The MLS is a local or regional joint venture of real estate brokers, typically operated by a local group of brokers affiliated with the National Association of Realtors (NAR), who pool and disseminate information on homes available for sale in their particular geographic areas. The MLS combines its members’ home listings information into a database, usually in electronic form. The MLS then makes these data available to all brokers who are members of the MLS. By listing information on a home in the MLS, a broker can market it to a large set of potential buyers. A cooperating broker likewise can search the MLS to provide a home buyer with information about all the listed homes in the area that match the buyer’s housing needs. MLSs are the primary source of home listings information because they contain real time information on virtually every home listed for sale in a given area, except FSBO homes.

Most MLSs require that a member broker, upon acceptance of a listing, enter the listing into the MLS database within a short period of time, e.g., twenty-four to seventy two hours. Although the specific data fields on each listing are determined by the individual MLS, they typically include detailed descriptions of the homes for sale, the asking price, the offer of compensation that will be paid to a cooperating broker who finds a suitable buyer, and the name of the listing broker.

The MLS allows broker-members to search and filter homes based on detailed criteria, including property and neighborhood information, offers made on the home, prior sales history, and days on the market. In addition to the database of currently available homes, an MLS maintains a database of homes sold through the MLS. Brokers can use this database to provide their clients with information on sales of comparable homes so that the clients can more accurately value their homes or determine the amount to bid on a home. The MLS also operates an arbitration mechanism to resolve compensation disputes between listing and cooperating brokers. For example, if a cooperating broker secures a buyer for a transaction and can establish through arbitration that he or she was the “procuring cause” of the sale, then the listing broker is liable for the cooperative compensation. One panelist who is a real estate broker and past president of NAR described the MLS as “a broker-to-broker information exchange that provides an opportunity for cooperation and compensation.” Another panelist, however, described the MLS as a “club” that can limit membership and access to MLS listings to firms that conduct business in a particular manner, thereby limiting consumer choice. This panelist, an economist, stressed that when competitors cooperate, as in an MLS, the rules governing that cooperation and the conditions under which the cooperation occurs must be examined closely.

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