The word MLS is used in every day conversation all over North America in the real estate business. The abbreviation stands for Multiple Listing Service. You would think that this is self-explanatory. I want to sell my property, I call a realtor and he/she lists it on MLS. That’s it.
Not quite. The MLS is the primary tool in the real estate business. The MLS data base is vital to the day to day activity of an agent. It also provides them with a long list of different but equally important data sets to keep the business transactions seamless.
There is one important piece of data agents and clients should pay attention to. It is the “List to closing ratio.” What is this and why is it important?
The closing price is the amount a property sold for. The MLS data base stores every sale and it is published monthly. The data is compered to the previous year month by month. We now have 11 months to compare to the year of 2016. The difference between the list and closing prices is called the list to closing ratio. That ratio has been increasing lately so that, as an example, where a year ago a property might have been listed at $100,000, at a ratio of 85% it sold for $85,000. That ratio is changing so that it is now up to 92% so that $100,000 property is now selling at $92,000. That’s a $7,000 increase in the price although the list prices have not changed.
This is the data realtors should and do keep an eye on. The MLS systems database is vital for realtors. It keeps us up to date with monthly report. It is equally important at the time we list a property and at the time of selling.
A well-priced listing sells faster and it also sells at market value. That keep the seller, buyer and the agent happy. But there is more. It creates a well balanced and healthy market. Furthermore, even on a slow market a listing that is realistically priced for the market conditions will sell. It is true that some owners will not list in a slow market because they are waiting for better conditions, but some owners will. You might ask why? Because if you sell in a slow market, you will also buy in a slow market.