Custom MLS Software Development for Real Estate Business

 

Multiple listing service (MLS) software is especially popular in the United States. According to the Real Estate Standards Organization, there are around 540 MLS systems in the US. Canada takes second place in the MLS ranking with just 35. In other countries, such services are even less popular, but we believe the MLS model has huge potential globally, making real estate MLS software development potentially profitable in many markets.

If you want to find out more about multiple listing services, their impact on the real estate market, and monetization possibilities – this article is for you.

But more likely, you came for instructions on how to build your own software and to get an idea of the approximate cost of MLS software development services. We cover those topics as well..

Welcome to our extensive guide to multiple listing services.

How do multiple listing services contribute to real estate industry development?

Let’s start with a short definition of what a multiple listing service is.

A multiple listing service is a centralized database of property for sale in a certain region. We call it centralized, as an MLS is usually managed and regulated by a professional organization such as a local Realtor association.

The concept of an MLS was created to foster cooperation among real estate agents, increase healthy competition in the industry, and provide home buyers and sellers with access to a larger market. What are the advantages of a multiple listing service? Here are the four most important:

1. Buying and selling agents can cooperate and share the commission from sales, enabling them to close deals faster and diversify their income.
2. Small real estate companies and individual agents can compete with large real estate firms, as all have access to the same database of properties and can offer more to their clients.
3. Homeowners can’t add their homes to an MLS directly, as only associated agents have access to an MLS. This encourages sellers to cooperate with trusted real estate agents to make their properties visible to more potential buyers.
4. Multiple listing services make the real estate market more transparent and help property managers and agents to spot tendencies and analyze trends.

As you can see, a multiple listing service fosters the development of the real estate industry in general and benefits every real estate agent.

Differences between an MLS and a property marketplace

At first glance, a multiple listing service looks like a real estate marketplace. However, these are two different types of platforms. Here are the main differences:

	Multiple listing service	Real estate marketplace
Access to listings	Only associated agents can access listings, and usually for a fee.	Listings are available to everyone, including homeowners and buyers.
Listing management	Only association members can create and edit MLS listings.	Both real estate agents and homeowners can create and manage marketplace listings.
Information relevance	Listing status, property price, and other conditions are kept up to date.	Property information is often outdated and inconsistent, and property listings may be duplicated.
Security	All property listed in an MLS is inspected and approved by a real estate agent and should, therefore, be legitimate.	There is no approval procedure on real estate marketplaces, so scam listings occasionally appear.

Some real estate marketplaces sync with certain MLS databases for broader reach. However, information relevance still suffers, as marketplaces often fail to update listing statuses and prices in a timely manner.

Also, certain MLS databases enable integrations with external websites. This allows real estate companies and brokers to list properties on their websites for a fee.

Types of multiple listing services

A multiple listing service is owned and managed by a single organization, which is usually a local association of real estate professionals. These databases are mostly general-purpose, meaning they list all types of property available for sale or lease in the region.

However, multiple listing services may also be special-purpose and focus exclusively on a single type of property, such as:

• Luxury homes
• Commercial property
• Vacation rentals
• Farms and ranches, etc.

Even if your region already has a conventional MLS or a multiple rental listing service, you can focus on creating a special-purpose property listing service, such as for farms and ranches. While such a market may be narrow, if you match the expectations of a niche target audience, your chances for success will be much higher than if you were to compete with an established conventional MLS.

So, learn about your local market and think about a niche you can occupy.

MLS as a business model

Of course, multiple listing service software aims to generate revenue along with benefiting the overall industry. An MLS may be another source of income for a professional real estate association — or a whole new business.

