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Why MLS

Mar 1, 2008
For real estate agents, the importance of the MLS is extremely apparent. In fact, in a Realtor orientation session, it is not uncommon for a majority of the new agents to state that the primary or only reason they signed up to join the local association was to obtain the ability to list properties in and search the local MLS. These new agents understand, perhaps by speaking to other agents, how the industry works. They understand that the MLS is the database of homes for sale in a particular area and is an unmatched marketing tool available to sellers. They realize that homes that are not on the MLS simply do not have the visibility of the vast majority of competing properties which are listed. While regular homeowners may have heard the term or understood that the Multiple Listing Service was a somewhat important concept, many want to know exactly why they should have their property listed in the MLS. The reasons are numerous, but largely come down to three things: getting your home sold, getting it sold quickly, and getting top dollar for your home.

The fact is, most For Sale By Owner (FSBO) properties do not sell FSBO as most homeowners who try to sell by owner end up listing with an agent. Studies have shown that the number of properties that sell as a straight For Sale By Owner transaction is less than 20%. Additionally, when you remove the number of FSBO sellers that paid a commission to a buyer's agent for bringing them a buyer as well as those transactions when the property really was not marketed for sale (such as off market sales between relatives or friends), the overall number of successful FSBO sales is even lower. The chances of an MLS listed property selling are many times greater than the chances of a FSBO property selling.

Homes on the MLS historically sell faster. Depending on which studies you believe, homes listed on the MLS are available on the market for 50% or fewer days than FSBO sales. Getting your home sold quicker can mean less uncertainty, fewer mortgage payments, less wasted time, and the ability to move onto your next home purchase quicker. In an appreciating market, you could lock into the price of your next home quicker, while in a declining market, you could get your current home off your books prior to the price declining further.

The average sales price difference between an MLS listed home versus a by owner home was 15.4 percent according to a National Association of Realtors study. While you have to question the source as being biased, there is some empirical evidence that buyers of for sale by owner homes expect to receive a discount because there are no agents to pay. Simply stated, all the savings do not go to the seller; the buyer wants to also save money.

Realizing the MLS is extremely important to selling a home quickly for top dollar, many sellers list with traditional agencies. However, there is a cheaper alternative that more and more sellers are now aware of. Flat fee MLS listing companies offer sellers that would have sold by owner the opportunity to list their home in the MLS for a small flat fee. Over time, data has shown that these sellers receive the same benefits of MLS listed homes: a high percentage of successful closings, fewer days on market and higher selling prices.
About the Author
Donald Plunkett is the President of Congress Realty, a $299 flat fee MLS company offering its MLS listing services in 11 states.
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