Select Page

Frequently Asked Questions About MLSs

Multiple Listing Services (MLS) in the real estate industry are multi-broker organizations that drive exposure for property listings. They ensure cooperation between buyers’ and sellers’ brokers in most of North America and some other parts of the world. More than 80 percent of homes sold in the U.S. are on the MLS.

MLSs are critical to a competitive and transparent marketplace for consumers. The details of these organizations lie beneath the surface of the internet advertising that most consumers experience. This guide provide answers to common questions about the MLS organization, its brokers, brokers’ consumer clients, and the technology that provides a platform for the MLS marketplace.

What is an MLS?
A Multiple Listing Service is an organization that is a collective of brokers. It establishes rules for cooperation in sharing and selling listings. A broker joining an MLS agrees to help sell other brokers’ listings, and those brokers agree to do the same in return. 

The MLS setup is unique, in that competitors must cooperate to successfully close transactions. This creates great benefits to consumers selling and buying real estate. The broker cooperative, or the MLS organization, is the foundation on top of which a technology platform exists today.

How many MLSs are there?

As of 2020, there are 597 MLSs in the United States. That number shrinks annually due to regional consolidation of MLSs. Canada has a comparative handful of MLSs (39) which serve the entire country. In most countries, MLSs either do not exist or they do not enjoy the broad market share that North American MLSs have. 

When did MLSs get started?
MLSs were first created in the late 1800s, far before computer or Internet technology existed. In-person listing sharing, paper notes, index cards and printed MLS books all preceded the online MLSs that we experience today.

Who belongs to the MLS?
Real estate brokers in a shared marketplace form and join an MLS. Brokerage organizations that cross over multiple marketplaces will often join multiple MLSs.

Who are participants and subscribers in an MLS?
Brokers in an MLS are called participants. Agents in an MLS are called subscribers. Agents cannot join an MLS unless their broker does so first. 

How can I list my home on the MLS?
Homeowners can work with a real estate broker to list their homes on the MLS. Only participating brokers can list properties on the MLS.

Why should I list my home on the MLS?
The MLS exposes a listing to every broker in the marketplace who may be working with buyers in search of this kind of property. This can include internet marketing that brokers approve through the MLS. Even listings that need privacy can be excluded from internet marketing yet still delivered to the MLS’s brokers for more discreet exposure to potential buyers.

Is the MLS a database?
The MLS has a database, but the MLS is not just a database. The organization and its cooperative broker rules allow for a listing database to be created and shared between participating brokers.

Are websites like Zillow.com, Realtor.com, Homes.com, and Redfin.com MLSs?
No: these are very popular websites that get some of their listing data from MLSs, but they’re not MLSs themselves. They’re advertising portals and brokerage websites with permission to display real estate listings. These organizations are all RESO members who contribute to the development of data standards that drive MLS technology innovation.

Why are there multiple MLSs in the same marketplace?
MLSs that formed from local associations can grow and sometimes overlap in other MLS marketplaces. They are not constrained by geography. Competitive MLSs will sometimes share data or merge, but many markets still have duplication of services with multiple MLSs.

Who owns the MLS?
Most MLSs are owned by the REALTOR® association that formed them. They may be owned by multiple associations in a regional MLS. Some MLSs were formed directly by groups of brokers which own the MLS themselves.

Who runs the MLS?
MLSs are managed in a number of ways. Some REALTOR® association-owned MLSs are managed by the association staff. Others are split off as separate organizations with separate staff from the association. Independent MLSs usually derive their management strategy and operations from the brokers who formed the cooperative.

Who can join an MLS?
For REALTOR® association-owned MLSs, brokers often have to be REALTOR® members before they can join the MLS. This isn’t true in all cases, as some states have regulations that require non-REALTOR® brokers to be allowed to participate in the MLS. Any broker can join an independent MLS. Real estate agents only join the MLS under the umbrella of a participating broker.

