Among the best publicized - as least examined - real estate institutions are multiple listing services. These services are cooperative organizations generally affiliated with local real estate boards. By one estimates there are between 700 and 800 services throughout the country.
A multiple listing service is a sales tool with two intrisically interwoven purposes - it is used to sell both houses and real estate marketing services. From the seller's viewpoint, it is a sales tool that should be examined in the context of effectiveness and cost. There are three specific questions to consider:
How many houses were listed in a year, how mnay were sold; and how long did it take to market those properties that were sold?
In Suburban Maryland, for instance, multiple listing services in Montgomery and Prince George's counties had listings last year of 20,200 and 19,816 homes with sales of 9,382 and 9,433 respectively. One could claim, with great simplicity, that a total of 40,000 homes was listed in a one-year period in suburban Maryland and that 18,788 (47 percent) were sold. However, this would be unfair - the figures today are so incomplete as to defy analysis.
First, the number of listings is complicated by the fact that a home may show up more than once in a year. For example, suppose a home is not sold by a broker during the listing period. The owner then lists with a second broker. The house may appear twice on the listings. Even if the house sells the listings would appear to only have a 50 percent rate of success. The critical question here is the percentage of listed houses sold by individual brokers - a significant index of skill that few brokers will disclose.
Second, a home entered in December of one year and sold the next may not be accounted for in the totals of either year.
Third, a listed home is also likely to be marketed through classified ads, an open house or signs. Is one factor the exclusive procuring cause of sale in these cases? Probably not.
Fourth, to what can listing services be compared? There are no hard figures concerning the success ratios of alternative marketing systems. However, it should also be stated that other systems are not products of the real estate industry.
These factors create a dilemma. What do we really know about the multiples? Promotions developed by the real estate industry only offer such slogans as "assured success," a "proven method of marketing real estate," and the ever-popular "more listings sold." Where, in this age of computers and unemployed doctoral candidates, is the hard evidence?