Multiple Listing Service

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A Multiple Listing Service (MLS) (also Multiple Listing System or Multiple Listings Service) is a suite of services that (1) enables brokers to establish contractual offers of compensation (among brokers); (2) facilitates cooperation with other broker participants; (3) accumulates and disseminates information to enable appraisals; (4) is a facility for the orderly correlation and dissemination of listing information to better serve broker's clients, customers and the public. A multiple listing service's database and software is used by real estate brokers in real estate (or aircraft broker^{[citation needed]} in other industries for example), representing sellers under a listing contract to widely share information about properties with other brokers who may represent potential buyers or wish to cooperate with a seller's broker in finding a buyer for the property or asset. The listing data stored in a multiple listing service's database is the proprietary information of the broker who has obtained a listing agreement with a property's seller.

Contents 1 Origin of the MLS 2 Purpose and benefits of the MLS 3 Limitations of access to the MLS 4 MLS Systems in North America 4.1 Canada 4.2 United States 4.2.1 New York City 4.3 Policies on sharing MLS data in the USA 4.4 Alternatives and changes to the MLS system 5 MLS systems worldwide 5.1 Europe 6 See also 7 References 8 External links and references

[edit] Origin of the MLS

According to the National Association of REALTORS:

"In the late 1800s, real estate brokers regularly gathered at the offices of their local associations to share information about properties they were trying to sell. They agreed to compensate other brokers who helped sell those properties, and the first MLS was born, based on a fundamental principle that's unique to organized real estate: Help me sell my inventory and I'll help you sell yours."^[1]

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).^{[citation needed]}

There is no single authoritative "MLS", and no universal data format. However, in real estate there is a data standard - Real Estate Transaction Standard - that is being deployed among many^[who?] MLS's in North America.^[2] 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 geographical area) or by real estate brokers—are collectively referred to as the MLS because of their data sharing or reciprocal access agreements.

[edit] Purpose and benefits of the MLS

The primary purpose of the MLS is to provide a facility to publish a "unilateral offer of compensation" by a listing broker, to other broker participants in that MLS. In other words, the commission rate that is offered by the listing broker is published within the MLS to other cooperating brokers. This offer of compensation is considered a contractual obligation, however it can be negotiated between the listing broker and the broker representing the buyer. Since the commission for a transaction as well as the property features are contained in the MLS system, it is in the best interests of the broker participants (and thereby the public) to maintain accurate and timely data.

The additional benefit of the MLS system is that an MLS subscriber may search the MLS system and retrieve information about all homes for sale by all participating brokers. MLS systems contain hundreds of fields of information about the features of a property. These fields are determined by real estate professionals who are knowledgeable and experienced in that local marketplace. Whereas public real estate websites contain only a small subset of property data.^{[citation needed]}

[edit] 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). However, access is becoming more open as internet sites offer the public the ability to view portions of MLS listings (see below).

A person selling his/her own property - acting as a For Sale By Owner (or FSBO) - cannot generally put a listing for the home directly into the MLS. An example of an exception to this general practice is the MLS for Spain, AMLASpain, where FSBO listing are allowed.^[3]) Similarly, a properly licensed broker who chooses to neither join the trade association nor operate a business within the association'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.^[4]

[edit] MLS Systems in North America

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.^{[citation needed]}

[edit] Canada

In Canada, MLS is a cooperative system for the 82,000+ members of the Canadian Real Estate Association (CREA), working through Canada's 99 real estate boards and 11 provincial/territorial associations.

The Real Estate Board of Greater Vancouver (REBGV) claims to have pioneered the first MLS in Canada.^[5]

A publicly accessible website (at realtor.ca, formerly mls.ca) allows consumers to search an aggregated subset of each participating board's MLS database of active listings, providing limited details and directing consumers to contact a Realtor for more information.^[6]

[edit] 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. As of 25 January 2010, it has about 49,140 active members, according to the public access sections of its website,^[7], although numbers vary according to when this data is accessed.

[edit] New York City

Although the other boroughs and Long Island have a well accepted MLS, MLS has never taken hold in Manhattan. A small group of brokers formed the Manhattan Association of Realtors and operate MLSManhattan.com. MLSManhattan has a small fraction of the total active inventory in Manhattan. The Bronx Manhattan North MLS also offers coverage in Northern Manhattan. It too has failed to acquire widespread adoption by brokers.

