If you’re a real estate investor or agent, then you’ve probably come across the Multiple Listing Services (MLS) at some point or another throughout your real estate career.
But what are Multiple Listing Services? What is their origin? Who controls access to them? And what is their use or importance to you?
These are all questions that this article will try to answer in order to provide you with a better understanding of the Multiple Listing Services and their importance for your career.
Multiple Listing Services (MLS)
What are Multiple Listing Services (MLS)?
MLS is a collection of private databases that are used by real estate brokers and shared with other brokers which include a large number of real estate property listings and information related to these properties.
The main use of Multiple Listing Services is to save the time and effort needed from real estate brokers, agents, and investors when trying to find investment properties or homes that are up for sale.
Brokers who post their listings on the MLS will earn a sales commission from the sale of the properties that they have listed or the properties that they help sell as a buyer’s representative.
Who Has Access to Multiple Listing Services?
MLS are mainly accessed by real estate agents and brokers and, specifically, those who are members of the National Association of Realtors (NAR).
For a long time, NAR members were the only real estate brokers who had access to the MLS databases. However, challenges by successful parties have made access to the MLS for non-NAR member brokers available in the states of California, Alabama, Georgia, and Florida.
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Traditionally, in order for you to get your property listed on the MLS, you had to pay a 5-6% sales commission on the property. However, in recent years, some brokers and listing services have been allowing sellers to get their properties listed for a flat-fee for FSBO (For Sale by Owner) sellers in addition to other services.
How Can Buyers and Sellers Take Advantage of Multiple Listing Services?
As a consumer, buyer or seller, in the real estate market, Multiple Listing Services can provide you with a number of advantages that can make the process of buying or selling a home much easier and faster than before.
It used to be the case that for a seller to find potential buyers for their home, they would have to post a “For Sale” lawn sign and hope for potential buyers to notice it, while buyers had to drive around and try to find homes with “For Sale” signs in front of them.
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The MLS, however, allowed sellers to find a medium to post their property listings on and guarantee exposure to a large audience, allowing them to reach more potential buyers whom they otherwise wouldn’t have reached. Meanwhile, buyers can now more easily search for homes that are up for sale in a far more efficient manner, allowing them to also search with certain criteria in mind to find the best homes for their purchase.
How Did the Internet Change the Way Multiple Listing Services Work?
Originally, when Multiple Listing Services were first created, only real estate brokers had access to them through private sources and databases that were not available for public display. And in order for a buyer or seller to utilize the MLS, he/she had to hire a broker who would in turn extract the data or list it on the MLS for his/her client.
The invention of the internet back in the 1990s had a huge impact on the accessibility to MLS. Nowadays, any real estate investor, buyer or seller, can easily access a number of different sources that serve a similar function to MLS or that extract data directly from it from the comfort of his/her own homes.
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This change gave more control to real estate investors, which also reduced the need for buyers and sellers to hire real estate agents and brokers to give them access to MLS.
This, however, does not mean that real estate agents are no longer needed in the market, but it means that the main purpose of hiring a real estate agent changed from being focused on finding properties or potential buyers for properties to serving the role of real estate experts who provide counsel and advice, or negotiation specialists who are more capable of drafting sale deals and closing them.
Mashvisor: An Online Real Estate Investing Platform Utilizing Multiple Listing Services
There is a large and constantly increasing number of online sources that are starting to utilize MLS data and integrate it into their own platforms and services.
Mashvisor, for example, extracts a large amount of its data from MLS as a reliable and up-to-date source of information and real estate listings. After the data has been extracted, it is then analyzed and compared to provide accurate results related to investment properties, their prices, their types, their conditions, etc.
In addition to using MLS data to showcase information about the individual properties, Mashvisor also utilizes a number of algorithms to “mash” the data and provide insights based on the qualitative and quantitative information about properties using a number of different metrics and criteria. For example, Mashvisor combines the data that is gathered from MLS with the data gathered from Airbnb to give accurate real estate rental property comps and stats, such as a property’s occupancy rate, cap rate, and cash on cash return, and to provide accurate averages for the area or neighborhood that the property is located in.
Bottom Line
As a real estate investor or a real estate agent, there is a high chance that you already know what Multiple Listing Services is, or have at least used some of the information that is extracted from MLS in one way or another throughout your real estate career.
It is important to understand, however, what MLS used to be historically, and how its use and application have changed and become more flexible in order to understand the importance of its utilization by online sources and platforms such as Mashvisor.