The MLS, or “Multiple Listing Service,” is one of the most basic and fundamental listing services for real estate agents in the United States. Basically, every home and condo in the United States that is for sale should be listed on the MLS to gain maximum exposure.
The MLS is a central database of homes listed by real estate agents throughout the United States detailing basic information such as square footage, number of bedrooms and baths, location, listing price, special amenities, and a photo of the home.
Access to the MLS is restricted to real estate professionals who are properly licensed members of a local Board or Association of Realtors and the NAR or CREA, (the National Association of Realtors in the US or the Canadian Real Estate Association in Canada), though many third-party websites now grant access to anyone with an Internet connection.
For example, sites such as Zillow, Trulia, and Redfin all cull data from the MLS so anyone can see what is listed.
Realtor.com has been given exclusive rights to display much of the MLS data online, though other websites syndicate this information as well. For example, you may see a website for “MLS listings on Long Island” or another specializing in “California MLS listings”. You are typically free to search basic MLS listings, but must pay or become a member to get more detailed information, view a property, or make an offer.
It is extremely important that your home is listed on the MLS because real estate agents use this central database first to search for homes for their clients. In this sense, the MLS is effectively a tool for agents to show other agents your listed home, and in turn get more qualified buyers to show interest in your home.
Brokers and agents who do not join an affiliated trade association nor operate under the rules of such an association may not join the MLS. For sale by owner properties cannot obtain a direct listing on the MLS unless they agree to an “MLS flat fee” which ranges from $200-$500, as well as the buyer’s agent commission of around 3%.
One special note about an MLS listing to keep in mind is that many banks and lenders will not refinance a home if it has been listed on the MLS in the past six months. The basic reasoning is that if you couldn’t sell your home on the open market, a lender won’t want to finance it either.
That’s why it might make sense to list your home as a for-sale-by-owner if you aren’t very serious about selling the home. That way, if things change, you can refinance the property with less trouble.