The purpose of the MLS is to enable the efficient distribution of information so that, when a real estate agent is introduced to a potential home buyer, he/she may search the MLS system and retrieve information about all homes for sale in a given area or price range, whether under a listing contract by that agent's brokerage or by all participating brokers.

The MLS systems are governed by private entities, and the rules are set by those entities with no state or federal oversight, beyond any individual state rules regarding real estate. MLS systems set their own rules for membership, access, and sharing of information, but are subject to nationwide rules laid down by NAR or CREA. An MLS may be owned and operated by a real estate company, a county or regional real estate Board of REALTORS or Association of REALTORS, or by a trade association. Membership of the MLS is generally considered to be essential to the practice of real estate brokerage.

Most MLS systems restrict membership and access to real estate brokers (and their agents) who are appropriately licensed by the state (or province); are members of a local Board or Association of REALTORS; and are members of the trade association (e.g., NAR or CREA).

A person selling his/her own home - acting as a For sale by owner (or FSBO) - cannot put a listing for the home directly into the MLS. Similarly, a properly licensed broker who chooses to neither join the trade association nor operate a business within the associations's rules, cannot join the MLS. There is a growing number of online services which offer FSBO sellers the option of listing their home in their local MLS database at a low fee.

United States

The largest MLS in the United States is currently the Washington, DC region's Metropolitan Regional Information Systems, Inc (MRIS) covering Washington DC, most of Maryland (including the Chesapeake Bay counties) and suburban Virginia counties, and parts of West Virginia and Pennsylvania. It has 59,673 active members, according to the public access sections of its website, MRIS.com. It is followed closely by the Multiple Listing Service of Northern Illinois (MLSNI) with over 45,000 active members.

New York City

Although the other boroughs and Long Island have an MLS, Manhattan does not, but it does have a database called RealPlus, which is governed by REBNY (Real Estate Board of New York). Many brokerages are members, but controversies surround it, especially since members are required to place listings on the system within 72 hours. Not unlike many other MLS systems requiring timely inclusion of information into the system, this allows brokers to contact all potential clients before they list.

Policies on sharing MLS data

The National Association of Realtors (NAR) has set policies that permit brokers to show only limited MLS information on their websites. NAR has an ownership interest in the company, Homestore, which operates a website that has been given exclusive rights to display significant MLS information. The site is Realtor.com.

The U.S. Department of Justice filed an antitrust lawsuit in September 2005 against the National Association of Realtors over NAR's policy which would have allowed brokers to restrict access to their MLS information from appearing on the websites of certain brokers which operate solely on the web. This policy would also have applied to commercial entities (who are also licenced brokerages) such as Homegain which solicit clients by internet advertising and then provide referrals to local agents in return for a fee of 25% to 35% of the commission.

The DOJ's antitrust claims also include NAR rules that exclude certain kinds of brokers from membership in MLSs.

Canada

In Canada, MLS is a cooperative system accessible only to the 82,000+ members of the Canadian Real Estate Association (CREA), working through Canada's 99 real estate boards and 11 provincial/territorial associations.

However, there is a publicly accessible website that serves as an "advertising vehicle provided by REALTORS across Canada to help market properties." The website contains a searchable database of properties listed on the MLS system, but with limited details. Users are directed to contact a Realtor for more information.

Alternatives to the MLS system

While the statements above talk generally, there are websites that allow a home owner and any state authorized agent to advertise homes. Some of these sites are not owned by agents or anyone interested in making a living out of selling real estate, but they allow any owner of a home (or any licenced real estate agent, REALTOR and non-REALTOR) to list any home with a variety of fee plans ranging from zero upwards. Prospective buyers can see all the listings at no cost.

Reference: Wikipedia
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