By now you have probably heard the term "MLS"
and you have probably seen several references to the MLS
or the Multiple Listing Service. So, what is the MLS?
Definition: Multiple Listing Service- An
MLS is an organization that collects, compiles and distributes
information about homes listed for sale by its members,
who are real estate brokers. Membership is NOT open to
the general public, although selected MLS data may be
sold to real estate listing websites. MLSs are local or
regional. There is no one MLS covering the whole country.
Why do brokers belong to an MLS service?
By belonging to an MLS service brokers expose
their company listings to participating brokers and agents
of other real estate companies. If a participating broker
brings a buyer to a listed property, the listing broker
agrees to pay a commission split to the cooperating broker
and/or agent. The benefits to this type of arrangement
Do all brokers belong to an MLS service?
No. It is not a requirement for brokers
to belong to an MLS service. There are actually many real
estate companies that choose NOT to belong to an MLS service.
How many MLS services are there?
There are hundreds of multiple listing services
across the county. Most local services are run by their
local Board of Realtors. The local boards determine the
requirements to belong to and to participate in their
MLS. It is actually quite common to have overlapping multiple
listing services in a particular area. For example, their
may be a county MLS in your area and also a local service
as well. Having more than one MLS can be problematic for
brokers. Their is generally an annual fee to belong to
an MLS. Having to belong to more than one service can
be costly. Therefore, many brokers generally choose one
service. This can create a problem for sellers in that
their listing may only get exposure to a select group
of participating brokers.
So what does all this mean?
The MLS continues to be one of the best
ways to expose you home to buyers who are actively searching
for a home, but remember, the only was to get your home
listed in a broker MLS is to hire a real estate agent.
This can be an expensive option because brokers charge
between 6% and 7% commission. However, it is now possible
to list your home in the MLS by paying a flat
fee. By using a flat fee broker you can cut the commission
in half! The internet has changed the face of the real
estate transaction the same way it has changed many other
aspects of our lives. Real estate brokers are finding
they have to offer new ways to sell real estate to keep
up with the changes. This has created great opportunities
for home sellers. In addition, "For
Sale By Owner" MLS services are now available
on the internet that function much the same way as a brokers
MLS and they allow the general public to list
their properties without having to hire a real estate
agent. As time goes on buyers and sellers are
becoming increasingly aware of the options available to
them. It is only a matter of time before most people discover
they can buy or sell a home on the internet without enlisting
the services of an agent.
Prior to the popularity of the internet,
the only way to see a home for sale in your local MLS
was to hire a real estate agent or broker to provide you
with their proprietary information that only they could
subscribe to. That has changed! It is now possible to
search most broker multiple listing services right on
the internet. In addition, most broker MLS services now
upload their MLS data to national broker MLS websites
making it even easier to find listed properties for sale
without having to wait for a real estate agent to get
the information to you. For
Sale By Owner MLS sites have also provided a way for
sellers to list their homes nationally without an agent.
By saving one-half of the commission using a flat fee
mls listing or all of the commission by selling FSBO,
sellers can offer their properties at a reduced price
compared to broker listed propertes which benefits the
buyer as well.
Summing it all up
The MLS is still a great and beneficial
way to sell your home or search for homes for sale. It
provides a seller with exposure to buyers working with
brokers and agents. Broker MLS data is now available nationally
through MLS websites. But, it is not the only way, there
are also new listing options available to sellers including
flat fee MLS listings as well as a For Sale By Owner MLS
listing. Buyers and sellers now have more options than
ever when it comes to buying or selling a home.