So just what is the difference between an MLS and a Property Portal? And, for those countries not in the North American Region, what is an MLS?
Most consumers and even many real estate professionals lack a clear understanding of the distinction between a property portal and an MLS.
Multiple listing services date back to the late 1890s – early 1900s when real estate brokers gathered local associations to share information about the properties they were trying to sell. They agreed to compensate other brokers who helped sell those properties and the MLS was born. Its primary purpose is to give listing brokers a way to provide a unilateral offer of compensation to other MLS members who bring a buyer to their listings, a setup that requires an exclusive-listing process. Mediated by the MLS, the offer of compensation is a contractual obligation between the listing broker (representing the seller) and the broker representing the buyer. Today, brokers and agents pay a monthly fee for MLS services, which does not include any advertising on listings in the system.
Data-sharing and exclusive listings are rare outside North America, and as a result, there is no commission-sharing system that functions like an MLS. North America has the greatest MLS, given its core role in the sale of a property. Other countries do have MLS, just not to the same Calibre:
- The United Kingdom (Independent Network of Real Estate Agents)
- Israel (The Jerusalem MLS)
- Spain (AMLASpain)
- Czech Republic
- Australia (EAC multiList).
Portals differ significantly from MLS’s. They are consumer-facing promotional platforms used by real estate brokers to advertise properties for sale. They do not offer compensation-sharing and, in most cases, brokers and agents do not pay them to list homes for sale. In addition, most international portals allow owners to post their listings directly; for-sale-by-owners (FSBOs). Portals generally derive the majority of their income from selling advertising space around listings rather than charging for data aggregation. Data aggregation and advertising are two different practices. Aggregation involves collecting, collating, and maintaining the integrity of the listing information while advertising centers on promoting the listing data to consumers.
Many industry observers believe portals will never replace the MLS, but others, especially those from outside the industry, believe it is simply a matter of time before the functions of the two merge into one platform.
The absence of Exclusive Listings
Daniele Mancini, the REA Group’s (rea-group.com) general manager for international expansion, described what happens in the absence of exclusive listings: “Sellers not only market their properties themselves, they also sign the equivalent of an open listing with three or four agents. This results in duplicate listings, conflicting descriptions, and sometimes even inconsistent prices. It also means that listing agents only provide the general area where the property is located rather than the actual address. Furthermore, because competing agents will scrape the photos from other agents’ listings, little money is spent on marketing and photos. This poses difficulties for both consumers and portals. Exclusive listings, in contrast, eliminate these issues and dramatically improve the consumer’s search experience.”
Property listings first became widely available on the Internet in 1994, and the oldest portals have been around for two decades. But the technology has improved, interfaces have become more streamlined, and demand from consumers has skyrocketed. As a result, portals now sit centre stage in real estate’s new, rapidly evolving online world.
Thank you to the staff at T3 Sixty for providing most of the above article.