MLS (YinYang)
Whether you're looking to sell or buy a home, you will no doubt encounter the multiple listing service, or MLS. This is, in many ways, the very lifeblood of the real estate business. But just what is the MLS? Sure, it's a huge database of home listings, but there's a lot more to it than just that. Let's jump in!
History of the MLS
Yes, the MLS seems like an invention of the modern age. But, in fact, the term "multiple listing" -- and the overarching concept behind it -- was first coined in 1907. Back then it described the old-timey practice in which real estate agents would gather regularly at offices or conferences to trade info about homes they were trying to sell, hoping this network could help connect them with buyers. In 1908, the National Association of Real Estate Exchanges (the organization that later became the National Association of Realtors) endorsed the use of this system by all agents. It quickly caught on from there, evolving, stage by stage, into the modern system in use today -- online and fully searchable by price, neighborhood, and home features.
While the MLS may look like one large national database, it's actually a suite of approximately 700 regional databases. And they're quite territorial: Each regional MLS has its own listings, and agents pay dues to access and post homes on each one. This is why agents who want a broader reach for their clients may become a member of more than one MLS.
There is a growing trend in which regional databases "share" listings without agents needing to become members of each, but that's still more the exception than the rule. In general, only one MLS has the keys, both figuratively and literally, to any one home.
While numerous websites aggregate home listings through highly condensed versions of MLS listings, realtor.com is by far the most comprehensive, with 99% of all MLS-listed "for sale" properties in the U.S. (And to further toot our own horn: Our listings are also the most accurate and up to date. Over 90% of "For Sale" listings are refreshed at least every 15 minutes, which can come in handy in a fast-paced housing market, where every second can count. OK, we're done!)
How the MLS works
Home sellers can't post their home directly to the MLS, because access to this database is limited to licensed agents and brokers who pay for membership. Once they have a client selling a home, they gather the necessary details such as the square footage, number of bedrooms, and other noteworthy attributes -- as well as photos -- then post a complete (and hopefully eye-catching) listing on their client's behalf.
When agents log in, they have access to a wealth of data that they can pass along to their clients -- or just help them do their business better and more strategically. And much of this goes far beyond whether a particular listing's driveway is made up of gravel or asphalt.
"Agents are able to upload and download documents on the MLS, such as seller disclosures and HOA regulations," notes Florida Realtor Cara Ameer. So even if you don't see the info you want on realtor.com, be sure to ask your agent, who may be able to deliver what you need with the click of a mouse.
Alternatives to the MLS
Home sellers who don't want to pay a real estate agent's commission can also list their home on a For Sale By Owner, or FSBO, site rather than the MLS. But do so with your eyes wide open: Selling a home on your own is far from easy, and FSBO homes sell for less money -- on average $39,000 less. This may explain why only 8% of homes sold every year are FSBO, and the vast majority go through the MLS.
There are also a few high-profile markets -- namely New York City and Seattle -- where the MLS is not the only way to list a home with an agent. In these areas, large real estate brokerages such as Sotheby's and Douglas Elliman use their own proprietary databases to list homes rather than syndicating them on the MLS. So in these markets, you may want to check directly with these brokers' sites in addition to the usual avenues if you want to make sure that all your house hunting bases are covered.
What is a pocket listing?
Sometimes high-profile sellers working with an agent will choose not to list their home on the MLS, for privacy reasons such as to avoid publicity or looky-loos. A property that is not entered into the MLS is often called a " pocket listing," as in, "hidden in an agent's pocket." That means that only those potential buyers with whom an agent works directly will be aware the home is on the market.
Typically celebrities or other high-profile people may try this route; but if you're just a regular Joe who wants to get the word out that you're selling, the MLS will get you the most eyeballs -- and top dollar -- for your home.
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Watch: The Features That Help a Home Sell Fastest