Real Estate in the Age of the Internet - Vol 5
Brief History of the MLS Prior to the 1920's the real estate market in the US was highly inefficient; home owners interested in selling their property, listed their house as "for sale" at a local real estate agent's office.
Because there was no central information repository for the homes for sale in a geographic area, buyers were forced to go from office to office to find out about available properties for sale.
The system was also a disadvantage for sellers since their properties received limited exposure outside the office it was listed in.
Recognizing the inherent inefficiency of this system, agents and brokers in common geographic regions began sharing information on properties for sale through what is now know as the Multiple Listing Service (MLS).
Originally printed in book form, the MLS was shared solely between participating agents and brokers who paid dues to be a part of the cooperative.
Current MLS Functions When a selling agent signs a listing a contract with a seller, the agent enters information about the property into the MLS database.
With over 900 different MLS systems in the US, there is little data standardization with respect to the information formats and information codes between the different MLS's.
Up until the recently the access to information in the MLS was tightly controlled by agents, essentially resulting in an information monopoly.
In recent years, information in the MLS has become available to the public through Internet web sites.
In addition to serving as a database of listings information the MLS also serves other legal and functional purposes.
The MLS contains the compensation agreement, which governs cooperation between the buyer and seller's agents.
In the real estate transaction, payment for brokerage services is contingent on the successful transfer of ownership of the property and flows from the seller to the seller broker/agent and buyer broker/agent.
Access to and participation in the MLS creates the contractual framework between real estate agents.
Finally, agents are able show MLS listed properties because the door key is made available to other members of the MLS though a coded lockbox.
Because there was no central information repository for the homes for sale in a geographic area, buyers were forced to go from office to office to find out about available properties for sale.
The system was also a disadvantage for sellers since their properties received limited exposure outside the office it was listed in.
Recognizing the inherent inefficiency of this system, agents and brokers in common geographic regions began sharing information on properties for sale through what is now know as the Multiple Listing Service (MLS).
Originally printed in book form, the MLS was shared solely between participating agents and brokers who paid dues to be a part of the cooperative.
Current MLS Functions When a selling agent signs a listing a contract with a seller, the agent enters information about the property into the MLS database.
With over 900 different MLS systems in the US, there is little data standardization with respect to the information formats and information codes between the different MLS's.
Up until the recently the access to information in the MLS was tightly controlled by agents, essentially resulting in an information monopoly.
In recent years, information in the MLS has become available to the public through Internet web sites.
In addition to serving as a database of listings information the MLS also serves other legal and functional purposes.
The MLS contains the compensation agreement, which governs cooperation between the buyer and seller's agents.
In the real estate transaction, payment for brokerage services is contingent on the successful transfer of ownership of the property and flows from the seller to the seller broker/agent and buyer broker/agent.
Access to and participation in the MLS creates the contractual framework between real estate agents.
Finally, agents are able show MLS listed properties because the door key is made available to other members of the MLS though a coded lockbox.
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