How Do You Spell MLS?

by Dave Phillips

CEO, PA Association of Realtors

Author website

Once, many years ago, I spelled CRB wrong and offended a bunch of brokers who held that designation.  I spelled it “CRS.”  Easy mistake for someone new to the REALTOR® business.  Heck, I hardly knew the difference between an agent and a broker back then, so how was I to understand what a big deal it was to confuse a couple of designations?  Of course, back then there were only a handful of designations – presently we have around 70 designations  that are recognized in the industry.  It must be really tough for a newbie to understand all the alphabet soup today.

It is probably also tough for a newbie to understand what MLS means.  Sure, the easy answer is Multiple Listing Service, but what is the purpose of the MLS?  I think many REALTORS®, and surely most of the general public, believe that the primary purpose of MLS is for collecting property data so it can be efficiently searched/distributed.  Even Wikipedia agrees with this common description of MLS.  Over the years, I have often been asked by sellers why they cannot enter their own listing in the MLS so it can be distributed like other listings.  This post details what I try to explain to these sellers.

Data distribution is certainly an important side function of MLS, but I argue that it is NOT the most important function.  If it were, then we should open up MLS to anyone who wants to enter a listing.  After all, if we had more data (including FSBOs, bank properties and government seizures) it would make data distribution even better. 

To understand what MLS’s primary function is, you need to go back to the beginning.  The first MLS predates the founding of NAR by more than 20 years.  It goes all the way back to 1887 in San Diego.  Needless to say, that original system was not computer based.  The first computerized MLS came about in 1975.  The public display of listings did not occur until the Internet explosion in the early 1990’s, and REALTOR.com was founded in 1997.

Okay, that’s more background than you probably wanted, but it is easier to understand the real purpose of the MLS if you think about it outside the current Internet phase we are experiencing.  The real purpose of MLS is to create an agreement between brokers to cooperate and compensate in real estate transactions.  By joining the MLS, a broker enters into a legal contractual arrangement with other members, to cooperate with each other and compensate each other when their joint efforts bring about a sale.

Cooperation and compensation are not as sexy as Internet data display, but MLS systems would not exist if competing brokers did not have this practical business reason to combine their critical business data.  Without this agreement, the real estate industry would be crazy and inefficient.  It is also this agreement, which is very legal in nature, that prevents MLS access by unlicensed buyers and sellers.  Since only licensed real estate brokers can share commissions (at least that’s the law in VA), unlicensed sellers could not legally participate in MLS.

I realize that this is all pretty boring, but if you are still awake, here is something a little more interesting.  The Internet has fundamentally affected MLS by opening up many new doors of opportunity.  My local MLS has had listings displayed on a public Internet site since around 1994, but the basic public interface has really not changed much in the last 14 years.  We have plateaued in recent years, with the public display of listing data with “maps” and “auto-valuations” being the only major improvements in the last 10 years. That is about to change. 

NAR is at the edge of a giant crevice that divides the old “offer of cooperation” MLS from the more contemporary (but incorrect) “public display” MLS.  The decision NAR is wrestling with revolves around how they want to spell MLS.  They have tried to separate off the public display of data in an attempt to preserve the true definition of MLS, but that is like trying to put the Kleenex…ah, I mean tissue…back in the box.  MLS, whether NAR likes it or not, has become a common term in the public domain.  Essentially, it is too late (or at least not cost effective) to recapture the term MLS for what it truly means (or meant). 

There have been attempts to spin off the public side of MLS by spelling it differently.  IDX (Internet Data eXchange) is the name that stuck, but that was the second way NAR attempted to spell it (sorry, I can’t remember the first).  Then the DOJ (Department of Justice) caused us to change the name to ILD (Internet Listing Display) which is currently the official way to spell the public side of MLS.  Most REALTORS® still use the term IDX, but the public has never made the transition from MLS.  NAR has also attempted to reclaim MLS (which is legally trademarked by Major League Soccer) by making the incorrect use of the term MLS an ethics violation.  This, however, is like trying to put the Coke…ah, cola…back in the bottle.

So, what is getting ready to change?  Probably not the NAR rules (at least not until the DOJ issue is cleared up).  There are, or better be, major changes in the software commonly referred to as MLS.  In Swanepoel’s 2008 Trends Report, Trend # 4 is about how MLS software will need to change to meet the demands of Gen X/Y and Web 2.0.  We need to stop worrying about how we spell MLS and start thinking of what the consumer expects from us.

I leave you with two examples that illustrate many of my points.  These are member solutions to the issues.  First, www.FranklyMLS.com is an agent site that combines Web 2.0 Crowd Sourcing (wiki) with the public display of MLS data to provide an interactive experience.  This gives us a glimpse of where we need to go with not only our public sites, but with our broker MLS systems.  This site also has a ton of disclaimers to make sure the public is not confused by our internal debate over how we spell MLS.  The second example is from Indianapolis’s answer to how MLS should be spelled.  They have created a trademarked term to define the internal “broker cooperation” side of MLS.  They call it BLC (Broker Listing Cooperative) and it could be the answer to the entire spelling issue.  We could adopt BLC and give MLS to the public, especially since they already have it (no disrespect to Major League Soccer intended).