Attorney explains MLS.
A realtor MLS is one in which participating brokers elect membership in a board of realtors chartered by the National Association of Realtors, subscribe to a Realtor Code of Ethics and agree to be bound by comprehensive rules which are fully enforced and which require mutual cooperation. To date more than 300 licensees have elected to be bound by such strict rules. Their motivation is access to www.realtor.com, the largest Internet website in the world, with over I million listings. The number of visits by Internet users to Manhattan listings has already risen to striking levels. During the month of January 2003, there were 858,520 consumer page views to Manhattan listings on www.realtor.com.
Sharing of listings between real estate brokers is believed to have come about in the 1880's or 1890's. The term "multiple listing" was first used in 1907 and multiple listing services developed rapidly in the 1920's.
The exchange of residential listings by real estate brokers occurred on "exchanges" and later became known as "boards." Brokers would gather weekly to announce to other brokers the listings each had acquired and what was being offered to other brokers in the way of compensation. The exchanges existed because there was concern that brokers did not have "real listings." In that period of time, exclusive agreements were rare and homeowners would contact all of the real estate brokers in an area and give them an open listing Brokers found themselves frustrated when, after significant effort and the production of an interested purchaser, the property had already been sold by another broker or by the owner.
Multiple listing services evolved as an efficient method of marketing exclusive listings. Initially, the concept of exclusive listings was resisted by homeowners. Many multiple listing services, however, refused to deal in open listings and required that the listing agent have an exclusive agreement with the owner. The operation of multiple listing services also historically became a means through which commission rates could be established between brokers. A United States Supreme Court decision in the middle of the 20th century, applied the anti-trust laws to real estate brokerage and thereafter, it became improper for a multiple listing service or aboard to establish commission rates.
Outside of large urban areas, multiple listing services were virtually non-existent until the mid-1950's. In the 1970's most brokerage firms had become members of local multiple listing services and the use of exclusive right to sell listings became commonplace. As photocopies and other efficient means of communicating listing information became available, the MLS became a true dissemination system and helped to create an orderly market as well as a database of information for the appropriate pricing of properties. By creating an MLS, a board of real estate brokers or realtors was able to attract new members and create a professional environment. Until MLS's became an essential tool of the brokerage business, boards of realtors had essentially been social organizations. The true MLS was created as a business organization, operating for the financial benefit of its participants. An affiliation with the local board of realtors or local real estate board was an essential element.
The National Association of Realtors banned mandatory commission rate schedules in 1961. Anti-trust litigation proliferated after 1969 when the United States Justice Department focused on the real estate brokerage industry and multiple listing services in particular, in order to confirm that suggested or recommended or required commission rates and commission splits were no longer being promoted by boards of realtors, real estate boards and their multiple listing services.
The National Association of Realtors, the largest trade association in the world with more than 840,000 members, worked to educate realtors and created rules that were not only ethically based but which produced an orderly marketplace with enforceable rules.
Multiple listing services operate with a staff of trained personnel who are able to differentiate between various types of listings (exclusive right to sell, exclusive agency and open listings). Exclusive right to sell and exclusive agency listings are permitted by each realtor MLS. Only a broker appointed exclusively by an owner can make a true offer of cooperation and a true offer of compensation to cooperating brokers.
Rules and regulations, working hand-in-hand with the Realtor Code of Ethics (considered nationally to be the industry standard) created an orderly marketplace for consumers and for realtors. MLS's also support the objectives of fair housing and have made the brokerage industry the most professional it has been in its history.
The advent of the Internet and the creation of www. realtor.com, the largest website for real estate listings in the World. has created new opportunities and new challenges for the industry. Brokers who effectively utilize the Internet have been able to dramatically enhance their business activities and marketing penetration by creating a window into their firms and the services they provide. Recent studies regarding the power of www.realtor.com indicate that the percentage of purchasers who contact real estate brokerage firms after performing searches on the Internet exceeds 50%.
The Realtor Code of Ethics and the MLS Rules and Regulations are carefully monitored by the Member Policy Department of the National Association of Realtors. These have become the cornerstone of each MLS system. With a staff to enforce the rules and regulations and a system to sanction, suspend or terminate a broker who does not adhere to the rules, realtor MLS's provide a genuine tool for professionalism and service to consumers. Brokers need not make formal complaints about the unethical conduct of another broker. The MLS becomes staff driven and support personnel are trained to monitor compliance by participating realtors.
Manhattan, with median residential property prices approaching the $1 million level and its concentration of cooperative apartments and condominiums is truly unique. The large number of rental properties also results in substantial commission revenues earned from rental brokerage. Until the formation Manhattan MLS, Inc. as a wholly-owned subsidiary of the Manhattan Association of Realtors, a true multiple listing service did not exist in Manhattan. The growth of this system has been truly remarkable. The guidance of a national organization in creating rules and regulations which support the consumer and the realtor, have been invaluable. The MLS offers an enforceable system which not only provides each participating realtor with an equal opportunity for success but also assures the consumer of competitive and monitored transactions, whether buying listing selling or renting.
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|Title Annotation:||realter multiple listing service is discussed|
|Author:||Sumber, Edward L.|
|Publication:||Real Estate Weekly|
|Article Type:||Industry Overview|
|Date:||Apr 9, 2003|
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