What is a Multiple Listing Service (MLS)
A multiple listing service (MLS) is a service used by a group of real estate brokers. They band together to create an MLS that allows each of them to see one another's listings of properties for sale. Under this arrangement, both the listing and selling broker benefit by consolidating and sharing information, and by sharing commissions.
Most MLSs create a book or an electronic database with all of the houses for sale by affiliated brokers, who update it on a regular basis. The participating parties distribute the book in print or online to each member of the service.
BREAKING DOWN Multiple Listing Service (MLS)
The concept of an MLS is generic. There is no governing MLS body, and the phrase cannot be trademarked or branded. Typically, brokers band together with other brokers in their local areas to create their own MLSs, and they allow brokers from other areas to view them as needed.
Benefits of Multiple Listing Services
MLSs give the selling broker more exposure, and they provide the broker representing the buyer with more options. In return, both the brokers receive a commission on the sale. These services also level the playing field by allowing small and large brokerages to compete with one another. For example, imagine if a small brokerage were only able to offer its buyers the properties it had listed. Its buyers wouldn't have the options they desire. However, with an MLS, the information is consolidated rather than fragmented. It allows competing brokers to work together toward a common goal of helping buyers find their desired properties, and helping sellers sell their properties.
History of Multiple Listing Services
MLSs allow brokers to network easily, and the concept is more than a century old. In the late 1800s, real estate agents often gathered in one another's offices, where they would share information about the properties they were trying to sell. Ultimately, this in-person networking was modified into the concept of an MLS.
Multiple Listing Services in the Digital Age
In the digital age, buyers can go online and look through countless real estate and brokerage websites. In spite of this increased exposure, the need for an MLS persists. If a buyer works with a broker who belongs to an MLS, the broker has the ability to quickly and conveniently search all of the properties for sale by participating agents. In most cases, the MLS listing also contains private contact information and details about showing times. Without this consolidating service, the broker would need to look through several different websites, each for individual brokers, to find available properties in the area.