The MLS in A Nutshell
If you’re considering selling your home, you likely know about the Multiple Listing Service (MLS). Just in case you need a refresher, it’s a database of for sale properties to which only licensed agents and brokers have access. This isn’t just any old database, however. Actually, there isn’t just one database. Around 700 regions across the United States have their own MLS database, all with searchable fields to help agents, brokers, and even buyers find specific properties, property features or their locations.
Agents typically fill out their clients’ property information on the MLS. It’s detailed, to say the least. Everything about your property, from its legal address to whether there’s an outdoor fireplace is listed. It takes time, a keen understanding of the property, and often, a few legal records and professional photos.
The Cost of NOT Listing on MLS
As a home seller, you may wonder if all of this MLS fuss is worth the effort. You may want to just sell your home on your own, pocket that pesky agent commission, and be on your way. Not so fast. The MLS shouldn’t be ignored. It’s where most people find their next home. The National Association of REALTORSⓇ reports 44 percent of buyers found the home they purchased on the internet, with most of those sites directly or indirectly linked to the MLS. No other database contains as much real-time, trusted, accurate data about a property.
If you want to sell your home, you need it to be found. The MLS is basically your marketplace – the place where you can advertise to the world that your home is on the market with all of the features your next buyer cares about most. The MLS is accessible to every real estate agent and broker, therefore all of their clients, associates and partners and is your #1 way to get noticed.
Related: 5 Reasons Why Some Homes Don’t Sell
Even if you live on a busy street in a highly desirable neighborhood, passersby want to know details about your home that aren’t available simply by driving by and picking up a brochure. They learn more than just square footage and price, but a multitude of information that enables them to compare your home with their existing home and other homes on the market. Because all MLS listings are set up exactly the same, it gives agents, brokers and potential buyers the ideal opportunity to perform an apples-to-apples comparison of properties.
The Cost to List on MLS
There is a cost to list on MLS and it varies widely. Keep in mind that only licensed real estate agents and brokers have access, therefore, you will have to go through them to get to the MLS. They can charge whatever they want for you to basically be using them for their access. Don’t worry – you can still sell your own home and forego the agent commissions, but you aren’t going to get on the MLS for free.
Many agents now offer an MLS access-only service whereby sellers pay them an upfront flat fee to gain access to the MLS, sans agent support or additional services. All you are paying for is to get onto the MLS. It’s quick and dirty, but it gets the job done. These flat-rate MLS services can be found for as little $49 (at last check) and as high as a few thousand dollars. The difference is usually the length of time you can have your property listed in the MLS database. If you want to keep your options open and flexible, opt for the longer terms. Your property may not sell as quickly as you anticipated and you don’t want the stress of knowing you’re up against an MLS deadline.
Discount brokers can also offer clients a low cost to list on MLS, a percentage point or two less than the typical 3% of the sale price that full-service agents charge their clients. You will pay this commission at the end of your transaction after your home has sold. Discount brokers may offer you additional services beyond MLS access. They are basically willing to work as a typical full-service agent but at a lower commission. For these agents, it’s frequently all about volume. They can get more clients in the door with their lower fee, thereby offsetting their discount.
For both flat-rate MLS providers and discount brokers, there’s an important factor to remember: you will still need to pay the buyer’s agent their commission at closing. As a FSBO, you are really only saving the commission you would pay your agent, the seller’s agent. The buyer’s agent still expects their standard commission, usually 3%, although, for some, that number may be negotiable.
Don’t Take Chances. List on The MLS.
You can try to sell your home off the MLS, but that usually only works if you already have interested buyers or an agent who is willing to market your home as a “pocket listing.” A pocket listing is not listed on the MLS. The property never has a “For Sale” sign in the yard. It is basically a “secret” listing that only a few may ever know about, but they are the few that would be interested in purchasing.
According to Realtor.com, “The real estate agent who’s been hired for a pocket listing keeps it in his metaphorical pocket (along with photos possibly) and shares it only with a smattering of agents he knows and trusts can turn him to the right clientele.” Sellers who want to maintain privacy, test the market or negotiate a lower agent commission sometimes try this tactic, although it is relatively uncommon.
The MLS is definitely worth the minimal cost as it is your best chance to bring more buyers sooner after your house hits the market. Every day your house sits on the market is money you aren’t making. Give your property the best chance of selling the fastest and for the most money (remember, the longer your property sits, the more likely you will have to lower the price to attract new potential buyers) by getting it into the database everyone trusts as the source for available properties.
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