Have you ever considered how the real estate marketing engine runs?
The processing and exchanging of information in a multiple listing service (MLS) is a complicated process orchestrated by several organizations.
The advancement of technology and the demands of the consumer are leading to change, but the industry is pushing back.
In the complex world of real estate, the key is the control and dissemination of information. Let’s expose a few truths.
First, some statistics
According to the National Association of Realtors (NAR), there are 54 state associations including the District of Columbia, Guam, Puerto Rico and the Virgin Islands. There are 1,178 local associations representing 1,233,704 Realtor members.
The California Association of Realtors (CAR) has 193,979 members and the North Bay Association of Realtors (NORBAR), for example, has 3,196 members.
A Realtor is a member of the association; however, a licensed real estate agent or broker (we will use “broker” to refer to both) does not need to be a member of the association to conduct business. Membership includes the local association, state association and NAR.
There are 101 regional MLSs across the United States.
Bay Area Real Estate Information Services (BAREIS) is the MLS for Napa, which is part of the local associations of NORBAR, the Marin Association of Realtors Inc., the Northern Solano County Association of Realtors and the Solano Association of Realtors Inc., as well as other outlying areas.
Each regional MLS is a membership-driven organization governed by their bylaws, rules and regulations.
In many cases, a broker does not need to be a member of a Realtor association to join the MLS. A broker could join multiple MLSs if he or she works in several different areas.
What is an MLS?
An MLS is an online database for use by a licensed broker to display represented properties for sale or lease as well as search for the same for buying clients.
The MLS is principally owned by its members who must be licensed. Additionally, the bylaws, rules and regulations stipulate how members conduct business and share in the commission.
Use of an MLS is considered a contract between brokers specifying how they will cooperate and how they will get paid for each listing.
The majority of MLSs are focused on residential real estate, however, depending on the MLS it may be utilized for commercial real estate sales and leasing as well.
Residential brokers have an MLS system that is the center of their business. It provides them access to all available properties and a great deal of statistical information on past sales to use. Plus, being owned by the brokers, they also own and control the data.
In part 2, I will disclose to you a few more secrets such as what it costs to be a member of an MLS compared to what the commercial brokers pay for the databases they use.
I am also going to tell you about something the commercial brokers lost.