in mind most of that information is being fed in from one of the hundreds of MLSs.
Most of the real estate websites use an IDX service approved by the MLS to gather the information from the MLS. In fact, that is what my website does.
So, aside from the MLS helping to pin down exact market conditions and find available properties, what else does it provide? Well, this is the most important part…
As part of the agreement to use the MLS, brokers and agents agree to compensate other agents for sales of their listings and vice versa. Basically, it motivates your agent to show you any home that might be perfect for you since they will be compensated.
Top Benefits of the MLS
- Almost all properties offered for sale are in one place to browse.
- The public can find homes in their area through the use of an IDX website that imports MLS data.
- Your agent can sell you any home on the MLS.
- Many agents can bring buyers to your listing on the MLS.
- The data accumulated by the MLS over time can help provide market values or comparisons.
Final Thoughts on the Multiple Listing Service
The MLS is the only place where every real estate professional that subscribes, and we all do, can find all the details of your home or prospective new home purchase. Without it, we would still be in the age of driving around looking at “For Sale” signs.
*There are few cases where the MLS would not be used to sell a home. Often referred to as a pocket listing, or a listing not on the MLS, these are usually only recommended if extreme discretion is needed during the sale of a property.
Do you have any questions about the Multiple Listing Service? Ask me in the comments.