What are the rules for participating in an MLS?
Participating brokers agree that they will share their listings with the MLS’s other participating brokers. They must abide by the MLS’s rules to act cooperatively and honestly in representing buyers and sellers through transactions with their competitors.

Who sets the rules for the MLS?
Each MLS sets some of its own local rules. For REALTOR®-owned MLSs, there are also overarching policies and rules that come down from the National Association of REALTORS®. The NAR Handbook on Multiple Listing Policy documents these mandatory and suggested rules.

Some NAR policies require MLSs to follow RESO standards in their technology. These standards create efficiency across all industry technology systems.

What is RESO?
RESO is the Real Estate Standards Organization. RESO creates open standards through its broad industry membership of MLSs, associations, brokers and technology companies. These standards drive interoperability and innovation across the industry. Read more about RESO.

What does the MLS organization look like?
The MLS is an organization with staff, technology vendors, data licensing agreements, rules and regulations, and a compliance department. It can be a very small organization with vendors supplying most of its services, or a large organization with in-house staff that supplies all of its organizational and technical needs.

How can I get data from the MLS?
The MLS provides data to its participating brokers. It also provides data to technology partners, with the approval of its broker membership. Some MLS data that is deemed to be helpful for consumers is displayed without cost to the public on broker and MLS websites.

Is the Web API the way I get data from an MLS?
The way MLSs transport data to their brokers and technology partners varies. The most modern and efficient way is through the RESO Web API standard. RESO doesn’t supply the data or the service, just the standard model for it. MLSs provide their own Web API services to deliver data to their customers.

Which MLS data is public and which is private?
Public MLS data is usually that which a consumer would use to learn about a listing for sale. Property information, media and agent marketing comments are usually public. Private information about sellers and agent-only showing instructions are usually held privately by the MLS’s broker participants.

Why are there so many MLSs?
MLSs were first created before computer technology. Local REALTOR® associations and brokers would come together and share listings in their local marketplaces. They created more than 1,000 local marketplaces and didn’t feel the need at the time to have large regional real estate cooperatives. 

As technology efficiency and a mobile population have made regional and national databases of real estate listings more desirable, MLS organizations continue to consolidate and shrink in numbers.

Are there MLSs in every country?
There are some forms of MLSs in many countries around the world. In practice, the only countries where the MLS is broadly effective and ubiquitous are the United States and Canada.

Is the MLS a real estate website?
The MLS may have a website, but that’s just one downstream product of the MLS organization. The MLS isn’t a public marketing platform. It’s a cooperative for brokers to share listings with other brokers. The MLS improves the brokers’ ability to market their own listings.

Who pays for the MLS?
Brokers and agents usually pay dues to the MLS. This may be directly to the MLS organization or through their REALTOR® association dues.

Does the MLS set commission rates?
An MLS does not take a position on what a broker’s business model is or what commission rates the broker charges. Most MLSs do require that a broker listing a property in the MLS offer compensation to any MLS broker who brings a ready and willing buyer to purchase that property. But the amount of compensation is not regulated.

Which technology vendors work with which MLSs?
There are about a dozen core MLS software platform technology vendors in North America. These companies get their technology certified by RESO on a regular basis, and you can see those certifications here. MLSs also work with many other accessory technology vendors and provide those services to their members.

What does it mean for an MLS to be certified by RESO?
Being certified by RESO means an MLS’s technology systems can easily talk to other technology systems in a standardized manner. RESO certified systems are interoperable: they speak a universal language, the language of standards. This makes life for brokers, agents, consumers and technology companies much easier, and it accelerates new technology innovation. 

Is my MLS RESO certified?
You can review all certified MLSs in North America on RESO’s MLS map. You’ll find their certification levels there as well.

What is “cooperation and compensation” in the MLS?
Cooperation and compensation are the core tenets of the MLS. Cooperation means sharing listings and abiding by the rules to cooperatively sell listings with competitors. Compensation means offering money to the other MLS participants if they can bring a buyer to purchase your listing.

 

DLU October 19th, 2020