What is a multiple listing service?

If you’re selling a home and looking for buyers – or the other way around – you may be overwhelmed by a lot of information you can find when just browsing on the internet. Sometimes your own circle may be limited, preventing you from reaching out to a wider market.

With the help of a multiple listing service, this initial process of looking for prospective buyers and sellers is made simple.

What is a multiple listing service?

A multiple listing service (MLS) is a program, platform, or database that allows users to see the list of properties that are for sale. It’s a great tool for brokers, agents, and even their prospective clients when looking for real estate listings.

Historically, particularly in the US, organized real estate created the first MLS. According to the National Association of Realtors (NAR), brokers regularly met at the offices of their local associations to discuss the properties they were selling. Then, they paid other brokers to help them sell these properties.

In essence, MLS is based on the principle of helping sell each other’s inventory.

The MLS has now expanded with the use of modern technology. The industry of developing the perfect MLS has also grown, with hundreds of available MLS in the market today. These numbers vary in every country.

Here’s a quick video as an introduction on how multiple listing services work:

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How does a multiple listing service work?

A multiple listing service is created by participating real estate agents and brokers. They will all have access to the list and will be able to input data into it. Participating and new agents and brokers will have to pay membership dues to access the list.

Multiple listing services can provide a list of properties for sale only in a specific locality or geographic region. This helps users trim down their choices when searching for listed properties.

Using multiple listing service as a seller

Sellers, who are accessing an MLS through their real estate professionals, can list their property in the database for wider market reach and exposure.

It must include all the required information to describe the property. To encourage more buyers, sellers may put up pictures and videos of the home, highlighting some of its best characteristics.

An open house opportunity can also be included when listing the property. It will then include the seller’s contact information to help an agent who wants to book an appointment.

Part of the listing appointment between the seller and the agent is using the MLS for a comparative market analysis (CMA). It will help them decide on the price of the property by showing data on other similar homes that were sold in the same area.

MLS members (the agent or broker) and their client-sellers must input the most accurate information in the platform. The photos and videos to be included in the listing must also be of high quality, depending on the MLS’s standards.

The accurate data about the property must also be placed in the MLS within a specified period. This is usually between 24 to 48 hours after completing the listing agreement. Otherwise, the MLS member may be fined or sanctioned.

The video below is a sample of how reporting inaccurate data in an MLS can be done:

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Using multiple listing service as a buyer

Multiple listing services can help a buyer zero in on the property suitable for their wants and needs through the search features.

Initially, both the real estate professional and the buyer will talk about the specifics that the buyer is looking for in a home. Then, the real estate professional will do their search in the MLS for the home that their buyer wants.

Filters can be used so that similar properties can be chosen by the buyer. Some examples of these filters are:

• location of the property
• type of home
• price
• property size
• number of bedrooms

After choosing a potential home, the real estate professional will then reach out to the seller using their contact information found in the MLS. If the seller allows an open house, the agent or broker can ask for details.

The real estate professional can also give the buyer access to the MLS, if necessary.

Limitations of multiple listing service

There are some restrictions when using multiple listing services:

Direct sellers

Homes sold by the owners themselves are not found in multiple listing services. Only the agents and brokers can add properties for sale in the MLS. To add their homes to the MLS, sellers would have to work with an agent or broker.

This means that sellers would need to hire a real estate professional to reach out to a wider market through the MLS.

Buyers cannot access privately sold homes, such as when a homeowner is selling their own property.

Pocket listings

Another restriction of multiple listing services is that it does not include pocket listings. Pocket listings are offers managed by a single broker or firm which sellers do not want to be marketed publicly.

Also called off-market listings or exclusive listings, pocket listings are called this way because these listings are figuratively in the pockets of agents or brokers. They are only sold by secretive means, or only through the firm’s own list of buyers.

High-profile sellers engage in pocket listings due to privacy concerns, or because they’re willing to wait for the right offer from a prospective buyer.

Public’s view vs. professional’s view

Accessing the multiple listing service in a region is purely restricted to its participating real estate professionals. In some cases, the public – or buyers without an agent or broker – can access one, such as a flat-fee MLS. The disadvantage is that the public’s view of an MLS will differ from that of an agent or broker.

