What You Need To Know About Advertising on The MLS

Here's what you need to know about advertising a property on the MLS when you are for sale by owner:

It doesn’t take long after you hit the market as a for sale by owner home seller before agents start calling and mailing you.  A few may have buyers interested in your home.  Most of them are trying to list you full service, some are promoting MLS programs for people selling by owner.

Here’s what you need to know about advertising a property on the MLS when you are for sale by owner:

First, keep in mind the MLS is the the agents’ playground. You will have to play by their rules. For example you aren’t going have very much control over the layout or the formatting of how your listing is presented. It will have to conform to whatever the local multiple listing rules are.

Keep in mind the purpose of the multiple listing. It’s a database of listings by agents for agents. The general public can go to a brokerage website and look at listings for homes, but only a small portion of the information on the MLS is shown on the brokerage websites, and each individual brokerage decides what is shown on their website.  It’s designed to encourage buyers to call an agent to get more information.

Another misconception about the multiple listing service is that anybody can look at it, and that’s just not true. The multiple listing service is a password protected, private data base. There are portions of it that are visible to the public on various brokerage websites,  but unless you are a licensed agent, you cannot see all of the details.  Information on how to contact the seller is available to the agents once they are logged in, but the general public won’t see it.  Remember when you put your home in the MLS with a by owner program, you are advertising to agents that are working with buyers.  Buyers may find your home online through an MLS affiliated website, but they will need to go through an agent to get all the details.  Unless you are an agent with a membership to the local MLS, your listing will not show you as the “listing agent.”  It will be linked to the local agent that is a representative of the by owner MLS program you are using.

Often I’ve spoken with home sellers that believe that REALTOR.com® is the MLS.  Again, close, but not true.  The MLS isn’t standardized across the country.  Different cities or regions have independent MLS databases.  Like the brokerage websites, information from the local MLS is shown through REALTOR.com’s® website, but again, it’s only part of the bigger picture.  Brokerages and agents pay REALTOR.com® to have their listings shown.  The more information and photos they want to show, the more they have to pay.  Not all brokerages or agents spring for this, so if this is important to you, ask the company you are considering working with, what level of advertising you can expect to get on REALTOR.com® through their program.

Expect to pay more to sell your home if your primary advertising is through the MLS.  When you advertise to agents, you will likely sell to a buyer that’s working with an agent, resulting in a commission.  If you want to save money on a commission, advertise outside of the MLS as well.  You’ll expand your marketing area and have a chance of selling in a straight by owner transaction and save even more.

While we are on the topic of commissions, we are often asked about offering less than the standard commission.  A broker experimented with this for almost two years in Spokane, Washington.  At the time, the market was good, averaging about 60-90 days for the median priced homes.  Sellers that offered less than 3% to the buyer’s agent got no response.  After 6 months of watching the results, we discouraged sellers from using this approach, after two years, due to the horrible response, the broker discontinued this option. Removing the incentive for agents to show your home, even during a ‘sellers market,’ results in no showings. No showings, no sale.

Lastly, beware of becoming a vending machine for a local agent.  This isn’t much of an issue unless you are overpriced.  Overpriced homes are frequently used by agents to compare against correctly priced homes.  If a brokerage provides you a yard sign, and your home is overpriced, buyers will call the number on the sign and talk to an agent to hear about your home.  The agent will get their contact information and can get them a list of other similar homes in case your’s doesn’t fit the bill.  If your home is overpriced, it never sells because there are others on the list that are just as nice or nicer that are priced cheaper.  When your are using an MLS program to be by owner on the MLS, the agent you work with isn’t spending any money on advertising (that’s your job), so if you are overpriced, you just end up being a vending machine, serving up buyers to the agency whose sign you are using.  It’s not a bad thing to use an agency’s sign in your yard, as long as you are priced correctly.

What questions and experiences do you have about working with the MLS as a by owner seller?  Add them to the comments area to keep this topic interactive.