2024-09-19 14:20:03
Most home sales in this country take place through a multiple listing service, or MLS. That’s the regional database real estate agents use to share information about properties for sale. These services have been in the news a lot lately as they implement changes put in place after a big legal settlement over real estate commissions. But what is an MLS, and how does it work?
“The first MLS, that we know of, was developed in 1885 in San Diego,” said Frederik Heller, director of the library and archives at the National Association of Realtors.
Based on limited information researchers could find, Heller said, every day, twice a day, the San Diego real estate board would provide updated listings to all its members.
“I believe what they did is they had runners go throughout the city to the different real estate brokerages and distribute them that way,” he said.
Cleveland and Chicago adopted similar systems. Back then, Heller said, anyone could declare themselves a real estate broker. There were no education requirements or state licensing laws.
“So the multiple listings sort of gave real estate brokers a way to to exchange information with people that they trusted, and it was a way to get the most up-to-date information about properties that were for sale,” he said.
It was also a way to gatekeep. As late as the 1960s, many real estate boards explicitly excluded Black, Jewish and female brokers from joining their boards, and therefore accessing the local MLS.
In the 1920s, the National Association of Real Estate Boards — the precursor to today’s National Association of Realtors — pushed for wider adoption of the services, and they exploded in the post-war housing boom of the 1950s.
Listings were printed on notecards, then compiled in big books, said Sam DeBord, CEO of the nonprofit Real Estate Standards Organization.
“You had to bring your clients into the office, pick up the book, go through the pages,” he said. “Of course, some of this would be outdated.”
Updated books came out once or twice a month.
“I don’t know if you’ve seen the movie ‘The Jerk,’ but when he gets really excited about the new phone books coming in, there was that level of excitement in the MLS offices about the new listing books coming in,” DeBord said.
Saul Klein felt that way when he first saw an MLS book in the mid-1970s, when a friend took him out to look at real estate in San Diego.
“It was an amazing thing to me, because it had all these properties,” Klein recalled. “It’s all black and white, one single picture, but it had bedrooms, baths, square footage, the dimensions of the rooms. It was just fascinating.”
Not long after, Klein got his real estate license and went to work. The technology evolved. In the late 1970s, computer terminals arrived in his brokerage office, allowing agents to search for properties electronically.
“That was back when you had phone couplers and you’d dial the number, you’d listen for the tone, you’d stick the phone on the back of the computer,” he said. “That was easier than going through a book.”
The internet, of course, changed everything. In the mid-’90s, Klein was part of the team that created Realtor.com, bringing listings based on MLS data to the public, much to the dismay of many in his industry.
“The value proposition of a realtor was that you knew what was for sale and nobody else knew what was for sale,” he said. “Brokers didn’t want to give this access away.”
The industry adapted. Today, you and I can look up almost any home for sale, on Zillow, Redfin or Homes.com, all fed by MLS data.
Klein is now CEO of the San Diego Multiple Listing Service, where it all started. It’s one of more than 500 across the country. Most are owned by local Realtor associations, operating under rules set by the National Association of Realtors.
It’s a uniquely North American system.
“In most places in Europe, you have to — if you were looking for a property — get in your car, drive around and go to the storefront of real estate offices and see what they have in their office,” said Merri Jo Cowen, CEO of Stellar MLS in the Orlando, Florida area.
And if you search online, “the same person, same seller, could list the house 10 times with 10 different agents, and it could be on the internet with 10 different prices,” she said. “It’s chaos in most places.”
That is starting to change. Cowen is part of a new International MLS Forum working to bring the U.S. model to the rest of the world.
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