Realty Reality - Continued
The Multiple Listing Service (MLS) has come under attack recently by people who have no clue about why it exists or what it does to help create an orderly marketplace for real estate transactions. In addition some of the people attacking it are real estate brokerages who do not want to "pay the freight" and follow the rules that apply to all members.
Myth #2: The MLS is exclusionary and doesn't allow all real estate brokers access to all of the inventory of houses for sale.
Realty Reality: This is absolutely false. The MLS system was set up in the 1950's because the real estate business was totally inefficient. A buyer would have to go to every single real estate office in town to find out what was for sale at each office in order to see the entire market. In addition, the real estate brokers had no way to expose their inventory of homes widely to each other and to the buyers interested in that area.
The Multiple Listing Service was started to bring order to a chaotic marketplace, much like the New York Stock Exchange did for the securities market. The stock exchange created memberships for those brokers who wanted to participate in an orderly method of marketing stocks. The stock exchanges charge a fee for membership, and there are strict rules that must be followed, not only by the stock brokers, but also by the companies who list their companies on the Exchange. Today, companies have many choices of markets: they can choose to list on the NYSE, or on the NASDAQ, or they can be traded "Over the Counter", or they can choose to sell their stocks themselves to private investors only.
Real estate brokers have similar options: they can choose to be members of the MLS in their areas, or they can choose not to. Home sellers also have many options: they can choose to list their homes with brokers who are MLS members, or they can choose to list their properties with brokers who are not. They can also choose to market their properties themselves without using a broker. Depending on the choices they make, the methods of marketing the property will vary.
If a real estate broker chooses to be a member of the MLS, he or she must pay membership fees, and follow the rules, just like a stock broker must as a member of a stock exchange. Those memberships are not restricted to certain types of brokers in either industry; Charles Schwab, as a "discount" broker can be a member just as Morgan Stanley can. In the real estate business it is the same; Help-U-Sell can be a member of the MLS just as a Realty Executives broker can. They all must pay the same membership fees and play by the same rules.
The MLS system allows a broker to be the best advocate for their sellers by protecting their rights to a commission no matter who buys the property. This makes it possible to be aggressive in marketing the property to the entire world without hesitation.
Anyone who thinks that the MLS system is hindering the marketing of properties or is excluding brokers from the marketplace, is just plain ignorant of the facts and history. Without the MLS, buyers and sellers would have limited access to homes and buyers, and would not get the advantages of the free market that determines the true values of the properties they are selling and buying.
The MLS is open to any broker no matter what business model chosen by the company. However, all members must pay the same fees and play by the same rules. Any real estate broker who complains about MLS access is most-likely too cheap to pay the fees to participate in an orderly market, or has a business model that has failed to account for the true costs of doing business.
Myth #2: The MLS is exclusionary and doesn't allow all real estate brokers access to all of the inventory of houses for sale.
Realty Reality: This is absolutely false. The MLS system was set up in the 1950's because the real estate business was totally inefficient. A buyer would have to go to every single real estate office in town to find out what was for sale at each office in order to see the entire market. In addition, the real estate brokers had no way to expose their inventory of homes widely to each other and to the buyers interested in that area.
The Multiple Listing Service was started to bring order to a chaotic marketplace, much like the New York Stock Exchange did for the securities market. The stock exchange created memberships for those brokers who wanted to participate in an orderly method of marketing stocks. The stock exchanges charge a fee for membership, and there are strict rules that must be followed, not only by the stock brokers, but also by the companies who list their companies on the Exchange. Today, companies have many choices of markets: they can choose to list on the NYSE, or on the NASDAQ, or they can be traded "Over the Counter", or they can choose to sell their stocks themselves to private investors only.
Real estate brokers have similar options: they can choose to be members of the MLS in their areas, or they can choose not to. Home sellers also have many options: they can choose to list their homes with brokers who are MLS members, or they can choose to list their properties with brokers who are not. They can also choose to market their properties themselves without using a broker. Depending on the choices they make, the methods of marketing the property will vary.
If a real estate broker chooses to be a member of the MLS, he or she must pay membership fees, and follow the rules, just like a stock broker must as a member of a stock exchange. Those memberships are not restricted to certain types of brokers in either industry; Charles Schwab, as a "discount" broker can be a member just as Morgan Stanley can. In the real estate business it is the same; Help-U-Sell can be a member of the MLS just as a Realty Executives broker can. They all must pay the same membership fees and play by the same rules.
The MLS system allows a broker to be the best advocate for their sellers by protecting their rights to a commission no matter who buys the property. This makes it possible to be aggressive in marketing the property to the entire world without hesitation.
Anyone who thinks that the MLS system is hindering the marketing of properties or is excluding brokers from the marketplace, is just plain ignorant of the facts and history. Without the MLS, buyers and sellers would have limited access to homes and buyers, and would not get the advantages of the free market that determines the true values of the properties they are selling and buying.
The MLS is open to any broker no matter what business model chosen by the company. However, all members must pay the same fees and play by the same rules. Any real estate broker who complains about MLS access is most-likely too cheap to pay the fees to participate in an orderly market, or has a business model that has failed to account for the true costs of doing business.
posted by Realty Executives Int'l at 8:22 PM
1 Comments:
Rich, I agree with many of you points of view but I think the MLS is under attack, by brokers in many cases, for some very valid reasons. Many of these, such as regionalization, data structure, data control, analytics and governance can and should be addressed.
At the Inman New York I attended a session call “MLS under Siege” It was quite informative. I think that these issues need to address and addressed quickly. I blogged about the event here: http://point2agent.wordpress.com/2007/01/18/61/ I would be grateful if you would give it a read and would value your comments and opinion.
Best
Brendan King
COO Point2
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