The Multiple Listing Service (MLS) appears to be in a constant state of change. Fortunately, the changes are mostly positive as they strive to meet the needs of the broker and consumer.
Part 1 of this series provided statistics and the basics of how the MLS operates and helps the broker.
Below are several secrets that may surprise you.
Reciprocating, syndicating and exchanging
Having 101 independent MLS organizations covering separate geographical areas each requiring a respective membership can become complicated.
Many MLS organizations created reciprocal agreements allowing MLS boards to exchange information.
This reciprocating agreement allows a participating broker to display another broker’s listing on his or her website, therefore providing more exposure for the client’s property.
The contact information of the broker is shown with the listing even though the listing is not theirs.
Zillow, Trulia, Realtor.com, and Homes.com use Internet Data Exchange (IDX) to syndicate listing information. For a fee, these services pull data from the MLS to display on their website for the public to search.
How do commercial listing services differ?
Commercial brokers are not so fortunate to have a comprehensive membership-driven MLS. Many use the local MLS for their listings, but not all are members, and exposure could be limited.
The nature of commercial real estate is regional rather than local and would require brokers to join several MLS boards.
Prejudice may also exist that the MLS is for residential real estate only—the commercial industry likes to keep the separation and distinction.
For-profit technology companies such as LoopNet, CoStar, Xceligent, and CREXi have filled the need for a national commercial real estate listing service.
These services allow subscribers to display their listing information for a fee and also research a plethora of statistical data pertinent to the commercial real estate industry.
The members of the MLS model own the data, so the fees paid are primarily operating costs for the organization.
Membership in an MLS board can cost a broker around $35 per month and includes an extensive statistical database.
A commercial listing service may charge a broker $150 per month to search the listing database and an additional $500 to post a listing.
Additionally, a broker could pay $1,500 or more per month per region to access statistical data with some subscribing to multiple regions.
Commercial brokers losing control of their data is a significant loss to the industry and a win of the for-profit listing companies.
In the midst of change
The many local MLS boards have a great product. However, there are two downfalls: the exchange of information across systems is cumbersome, and the lack of adoption by the commercial industry.
My hope is as the MLS organizations continue to grow in membership, consolidate MLS boards and adopt new technology they will better understand the need of the commercial industry, and in turn, the commercial broker will embrace the membership-owned model of the MLS.