This week has brought to the forefront a number of different issues related to how real estate work gets done and the various functions and relationships we Realtors have with one another. I thought since this is somewhat confusing, even for Realtors sometimes, that perhaps it was worth a bit of explanation. I hope you learn a bit along the way.
MLS stands for Multiple Listing Service. This is the way in which the listings each firm has (through a contractual agreement with their client) are shared among a group of Realtors. Perhaps you can imagine back to the days before computers and you will understand what the function of MLS is and how it came to be.
My understanding is that in the pre-computer days of this association there were meetings or social gatherings, probably on a monthly basis...but maybe more often. At these meetings/ social gatherings, the Realtors would bring a book or a folder with the listing information they had and they would show their listings to fellow Realtors in the hopes of finding a buyer through the other Realtor. (I suspect that there might have been an office or at least a desk where these listings were submitted as a sort of clearinghouse, but I'm not sure about that. Let's not put that into the equation for this discussion.) So imagine that there was a way that Realtors were communicating with each other about what they had for sale. Sure they would possibly prefer to sell the property themselves, but sometimes that wasn't happening, or wasn't the best way to pursue selling. So there was a central event, albeit not completely sophisticated and perhaps not overwhelmingly effective--for despite the fact that the Northern Neck is small, in actuality if you are trying to know all of it, it really is impossible. It is huge. Probably not everyone came to all these events, etc. Maybe a bit hit or miss. Or perhaps a handful of Realtors had all the action and they communicated well. I wasn't there and wasn't a part of this. I can only speculate. What you can understand from this is that twenty plus years ago, a listing and how it was shared was a completely different proposition.
Enter the computer as a way to share information. At this point I won't discuss all the bumps along the way with this newfound way of sharing information. I was chairman of the MLS committee for 8 years here on the Northern Neck at the time when the bugs were being worked out of MLS systems and it wasn't pretty. Still and all, once the majority of glitches were resolved it made for a much more reasonable way to get listing information to fellow Realtors.
As Realtors we belong to the National Association of Realtors, the state association in which we practice, and a local association. The local association collects our dues and pays both the state and the National portion to the appropriate office. Within our local association a decision was made about which MLS vendor we would work with. We have had a contract with a firm in North Carolina for probably 18 years or so (I believe the contract gets renewed every couple of years...that's what I remember). This MLS company provides us with the tools to put our listings into the system so that they can be seen by more parties. At first the intention was simply that fellow members of that same board and users of the MLS would see them (not all board members initially signed up for MLS because it costs money. Eventually almost everyone did join...perhaps one or two out of close to 200 don't subscribe at this time). At a later date it became the intention (and requirement) for these listings to be seen more widely. Currently our listings that go to our MLS provider are sent on through syndication to a vast array of web sites for display of the listings. This is a much broader way of presenting listings and they can be seen throughout the world. This is the same for all MLSs.
So why am I bothering to discuss this? Well there is what I believe is an odd perception that one MLS functions better than another in terns of conveying information to potential buyers. In my opinion only the local MLS functions better than others for local listings. The local MLS is where when you put your listing and it is automatically fed to other members' web sites where theses listings are shared. When someone looks for Northern Neck property, there are perhaps 200 different web sites hosted by Northern Neck Realtors that will bring up the listing. Beyond that, the listing appears on Realtor.com, Trulia, Zillow and a whole host of other major sites.
Why the argument of perhaps using a Richmond Realtor or a Northern Virginia Realtor instead of a Northern Neck Realtor when selling a Northern Neck property? I think what is sometimes mistakenly considered important is that Realtors in jurisdictions where there are more jobs, and more money and more likelihood of someone buying a second or vacation home in the Northern Neck somehow are a better choice for where the listing information should go. If someone lists with an out-of-the-area Realtor and exclusively has their listing on that MLS, it too goes out to all the different search engines which is great. Guess where it doesn't show up? Not in our local MLS, so not in a place where each and every agent in our MLS and association can see it and can search for it within the context of similar properties. It's not that it can't be found, it's just that a main tool isn't part of the package. Northern Neck agents are working with lots of people from out of the area who have sought out and developed a relationship with someone to assist them--locally. The local Realtor can compare apples to apples and tell you something is apples to oranges. They know where the closest store is. They know if there is or is not a golf course, or a hospital or a whole range of amenities in the area or not. They know. They can help you find a contractor. They can smooth the way with local county officials. They know the territory. And on the other hand, when a property is listed with with a Northern Virginia Realtor are they going to come down and show a house down here to a prospective buyer with that buyer agent? You tell me. Perhaps. But in my experience the answer is, no.
