If you’ve ever talked with a REALTOR®, you’ve probably heard “MLS” at some point in the conversation. Chances are, unless someone has explained what the MLS is and what it does, you might have some misconceptions about the MLS and real estate brokerages in general. Often I hear sellers refer to the MLS as if it has some sort of magical power to sell homes. As if, simply listing a home on the MLS will make it sell. The fact is, it takes much more than that to sell a home. So, if you’re thinking of selling in the near future, and are even slightly confused about the MLS, please read on. You may need to revamp your understanding of real estate brokerages as well.
What is the MLS?
An MLS (Multiple Listing Service) is a tool that local REALTOR® brokerages use to share their listings with other brokerages and the general public. Before the internet, brokerages had to do lots of tedious work to gain maximum buyer exposure for their listings. Back then, maximum listing exposure depended on brokerages finding ways to put their listings in front of both the general public and other brokerages on a regular basis. Means of accomplishing this task included fax, telephone, ‘snail’ mail, magazine ads, newspaper ads, and listing printouts—handed out to other brokerages at REALTOR® board meetings, and in info boxes attached to for-sale yard signs. Today, all across the US, local REALTORS® own, pay for, and maintain local Multiple Listing Services in order to accomplish this once tedious task. The local MLS in Central Arkansas is Cooperative Arkansas Realtors® Multiple Listings Services, Inc. (aka CARMLS). CARMLS is essentially a huge database of real estate listings. When local REALTORS® input a new listing into CARMLS, other CARMLS members can then see and access the listing from their own computer, tablet or smartphone. Additionally, through CARMLS, members can syndicate their listings to major real estate websites like Zillow.com, Trulia.com and Realtor.com. For more MLS background info, check out the MLS Wiki or this article from Realtor.org.
So, why does any of this matter to you, a seller? Well, it may mean you should reconsider what’s really important when choosing a brokerage to list your home.
Listing Exposure: then
Back in the days when buyers had to physically go to a brokerage and look in a book to find where all the for-sale homes were, it made sense for sellers to want to list with the biggest, oldest, or most well-known brokerage in town; because, those brokerages would probably be the brokerages that buyers would visit first. Basically, it made sense for sellers to examine the local market, determine where the buyers would most likely go to search for a home, and then list their home with the brokerage that would provide exposure to the largest number of potential buyers. This sort of reasoning made sense–back then.
Listing Exposure: NOW
In central Arkansas, the majority of brokerages are CARMLS members. From the franchise/brand name brokerages, to the large “we’ve-been-number-1-in-this-town-for-30-years” private brokerages, to the smaller, newer private brokerages with just a few agents, the majority of local brokerages are CARMLS members. So what’s the point? Well, since CARMLS syndicates listings to all of the top five most visited real estate websites in the US, and since 92% of homebuyers are searching online for their next home, the traditional criteria for measuring listing “exposure” really isn’t valid anymore. Think about it. Regardless of which brokerage you list with—the large one with signs all over town, or the one you’ve never heard of—if they’re a member of CARMLS, they’ll be able to send your listing to Zillow, Trulia, Realtor.com, etc. Some brokerages may go beyond internet listing syndication to provide additional exposure for your listing locally (Geraldson Realty provides geo-targeted social media marketing), but in terms of exposing your property to the 92% of buyers that are visiting the top real estate websites, CARMLS syndication is the same from one brokerage to the next. For many traditionally-minded sellers (and traditionally-minded real estate agents) this modern reality is a difficult concept to grasp. Especially in light of how compelling many listing agents are when they start naming all of the websites they’ll put your listing on. If that’s you—a traditionally-minded seller, then try this: Go to Zillow.com > Search for homes in your Zip Code > Filter your Search Results to show only “FOR SALE” “By Agent” homes. Once you’ve done that, start clicking on some of the listings. On each home that you click on, scroll to the bottom of the listing and look at the fine print that says “Listing provided by:_____”. As you examine a number of different listings, you’ll find that all sorts of brokerages—large & small, franchise & private—are all providing the same listing exposure on Zillow.com. The same thing goes for Trulia.com, Realtor.com and so on. If you’re still not convinced that the traditional listing “exposure” criteria is a bit dated (i.e. biggest and most well-known brokerage = best listing exposure), just ask yourself this question: Have you ever heard of a buyer turning down a house they loved, because of the sign in the front yard?…Of course not.
Does Bigger Always Mean Better?
So, when it comes time to sell your house, if your first instinct is to pick up the phone and call a local brokerage, before you make the call, pause; and ask yourself: “Why am I calling ____?” “What is it about ___ brokerage that makes me think I should list with them?” If you find yourself assuming that because you see ______ brokerage’s signs everywhere, they must be able to expose your home to more buyers, you might want to reconsider what you’re basing your assumptions on. All of the other local brokerages are reaching the same 92% of buyers as well. As for all of their signs that you see everywhere, well, perhaps ____ brokerage simply has a lot of agents. Does bigger always mean better? Perhaps, in this modern age of information technology, listing exposure has nothing at all to do with the size of a brokerage or the logo on its “For-Sale” signs. Perhaps, in a town like Conway, Arkansas, where the median age is 27, a brokerage’s ability to reach a tech-savvy (by today’s standards) buyer market is a more important factor to consider when you’re determining which local brokerage will provide the best market exposure for your listing.