Each MLS is created, maintained and paid for by participating real estate professionals in that local area. It’s where brokers and agents share their listings, upload pictures and detailed information of each property, and update them on a regular basis with the goal of connecting home buyers to sellers.
Brokers and real estate agents pay dues or a membership fee for access to each MLS. If a broker wants to list or view homes in an area that isn’t covered by the MLS they’re currently part of, they’ll need to join the MLS for that area as well. So, it’s possible and sometimes necessary for brokers to participate in multiple MLS databases. Each database has its own prices, fee schedules and rules.
Essentially, the multiple listing service was created 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. In 1908, the National Association of Real Estate Exchanges (now the NAR®) endorsed the use of this system by all agents. This information sharing first took place via books, index cards, and catalogs, but has quickly evolved into the modern system in use today—online and fully searchable by price, neighborhood, and home features.
As of 2020, there are about 600 MLSs throughout the United States, according to the Real Estate Standards Organization (RESO). However, the number rises and falls year-to-year “due to regional consolidation,” or when neighboring databases come together to form larger, regional ones. There are also rare markets that do not have an MLS, such as New York City.
But aside from this basic information, MLS listings will also typically include private remarks meant only for other agents. This is to protect the privacy and safety of the seller. These notes can include things like seller contact information, showing instructions (such as the best time for showings, information about pets in the home, gate codes, etc.), and even seller disclosures and homeowners association (HOA) regulations.
Each property is assigned an MLS number, a serial number created to make it easier to differentiate properties and find properties quickly.
Once a seller has their home listed on the MLS, it will be visible to all other agents and brokers who use that MLS, significantly increasing their chances of finding a buyer. In fact, access to the MLS is one of the main benefits for homeowners who hire an agent to help sell their home, compared to going the For-Sale-By-Owner (FSBO) route.
Similarly, prospective home buyers gain access to numerous listings through the MLS. When a buyer works with an agent to purchase a home, an agent will ask where they’d like to live and what type of home they’re looking for. They’ll also discuss with the buyer their ideal price range, what size home they need, their needs vs wants, which features are important to them, and so on. The agent will then use these criteria to search for homes in the MLS that suit the buyer’s preference. When the buyer eventually finds homes they are interested in, they can use the information in the MLS to schedule showings or inform the buyer of upcoming open houses.
In most cases, the MLS listing also contains private contact information and details about showing times.
MLSs level the playing field by allowing small and large brokerages to compete with one another. With the help of these services, property information is consolidated rather than fragmented, and there’s no need for brokers to create their own separate systems of cooperation.
An MLS allows competing brokers to work together toward a common goal of helping buyers find their desired properties and helping sellers sell their homes. In return, both brokers receive a commission on the sale.
Some regional MLS databases may have a ‘public-facing side’, which means anyone can view MLS listings without professional assistance. However, the agent side contains a little more information about showings, property access, how to submit offers, agency and commission cooperation and the ability to run a market analysis, among others. Many real estate firms also feature MLS feeds on their websites to advertise the homes they’re selling.
While the vast majority of homes available for sale are included on the MLS, there are definitely exceptions. Firstly, strictly FSBO homes won’t be found on the MLS database. Likewise, off-market listings, also known as quiet or pocket listings, which are homes that are not marketed in the typical ways, will not be included on the MLS since the seller keeps the property quietly “in their pocket”, hence the name. It’s when sellers desire to test the waters, maintain privacy, or create a sense of exclusivity that could drive up a home’s selling price.