The prevalent database is operated by the Real Estate Board of New York (REBNY), a non-Realtor entity that seceded from the National Association of Realtors in 1994. ^[8] REBNY operates a database called RLS which stands for REBNY Listing Service. A predecessor of RLS was marketed as R.O.L.E.X (REBNY Online Listing Exchange), before Rolex Watches claimed trademark infringement.

Unlike MLS, RLS does not have under contract, sold or days on market data, nor does it have rental listings. RLS is more of a Gateway of Active listings. There is no single database. The RLS gateway is populated by several private databases that include Online Residential (OLR) and Realplus a proprietary database exclusive to a few large Manhattan Brokers. These databases exchange data continually effectively creating several separate systems with essentially similar data. Another vendor, Klickads, Inc D/B/A Brokers NYC, owned by Lala Wang sued in 2007 to be included in the list of firms permitted to participate in the Gateway.

Most Manhattan brokerages are members of REBNY. The REBNY RLS requires all listings to be entered and disseminated within 24 hours (Until 2007 72 Hours to accommodate agencies without weekend data entry)^[9]

[edit] 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 Move Inc., 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 allowed brokers to restrict access to their MLS information from appearing on the websites of certain brokers which operate solely on the web.^[10] This policy 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 proprietary data.^[11]

The case was settled in May 2008, with NAR agreeing that Internet brokerages would be given access to all the same listings that traditional brokerages are.^[12]

[edit] Alternatives and changes to the MLS system

Up until 1968 almost all brokers involved in transactions represented the seller, either as the seller's agent or as the sub-agent of the listing broker. The seller paid the listing broker who, in turn, was responsible for compensating the broker working with the buyer. The MLS was intended to be a simple system that benefited everyone, including both the buyers and sellers.

The 2005 Justice Department antitrust lawsuit against the National Association of Realtors threatens the exclusivity MLS services in the US. If this case undermines MLS exclusivity, open internet MLS systems may begin to thrive, perhaps combined with Web 2.0 technologies such as social networking, allowing buyers and sellers to interact without the need for an agent.

[edit] MLS systems worldwide

Although many countries are lacking regulations regarding real estate transactions, lately there are attempts to align with those in developed markets. For example in Lebanon, Domini Homes is claiming that it is developing the first MLS in the Middle East while in Malaysia, Singapore and Thailand a joined MLS is being developed called Vivaldi (expecting to release in early 2010).^[13] A special case may be Italy which is developing the first international MLS. Its multilingual interface, which translates property details and all the web pages instantly and automatically into 8 languages, allows estate agents to share their property listings with other estate agents around the world. The platform links over 1000 real estate agents and over 40000 offers from 16 countries worldwide.^{[citation needed]}

[edit] Europe

In certain European countries, most notably in Spain. The Spanish MLS website is www.mls.es^[14]

Real estate agents pay subscription fees to an MLS company which then allow property listings to be uploaded onto their servers. Also, all subscribing real estate agents create a property search link on their own websites which links directly to the MLS service. Thus, any site visitor to any of the subscribing agents' sites will be able to find all properties listed on the MLS servers, even though they are visiting the website of a single agent. In effect, every single subscribing real estate agent appears to be offering exactly the same properties for sale, not unlike the situation with IDX systems in the United States.

When buyers use the internet to find property, often using Google, the search results usually provide a list of real estate agents’ websites in the locality which is being searched. The buyer clicks through the various websites and starts browsing properties of interest, although every site visited is offering the same properties because they are all linked to the same MLS server.

The buyer then has to choose an agent (again, not very different from elsewhere), but it does force the buyer to make a decision, since all agents in the area have access to all properties and the seller's agent will benefit regardless of who brings the buyer, again very like the US.

Although there are currently no regulations in Europe in relation to MLS, it may be a matter of time before its use may be viewed as a restrictive practice designed to benefit real estate agents, rather than consumers.

[edit] See also

• Real estate trends
• Real estate broker
• Reduced-commission MLS Listings
• Real Estate Transaction Specification (RETS)
• Internet Data Exchange (IDX)
• Pocket listing (or exclusive listing)
• Commercial Information Exchange
• Loan Exchange

[edit] References

[edit] External links and references

• NAR's ILD (Internet Listing Display) policy outlined Retrieved November 7, 2005
• "JUSTICE DEPARTMENT SUES NATIONAL ASSOCIATION OF REALTORS FOR LIMITING COMPETITION AMONG REAL ESTATE BROKERS", Department of Justice antitrust lawsuit press release, 8 September 2005