Real Estate Trends & Advice - The Power of MLS

The Power of MLS
By Jim Palmer Jr.

For years the Multiple Listing System that is used by real estate brokers across the country has been under fire from critics who see that system as antiquated or as a monopoly of data.  Most of those critics are competitors for the data.  The MLS system has continually withstood the constant badgering of such fault-finders, including an anti-trust lawsuit from the U.S. Department of Justice. 

What makes the MLS system option best for consumers is that it continues to be the largest database of available homes, using the most up-to-date home status information while maximizing visibility of homes for sale.  In other words, this database is the most verified, trusted, detailed and accurate property information available.  The unique and powerful cooperation agreement between brokerages, who are all competitors, facilitates the best collaboration possible between buyers and sellers in a real estate transaction.  The MLS system gives equal opportunity for all home buyers and sellers, leveling the playing field between large and small brokerages.

A world without the MLS would mean no centralized source of available homes, leading to outdated home status information and fewer homes for buyers to choose from on real estate websites.  Information would be unverified, inaccurate and unreliable like it is on some popular real estate websites who try to compete with the MLS system.  Sellers would have to pay to list on websites and would have fewer options for attracting buyers.
Realtors® have recently fought through a barrage of attacks to the MLS system where attorneys accused certain MLS’s of fixing or setting commissions at a certain rate.  Even though those accusations are patently false, the resulting settlement came at a huge cost for those Realtor® members.  The settlement agreement forced some changes to Realtor® owned Multiple Listing Services methods of operation.  Effective in August of this year, brokers will no longer be able to publish a compensation amount that sellers are willing to pay buyers brokers to help sell their property. 
Advocates of this settlement agreement believe that new practice will make it less likely for brokers to set commission rates that could be construed as “the going rate.”  It remains to be seen how sellers will incentify buyers if they can’t post a buyer broker commission in an MLS listing as they have in the past.

The result of destroying the MLS, like some Realtor®-hating-advocates push for, would have the opposite effect as what they think.  Markets would become broker-controlled without the oversight and watchful eyes of the competition.  The MLS system has evolved to provide the best possible outcome for consumers.