What is an MLS?

    Most real estate professionals think they know what an MLS is. If you asked them, they’d tell you that it’s a way to list properties for sale, of course.

    While this explanations covers the basics, it doesn’t capture the full scope of services an MLS provides. Most importantly to some, a multiple listing service is a way for listing and buyer agents to share commission on the sale of real property. This principle is called “cooperation and compensation” and is core to the function of most MLSs.

    But is cooperation and compensation necessary to sell a property?

    The short answer is: no – but it’s important. In the Internet age, with third party sites advertising property directly to consumers, many agents feel they can find a buyer themselves for their listings. They feel they don’t need to rely on a buyer’s agent to bring a buyer for their listings. Agents may feel there’s no need to co-broke.

    What is a co-broke?
    A co-broke is a way for a seller’s representative and a buyer’s agent to split the commission on the sale of a property – and split the work of bringing the sale to the closing table. When an agent lists a property on the MLS, they also list the co-broke amount, the portion of their commission they will share with the buyer’s agent.

    But what if you don’t want to use an MLS to sell your property and don’t want your agent to split commission?

    If you think you can save a buck by allowing your broker to do all the work and give you a reduced rate on that commission, be prepared to accept a lower price. When selling your home, what matters most is the bottom line – the amount you walk away from the table with. When looking for a discount, you’re likely to end up accepting a lot less for your home, and usually the difference is greater than the slightly higher commission you would have paid.

    When your listing broker doesn’t co-broke, your home will be shown less frequently, which means fewer potential buyers, and even fewer offers. Your listing may reach the same number of people through third party listing sites, but buyers want to use their trusted buyer’s agent. If they can’t, they might be leary of purchasing the property (after all, this may be the biggest purchase of their life).

    To get the highest price for your home, you should be showing the property to as many potential buyers as possible. That means listing your home on the MLS, and allowing your broker to cooperate with other agents.

    Looking to hire an expert agent?

    Check out our list of 4 Questions to Ask Your Listing Agent to make sure you’re hiring the right person for your needs! Read More

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