What Is a Multiple Listing Service (MLS)?
A multiple listing service (MLS) is a database established by cooperating real estate brokers to provide data about properties for sale. An MLS allows brokers to see one another’s listings of properties for sale with the goal of connecting homebuyers to sellers. Under this arrangement, both the listing and selling brokers benefit by consolidating and sharing information and by sharing commissions.
Typically, multiple listing services 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.
- A multiple listing service (MLS) is a database established by cooperating real estate brokers to provide data about properties for sale.
- An MLS allows brokers to see one another’s listings of properties for sale with the goal of connecting homebuyers to sellers.
- An MLS helps real estate agents and brokers connect by consolidating and sharing information while sharing commissions.
Pocket Listings In Real Estate
How a Multiple Listing Service (MLS) Works
The multiple listing service was created in the 1800s to foster better cooperation among real estate agents when they realized each brokerage could sell their houses more effectively and serve their clients better by going outside their own brokerages’ listings. The MLS is essentially an agreement among real estate agents to list each other’s properties through a cooperative service. The first multiple listing services were circulated via catalogs, but almost all of them are online today.
The concept of an MLS is generic, with no governing MLS body, and the phrase cannot be trademarked or branded. Typically, real estate brokers work together in their local areas to create their own regional MLS. As a result, there are hundreds of regional databases that comprise all of the national listings found on various real estate agent websites.
Real estate agents and brokers pay dues or a membership fee for access to each MLS. In return, the agents receive information on the homes in an area, including listings, photos, and details such as square footage and features of each property. An MLS can only be accessed by licensed agents and brokers. Although each MLS may have its own procedures, they typically follow the rules set out by the National Association of Realtors (NAR). The rules stipulate that the listing must show the commission earned for the seller, which gets shared with the other Realtor or broker who introduces the buyer.
Why Multiple Listing Services Are Needed
In the digital age, buyers can browse 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, then the broker can 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.
Benefits of Multiple Listing Services
Multiple listing services provide more exposure to the selling broker and more options to the broker representing the buyer. In return, both 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 that the firm had listed. The firm’s buyers wouldn’t have access to all of the listings from other brokers in the area. However, with an MLS, the information is consolidated rather than fragmented. An MLS allows competing brokers to work together toward a common goal of helping buyers find their desired properties and helping sellers sell their properties.
As a result of the cooperation of the agents and brokers to create the MLS databases, prospective homebuyers gain access to numerous listings, while sellers get connected to buyers through their broker or agent. Even online real estate websites containing national listings—such as Zillow, Redfin, Trulia, etc.—actually pull data directly from all of the regional MLS databases.
Do I need a real estate license to access a multiple listing service?
Typically, to view listings on your local multiple listing service (MLS) as a buyer or seller, you need to be given access through a real estate agent. To actually post properties on the MLS, you need to have a real estate license. If you are not willing to get a real estate license and don’t want to work with a full seller’s agent, several areas have flat-fee multiple listing services that will list your property for you.
What fees are associated with the MLS?
There are hundreds of MLS organizations nationwide, and they all charge different fees directly to the real estate brokers who belong to their MLS network. The MLS does not charge fees directly to the public.
What is an MLS number?
An MLS number is essentially a serial number for each property on the market. It was created to make it easier to differentiate properties and find properties quickly. In contrast, the NMLS number, while similar and involved in real estate transactions, is issued by the Nationwide Multistate Licensing System and is permanently assigned to each individual who works as a mortgage loan officer.
The Bottom Line
The multiple listing service (MLS) exists to make it easier to find properties for sale and for you to sell your property. With the rise of massive real estate websites like Zillow, Trulia, Redfin, etc., searching through the MLS can feel outdated, but it is still the most accurate and up-to-date way to find homes for sale in most areas.