Let’s start with a little history lesson about how real estate markets work and how this tool called the multiple listing service originated. Let’s also admit that real estate agents and brokers are territorial in nature, we’ll circle back to why that matters in a moment.
Imagine more than 100 years ago a few real estate brokers would meet in person to share information about their listings and offer to work with each other to get a closed sale. It’s common for one broker to have a listing and an entirely different broker to have the buyer. In its most simplistic form, this is the basis of the Multiple Listing Service of today.
As of 2020, there were 597 independent MLS items in the U.S. which are owned by the local Realtor boards.
Immediately the reader might ask, “wouldn’t it make sense to have a national MLS?” Would it make sense for a prospective buyer to log in to a site and search the entire country? Well, this is where the “territorial” nature of the real estate brokerage business comes in.
Even in Hardin and Jefferson counties, where the vast majority of local real estate agents work, there are two completely independent systems in place. Although it’s possible for agents to be members of both services, most aren’t.
The technology to aggregate listing data from all MLS platforms into one web portal has existed for a number of years. As this technology evolved, a number of creative folks set up these sites. Realtor.com was one of those and had some dominance until Zillow came along and kicked them to the curb.
Today, Zillow is the dominant force in the consolidation of detailed listing data on every house in the country, whether it is an active listing or not. I get calls every day that start with, “I saw it on Zillow.”
Although Zillow has the capability to be a national MLS, it isn’t. Amazon also has the capability to start a national MLS and may one day do just that.
Zillow is an advertising company and lead-generating platform. It connects prospective buyers with their subscribers, which are real estate agents.
Over an 18-year period, it built a massive business in a sector where the National Association of Realtors failed to capitalize. Of course, there have been plenty of lawsuits filed for various reasons, but it continues to dominate.
Initially, Zillow was the boogeyman in the real estate brokerage world and still is to some. However, it turned out to be a hugely successful business model that owns the online real estate shopping experience.
In closing, it’s still the case that no matter where you initially identify the house you might be interested in, a local agent is going to be responsible for the closing process. A process with more than 40 tasks and a period of four to five weeks to close. Fortunately, we have plenty of qualified real estate agents, home inspectors, lenders, insurance agents and title companies in the Hardin County market area to rely upon.
T.W. Shortt is past president of Heart of Kentucky Association of Realtors and a local real-estate broker.