What is MLS?
For soccer fans MLS stands for Major League Soccer, but for first-time homebuyers MLS stands for Multiple Listing Service.
A Multiple Listing Service (MLS) is a service that real estate agents and appraisers use to obtain and share details about properties that are for sale or have been sold within a particular area. Real estate agents have special access to their local MLS to search for properties that best match the needs of their clients. Using their local MLS, real estate agents search for the houses that are actively being listed for sale. They can narrow the search for a property, a hundred different ways. The MLS allows real estate agents to limit their home search by sales price, neighborhood, schools, number of bedrooms, number of bathrooms, square footage, year built, style, lot size, as well as, many other important characteristics of a home for sale.
Once the agent has completed their search, they typically provide their clients individual listings of the homes that met their property search criteria. These listings provide homebuyers a wealth of information and are used to determine if the homebuyer wants to take the next step and visit any of the specific homes that are listed for sale. In other words, the listings allow the homebuyer and agent to see detailed information about all fo the homes that are currently on the market and then pick and choose which properties to visit.
Real estate appraisers also have special access to their local Multiple Listing Service (MLS). Real estate appraisers access the sales data from their local MLS to determine the fair market value (FMV) of homes that have recently sold in a particular neighborhood. Using this data the real estate appraiser independently assesses the value of the home to determine if the sales price of a particular home is equal to or greater than the property’s fair market value (fmv). The appaiser does so by comparing the subject property to similar homes in the same neighborhood that have recently sold.
Getting an appraisal is typically required by the mortgage lender, as is required in order to get most home loans. In order for a lender to know how much money they are willing to loan, they first need to know how much a particular house is worth. The cost of the appraisal is typically paid for by the loan applicant and it ranges from $400 to $500 dollars. The cost of the appraisal is non-refundable in most cases and so it is obtained after a homebuyer has an accepted offer on a home and after they have been pre-approved for a home loan.
There are hundreds of different Multiple Listing Services throughout the United States. To learn more about the MLS in your area ask your homebuyer education provider or a trusted real estate professional for more information.