Real estate can be confusing when you’re not practicing it every day. As real estate agents, we sometimes think consumers understand all the nuances of our business.
Real estate terms are often used as a standard part of everyone’s language. Unfortunately, that is not the case.
There are many meanings of things that escape the average consumer.
The perfect example is the Multiple Listings Service and the corresponding listing statuses we take for granted as agents.
Many buyers and sellers don’t know what these terms mean. After reading, you’ll better understand how the multiple listing service (MLS) works.
You’ll also have a better handle on each MLS listing status when looking at homes online.
To list in MLS offers significant advantages for consumers. But what exactly is the Multiple Listings Service?
What is The Multiple Listing Service (MLS)?
Have you ever wondered what the MLS is and how it works?
MLS is short for the multiple listing service. The multiple listing service is a system whereby real estate agencies disseminate information about properties from one real estate agent to another online.
The first multiple-listing services were created in the 1800s.
At first, information was passed by books or journals. Things changed when the internet arrived, and the MLS was moved entirely online.
The multiple listing service works as a system of cooperation and compensation from one broker to another regarding all housing types.
The MLS helps clients buy and sell properties. Through the MLS, consumers can see all the homes available for purchase and what they have sold for.
The MLS will show you what’s available: a single-family home, condo, multi-family, townhouse, or land.
No Multiple Listings Service Means Limited Exposure For Home Sellers
Without the multiple listing service (MLS), a seller’s property would be exposed to fewer buyers. There are more than 800 MLSs across the United States.
Real Estate brokerages share properties they have listed through the system. Other brokers and real estate agents can cooperate with the listing agent and be compensated with a real estate commission for bringing the buyer.
Through the MLS, a seller benefits by getting significantly increased exposure for their property. Buyers benefit by working with one buyer’s agent to obtain information about all MLS-listed homes for sale.
It’s the reason pocket listings and off-market properties are frowned upon. The MLS is a powerful marketing tool.
Each MLS is a private database created, maintained, and paid for by real estate agents. Many prominent real estate websites such as Realtor.com, Zillow.com, and Trulia.com get the listing information displayed on their websites through an MLS feed.
The Multiple listing service (MLS) is an exceptional resource that levels the playing field within the real estate industry. With the MLS, a small boutique brokerage in town can compete with a significant industry franchise.
By working with one brokerage, sellers and buyers can work with anyone they choose and be confident they are not missing out on any properties.
Who Maintains The Service?
Real estate companies pay for and help maintain the private MLS databases nationwide. While usually accessible to the public. The multitasking job of protecting the consumer is not to allow publicly accessible information that could violate a seller’s safety or privacy.
For example, the seller’s contact information.
A home seller cannot put their home directly into the multiple listing service because it’s limited to brokers and licensed agents who pay for membership.
What Information Do You Get From The Database?
By paying dues, real estate agents gain access to the local MLS, which allows them to see all the listings available.
Much information is shared, including photos of all the properties and essential details.
Some of the MLS details include:
- The address of the property
- Style of the home such as colonial, contemporary, ranch, split-level, and many others
- The list price of the home
- The number of bedrooms and baths
- Square footage of the property
- The square footage of the land
- Many other features and amenities
- A description of the property
- The listing brokerage
- The listing agency
- Showing instructions
- An offer of compensation (the commission)
- The days on the market (DOM)
- The cumulative days on market (CDOM)
- Miscellaneous details
What is an MLS Number?
An MLS number is an arbitrary number assigned to each listing to identify it quickly.
Now that you understand the MLS and its meaning, let’s look at each listing status.
You Also Get Other Information
The Multiple Listings Service not only gives real estate agents access to other properties for sale but also provides other information. For example, you can find out who owns a property.
You can also access some information about the previous history of the property. Typically, you can see who the previous owners were, when they bought the property, and what they paid.
Sometimes, you can also see the mortgage they took at the time of purchase. Agents can also upload additional information to help sell a property.
It Helps Real Estate Agents Create a Comparative Market Analysis (CMA)
Another significant benefit of the MLS is that it allows agents to gather all the necessary information to create a comparative market analysis for buyers and sellers.
When homeowners sell their property, agents can gather necessary data on similar homes, such as the number of bedrooms, baths, square footage, and lot size. They can then find comps to compare and analyze.
A buyer’s agent can also use this information to help construct an offer that makes sense. Without the information provided by MLS, a real estate agent’s job would be one thousand times harder.
What is Flat Fee MLS?
The MLS is a powerful marketing tool, but full-service agents do much more to sell a home than listing it in the MLS.
However, if that is what you are looking for, there are flat-fee real estate brokerages that do nothing more than list your house in MLS.
Listing in the Multiple Listings Service is only a few hundred dollars. Doing this has many cons if you want to sell for the highest price possible.
You should now better understand the MLS and how it works. Let’s examine each listing status.
On Market Property Listing Statuses
First, let’s look at each listing status for active properties.
New Listing (NEW)
When you see the word new next to a listing, the property has just come on the market. The status will likely remain “new” for a few days before it changes to “active.”
When you see a NEW listing, it should be available to purchase.
Active Listing (ACTIVE)
When you see the word “active” on a listing, it should be available to purchase. However, it is vital to note that an offer to purchase can be accepted at any time on a property.
A real estate agent might not rush to their computer to change the status.
