The Multiple Listing Service (MLS) is a centralized database and networking platform used by real estate professionals, including agents and brokers, to list and access properties for sale. It serves as a collaborative tool where real estate professionals share detailed information about properties, allowing them to connect buyers and vendors more effectively.
The MLS is not a single national system but a collection of regional and local databases operated by real estate organizations. While access to the MLS is typically restricted to licensed professionals, its data is often used to populate public-facing real estate websites. However, these public platforms may provide a different level of detail or real-time updates in the MLS.
An MLS listing includes comprehensive details about a property, such as its price, square footage, photos, features, neighborhood information, and history of price changes or previous sales. By providing a single, trusted source of information, the MLS guarantees transparency and efficiency in real estate transactions, acquiring buyers and sellers through streamlined processes and access to a larger amount of opportunities.
When buying real estate, understanding key terminology related to the Multiple Listing Service (MLS) can help you navigate the home-buying process more efficiently. The MLS is a database real estate professionals use to share information about properties for sale. Below are some of the most common MLS terms every buyer should know:
Active
- Definition: A property that is currently for sale and available for purchase.
- What it Means for Buyers: The property is still on the market, and you can make an offer on it.
Contingent
- Definition: A property that has an offer accepted, but the sale is contingent upon specific terms being met (such as financing, inspection, or appraisal).
- What it Means for Buyers: The seller has accepted an offer, but the sale still needs to be finalized. If the contingencies are unmet, there may still be a chance to submit a backup offer.
Pending
- Definition: A property with an offer accepted and all contingencies have been met, but the sale has yet to close.
- What it Means for Buyers: The property is almost sold, and it’s unlikely that the deal will fall through unless there are serious issues. It’s still possible to inquire and submit a backup offer.
Sold
- Definition: A property that has completed the sale and is no longer available.
- What it Means for Buyers: The property is no longer an option for purchase.
Withdrawn
- Definition: A property listed for sale but removed from the MLS by the seller or listing agent.
- What it Means for Buyers: The property is no longer available, and the seller may decide to relist it later.
Price Reduction
- Definition: A decrease in the listing price of a property.
- What it Means for Buyers: If you see a price reduction, it could be an opportunity to negotiate or purchase at a lower price than originally listed.
Price Increase
- Definition: An increase in the listing price of a property.
- What it Means for Buyers: The price has increased, which could indicate demand or a seller’s desire to get a higher return.
Back on Market (BOM)
- Definition: A property previously under contract but now available for sale again.
- What it Means for Buyers: The deal fell through, and the property is available again. You may have a second chance to make an offer.
New Listing
- Definition: A property that has just been added to the MLS.
- What it Means for Buyers: This is an opportunity to view a new home that has just become available for sale, often before other buyers know it.
Days on Market (DOM)
- Definition: The number of days a property has been listed for sale on the MLS.
- What it Means for Buyers: A high DOM could indicate that the property has been on the market for a long time, and the seller may be more willing to negotiate. A low DOM means the property is fresh and may receive more competition.
Offer Date
- Definition: The date the seller has requested all offers be submitted for review.
- What it Means for Buyers: This is a critical date in competitive markets, and if you’re interested in the property, you’ll want to ensure your offer is submitted before this date.
MLS Number
- Definition: A unique identifier assigned to each property listing in the MLS database.
- What it Means for Buyers: This number allows buyers and agents to effortlessly track or reference specific listings when looking or making inquiries about a property.
Seller’s Disclosure
- Definition: A document the seller provides that outlines the property’s condition, including any recognized issues or defects.
- What it Means for Buyers: Before making an offer, you should carefully review the seller’s knowledge to understand any potential repairs or issues with the property.
Appraised Value
- Definition: A professional appraiser determines a property’s estimated value based on aspects like condition, location, and comparable sales.
- What it Means for Buyers: The appraised value helps guarantee that the property is worth the price, but it may affect the mortgage approval process.
Comparable Market Analysis (CMA)
- Definition: A report generated by real estate agents that compares recently sold properties similar to the one you’re interested in.
- What it Means for Buyers: This report can help you assess whether the listing price of a property is reasonable based on local market conditions.
Square Footage
- Definition: The total area of the property, typically measured by the home’s interior.
- What it Means for Buyers: Larger homes typically have higher prices, so knowing the square footage can help you evaluate whether a home fits your needs and budget.
HOA Fees (Homeowners Association Fees)
- Definition: A regular fee is paid to a homeowners’ association to maintain common areas and other community services.
- What it Means for Buyers: Be aware of these fees, as they can add to the cost of homeownership, especially in planned communities or condominiums.
Virtual Tour
- Definition: An online, interactive property tour lets you view the home remotely.
- What it Means for Buyers: A virtual tour allows you to view a home in detail without physically visiting it, saving time and helping you narrow down your options.
Fixer-Upper
- Definition: A property that requires significant repairs or renovations to be livable or to reach its full value potential.
- What it Means for Buyers: If you’re willing to invest in repairs, a fixer-upper can be a chance to buy at a lower price. However, it can also lead to substantial costs and effort to make the home livable.
Closing Costs
- Definition: The fees associated with completing a property transaction, including title fees, inspections, loan origination fees, taxes, and other miscellaneous charges.
- What it means for Buyers: You’ll need to plan for these additional costs, which range from 2% to 5% of the purchase price.
By understanding these MLS terms, you can better communicate with your real estate agent, make informed decisions, and avoid surprises during your home search. These terms will help you explore the complexities of the real estate market and ensure you’re prepared for every step of the buying process.
Frequently Asked Questions
What does MLS do?
The Multiple Listing Service (MLS) is a strong tool designed to streamline the real estate process by acting as a central hub for property listings. It enables real estate agents and brokers to share detailed information about properties for sale, making it more uncomplicated to connect buyers with sellers. The MLS promotes collaboration among real estate professionals, guaranteeing everyone can access the most updated and accurate data.
Using the MLS, real estate agents can view multiple property details, including pricing, property features, tax history, square footage, and even insights into neighborhood amenities. This level of detail guarantees transparency and allows agents to give their customers the best possible advice.
Beyond its role as a listing platform, the MLS also improves efficiency in real estate transactions. It allows agents to follow market trends, identify comparable sales, and gain valuable pricing and negotiation strategy insights. This comprehensive functionality makes the MLS an essential resource for anyone in the real estate market.
Why is MLS only available to agents?
The MLS is exclusive to licensed real estate agents and brokers because it is a professional tool designed to maintain industry standards and support the integrity of real estate transactions. As a platform built by and for professionals, it ensures that only those with the necessary training and credentials can access its data. This exclusivity assists in upholding the quality and accuracy of the information, as agents are accountable for entering, updating, and understanding the details accurately.
Additionally, the MLS often contains private information not meant for public access, like private seller notes, commission agreements and showing instructions. Limiting access to licensed agents protects this data and guarantees it is used carefully. Keeping the MLS within the professional community promotes collaboration and trust among agents and brokers, creating a trustworthy framework for real estate transactions. This structure also ensures that consumers receive expert guidance in exploring the complexities of the market, as agents can leverage the MLS to provide accurate, actionable insights.
Is it worth it to get an MLS?
Access to the MLS is worth it for licensed real estate professionals because it provides comprehensive, real-time property data, fosters collaboration, and enhances their ability to serve clients effectively. Working with an agent with MLS access guarantees buyers and sellers benefit from accurate market insights and maximum property exposure. Investors may also find MLS access valuable for identifying opportunities, often by working with agents or obtaining a license. The MLS is a key tool for making informed real estate decisions.
