MLSs are private databases for real estate agents called “Multiple Listing Services”. But are MLS databases still relevant?
In this video, Real Estate Broker Eric Andrews explores the relevancy of the MLS in 2021 and beyond.
Long ago, real estate agents were the gatekeepers of information. If you wanted to know about property for sale, you would go talk to an agent who would then access the MLS and pull up a list of properties for sale which met your criteria. But these days, property may be listed on Loopnet, Zillow and Homesnap with or without the MLS and people can discover new properties for sale in seconds.
Interviewer: Is the MLS still relevant?
Eric: Yeah. I don’t think, it’s certainly not as relevant as it used to be. MLS used to be, I mean, the whole thing with real estate agents and the MLS is like MLS was all the information. If you wanted to buy a house, you had to come to a real estate agent because we were guardians. We were keepers of the information. Well, we’re just, it’s just not that way now. We have Zillow for residential. We have Land Watch for land and we have Loop Net for commercial property. So we’re not the gatekeepers of information. Zillow is a national company. Okay. So much invested in it. Your MLS is either a town or a few counties or some of the MLSs are statewide, but it still doesn’t compare to Zillow that’s national. Same thing with LoopNet.
So the information now can go to 800 different websites. So the information isn’t so important. What MLS still does is it’s a means for other agents to get into properties. Well, now there’s companies like Open Door where you can get your cell phone, you can actually get into a property. So we’re not as relevant as far as the information is concerned. We’re not as relevant as far as access is concerned. The MLS also allows for cooperation between two agents. So we have a contract that’s signed that says, Lynn, if you sell my listing, I’ll make sure that you get two and a half percent commission out of my 6%. You get two and a half or out of my 6% you get three or whatever. We’re going to divide the commission and we have an agreement as to how we’re going to divide it.
So that’s one of the values of MLS. Before, there’s a little bit more detailed comp. So like if I want to figure out the price of your house, I can do the comps from MLS. Well, Zillow’s getting better and better in that. Homesnap, we talked about earlier. Homesnap’s getting really good at getting that information. So if MLS isn’t important, why do you still need a real estate agent? If MLS isn’t relevant, you need a real estate agent because they’re professional negotiators, they understand the contracts in and out or they should. You want an agent that understands the contracts, market awareness. I mean, I just had a sales meeting last month and I said, if I hear of another agent bragging about how they got over list price, or they were in a multiple offer situation, I might fire you on the spot because you’re not doing a good job.
If you got 25,000 over list price, it means you didn’t list it right. You weren’t aware of what the market was. So I don’t want agents in this firm bragging about how they got over list price. We want to be aggressive on that. So you’re not going to get that from comps. You have to get that because you’re an agent that knows the market. Of course, vendors, contacts, repairs. That’s what is also relevant. So if I had to do it all over again, I wouldn’t even join the MLS. Too many agents in my firm, too many people love the MLS. I remember when we first started out, we put our homes and lands in the Chatham News and Record. Chatham News and Record’s a great paper, but it wasn’t selling our houses.
So I made the decision to pull out of the Chatham News and Record and I had a lot of seller resistency. I wish I could get my agents and sellers to say MLS is irrelevant right now. You can make people aware of your properties because of the comprehensive exposure that the internet has. If I don’t have to have MLS and a couple hundred million people in the United States will know that your house is for sale. You don’t need that anymore.