Multiple Listing Service

A multiple listing service (MLS) is a private arrangement through which real estate brokers in geographically defined market areas voluntarily share information about properties (primarily residential properties) they have been authorized by the owners to sell or lease. To enter a property into the MLS, the broker must make an offer to share the compensation they will receive from the owner with any broker who successfully identifies a buyer or tenant.

Most owners wishing to sell or lease a property enter into an exclusive listing agreement with one “listing” broker who is authorized for a specified period of time to seek a buyer or tenant and, if successful, to receive compensation. MLSs provide an efficient mechanism for disseminating information about each listing broker's properties to other brokers who may not otherwise be aware of a property's availability but who may search for a buyer or tenant once they become aware and have a financial incentive to do so. A 2007 report by the Federal Trade Commission and Department of Justice states that multiple listing services “are so important to the operation of real estate markets that, as a practical matter, any broker who wishes to compete effectively in a market must participate in the local MLS” (p. 12). A 2006 national survey of house buyers and sellers by the National Association of Realtors’ MLS indicates that 88% of houses sold in the United States were listed in an MLS.

In most housing markets, MLSs are the primary source of information about houses currently for sale and the prices at which other houses have sold. MLS allows brokers to search for currently available as well as previously sold houses based on detailed criteria, including property and neighborhood information, prior sales dates and prices, and how long the property has been available for purchase or lease. Although the information about currently available properties is the primary focus of an MLS, information related to previously available properties that have been sold or rented is also useful to participants for evaluating market conditions and establishing listings and offering prices and rents. Appraisers also find this type of information especially useful in forming value opinions for their clients.

Only licensed real estate sales professionals can participate in an MLS, though some services permit limited access by appraisers, universities, and government agencies for research purposes. Most MLSs allow limited public access to information regarding currently available properties but do not allow public access to closed transactions and expired and withdrawn listings stored in the system. Participation in an MLS requires payment of a membership or license fee to the MLS operator, which may be a local chapter of the National Association of Realtors or a private entity. The participation fee varies from a few hundred dollars per year per broker in some MLSs to several thousand dollars per year in others. New participants typically are required to undergo training on the proper use of the MLS. Continued participation in the MLS requires compliance with various rules established by the entity that controls the MLS. Examples of such rules include (a) all new property listings obtained by the broker must be entered into the MLS within a certain number of days, unless an owner chooses not to have the property entered; (b) certain data, such as street address, lot size, year built, and listing price must be entered; (c) an offer of compensation to the selling broker, either in dollars or as a percentage of the transaction price, must be entered; and (d) the status of the property listing must be changed promptly upon sale, lease, withdrawal, or expiration of the listing agreement, and the transaction price or rent must be entered promptly, when applicable. Some MLSs impose fines and penalties for rule violations, with revocation of continued participation rights being the ultimate penalty.

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