Obviously there are positives and negatives to every choice. The question is what will work best for you. By choosing an out-of-the-area Realtor over a local one, one of the key sales instruments that is available (Northern Neck MLS) is not a part of the marketing program. The listing isn't in our MLS. Beyond that, it may well be that no one is going to open up the house, and open the blinds and turn on the lights when a listing is being shown. A buyer's agent assisting his or her clients may have 8 or 10 properties to show in a day. They may well have more than enough to manage in the busy blitz that is their program. They can't be expected to rush into a house and turn on every light and open up every blind and draw attention to each and every special feature that they may or may not know about. These things are important. A bright and open and alive house has something going for it even before the specific attributes come into play.
Okay, I'm getting a bit carried away. Referrals, though, that's also a worthy topic. Within the way Realtors work is the referral process. We can refer buyers or sellers to other jurisdictions and they can be referred in to us. What is agreed to, generally in writing, is the amount of the overall listing or selling fee that will be paid to the referring party. Let's just say someone refers a seller to me. They are a Realtor in New Jersey and they've learned of me through a friend or family member and they trust me with listing a house for them. They call me, we discuss the property, I figure out if I can help them and if so, we agree to a percentage of my listing percentage (not the whole fee) that they will receive once the property is sold (everything is done through the firm). We exchange a form that each party signs and that referral and listing is set into motion. I like this system. I think it makes sense. But I think (and have stated) that there should be an automatic referral requirement when properties that are of interest are 80 or 100 miles away from the Realtor. Here's a for instace. I have a friend who lives here who wanted to purchase a property in Northern Virginia. Given that those properties are in-state, I could have done my research and called the listing Realtors and gotten into those properties with my friend and been the buyers agent (i.e. received the full percentage for the buying side). I knew, though, that I wasn't very familiar with the territory. Although I could drive around and find my way, I didn't know the ins and outs of the area. I called a Realtor in the town of interest who I'd worked with previously (with a different set of real estate issues) and asked if I could refer my buyer to him. We worked it out. The answer was, yes. Now I don't expect other people to do this, but I accompanied my friend to Northern Virginia and viewed all the properties she did. I was a bit of a middle man and faciliator in the process of writing up the contract and I attended closing. This is not what is expected. Normally once the referral takes place, someone steps in for you and works to find the property, etc. When it closes a check is sent. That's that. Generally that works perfectly.
Let's put the shoe on the other foot, though ...if I didn't feel fully able in Northern Virginia, then think about out-of-the-area Realtors bringing a buyer here to buy. Does that work or doesn't it.....probably, sometimes. I'm not saying that no out-of-the-area Realtor is a good fit. I'm sure that some of them are knowledgable and if not, they do their homework fully before they embark on assisting someone to buy down here. But it is a situation that a potential buyer should not consider lightly. Does the party know about the controlling depth at the mouth of the creek? Local shopping? Where's a golf course? Where's a hospital? Who is the right county official to help with "x"? What about a contractor? What about a year from now when I might have other questions that a local Realtor could potentially answer?
There is no perfect choice. Obviously each decision a buyer or seller makes comes with its pros and cons. It is just that the assumption that local means less capable because we aren't big city people...that's pretty funny. One of the things that I appreciate having come from two big city environments is that people here are like people everywhere...there are capable and incapable and in between. There are college educated people who aren't the most able, and hardly-out-of-high-school who are top knotch. Working well with a Realtor isn't a perfect straight line and everyone is learning along the way. There is no perfection...but remember....you are looking to have your needs addressed in a way that best solves the problem and with the most comfort...What is most important in all this is knowing your territory. That's what a local Realtor knows....the territory. Nothing replaces that knowledge--nothing!!
Hope this rather long-winded rambling gave you some new perspective.