Explaining MLS (Multiple Listing Service)
What is the Big Deal with MLS and why do I need it as a Seller? The proper name of MLS is Multiple Listing Service. It serves as a database for registered realtors of the local Board of Realtors. The purpose of this database of properties is for these agents to make commission upon their closings. They are not for the purpose of sellers to sell their homes while saving. Below are the Three Important Factors of the Multiple Listing Service in Texas.
1. MLS is Almost Irreplaceable
Do you ever wonder as a Seller why the typical cost of commission stays at 6%? This may be due to how irreplaceable MLS is to both the Agents and the Sellers. These databases are not just accessed by Agents, but also by Appraisers to dictate the value of your home. The cost to be a member of MLS and the Local Board of Realtors is NOT inexpensive for the Brokers and their Agents.
2. Zillow is NOT a replacement of MLS
In fact, Zillow, Trulia and other websites such as Realtor.com depend on AND pull data from the local MLS. This goes back to number one on how irreplaceable MLS can be. Sometimes, Sellers confuse Zillow (which pulls from an MLS database) with Zillow For Sale by Owner (which is NOT MLS pulled data). Your property under Zillow FSBO only publishes to close by Sellers and other Local Agents rather than being published nationally as you would be on MLS. Expect calls from these Local Agents that look for Zillow FSBO properties in order to push their 6% services. This may be the real purpose of Zillow For Sale by Owner.
3. Flat Fee MLS is Your Work Around
Flat Fee Real Estate is very helpful for the Seller to get their property listed on MLS inexpensively. However, do remember that the purpose of MLS is for the Buyer’s Agents to make commission. Saving can be easy with this Flat Fee MLS system, but it still involves offering commission to the Buyer’s Agent. Be careful, not all Flat Fee MLS services are the same.
Multiple Listing Service is designed for Agents, not for Seller's to have any convenience in selling their property. The interest of those who run MLS is for the Seller to pay 6%. Flat Fee MLS can be a great alternative to 6% commission. However, not all Flat Fee MLS services are helpful. Could you imagine those that still pay 6% when selling their home?
Will Puente, PhD, MBA, JD Candidate