Why Multiple Listing Services Are Not for New York

I have often encountered brokers who question why New York City’s residential market is one of the few that has never had a bona fide multiple listing service, i.e., MLS. To understand this, one has to first look at what an MLS comprises to discern why it may not be particularly germane to our very specialized, idiosyncratic marketplace.

 

By compiling all the listings of multiple real estate agents in one location, an MLS allows agents to show their own potential buyers listings that belong to other agents. Buyers and sellers appreciate being able to view a large number of listings in one location without having to bounce around between different websites. Although this system works well for numerous markets, I would argue that New York’s lack of an MLS is a product of the fact that having one simply wouldn’t serve the real estate needs of this city.

 

Cooperative corporations, also known as co-ops, make up the majority of our apartment sales, and are a phenomenon nearly exclusive to New York City. Co-op boards tend to have different rules and requirements, so compiling those availabilities for a multiple listing service wouldn’t necessarily tell the whole story. Surely, not everyone viewing a particular listing would qualify to live there, which would likely lead to confusion and frustration for all parties involved. As a co-op is comprised of people who own shares in a cooperative corporation, buying a unit in a co-op building doesn’t constitute property ownership in the traditional sense of the phrase.

 

Moreover, many potential buyers believe that they can negotiate a better deal directly with the seller’s broker. However, when using an MLS, all the listings are inherently generic and brokers can allude to the fact that certain listings belong to them, even when not true. Furthermore, buyers’ brokers do not exist in any contractual sense in New York City, meaning that potential buyers are not necessarily legally beholden to anyone representing them throughout the sales transaction.

 

Adding a further complication, residential sales prices in this city are among the highest in the nation and there is a multitude of exclusive apartment and townhouse listings here. The New York City real estate world is a tight-knit community, in which buyers, sellers and agents tend to know one another and access to exclusive listings is gained largely through relationships. An MLS seems particularly impersonal and New York City is a very personal place. For many people, a multiple listing service for New York City would be confusing at best and completely misleading at worst.

Thoughts by:
Adam Frisch,
Managing Principal