Recently, Zillow announced that it will exclude any properties that aren’t shared
via the Multiple Listing Service. Zillow is the most popular real estate website of its kind
in the U.S. offering online information and services related to selling, buying, renting,
and financing real estate. It has more than 200 million unique monthly users, so when
Zillow threatens to exclude certain properties, it’s a big deal.
The Multiple Listing Service, or MLS, is a database where real estate brokers
upload information about properties for sale. The MLS is powered by the Internet Data
Exchange (IDX)—and Zillow has an agreement with IDX to display the data uploaded
by those brokers (with their permission, of course).
If your head is spinning, stay with me. This actually matters if you’re interested in
buying or selling a house.
By requiring properties-for-sale to be listed on the MLS, Zillow has made the real
estate market freer and fairer. Now, I’m not so naïve as to think Zillow is motivated by
these lofty ideals. I expect Zillow is trying to get more for less, that is, to reduce costs
while improving their offering. Since Zillow uses IDX data, it makes sense that Zillow
wants everyone to upload their information to the MLS, which feeds IDX. The more
robust the IDX feed, the more useful the Zillow platform.
Regardless of Zillow’s motivation, when all listings are shared on the MLS, it’s
good for buyers and sellers. As of now, the only properties that do not appear on the
MLS are homes that are for sale by owner (FSBO) and those for which a seller has
signed a request for exclusion. Short-term exclusions are fine if the seller is simply
finishing up a repair or renovation or getting the house painted. Otherwise, listings
should be out in the world for all to see.
When a listing is not on the MLS, an unscrupulous agent can limit who sees the
listing in an effort to double-end the sale (that means collecting the commission by
representing both the buyers and the sellers). Sometimes offices try to use “office
exclusives” as a benefit for their agents. With an office exclusive, only real estate agents
in a given office know about a listing, so only they can get the commission.
As a rule, the more marketing exposure any property gets, the better the
outcome for the seller. In the aggregate, this also benefits buyers because they get to
see more properties.
So, if you engage a real estate agent who recommends skipping the MLS, that’s
a red flag unless they are responding to your needs. A REALTOR’s job is to sell your
house for the highest price in the shortest time with the least inconvenience. The best
way to do this is to get your property in front of as many buyers as possible, and that’s
what the MLS does—even more so now that that Zillow won’t include non-MLS
properties.
If you have questions about property management or real estate, please contact
me at [email protected] or call (707) 462-4000. If you have an idea for a future
column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’s
Bakery.
Dick Selzer is a real estate broker who has been in the business for more than
45 years. The opinions expressed here are his and do not necessarily represent his
affiliated organizations.
