There’s a lot to keep track of when buying or selling a home, but one important thing to know is MLS, which stands for multiple listing service. What is the MLS, and what does it have to do with your property?
What is the MLS in real estate, and why is it important?
The MLS is a centralized database of properties for sale. At the most basic level, the MLS helps real estate professionals see what’s available all in one place so they can quickly connect buyers and sellers with accurate, up-to-date information. Because the MLS is maintained in real time, agents and brokers can get more eyes on each seller’s property and expand opportunities for buyers.
How does the MLS work?
The MLS isn’t actually one system that lists every property for sale in the United States. An MLS is a local or regional marketplace run by associations of cooperating real estate brokers. According to the Real Estate Standards Organization, there are more than 600 certified MLS portals nationwide. Only members of the MLS can list properties for sale, and the rules for how an MLS operates are set by the National Association of Realtors.
An MLS database includes much of what you see on Zillow and other real estate marketplaces: vital statistics about the property, such as the size, number of bedrooms and bathrooms and key features as well as photos. An MLS listing has confidential information, such as seller disclosures, commission percentages and details about showings like gate and lockbox codes—public sites do not have those details. This is data only brokers and agents can access and use to help their clients.
Each MLS property is assigned a unique ID number—an MLS number—so real estate pros can easily identify and search for your listing.
What are the advantages of an MLS?
From a buyer’s perspective, the advantage of the MLS is the ability to get a lot of information about a lot of properties at once—and fast. MLS listings are updated throughout the day, so your broker always has the most current information at their fingertips, and you may have a leg up on other buyers in competitive markets.
The main benefit of an MLS listing for sellers is increased visibility among agents and brokers (and, by extension, buyers). You don’t have to depend on word of mouth or prospective buyers driving by or browsing public listings—that may shorten the time on the market. The MLS also provides a clear picture of the local home-buying landscape so you can competitively price your property.
“It is all about getting the most eyeballs on the home to bring in the most traffic and generate the most offers,” said Rick Albert, broker associate at LAMERICA Real Estate in the Los Angeles area. “This means if you are a buyer, you get to see most of the available inventory, and if you are a seller, it means you get the most views.”
There are a few downsides to the MLS. One is it’s only accessible to licensed real estate professionals, meaning you cannot list your home (as the seller) or directly browse the database (as the buyer) without hiring an agent or broker. If you’re going the for-sale-by-owner (FSBO) route or simply don’t want to pay a commission, this makes an MLS listing off-limits.
That said, listings are still made public in some capacity, including through syndication to sites like Zillow. While you may not see properties as soon as they hit the market—a potential disadvantage for buyers in highly competitive areas—you are likely to eventually have access to them.
Of course, a potential pitfall with increased visibility is competition. While competition is generally good for sellers, you may get lots of requests for back-to-back showings. And as a buyer, you may be battling with dozens of other interested parties to view the property and submit an offer.
Is the MLS good for wholesaling real estate? While some may argue wholesaling MLS properties is complicated or even impossible, approximately 5-10% of all new MLS listings are distressed properties where the ideal buyer is an investor with a cash offer. In most real estate markets, this creates abundant lead flow for savvy investors who know what to look for on the MLS.