A brief look at the real estate MLS and what it really is.
Anyone with even the most cursory of knowledge about real estate has heard the term ‘MLS’, usually in conjunction with ‘Comps’. Although the general meaning can be easily ascertained through contextual clues, many homebuyers and sellers are unsure of what precisely the MLS is. Let’s take a look at what the real estate MLS really is.
MLS stands for Multiple Listing Service, and the real estate MLS is precisely that; a service (or database) which contains information on multiple listings. The MLS finds its origin in the late 1800s when brokers in a region would meet regularly to share information on the properties which they had for sale so that other brokers might be able to match them with buyers whom they represented. Today’s incarnation is no more complicated, but it has moved online. Brokers representing properties are able to post information about the property online where brokers representing buyers can search it in order to create a match.
The real estate MLS is not only used to facilitate transactions between brokers, but can also be used to better determine a property’s worth in a fluctuating market by comparing one home to others like it which are listed in the same area. Likewise, buyers interested in a property are able to compare it to like homes and make a determination as to a fair offer.
Although there is no single MLS service, the format for data entered into an MLS system is standardized. MLSs are regional and stewarded by the brokers of the region who have access to the MLS (access is limited). The trend with MLS, like many other things, is toward freer access to the public. There are regions and concierge sites which offer less limited access to the public, while still maintaining control over sensitive information such as sellers’ contact information and times when homes are vacant for showing.
No matter how involved you are in real estate, understanding the key concepts can make a big difference.
Image courtesy Flickr and taymtaym