Recent industry turmoil surrounding compensation, mentorship and more due to lawsuits, investigations Ministry of Justice, those outside the real estate industry would argue that the benefits of listing a home on the MLS are negligible. They are wrong.
Even in a strong seller’s market, the MLS is critical to home sellers because it provides significant financial benefits and attracts more potential buyers, according to a recent MLS study. Bright MLS It’s called “On-MLS Study: Measuring the Benefits of an Open and Transparent Housing Market.”
Bright MLS, in partnership with Drexel University, analyzed the role the MLS plays in home sales transactions, specifically measuring the seller interests associated with listing and marketing a home on the MLS. The study compared home sales inside and outside the MLS, analyzing more than 1 million transactions that occurred on the Bright MLS from 2019 to the first quarter of 2023.
BrightMLS Chief Economist Lisa Sturtevant answered this question on the Real Estate Insider Podcast hosted by James Dwiggins: “To those who commented, ‘It’s shocking that an MLS survey was positive about the MLS. , what do you have to say?
“I really want to answer the questions I don’t want to answer. [have a] “gotcha” moment. Conversely, does something make logical sense to me?Before we get into math, statistics or data, does it make sense that the more attention you pay to a property when it becomes available to more people? [would create] More demand, then the best offer? Sturtevant said. “This is Econ 101. If supply stays the same, which it does, then demand will rise because of more attention, which should put upward pressure on prices.”
Once she decided it was a logical hypothesis, Sturtevant looked at research Bright MLS had done on the topic years ago. “[That study] Just showed the average outside the MLS versus the average within the MLS. She noted that this doesn’t tell the whole story because perhaps properties outside the MLS are harder to come to market, so she looked for true “apples to apples” comparisons in her latest survey. Instead, she decided to dig into the public records data and compare it to Bright MLS data.
The research findings are as follows:
Research Shows Homes Selling During MLS Periods for Higher Prices Than Homes During Non-MLS Periods
When a home is listed on the MLS, it sells for more. The study looked at comparable homes for sale on and off the MLS and found that homes listed and sold on the MLS consistently fetched higher prices for sellers. Between 2019 and the first quarter of 2023, homes sold on the MLS sold for 17.5% more than comparable homes not sold on the MLS.
Additionally, premiums on the MLS have increased in recent years, according to research. In 2019, MLS online sales prices increased by an average of 13.3%. Typical sales prices on the MLS will increase 18.3% in 2022, and data from the first quarter of 2023 shows that the price premium on the MLS is even more pronounced this year. MLS increases are based on the average sales price of homes sold through Bright MLS in 2023 compared to other similar homes in the same area.
Study Shows Financial Benefits of Listing on MLS
Research also shows that sellers who sell their homes on the Bright MLS can reap significant financial benefits.
Unlike homes that are sold privately by the seller, are offered exclusively as a broker’s office, or are sold without being listed on the MLS, homes listed on the MLS attract the greatest number of potential homebuyers and give sellers the most competitive Quotation. The study shows that listing a home on the MLS could bring the typical home seller $53,890 in additional income by 2022, compared to $53,890 if they sold their home outside the MLS.
Some other points:
- Between 2019 and the first quarter of 2023, 84.0% of all homes sold on the Bright MLS were listed on the MLS.
- The regression results show that homes listed on the MLS have a 17.5% price advantage compared to non-MLS sales.
- MLS premiums in the Philadelphia metropolitan area are 15.5%, while those in Baltimore and Washington, D.C., are 15.8% and 17.0%, respectively.
- Listing on the MLS generated nearly $54,000 in financial benefits for sellers in Bright’s footprint in 2022.
- When listing on the MLS in 2022, sellers in the Philadelphia metro area made $53,110 more, sellers in the Baltimore metro area made $52,480 more, and sellers in the Washington, D.C. metro area made $61,170 more.
method: The study analyzed more than 1 million home sales that occurred in five states and the District of Columbia between 2019 and the first quarter of 2023. Information on transactions within local jurisdictions.
Transactions in public records are compared to Bright MLS listings, a comprehensive database of properties listed for sale by participating agents and brokers in the area.
A key element of the research is to identify true “fair” residential resale home sales transactions in order to estimate the results for typical sellers in the market. An arm’s length transaction is one in which the buyer and seller act independently and have no relationship with each other. Therefore, parties will only complete a deal if they believe it is in their own interests.
There are no specific identifiers for fair trade in public records or MLS profiles; however, the data used in this study include a range of information used to define traditional fair trade as carefully as possible. This analysis excludes several other types of homes to narrow the focus to traditional home sales and to compare transactions within and outside the MLS.
