Multiple Listing Service Disputes

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What Is the Multiple Listing Service?

The Multiple Listing Service (MLS) is an online database for the real estate industry that was designed to facilitate the sale and purchase of real property, such as homes and commercial buildings. This service was developed by REALTORS, a private organization of over 800 listing brokers. MLS listing brokers work with sellers who wish to part with a piece of real estate.

The MLS listing broker works with the seller to determine the price of the home, then gathers detailed information about the property, such as square footage, the number of bedrooms and bathrooms, any added bonuses such as a pool, and the home’s flooring type(s). The listing broker also takes photographs of the home. Often, the listing broker will stage these photographs. “Staging” means the broker will temporarily rent furniture and decorations for an empty home in order to create a friendlier yet well-polished atmosphere for listing photos and showings.

The listing broker will then combine the information and photographs into a listing. All MLS listings take the same format. The broker then uploads the listing to the Multiple Listing Service system. Any realtor with access to the MLS system nationwide will be able to find and view the listing for this property.

Buyers’ brokers are special realtors who work with buyers who are interested in purchasing property. The buyers’ broker will scour available MLS listings for properties that fit their clients’ demands. If the buyers’ broker sees a listing that the client might be interested in, the buyers’ broker will then call the listing broker to schedule a showing.

The Multiple Listing Service is the largest and most popular online service of its kind, and while there are many ways to sell a home, a vast majority of homes sold by realtors are done through MLS.

Common Multiple Listing Service Disputes

While MLS is designed to ease the process of both buying and selling a home, conflicts do often arise. The most common type of dispute involves fraudulent MLS listings. The Multiple Listing Service listing provides a lot of information about the property for sale, and listing brokers are liable for misrepresentations about the property that are mentioned in the listing. For instance, if a Multiple Listing Service listing states that the home has never had a mold or mildew problem but the buyer soon learns after performing some renovations that the previous owner had covered up a deadly black mold issue with drywall, the buyer will have an MLS listing fraud claim.

In addition, sellers may disagree with the language or terms of the MLS listing. The best way to approach this issue may be to fire the realtor and hire a new listing broker or to avoid MLS altogether.

Litigating an MLS Dispute

Licensed realtors who subscribe to the MLS service are also members of local realtor organizations. These organizations may cover a city, county, region or entire state. While it is possible to dispute a Multiple Listing Service issue with the listing broker, the local realtor organization often times acts similarly to a union and represents the local realtor in an MLS-related lawsuit.

If a seller of a home attempts to sue MLS or the listing broker, the seller will often be required to submit their dispute to arbitration first. The Multiple Listing Service requires in its agreement that all homeowners who place their homes for sale on MLS must arbitrate using pre-selected hearing officers. Arbitration hearing officers are often experienced real estate attorneys or even retired judges.

If a buyer of a home attempts to sue the Multiple Listing Service, the listing broker, or the seller due to fraud relating to an MLS listing, the buyer is not confined to arbitration.

Seeking Guidance from a Real Estate Lawyer

If you are a buyer or seller and are experiencing difficulty with an MLS listing or home purchased through MLS, you have legal recourse. A knowledgeable real estate attorney can evaluate your potential claims and advise you on your legal options.

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Last Modified: 07-22-2015 05:47 PM PDT

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