Sometimes, it won’t be done until the earnest money is in hand and deposited into the company’s escrow account.
It would be best never to assume a home is available without first checking with your real estate agent.
The active listing status applies to both homes for sale and properties for rent.
Contingent Listing (CONTINGENT)
When a home is listed as contingent, the property is under contract. A buyer and seller have executed an offer to purchase or a purchase and sale agreement.
Contingent real estate can sometimes be confusing, although it shouldn’t be.
Some contingencies must be met with the contingent status before the sale can proceed. Some of the most common contingencies in a real estate contract include a home inspection and mortgage financing.
A home sale contingency clause may be included, but that is rare. Most sellers will shy away from such a clause. Real estate agents can market a home as contingent or pending when there is a ratified contract.
When a home is marked as contingent, the days on the market continue to increase as if the house were for sale. For this reason, some agents, including myself, will mark the home as pending instead. See pending vs. contingent for an explanation of why.
Higher days on the market can negatively impact a seller if the accepted contract falls through.
Price Change (PCG)
When the price of a home changes in the multiple listing service, it will be noted as a listing status called PCG. The status will stay that way for a few days before it reverts to active status.
Any potential buyers can see a price reduction or increase by noting the price change in MLS.
Back on Market (BOM)
When a house sale falls through, and the seller wishes to continue trying to sell, the house returns to the MLS with a BOM status.
When a home goes back on the market, it will be listed as such for three days. If nobody comes along in that time frame to purchase the house, it will fall back to active status.
Real estate agents will want to discover why properties come back on the market. The most common reasons are a home inspection revealing significant problems, a low real estate appraisal, or the buyer not getting their mortgage.
When real estate markets heavily favor sellers, bidding wars often push the sale price past the current fair market value. This can lead to failed appraisals, so many real estate agents are now asking for appraisal gap language to be included to avoid this issue.
Extended Listing (EXT)
A listing contract is signed when a real estate agent initially meets with a homeowner to list their property. The agreement is for a specific period, typically 3-6 months.
When a real estate agent has not sold a home within the agreed-upon period, the contract may need extended. A listing can be extended for an agreed-upon amount of time. When you see this status in the MLS, the seller and agent have agreed to continue the listing contract.
Reactivated Listing (RAC)
If you see the reactivated listing status, the property has temporarily fallen out of the MLS system. It will be marked as expired at first. When an agent returns home to the system within ten days, it will show as reactivated.
Off-Market Property Listing Statuses
The following are the listing statuses you will see in MLS when the home is no longer for sale.
Under Agreement (UAG)
The under-agreement listing status means a contract between the buyer and seller has been executed.
It is also likely to indicate that all the contingencies have been satisfied. In a competitive seller’s market, cash buyers have no contingencies.
When there are no contingencies to satisfy, an agent will mark the home in MLS as pending. See a detailed explanation of what pending means in real estate.
Most of the time, a pending sale does not come back on the market.
At this point, a sale is only likely to fall apart if the buyer loses their job or the title search reveals a title defect that cannot be solved quickly enough.
Withdrawn Listing (WDN)
A withdrawn listing means the seller has decided they no longer wish to sell their property. However, the listing contract remains in full force and effect.
The seller must still honor the contract terms before selling their property during a specified period.
It is possible the listing will only be withdrawn for a short time. If you’re interested in the house, have your real estate agent check.
Expired Listing (EXP)
An expired listing occurs when the home does not sell during the contract between the agent and the homeowner. Expired listings sometimes reappear with a new real estate agency.
The likelihood of that happening is significant when the seller feels the real estate agent did not do a good job marketing and selling the home.
Expired listings happen more frequently when the real estate market favors home buyers.
Canceled Listing (CAN)
A canceled listing is a listing status in which the seller and real estate agent mutually agree to terminate the contract. Canceled listing contracts usually happen for several different reasons.
Either the seller no longer wishes to sell, or the parties do not agree. Sometimes, a seller feels their agent is doing a terrible job and wants to fire them.
The home would likely be back on the market if the listing were canceled due to the agent’s performance.
Sold Listing (SLD)
A sold listing is a successful home sale. The home is no longer available to purchase as there is a new homeowner. Sold properties happen very quickly in a favorable seller’s market.
Reaching the sold status in a buyer’s market can take much longer.
Rented Listing (RNT)
When looking to find a rental home, you may come across the rented listing status. It means another tenant has been accepted, and the property is no longer available to rent.
Other Statuses You Might See
The above listing statuses are the most common. However, you may see a few others depending on your location. If unsure about a property listing status, speak with your real estate agent. They should be able to define the listing status for you clearly.
Final Thoughts
The Multiple Listings Service (MLS) is an exceptional tool for connecting buyers and sellers. Without MLS, real estate agents could not market homes as effectively.
You should now understand the Multiple Listings Service’s purpose and each MLS status. If you have any questions, feel free to contact us.
About the Author: Bill Gassett, a nationally recognized leader in his field, provided the above real estate information on what the Multiple Listing Service (MLS) is. Bill has expertise in mortgages, financing, moving, home improvement, and general real estate.
Learn more about Bill Gassett and the publications he has been featured in. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-625-0191. Bill has helped people move in and out of Metrowest towns for the last 37+ years.
Are you thinking of selling your home? I am passionate about real estate and love sharing my marketing expertise!
I service Real Estate Sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, and Uxbridge MA.
