The MLS or the Multiple Listing Service is the database of real estate properties available per area. This is the tool used by real estate agents to share information, offer commission, and work together to connect buyers and sellers.
How it started
According to the National Association of Realtors, the MLS started in the late 1800s. During that time, local real estate brokers were already sharing information about the properties they were looking to sell, while offering compensation to the other brokers who can help sell their inventory. The term “multiple listing” was coined in 1907, expanding its function nationwide as a basis for appraisals and valuation of real estate properties.
How it works
Through a widely used programming interface, the MLS is presented in a simplified format to update real estate listings. Local realtors and broker groups submit accurate data containing relevant features of the properties they are selling, including the offer for a commission. MLS subscribers retrieve the information they need from the hundreds of homes sold by area, property type, square footage and more.
Why it matters
Without the MLS, home sellers will have to contend with the limited exposure of traditional marketing. Since the MLS automatically feeds property information to thousands of realtors nationwide (who usually have qualified buyers already looking for the perfect home), it beats the idea of just putting up a “for sale” sign in the yard. It’s the kind of leverage that postcard distribution and social media ads cannot easily reach. MLS delivers the news that this particular house is available, right to the people who need to know about it.
Benefits for the sellers
Through the MLS, all the listed properties for sale appear on a variety of sites, including Zillow, Realtor, and Redfin to name a few. MLS makes it possible for home sellers to advertise their homes publicly while keeping their personal data confidential.
Benefits for the buyers
MLS levels the competition between real estate agents by making the listings available to all of its subscribers. Hence, buyers can choose the agent whom they are comfortable with, without the worry of missing out the information they need.
With MLS, buyers can save time and effort by quickly comparing the features of one property to another. Current market values can also be verified through the CMA (Comparative Market Analysis) which compares the prices of recently sold and available similar homes on the MLS. This tool enables the buyer to make an informed decision, as to whether the desired home is overpriced or not.
How to get listed
Home sellers can get their property listed through their agent’s subscription. Real estate brokers and agents all subscribe to their local MLS database. This is part of the reason why agents are paid 2.5 to 3% commission upon the sale of the home. Meanwhile, home sellers who do FSBO can also list their properties on the MLS by seeking out flat fee listing services offered by some companies. These flat fee listings, however, are provided with short-term exposure and can be costly if the home is not sold quickly.
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