The fundamental objective of an MLS is to allow a listing broker to make a “unilateral offer of compensation” to other broker participants in that MLS. In other words, the listing broker’s commission rate is listed in the MLS for other collaborating brokers to see. This compensation offer is considered a contractual obligation, but it can be renegotiate at any time between the listing broker and the buyer’s broker
A multiple listing service (MLS, also known as a multiple listing system or a multiple listings service) is a company that provides a set of services to real estate brokers, such as establishing contractual offers of cooperation and compensation (among brokers) and collecting and disseminating data for appraisals. Real estate brokers (or aircraft brokers in other industries, for example) who represent sellers under a listing contract use a multiple listing service’s database and software to widely share information about properties with other brokers who may represent potential buyers or wish to work with a seller’s broker in finding a buyer for the property or asset. The confidential information of the broker who has obtained a listing agreement with a property’s seller is stored in a multiple listing service’s database.
In the United States, the phrase “MLS” is deemed generic and cannot be registered or branded. Individual REALTOR associations, regional multi-association conglomerates, and independent cooperatives of real estate brokerages can all own and manage MLSs. There is no single MLS that is authoritative. For MLS systems, however, there is a data standard. The Data Dictionary for common real estate words and data formats, as well as the RESO Web API for data transmission, are both provided by the Real Estate Standards Organization. RETS, a previous common data transport standard, has been phased out.
Many Realtors believe that commission cannot be discussed after an offer has been accepted, however the National Association of Realtors claims that it can be done at any time. Because the commission for a transaction, as well as the property details, are stored in the MLS system, it is in the brokers’ best interests to keep correct and up-to-date information.
The ability to search an MLS and receive information about all homes for sale by all participating brokers is another advantage of MLS systems. MLS systems provide hundreds of fields of data regarding a property’s attributes. Real estate specialists that are skilled and experienced in the local market determine these fields.
Most MLS systems only allow real estate brokers (and their agents) who are properly licenced by the state (or province), members of a local board or association of realtors, and members of the applicable national trade association to join and access the system (e.g., NAR or CREA). Internet sites that allow the public to examine portions of MLS listings are becoming increasingly open (e.g., without joining the local board). Access to information within MLSes is still limited; in general, only agents who are reimbursed proportionally to the value of the transaction have unrestricted access to the MLS database. In terms of evaluating comparable homes, past sales prices, or monthly supply figures, many public Web forums are limited. This is at the heart of various ongoing debates concerning the state of the real estate market, which revolve around the need for free and transparent information for both buyers and sellers to ensure fair prices are negotiated before closing, resulting in a more stable and less volatile market.
The national MLS in Canada is a cooperative system that works through Canada’s 101 real estate boards and 13 provincial/territorial associations to benefit members of the Canadian Real Estate Association (CREA). The phrases Realtor and MLS are both registered trademarks for the CREA’s members and data. The Real Estate Board of Greater Vancouver claims to have created Canada’s first multiple listing service (MLS). Consumers can browse an aggregated subset of each member board’s MLS database of active listings on a publicly accessible website, which provides limited details and directs them to contact a real estate agent for more information.
While the majority of real estate boards participate in the national MLS, also known as the Data Distribution System, others submit listings to Centris, a Quebec-based service. Others, such as the Toronto Regional Real Estate Board (TRREB), run their own MLS system.
Realtysellers closed down in 2007 after asserting that the CREA and the Toronto Regional Real Estate Board (TRREB) had changed their laws to prevent flat-fee MLS services for those selling their own homes. The CREA and the Competition Bureau reached an agreement in 2010 to allow flat-fee listings. Some real estate boards, however, continued to prohibit the practise, citing interpretations of provincial regulations that require real estate traders to be licenced. Flat-rate providers argued that their services were no different than posting classified ads and that they were not necessarily trading. Realitysellers filed a federal complaint against the TREB with the Competition Bureau in 2015.