Most home sales in the United States occur through a multiple listing service (MLS), a regional database that real estate agents utilize to exchange information about available properties. Recent news has focused on these services as they adapt to changes following a significant legal settlement regarding real estate commissions. But what exactly is an MLS and how does it function?
Frederik Heller, the director of the library and archives at the National Association of Realtors, notes that the first known MLS was created in 1885 in San Diego. According to Heller, the San Diego real estate board provided updates on property listings to its members twice daily.
“Runners would distribute the updated listings to various real estate brokerages throughout the city,” he explained.
Similar systems were soon adopted in Cleveland and Chicago, at a time when anyone could claim the title of real estate broker without educational or licensing requirements. This allowed brokers to exchange information among trusted peers, providing access to the latest property listings.
However, it also served as a means of exclusion. Many real estate boards in the 1960s barred Black, Jewish, and female brokers from membership, effectively limiting their access to the MLS.
In the 1920s, the National Association of Real Estate Boards—an ancestor of the current National Association of Realtors—advocated for broader adoption of MLS services, which surged during the post-World War II housing boom in the 1950s.
Initially, listings were organized on notecards and later compiled into large books, which agents had to sift through in their offices to show clients. Sam DeBord, CEO of the nonprofit Real Estate Standards Organization, remarked, “You had to bring your clients into the office, pick up the book, go through the pages. Of course, some of this would be outdated.”
Updated listings were released once or twice a month, generating excitement akin to the anticipation for new phone books, as illustrated by DeBord’s comparison to the film ‘The Jerk’.
Saul Klein recalls his first encounter with an MLS book in the mid-1970s, which captivated him with its detailed property information. Shortly after, he obtained his real estate license, and the technology rapidly progressed.
In the late 1970s, computer terminals were introduced, allowing agents to search for properties electronically, revolutionizing the way real estate information was accessed.
The internet transformed the industry further. In the mid-1990s, Klein was instrumental in launching Realtor.com, which made MLS data available to the public, disrupting traditional practices where brokers kept such information private.
Today, almost anyone can search for homes through popular platforms like Zillow, Redfin, or Homes.com, all utilizing MLS data. Klein now serves as the CEO of the San Diego Multiple Listing Service, one of over 500 such services across the country, primarily owned by local Realtor associations and adhering to regulations from the National Association of Realtors.
The MLS framework is distinct to North America. Merri Jo Cowen, CEO of Stellar MLS in Orlando, Florida, explains that in many European countries, potential buyers must visit real estate offices individually to find property listings, often encountering confusion with multiple agents listing the same property at varying prices.
This landscape is beginning to shift, with Cowen participating in the International MLS Forum, which aims to introduce the U.S. MLS model globally.