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There are three major kinds of property listings; open listings, exclusive listings, and multiple listings.
Open listings are listings in which homeowners list their property openly with many agents. There are no guidelines as to how many agents can represent an open listing. Open listings are often attractive to homeowners as they are able to have numerous agents working on selling their home simultaneously. Unfortunately, this method usually does not result in fast and successful home selling as agents become demotivated from the high competition amongst themselves. There is little financial security for the work that put into the listing.
Exclusive listings are often thought of as an attractive listing method by agents, as the homeowner agrees to give only one agent the rights to sell their home. With exclusive listings, agents are confident that they are the only individual who will get the commission from this home sale and therefore are highly motivated. Unfortunately, homeowners are discouraged to sign their property as an exclusive listing due to the significant decrease in market exposure.
The multiple listing was developed to encompass the benefits of both the open and exclusive listing. The multiple listing requires that a homeowner lists with only one agent, guaranteeing that agent rights to the commission of the home sale if it is sold before the listing expiration. However, unlike an exclusive listing, the multiple listing ensures vast market exposure as every agent has the right to sell that home and share in the commission. The multiple listing service provides that there is both a listing agent and a selling agent and that these two agents share the commission. The listing agent represents the homeowner and is responsible for drawing attention to their listing, while a selling agent represents buyers and is responsible for finding a property to meet their buyers needs.
In order for Multiple Listings to be successful, associations of real estate agents were created. These associations enabled the exchange of information among agents to ensure that listings were getting full market exposure.
Today's Multiple Listing Service provides a means of advanced data sharing where all association members can quickly access information about MLS® listings. This system is very successfully as homeowners know that to get full market exposure they need to list their property on the MLS®. Multiple Listing Service entitles agents to secure compensation, homeowners to extensive market exposure, and prospective buyers to a comprehensive and detailed list of properties for sale.
The Benefits of MLS®
Certainty of Commissions
Multiple Listings were invented to better secure the obligation to pay the commission. For this reason "Multiple Listings" are similar to "Exclusive Listings" in that they provide for the undisputed payment of the commission upon the sale of the property. The listing agent is not required to prove to the seller that he was the "procuring cause of sale".
An MLS creates a database of known sale prices. Therefore true market values are better understood by Agents, Sellers and Buyers. Third party companies such as banks, construction companies and tax authorities can also benefit greatly from access to known sale prices.
Convenience to Buyers
By consolidating all properties for sale in one place (a national website) it becomes much easier and more convenient for buyers to shop for the ideal home.
Market Exposure for Sellers
Multiple Listings create optimum market exposure for sellers, going of course beyond exclusive listings but even beyond what can be achieved through open listings with many different offices. By definition a Multiple Listing is open to all agents to sell (hence it is called "Multiple"). In terms of how this would be understood by a typical home seller in Latin America; what it means is that when he signs a Multiple Listing effectively he is giving an exclusive listing to the entire real estate community.
Deployment of Computer Tools
The presence of a computer MLS database makes it uniquely easier to bring computer technology into the buying and selling process. Hence REALTORS® using an MLS have access to mapping, forms, automatic emailing, mailing lists, prospect tracking, appointment scheduling and similar support tools to improve the quality and efficiency of their services.
The MLS business model makes it possible for Agents to work exclusively with either sellers or buyers based on where their best talents lie.
Independent Agent Representation
The MLS business model makes it possible for both the Seller and the Buyer to be represented throughout the entire selling process by a single agent whom they know and trust. This creates safety and security in the marketplace and facilitates negotiations leading to a sale.
Strengthening the Role of the Association
The MLS strengthens the role of the association that is providing the MLS service and in time it leads to 100% membership in that association by all real estate agents. This then improves the industry, as the association is in a stronger position to enforce behavior standards for all practicing agents and to protect their collective interests.
An MLS strongly encourages cooperation among all agents. This improves productivity for the real estate industry and reduces inefficient activities, redundancy and waste.
The MLS database contains comprehensive and detailed records of listings and sales. With these records all forms of computer generated reports can be derived. These reports can identify marketplace trends and facilitate well informed decision making.