Whether you're selling your own home or working with an agent, most every seller takes it for granted that their home will be sold in large part by virtue of it being listed in the MLS, or the Multiple Listing Service. The MLS system certainly will make your home available to be searched online, but does it really do what you think it does?
The MLS was created way back in the late 1800s. It's a loose for-profit system of decentralized organizations that primarily exists to earn revenue by regulating and controlling how realtors market home listings to buyers.
Today, MLS offices make their money by charging agents steep fees to put homes into their databases so they can then be pulled and made available to home searchers online via the many millions of real estate brokerage and agent websites around the country.
You could call it marketing - and the MLS does - but it's not the kind of marketing you may have become accustomed to since the web, mobile and social media transformed our lives as consumers. It's perceived benefits also come with quite a few downsides that buyers and sellers must overcome in order to achieve an optimal real estate transaction.
Here are the top 3 reasons why listing your home in the MLS alone may not be enough to sell your home faster and for the money you're seeking:
1. MLS Doesn't Guarantee Your Home is Being Well-Advertised
MLS is kind of a relic in the modern digital marketing and Google-driven world. It's a closed system still alive in a time when effective marketing means advertising your products so they can be found instantly by the right buyers searching on the web.
Real estate brokerages and agents typically make home listings available by having someone build them a website that connects to MLS and allows their website visitors to search homes in a given area. But each realtor website is built and set up differently, with different levels of SEO, mobile compliance, quality, different software configurations and different objectives. That means your home could end up buried under other, more heavily featured homes, homes that a given brokerage wants to surface or, more commonly, the victim of poor web development that may not even allow your home to come up in search results due to a lack of SEO understanding, programming errors, bad search configurations and a thousand other very, very common technical glitches.
Plus, with so many realtors who have so many websites, having your home bubble up to the top in a typical home buyer search is kind of like throwing darts at a dartboard - blindfolded. Today, our web world begins and ends with Google and how they index the best, most relevant content for us to find in our searches. That means real estate brokerages must have in-depth expertise in web technologies and search engine marketing. The problem is, almost none of them do. Lots of technology, very little expertise in how to use it.
Rigthly so, realtors are focused on selling homes and customer service, not software engineering. That means the level of digital marketing you've become used to with services like Amazon, Wal-Mart and Zappos simply does not exist. The effect? Home buyers usually end up picking almost blindly from a list of realtors that come back on the first page of any search and then get "horse-blindered" by whatever level of service they are offering.
In short? Effective digital marketing today helps web searchers immediately find what they're looking for and engage with the seller as directly as possible. MLS is simply no guarantee of that happening at all.
2. MLS Guarantees More Middlemen In Your Real Estate Deal
In our web and mobile world today, we expect to search for something, find the best deal, go straight to the source and get it. This dynamic just doesn't exist in real estate and the MLS system is actually impeding progress to make it this way for consumers.
By tightly controlling access to and charging for the use of what is a closed database of home listings, the MLS is preventing the evolution of services we have all become accustomed to. It's not only costing us all more in the form of higher commissions so that agents can cover their MLS fees (and still not get your home marketed as it should be!), it means there will always be more and more middlemen and women involved in your deal. Or, it may mean there's no one involved in your deal at all. Read on as to why...
3. MLS Doesn't Feature FSBOs and Off-Market Listings
MLS is a system set up primarily as a marketplace between realtors; realtors representing home sellers who have agreed to full commission-based transactions. So, will paying an agent or an MLS proxy service a high fee to put your FSBO home in MLS ensure that it gets the same amount of attention? In almost all cases, it's a guarantee it will largely be ignored.
Just think about how traditional real estate works. Realtors get paid a commission (usually between 5 and 10% of sale price) typically by the home seller which they then split with the buyer's agent and their brokerage when a deal takes place for handing all the MLS fees (average per agent in the U.S. is $5K a year!), advertising, marketing, contract paperwork, legal compliances and more.
Does it seem realistic that agents with buyers will seek out your FSBO listings in MLS when they know they won't be compensated for their hard work? Quite simply, thinking that paying anywhere from $199-$500 or more to get your FSBO in the MLS will boost its exposure is actually like thinking it would be fun to flush $20 bills down the toilet for an hour.
It affects realtors too.
At any given time, most realtors have a few so-called "pocket listings." These are homes for which the seller does not want their property listed in MLS to avoid it being openly known they are selling, various special circumstances such as divorce or other legal matters, extra privacy, special features, price or timing issues. Instead, they opt to have their agent market their home "word of mouth" to their agent network.
As you may expect, the issue is exposure. How do you best advertise a home that you can't really openly market? By focusing on MLS, buyers often miss out on a hidden world of FSBO and off-market pocket listings that are not listed in MLS at all.
In closing, the MLS may in fact hurt the sale of your home instead of help it. It certainly costs you more money than you're likely to see the benefit from spending. At present, we're on the precipice of a generation changing hands in real estate as buyers and sellers demand a more direct connections.
At HomePocket, we're helping to speed that along by advertsing your home listing more effectively on the web, mobile and social media directly to buyers. In October 2016, we launched a first-of-its-kind mobile application to help sellers and agents snap photos of their homes on their phone, post a simple description and get their homes marketed instantly and directly to consumers the way they're now used to doing.
Let the revolution begin!
Let HomePocket get you the digital exposure you need for your FSBO or Pocket Listings for free.
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