Understanding the MLS - What it Is and Why It Matters
You may have heard that gaining access to MLS listings is one of the big advantages that Waterloo Region homesellers gain when they work with a local real estate rather than trying to sell their home alone, a process usually referred to as FSBO (for sale by owner) But what is the MLS? And why is access to it so beneficial? These questions, and others, are what we are going to take a closer look at here.
What is the MLS?
The Multiple Listing Service (MLS), is owned and operated by REALTORS, and is the most powerful real estate marketing system in the country. Actually, make that the world, as there are MLS systems that cover the vast majority of the real estate market all over the world.
Housing market information originating from the MLS has long been recognized as the most reliable and comprehensive data available for those looking to buy or sell a home.
The strength of this more than 65-year-old system rests in the quality and accuracy of the information. Government, economists, financial institutions, appraisers and others all rely on MLS data. This is because Realtors who submit the listing information, and MLS staff at real estate boards who conduct quality control, are trained and educated in the complexities of real estate.
The MLS system gives unmatched exposure to properties for sale. If you’re selling your home, a listing on MLS will be shared with thousands of other Realtors for the broadest distribution possible. If you’re buying a home, MLS will have the largest pool of homes to choose from.
The MLS also validates and increases the accuracy of our property taxation system by providing reliable information, backed by professional accountability, to government bodies responsible for assessments in our province and on a national level.
Realtors know how to describe a property accurately and what information must be disclosed in an MLS listing. For instance, if there is a restriction on the use of a property, something called an easement, this information must appear in the MLS listing.
Can Buyers Access the MLS on Their Own?
To look for homes on the MLS, you will need help from your real estate agent or broker. MLS access is limited to properly credentialed real estate brokers and real estate agents who pay an annual fee, and meet some strict legal access criteria.
So when you work with an agent or broker, they will give you access to a portion of the MLS that matches your search criteria. Typically, this is done either through email, a special log-in, or both.
At Team Pinto, for example, we offer our clients a variety of ways to access MLS listings that might be relevant to them so that they can do so in whatever way works best for them.
Why Can't FSBO Sellers List on the MLS?
As we mentioned, a lot of people rely on the MLS listings in each market to be the most accurate representation of properties for sale, and in order to make sure that is the case, access is restricted to those who have the proper licenses, which means they have the proper education, to do so. Those listings are then also usually double-checked by MLS employees.
Although people don't often don't realize it, real estate agents and Realtors have to go through a lot of education to get their licenses and credentials. Not only do we need to know our craft as salespeople, but there are (literally) hundreds of laws, rules and regulations we have to be aware of to ensure we operate within the law on both a provincial and national level.
FSBO sellers don't have that level of education or liability, so they cannot list on, or access the MLS directly. In the US, some companies allow FSBO sellers to pay to add a listing via their license, but that is not something that is legal in Ontario right now.
Why the MLS is Important for Everyone
The MLS helps with many facets of the real estate market and the people with holdings in it, even though it was developed for and is maintained by real estate professionals. Since everyone who needs to can see what is listed for sale and at what price thanks to the MLS, a fair housing market can be established and maintained.
How the MLS Helps Real Estate Agents
An MLS is a fantastic tool for real estate agents and has several advantages for their business. Sharing listings with buyers is simple with the MLS because it typically provides them with a link to view their matches. When a buyer locates a property they want, they can quickly express their interest to their Realtor and arrange a viewing.
Additionally, agents can promote the houses they are selling to thousands of potential purchasers. To make the property more appealing, they can easily make changes to the listed information, or they can update the listing if something important has changed. The best real estate agents make great use of the MLS listing space they allowed, both in terms of great copy and photographs and videos that help the listing stand out.
How the MLS Helps Sellers
The MLS is useful for home sellers as well. Sharing their listing with potential buyers is made very simple by the program, giving them exposure they would not generally get if selling on their own.
The seller will learn about other properties' selling prices and characteristics throughout the comparative market analysis (also known as "comps") procedure. The best original asking price for a home is partially established in this manner.
However, a seller can benefit from this knowledge in other ways. For instance, if their house has a competitive disadvantage, the seller might be able to fix it before listing the house.
For suggestions on home upgrades, sellers can look at the property characteristics of comparable houses that are selling at the top end of the market. A few minor improvements frequently lead to a shorter time on the market and a higher sales price.
How the MLS Helps Buyers
The MLS can also be advantageous to a buyer with the aid of an agent. A buyer will have more selections that fit their criteria as they progress through the buying process, and the MLS will offer more specific details about the listing, such as size, features, style, neighborhood, and more. This saves the buyer time by making it much easier for the agent to sort through the potential hits and guide them to properties that best fit their needs.