Overview
Multiple
Listing Service (MLS) (also Multiple Listing System or Multiple Listings
Service) is a group of private databases which allows real estate
brokers representing sellers under a listing contract to widely share
information about properties with real estate brokers who may represent
potential buyers or wish to cooperate with a seller's broker in finding
a buyer for the property. There is no single authoritative "MLS", and no
universal data format. The many local and private databases some of
which are controlled by single associations of realtors or groupings of
associations (which represent all brokers within a given community or
goegraphical area) or by real estate brokers are collectively referred
to as the MLS because of their reciprocal access agreements.
Seen most widely in the US and Canada but spreading to other countries
in a variety of forms, the MLS combines the listings of all available
properties that are represented by brokers who are both members of that
MLS system and of NAR or CREA, (the National Association of Realtors in
the US or the Canadian Real Estate Association).
The purpose of the MLS is to enable the efficient distribution of
information so that, when a real estate agent is introduced to a
potential home buyer, s/he may search the MLS system and retrieve
information about all homes for sale in a given area or price range,
whether under a listing contract by that agent's brokerage or by all
participating brokers.
In North America, the MLS systems are governed by private entities, and
the rules are set by those entities with no state or federal oversight,
beyond any individual state rules regarding real estate. MLS systems set
their own rules for membership, access, and sharing of information, but
are subject to nationwide rules laid down by NAR or CREA. An MLS may be
owned and operated by a real estate company, a county or regional real
estate Board of Realtors or Association of Realtors, or by a trade
association. Membership of the MLS is generally considered to be
essential to the practice of real estate brokerage.
Limitations of access to the MLS
Most MLS systems restrict membership and access to real estate brokers
(and their agents) who are appropriately licensed by the state (or
province); are members of a local Board or Association of Realtors; and
are members of the trade association (e.g., NAR or CREA).
A person selling his/her own property - acting as a For Sale By Owner
(or FSBO) - cannot put a listing for the home directly into the MLS.
Similarly, a properly licensed broker who chooses to neither join the
trade association nor operate a business within the associations's
rules, cannot join the MLS.
However, there are brokers and many online services which offer FSBO
sellers the option of listing their property in their local MLS database
by paying a flat fee or another non-traditional compensation method.
This may be the fastest growing segment of the real estate industry.
MLS Systems in North America
New York City
Although the other boroughs and Long Island have an MLS, Manhattan does
not, but it does have a database called RLS, which is governed by REBNY
(Real Estate Board of New York). Many brokerages are members, but
controversies surround it, especially since members are required to
place listings on the system within 72 hours. Not unlike many other MLS
systems requiring timely inclusion of information into the system, this
allows brokers to contact all potential clients before they list.
United States
The largest MLS in the United States is currently the Washington, DC
region's Metropolitan Regional Information Systems, Inc (MRIS) covering
Washington DC, most of Maryland (including the Chesapeake Bay counties)
and suburban Virginia counties, and parts of West Virginia and
Pennsylvania. It has 58,550 active members, according to the public
access sections of its website, [1], although numbers vary according to
when accessed.
According to the Swanepoel TRENDS Report 2007 the following are the MLS
Boards with more than 30,000 members:
* 60,000 - Metropolitan Regional Information Systems - Washington, DC
region (inc. Maryland & Virginia)
* 55,000 - Southern California MLS
* 50,000 - MLS of Northern Illinois
* 42,000 - South East Florida Regional MLS
* 38,000 - First MLS - Georgia and the Southeast
* 37,000 - Arizona Regional MLS
* 35,000 - Georgia MLS - Georgia
* 33,000 - MLS Property Information Network - Massachusetts and other
part of New England
* 32,000 - TREND Philadelphia Metro area
Policies on sharing MLS data in the USA
The National Association of Realtors (NAR) has set policies that permit
brokers to show limited MLS information on their websites under a system
known as IDX or Internet Data Exchange. NAR has an ownership interest in
Homestore, the company which operates a website that has been given
exclusive rights to display significant MLS information. The site is
Realtor.com.
Using IDX search tools available on most real estate brokers' websites
(as well as on many individual agents' sites), potential buyers may view
properties available on the market, using search features such as
location, type of property (single family, lease, vacant land, duplex),
property features (number of bedrooms and bathrooms), and price ranges.
In some instances photos can be viewed. Many allow for saving search
criteria and for daily email updates of newly-available properties.
However, if a potential buyer finds a property, he/she will still need
to contact the listing agent (or their own agent) to view the house and
make an offer.
The U.S. Department of Justice filed an antitrust lawsuit in September
2005 against the National Association of Realtors over NAR's policy
which would have allowed brokers to restrict access to their MLS
information from appearing on the websites of certain brokers which
operate solely on the web. This policy would also have applied to
commercial entities which are also licensed brokerages, such as HomeGain,
which solicit clients by internet advertising and then provide referrals
to local agents in return for a fee of 25% to 35% of the commission.
The DOJ's antitrust claims also include NAR rules that exclude certain
kinds of brokers from membership in MLSs. NAR has revised its policies
on allowing access on web sites operated by member brokers and others to
what might be considered as propriety data.
While IDX sites presently allow limited information to appear on all
brokers' sites, new proposals state NAR's ILD policy will create
Internet Listing Display sites and individual brokers may opt out of
allowing their listings to be seen on all websites:
"Unless state law requires prior written consent, each Participant’s
consent for display of that Participant’s listings on the ILD site of
other MLS Participants is presumed unless a Participant affirmatively
notifies the MLS in writing that it has withdrawn consent to such
display (“opt out”).
A Participant that opts out may not display on its ILD site(s)
(including by framing any other website), if any, the listings of any
other MLS Participant provided by the MLS.
A Participant that opts out may not permit display of its listings on
any ILD site of any other Participant. It may, however, display its
listings on public websites of third parties, including but not limited
to Realtor.com.
A decision to opt out may not be revoked for a period of ninety (90)
days from the date the decision becomes effective"
Alternatives and changes to the MLS system
Looking back in time, the MLS was supposed to be simple: A seller – a
listing - an agreement to share - a buyer - a sale. Everyone benefited,
including the buyers and the sellers. The MLS model in use today dates
back to the 1960s when almost all brokers involved in transactions
represented the seller, either as the seller’s agent or as the subagent
of the listing broker. The seller paid the listing broker who, in turn,
was responsible for compensating the broker working with the buyer.
According to the Swanepoel TRENDS Report 2007 this changed during the
1990s, with the evolution of buyer’s agents, the advancement of the
Internet, the subsequent and rapid sharing of real estate listing data
online, and the copyright door being thrown wide open. Today there are
800+ MLS systems across the country and consolidation is inevitable. The
drive towards the freedom of information has caused MLS to evolve into a
consumer marketplace and a quasi public utility. That in turn has opened
new competitors such as Google Base, Zillow.com, and Craigslist. Point2
NLS, Trulia, and Oodle are other examples of newer alternatives to the
MLS service.