The real estate industry is built on a foundation of information sharing and collaboration between agents, buyers, and sellers (among others). One tool stands out as a “must-use” in this process, known as the MLS (multiple listing service).
What Is the MLS?
The MLS is a group of databases providing information about real estate for sale and rent. Real estate agents use the MLS to help their clients sell, buy, and rent properties.
After signing a listing agreement with a property owner, a listing agent enters that property’s information into the MLS database. Doing so creates a listing for other agents to view, which has pertinent property information — everything from a house’s square footage to open houses and if the property’s a short sale. Each listing also includes the agent’s contact information.
History of the MLS
In the early 20th century, real estate agents and brokers met in person to exchange information about the properties they were selling or looking to buy. People started using the term “multiple listing” in 1907.
In 1908, the National Association of Realtors’ forerunner, the National Association of Real Estate Exchanges, endorsed such a system. At the time, brokers called these in-person exchanges MLS initiatives.
The system has grown and adapted into the digital version that agents and brokers use today.
Who Uses the MLS?
Only people with a real estate license can use the MLS, which limits access—for the most part—to real estate agents or brokers, who pay a fee.
An MLS usually does not include for sale by owner properties. While homeowners selling on their own aren’t able to create an MLS listing, they can hire an agent or commission a service to do so on their behalf.
Real estate websites such as Trulia and Zillow include some information from the MLS. However, these sites only aggregate MLS listings. They don’t display all the data from a listing, and they don’t always include every listing.
How the MLS Works
Real estate agents use the MLS to publish details about properties they’re selling, and in turn, they can access information about other listed properties. This mutual sharing facilitates the buying and selling process, ensuring all agents have access to the same data pool.
Each MLS is region-specific, meaning there’s not just one centralized system but many across different areas. When a property is listed, important details like price, size, amenities, and photos are uploaded. This centralization ensures consistency, making property comparisons more straightforward.
By fostering collaboration among agents, the MLS ensures a smoother, more transparent real estate transaction for everyone involved.
Benefits of Using the MLS
The MLS is a mainstay in the real estate industry, providing a myriad of benefits to agents, buyers, and sellers alike. Designed to enhance efficiency and transparency, it streamlines the property transaction process. Here are some of its key benefits:
- Comprehensive listings: The MLS offers an extensive database of available properties, giving buyers a broad view of market options and sellers a wider audience.
- Up-to-date information: Properties on the MLS are constantly updated, ensuring agents and buyers get the latest details about a property’s status, price, and more.
- Professional network: The MLS fosters collaboration among agents. This network promotes the sharing of information, ensuring properties get maximum exposure and buyers find the right fit faster.
- Consistency: All listings on the MLS follow a standard format, making property comparison more straightforward.
- Exclusive access: While some listings are available to the public, many are exclusive to agents on the MLS, giving them a competitive advantage.
By harnessing the power of the MLS, agents and their clients are equipped with an advanced tool set, ensuring a smoother real estate journey.
The MLS has evolved from in-person property exchanges in the early 20th century to a sophisticated digital platform in today’s real estate industry. Its unmatched efficiency, transparency, and collaborative nature empower real estate agents to facilitate the best possible outcomes for both buyers and sellers. Even as the real estate industry evolves, the significance and relevance of the MLS remains the same.
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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.