This article was taken from the Vancouver Sun dated March 5 2014.
The public knows the term Multiple Listing Service (MLS) best for generating exposure for homes listed for sale. Housing market information originating from the MLS system has long been recognized as the most reliable and comprehensive data available for those looking to buy or sell a home.
But what are the MLS systems?
The public website www.realtor.ca is the most popular and comprehensive real estate listing website in Canada. Each month, over five million unique visitors go to www.realtor.ca and view more than 131 million pages. But www.realtor.ca is not an MLS system. It’s an advertising vehicle through which Realtors provide the public with access to information about properties listed on MLS systems across Canada.
The idea of a ‘multiple listing service’ was born from the need to create an infrastructure through which real estate agents could compete and cooperate at the same time. It’s variously been called a ‘listing exchange’, ‘cooperative listing service’, and today’s ‘MLS’ (a brand which was owned by the Real Estate Board of Greater Vancouver and given to the Canadian Real Estate Association in 1962 for use by the real estate profession across Canada).
The MLS® evolved to become a complex system of rules and regulations (including processes for dealing with complaints and arbitration), professional standards, education and code of ethics – all to provide a framework for how Realtors could cooperate while competing. Thus, listing data may be seen as a by-product of a system developed by Brokers and Realtors over many decades to enable Realtors to work together in the interest of their clients.
For nearly a hundred years, the Real Estate Board of Greater Vancouver has been gathering and sharing data to help ensure a functioning and effective real estate market.
To participate on the MLS, Realtors must meet professional development requirements and adhere to a code of ethics and rules of cooperation. They must also, among other things, carry Errors and Omissions Insurance and follow an established process for arbitrations.
The arbitration process for Realtors is an example of how the MLS framework puts the public first. If there’s a dispute about commissions paid or any other issues between Realtors, the process recognizes that the client should get what they want first. Any lingering issues, between the cooperating Realtors, are to be adjudicated afterward.
Many alternate systems and services exist today to market homes for sale. The MLS goes far beyond a listing service. It’s a well-regulated infrastructure designed to help the public safely navigate the home buying and selling process.
The value of MLS system data 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.
“Today, MLS data serves as the foundation of our property taxation system by providing reliable information, backed by professional accountability, to government bodies responsible for assessments in our province,” says Sandra Wyant, president of the Real Estate Board of Greater Vancouver.
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.
“Sellers and buyers often decide to work with a Realtor because they want expert guidance through a complex process. For this important transaction, people want to select someone they are comfortable working with and who offers the services they are looking for at a price they can agree on. The MLS system provides consumers a vast range of choices,” Wyant says.
The marketing power of the MLS system is another output of this infrastructure.
“Using the MLS gives unmatched exposure to properties for sale,” Wyant said. “If you’re selling your home, a listing on MLS will be shared with other Realtors for the broadest distribution possible. If you’re buying a home, MLS will have the largest pool of homes to choose from.
“Through the MLS system, the Realtor who represents a seller is inviting all other Realtors to offer that home for sale to their buyers. Sellers therefore have all the Realtors in their community seeking buyers for their homes. For buyers, it’s a one-stop shopping experience,” Wyant said. “By having Realtors agree to share their inventory with one another, a more efficient marketplace is created,”
If the MLS system did not exist, sellers would have to choose an individual real estate brokerage to list their home and only that brokerage would have the information about it and the ability to show and sell it. If the MLS system did not exist, buyers would have to go from Realtor to Realtor to view the listings of each individual brokerage.
(MLS® and Realtor® are registered marks owned and controlled by the Canadian Real Estate Association.)
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