For example, certain features such as requests to access the property and submit an offer to the seller can only be done through the agent’s or broker’s account. Other important information can only be viewed by members of the MLS, such as the size of the property, size of each room, etc.

That is why it’s still important to engage the services of an agent or broker to have a full view of the MLS.

Who can access a multiple listing service?

Accessing a multiple listing service is only limited to:

• Agents and brokers: the licensed real estate professionals who are members of the multiple listing service
• Clients of agents and brokers: if they partnered with these real estate professionals with access to the MLS

There are other ways of accessing a multiple listing service or its information from third party websites:

• workers of firms and brokerage: assistants and staff of real estate firms and brokerage can be granted access, such as through sponsorships
• public MLS: there are some MLS which the public can openly access, but with restricted view or some redacted info on the property being sold
• through syndication agreements: people can access listings from various MLS through websites offering a syndication service
• through an IDX: internet data exchange (IDX) is a website managed by an agent or broker that features their own listings of real properties

What are the benefits of using a multiple listing service?

There are many benefits in using a multiple listing service. Let’s discuss these benefits and advantages from the different viewpoints of buyers, sellers, and real estate professionals:

Benefits for buyers

When real estate professionals deal with sellers or their clients, a multiple listing service simplifies the process.

This database can be used by agents or brokers when showing prospective homes to their clients. Everything else related to that home is also provided, such as its detailed descriptions, and photos or videos of the property.

It also prevents buyers from hiring multiple agents or brokers to access a wide range of listed properties for sale. If the buyer’s agent or broker is a user of an MLS, the buyer can check on multiple properties for sale by hiring only one professional.

Benefits for sellers

Sellers benefit from multiple listing services because they increase the exposure of the property they’re selling. Aside from the traditional means, sellers can reach out to more potential buyers, and even brokers and agents, when using multiple listing services.

They’re also assured that no bogus buyers will reach out to them through the multiple listing service.

Similarly, buyers can also rest assured that the information in the MLS is accurate and that there are no sham properties for sale. Only buyers working with an agent can access their properties on the platform.

Benefits for real estate professionals

Multiple listing service is a great tool for new real estate agents or brokers, especially if they’re only starting with their career or want to expand their reach.

Multiple listing services foster cooperation among local brokers and agents. The tool allows them to interact for the success of their transactions and for their clients’ benefit. It also levels the playing field among these local brokers and agents. All in all, it encourages healthy competition in a very aggressive industry.

Real estate professionals can also save more time and resources when using multiple listing services. Important details such as the seller’s contact information and appointment process are made available to agents and brokers in just one platform. They would not need to search on multiple websites or where else to find this information.

For wider access to real estate properties for sale, professionals can also be members of multiple listing services. This will also depend on the needs of their clients, such as a buyer looking for properties in not just one locality.

Using a multiple listing service can also help professionals comply with regulations on buying and selling properties in their country.

How are complaints about a multiple listing service handled?

Different complaints may arise about a multiple listing service. It can be from its member real estate professionals against another, or from a buyer or seller.

The usual causes of these complaints are allegations of violations of the MLS’s rules and regulations or of the industry’s code of ethics. Inaccurate information about the property can also be raised in these complaints.

Every MLS has its own complaint-handling process that members and clients must follow. In most cases, below is a usual process for complaints:

• complaints can be submitted in the MLS administrator’s website, or within the MLS
• the MLS ethics committee or grievance committee will handle the complaint
• if found guilty of violation of the MLS code of ethics or its rules, the member can be sanctioned depending on the offense

However, there are times when the real estate professional being complained about is not a participating member of the MLS. Here, the complainant’s can go through the licensing authority of the country or state.

Use a multiple listing service to your advantage

A multiple listing service is a great tool for all parties in a real estate transaction – which includes the buyer, the seller, and the agent or broker.

It eases the overall process, from listing the property for sale, when looking for homes to be bought, to the initial negotiations of the parties.

How helpful is using a multiple listing service in your day-to-day role as a real estate professional? Let us know in the comments.