What is a Multiple Listing Service?
A Multiple Listing Service (MLS) provides a private offer of cooperation and compensation by listing brokers to other real estate brokers. There are more than 800 MLS organizations doing business today.
Before the advent of the MLS, real estate brokers gathered at the offices of their real estate associations to share information about properties for sale. Then came agreements by which one broker would compensate other brokers who helped sell those properties, through a system of shared inventory sales. In a cooperative effort, one broker assists another broker by producing a buyer for a sale and, subsequently, shares in the compensation.
An MLS facilitates efficiencies in the real estate transaction. It is an agreement among competitors to share information under certain conditions. Foremost among those conditions is the blanket, unilateral offer of compensation. Other conditions have evolved into the Rules and Regulations that govern the accepted uses of the property listing detail contributed by a broker, data integrity and respectful behaviors towards fellow brokers and agents.
Within the MLS, property listings are intended to be used for informational purposes to inform other real estate professionals, who will then inform their clients and customers. The MLS is not a vehicle for selling a listing to a consumer by positioning it for greater appeal. It is an information exchange for and between professionals.
Sellers benefit by increased exposure to their property. Buyers benefit because they can obtain information about all MLS-listed properties while working with only one broker. MLS organizations, through the data they provide, facilitate the cooperative effort, without which brokers might create their own separate systems, fragmenting property information. With the MLS in place, buyers and sellers can work with the professional of their choice, confident that they have access to the largest pool of properties for sale in the marketplace.