Before I get into the benefits of the wildly popular Multiple Listing Service®, allow me to give you a ...
Many years ago, long before the introduction of the Canadian Multiple Listing Service® or the American equivalent, along with computers and other technological marvels, to buy homes or trade houses, buyers (purchasers) and sellers (vendors) depended on independent real estate companies. And for real estate marketing, their options were pretty much limited to newspaper ads and home-made for sale signs.
Real estate brokerages were quite independent from each other, with each brokerage typically only showing their own exclusive listings. Therefore, if a buyer wanted to view two properties listed with different companies, unless those two brokerages agreed to cooperate with each other, the buyer had to do so with two different sales representatives.
If a real estate company listed a home, competing realty companies were normally unaware of it unless they happened to see the lawn sign or newspaper real estate ad, or had a friend at a competing realty company who called them on the phone.
When they agreed to cooperate, the brokerage with the buyer would bring the offer from their customer to the listing brokerage. If the negotiation was successful, following the closing, the listing brokerage would pay the agreed real estate commission to the cooperating brokerage. Usually, a ‘co-broke’ agreement was executed wherein the listing brokerage would promise to pay the cooperating brokerage an agreed share of the total commission generated from the sale. It was the age of exclusive listings, before the introduction of the ...
The Multiple Listing Service®, a cooperative selling system operated by real estate boards, which are members of the provincial or state associations as well as the national associations, revolutionized the industry.
With the introduction of MLS® systems in Canada, the United States and around the developed world, came higher commission rates than what had been the norm at the time. The rate for an exclusive listing was typically 5% of the sale price (with no GST/HST of course). If a homeowner wanted the added exposure offered by the new MLS® system, they had to pay the standard rate of 6%. Unlike today’s negotiable commission rates, the rate was determined by the local real estate board, which would typically refuse to process a listing if the contractual rate was any different than they decreed.
These boards, of which there were many sprinkled around the country, were autonomous organizations formed to administer listing and sale activity within a specific geographic area. Sellers could have their homes offered for sale through this fantastic, brand new system of exposure. It represented a ...
Buyers still had to depend on realty agents. However, buyer service was much better since all board member brokerages had access to a much larger pool of listings from which to choose properties to show their buyer customers.
Nevertheless, the Multiple Listing Service® was somewhat primitive compared to today's system. In those old days, brokerages depended on paper 'dailies' consisting of 'tear sheets' delivered each day by the local board courier service. These dailies, called ‘hotsheets’, contained a detailed list of all reported new listings, sales and price reductions from the previous business day in the various real estate board sub-districts, including black and white photos of the front exterior of the home and basic property details.
... made co-broke agreements redundant. Board membership required its members to follow a stringent Code of Ethics, Standards of Business Practice and a set of MLS® Rules and Regulations. A listing brokerage was now compelled to pay a cooperating selling brokerage the commission as advertised on the MLS® system listing. The commission, after the nominal board listing fee was deducted, was usually divided 50/50 between the two brokerages.
was a tedious and time consuming procedure to tear the perforated
sheets and organize them into the appropriate binders. Often, they
simply ended up piled on someone's desk. This is the origin of the term
'buried listing'. Older listings that failed to sell quickly, ended up
being buried under the newer listing sheets. Hence, the newer listings
got most of the attention. It's pretty much the same way nowadays, but
for a different reason. Older listings these days simply get forgotten by the membership at large.
This inefficient system was
eventually replaced with weekly catalogues - a wonderful innovation at
the time - since it eliminated the monotonous, labour-intensive task of
tear sheet organization. However, it meant that if an agent relied on
the catalogue alone, they were unaware of new listings and sales that
occurred between issues of the catalogue.
What a difference! Not only were real estate agents able to receive almost instantaneous current data on listing and sale activity, they were relieved of the previous administrative baggage and monotony of the older systems.
Suddenly, the more technically savvy agents could perform home searches and email new listings directly to their buyer clients and customers. As software improved and personal home computers proliferated, home buyers were delighted. As a result of the MLS® online system, not only could they receive detailed information, including colour interior and exterior photos as well as virtual tours if available, they could personally perform their own rudimentary searches of Canadian real estate themselves on REALTOR.ca® (formerly known as MLS.ca®) or American real estate at REALTOR.com® (formerly MLS.com®).
Countless real estate brokerages and sales people created their own websites, but by far the most popular with the public were those created by the national associations like The Canadian Real Estate Association (CREA®) in Canada, and The National Association of Realtors (NAR®) in the USA. The term REALTOR® was created and applied to a member of the board and the provincial, state and national associations.
the way, the term, REALTOR®, is often erroneously used to refer to real
estate sales people, when in fact, it's actually a sale person or broker member of one of the national associations. It is a
designation rather than an occupation.
It provides buyers with the opportunity to perform basic home searches in virtually any area across the country and obtain information and photos of every home listed on the Multiple Listing Service® system, wherever they have access to the Internet. And if a buyer is reluctant to hire an agent to represent them right away, it's a great place to begin exploring the marketplace.
For sellers, whether planning to sell a home, investment property or trading houses, it offers the best real estate marketing exposure money can buy. It's where nearly all buyers begin their home search. Property owners should not miss out on the fabulous listing exposure offered by the MLS® system.
Recently, several real estate boards, including the biggest board in Canada, the Toronto Real Estate Board
have organized a data sharing agreement called CONNECT
that permits a member the privilege of accessing current
listings and recent sales of property in other board databases. Thus, the services available through the Multiple Listing Service® system
continue to evolve and improve. As far as I know, currently no better resource exists for buyer home searches or seller property exposure.
Unfortunately, the public domains of the system are typically not quite as current as the industry version of the same MLS® system because the uploading is the responsibility of the local real estate board. Therefore, due to the huge volume of daily listings submitted by the member realty companies during active market periods, there’s often a few days delay from the signing of the listing contract and the appearance of the listing on the Multiple Listing Service® system.
The Multiple Listing Service® system will definitely assist you in your home search or home marketing. It's a great way to get started. Over 90% of all home buyers begin their home search on the Internet. At some point, however, most buyers establish a relationship with a REALTOR®.
It Simply Makes Sense
If you're interested in delving into the buying and selling processes to a greater depth, including going it alone with a private sale or purchase attempt, you may want to check out my book The Happy Agent.
It's chock full of home searching and marketing tips, techniques and advice, including
sections on selling privately, open houses, advertising, negotiating and more that could
make the difference between attempting to sell privately and actually
creating a successful sale. A pittance of your time and money could prove quite worthwhile. Learn to trade like a pro.
Available virtually everywhere print and e-books are sold.
Canadian and American Trademarks are owned or controlled by The Canadian Real Estate Association or the National Association of REALTORS respectively. Used under license.
A must-read for anyone contemplating a realty career and the perfect antidote for agents seeking a more productive, less stressful direction for their own realty business.
It’s also designed as an insightful resource for home buyers and sellers curious about the ins and outs of buying and selling real estate.
"An inspiring and candid tale of one man's journey to success as a real estate agent and achieving inner freedom. This book is sure to ignite the passion and holds the key to unlocking the power that lies within us all." Gina Ceci, Real Estate Lawyer