The MLS and the client

Let me take a moment just to explain how I see the MLS in relation to the client.

First off our local MLS is owned by our local Association (KGVAR). That does mean in this case that one has to be a Member of the KGVAR to have access to the MLS. The Multiple Listing Service (MLS) is a handy tool for Members. When a client signs an employment agreement with a Member of the KGVAR, the client has an option to have their listing appear in the MLS for all the Members to view. That's right it is still an option.

However the MLS is still a very intelligent way to advertise a property listing. While non Members of the MLS can't have full access to the data, through the MLS data those non Members can still happen across listing information via the IDX data stream. One may notice these listings at REALTOR.com, my website, or other advertising avenues. Usually you will see a photo of the home, the price of the home, and other information such as size of property and bedroom information.

That's all good because we have been told for many years that buyers begin their search for property online. And agent or even an unrepresented seller can manually list their listings on other search mediums like Google Base, Yahoo Real Estate, and Trulia.com. However not every potential property buyer goes to each non MLS site to search because there are so many of those.

The crux of all of this is in order to place your listing on the MLS, there has to be an offer of compensation to the buyers agent. In other words, it will cost a certain amount of your proceeds to place the listing in the MLS. Now many think that offer of compensation has to be half of the negotiated listing fee. For example, many brokers charge a 6% listing fee and half of that 6% gets paid out to the buyers broker (think 3%). But it doesn't have to be that way at all. You as the property owner can negotiate that amount that you are offering on the MLS. Now for you it is a unilateral negotiation for the most part. If you say that you'll only pay a flat fee of $2500 when 3% of the sales price could mean $5000, you may not get alot of response from the real estate professionals. Again the key word there is may.

Agents should not only show buyers homes that pay them the most amount of dollars, but we are all human and sometimes that human nature thingy takes over. Keep in mind right now that there are many more listings on the market than there have been (probably ever in this market), and to separate your listing from others you will want to think about perhaps increasing the amount of compensation offered on the MLS.

Perhaps offer 3.5%. But that does not mean you have to pay a higher total amount of fee's. You could still perhaps settle on a 6% fee with your listing agent and tell the listing agent that you want to see the split be 3.5% for the buyer broker and 2.5% to the listing broker. Now, I will tell you that there are brokers that will not want to play that game. So contact another agent that might be willing to do so (like me).

I explain to my potential listing clients how compensation works. That there is basically three components to compensation. I'll explain that in another post on another day. For now though, I hope you'll have a better understanding of the MLS. Leave a comment if you have further questions.