Real estate brokers are capable of communicating details about available homes through the Multiple Listings Service (MLS). The concept is an old one and dates back to the late 1800s when neighborhood brokers got together to talk about available real estate properties. Local brokers provided each other commissions in exchange for help in selling properties. The unspoken code of the real estate industry soon became an outgrowth of that old saying about “one hand washing the other” (even though in this instance, the hand means the property).
The MLS provides a way for “unilateral offers of compensation,” thus the rate of commission provided by a listing broker becomes a known fact with other cooperating brokers. Even though such offers are thought to be contractual obligations, a commission rate can still be negotiated on the part of the listing broker and the agent representing the homebuyer.
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The MLS has a lot of advantages for broker members. All information within the MLS system is updated frequently because it is in the best interests of all for the system to maintain the most current accurate information on all available homes for sale. All details regarding any home for sale is available to any MLS subscribing broker. Different than public real estate websites that feature only a restricted amount of details about available properties, MLS systems contain specific data fields about all properties listed.
The chief criticism of MSL systems concerns the limited membership, although it is becoming more accessible as Internet sites have granted homebuyers the capability to view portions of MLS listings. For those real estate brokers who have been compensated proportionately to the value of the sale of a property unrestricted access to MLS is freely permitted, however not to others.
It is a source of public debate as to whether or not information relating to real estate listings should be free and open to all in order to ensure a stable market, honestly dependent on the beliefs of supply and demand. Limitations in the ability to evaluate comparable properties, past sales and monthly statistics definitely hinder the abilities of public web sites and are a legitimate cause of objection.
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