How Does the MLS Work? MLS stands for Multiple Listing Service. There are hundreds of them across the country (and in many other countries as well). Every seller knows that they need to get their house listed on this to sell it; every home-buyer knows that if they can see what's on MLS, they will find their dream home.
Heartland MLS, the MLS of the Greater Metropolitan Kansas City Area, started in 1993 after a couple of local brokers saw an MLS back east at a conference. Prior to the formation and implementation of this system, buyers had to go to multiple brokers to find out which homes were for sale and any details about the homes had to be obtained from the listing agent. Does anyone remember life before cell phones and computers?
In order to create our current MLS, every broker in and around Kansas City had to agree to cooperate and participate in the enterprise. Getting everyone to agree to work on this together was huge! But they did and it made life better for home sellers and home buyers in Kansas City. It was not easy and it was not cheap. Keeping the MLS running now takes a team of computer experts and support personnel along with every active real estate agent, broker and realtor in KC.
The physical location of Heartland MLS is out State Line Rd, by the Blue Hills Country Club. The Kansas City Regional Association of Realtors also has their offices here. One of Better Homes & Gardens Real Estate Kansas City's offices is in the building.
When an agent accepts a listing, they enter it into the MLS. We can either fill out a form and have the designated assistant at our office input the information or, what many of us do, enter the information ourselves from any computer with internet access.
Modern computers have made the process so much easier than the old "books" which were published and distributed monthly. We can enter listings 24/7. We can change the status from "Active" to "Pending" or "Back Up" or "Sold" at any time of day or night.
Here's the catch: everyone has to do it. That's why it works. It is my privilege and my responsibility to enter any and all new listings into the system within 3 business days from the time the Listing Agreement is signed. If I fail to comply with any of the Rules & Regulations, I can be fined or my privileges may be suspended or revoked.
Why does it work? To successfully conduct real estate transactions, every agent must pay their dues and follow the rules. That is the only way to keep the information up to date. We have to keep up with the inventory in order to work. The information has to be accurate in order to be useful. So everybody participates because we all need the information.
Last week, Trulia sent me an email telling me that if I want to post my listings on their site in the future, I will need to pay them. Today, Zillow left me a voice mail informing me of "an exciting opportunity." "Exciting opportunity" means they want money for something; I don't yet know what that something is but I can guess. I've read the articles, blogs and rants from people who want to make the MLS publicly available to all and join all of the MLS's together into one giant MLS covering the nation. While that sounds good in theory, who do they think is going to pay for, and maintain, this giant public MLS?
Agents, brokers and realtors have a vested interest in maintaining our local MLS's. If you don't pay, you don't work, you don't get paid, you don't eat. If you don't enter the required information within the timelines, you lose your access, you don't work. John Q. Public has no reason to support the service except when they are buying or selling a house.
Trulia and Zillow are interesting sites; I visit them both regularly and even participate in some discussions. There are several other "national MLS" sites (aka aggregator site) on our world wide web; guess where they get their information? From all of the local MLS's maintained by real estate agents, brokers, and realtors. Without the local agents entering and updating the information, these other sites would not have current information to offer - and their info is not exactly current. Drawing from that many feeds takes time so there are lags and inexplicable inaccuracies.
Keep in mind that each state has their own real estate laws. Each MLS has their own rules and regulations. So, while the idea of a giant, public MLS may be romantically appealing, it is thoroughly impractical at the present time. It is cool to look online at homes for sale in Maui and Oregon but if I wanted to actually buy a house there, I would pick up the phone and call a realtor in that location.
The MLS is a tool; one of the tools that real estate agents use to conduct their business. The agents are responsible for keeping their tools in proper working order. Agents and brokers allow limited access to their MLS, through their licenses, to clients so that they can search for homes. This is a shopping convenience for clients. If all of the states had the same real estate laws and all of the MLS's could come to an agreement regarding rules and regulations, then maybe the computer whizzes could write a program that would cover the entire Untied States but someone would still have to pay for it and maintain it. Since real estate is local, I just don't see the giant MLS happening anytime soon, do you?