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Real Estate Commissions and the MLS

Most real estate transactions begin in the Multiple Listing Service. A Multiple Listing Service is an organization that is a collective of brokers. It sets down guidelines for cooperative listing sharing and sales. Members agree to work with and compensate other brokers in order to sell their listings. MLSs are not websites, databases, or REALTOR® associations. While an MLS may have some of these elements, its main function is to ensure compliance with cooperation and compensation rules. The MLS is essential for the operation of real estate markets that are pro-consumer, pro-competitive, and provide broad access to housing options. The buyer's broker often receives a commission from the seller's broker for locating a ready, willing, and able buyer. Working with an established collective of brokers expands the pool of potential purchasers for sellers and helps them save time and money. For buyers, it allows them to acquire expert representation and saves them money at closing.

To help show how the hundreds of multiple listing services, or MLSs, promote competition between real estate brokers, to the ultimate benefit of consumers, NAR asked independent, expert economist Frederik Flyer to explain how an MLS works in a published report, Procompetitive Benefits of Policies Limiting Access to Local Multiple Listing Service Data.


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