During the early days of real estate in the late 1800s, it became common for realtors to meet at local association offices and disclose their stock. They reached agreements to share commissions if another was effective in a sale. This practice has continued on the internet so it is clearly to the industry’s advantage. Although it may not be as advantageous to the seller as we shall show.
Standards and Norms for the Practice
The concept of a multiple listing service (MLS) is in the public domain and cannot be trade marked or branded. There is therefore no universal standard, although the Real Estate Transaction Standard lays down a framework for the electronic exchange of data in North America. The RESO Web API is superseding this.
How the Multiple Listing Service Really Only Benefits Brokers
The primary intention of the MLS is to benefit realtors. Instead of having to advertise, they tap into the collective buyers of every agent in the network. They have a pre-agreement of how any sales commission may be shared. The pressure is therefore off them to put their heart and soul into their client’s properties.
Most MLS systems restrict access to registered brokers and their agents. These exclude private sellers, effectively tightening the virtual monopoly of the industry. However some more enlightened ones allow for-sale-by-owners to list for a flat fee.
Moreover the multiple listing service flies in the face of confidentiality between client and service provider. Instead, anybody who wants to know may find out whether a particular property is for sale. This is not necessarily a good idea for an employee or a business associate.
It must be said that a real estate broker should obtain a client’s written, informed permission before multi listing a property, and they should be able to withdraw their consent at any time without having to provide a reason.
How the Best Service Depends on a Single Provider
It stands to reason that a line angler will try harder than a member of a trawler crew. Likewise a realtor with a sole mandate, but without multi-listing consent will work a property harder. Sellers should ask themselves why this is so, if a realtor declines to accept these terms.
Stonegate Equity Ltd is an independent property consultant in Calgary, Alberta, Canada. We work every property as if it were the only one on our books. This is the way things are supposed to be. We work hard for our money and our administration fee is remarkably lower than the commission prevalent in the Canadian real estate industry.
EnCana Place. Calgary: Bernard Spragg BY Public Domain