How does a multiple listing service work? There are several ways for an MLS to generate revenue. Here are the main ones:

• Subscription fees
  Agents pay a monthly or yearly fee to access an MLS real estate database and property information. Sometimes, use of an MLS is included in real estate association membership fees. Charging a subscription is the most common monetization model for a multiple listing service.
• Listing fees
  Real estate brokers may be charged to add properties to an MLS database. The fee may vary depending on the broker’s membership level, the type of property listed, and additional services requested, such as priority listing.
• Transaction fees
  After property is sold, the selling and buying agents share commission. A percentage of the commission may also go to the MLS.
• Data licensing
  Many multiple listing services allow real estate websites and marketplaces to showcase listings for a monthly licensing fee.
• Additional services for real estate agents
  MLS providers can offer additional fee-based services such as marketing and advertising, networking, and professional training to real estate professionals, helping to grow the real estate community and generate additional revenue.

Similar to property management software development, creating a multiple listing service for your region may seem like a great business opportunity. However, the real estate industry is highly regulated in most countries, so you have to learn about legal aspects before entering this side of the real estate business. The next section sheds some light on the compliance requirements you have to be aware of.

Compliance requirements to be aware of

Before you start building your multiple listing service, learn about applicable laws and regulations in your region. Pay specific attention to the following:

• Data privacy laws
  An MLS collects data about properties, owners, real estate agents, and so on. Make sure that sensitive information remains confidential according to the General Data Protection Regulation (GDPR) in the European Union or state laws like the California Consumer Privacy Act (CCPA) in the United States. Check for relevant data privacy laws in your region, as you don’t want to violate them.
• Fair housing laws
  Since 1968, the Fair Housing Act has prohibited discrimination in real estate transactions based on factors such as race, color, religion, national origin, sex, family status, and disability. If your MLS will operate in the United States, make sure that your policies and practices comply with the Fair Housing Act.
• Antitrust laws
  MLS organizations must comply with antitrust laws that prohibit anti-competitive practices, collusion, price-fixing, and other activities that restrict competition within the real estate market. MLS rules and policies must be designed to promote competition, innovation, and consumer choice while avoiding practices that could harm competition or consumer welfare.
• Intellectual property rights
  MLS organizations must respect intellectual property rights, including copyrights, trademarks, and database rights related to property listings and other content displayed on the MLS platform.

You will need to work with lawyers to ensure that your MLS complies with all relevant laws in jurisdictions where it operates. By introducing specific internal policies and procedures, you can promote trust, transparency, and professionalism within your industry.

Stages of custom MLS software development

At this point, you know a lot about multiple listing services, have an idea of how they operate in different regions of the world, and what legal specifics you have to consider when starting such a venture. Now, it’s time to get acquainted with the steps of real estate software development.

The process is not unique and resembles property management software development, which we released a guide about earlier. We define three big software development steps: discovery phase, MVP development, and app maintenance. Let’s find out what hides behind each of them and focus on the specifics of MLS software development services.

MLS software discovery phase

Your real estate MLS software development journey should start with thorough preparation. Since it is a long-term and costly process, you want to make sure you analyze and plan everything in advance. Otherwise, the outcome will be unpredictable, as will be the total MLS development cost and time.

During the discovery phase, you should involve multiple specialists, including a business analyst, software designer, software architect, and quality assurance engineer. This technical team will help you analyze the existing situation, predict software development risks, define your business goals, and form software requirements that help you achieve those goals.

This is a short list of deliverables you may receive as a result of the MLS listing software discovery phase:

• Business model canvas
• Wireframes
• Interactive prototype
• Product requirements
• Product architecture
• Feature breakdown
• Development and testing plan
• Risk assessment and mitigation plan
• Product roadmap
• Cost estimate

You can hire technical specialists to conduct industry research and create these deliverables, or you can outsource the whole discovery phase.

Working with an in-house development team requires more management and responsibility compared to outsourcing. If your company lacks technical leadership, you will have to seek it externally. Luckily, you can opt for software development consulting to help with essential technical decisions.

In our experience, the most rewarding approach is to outsource all three stages of real estate MLS software development to the same software development vendor. After performing all discovery and planning activities, your development team members will know exactly how to execute the plan, so they should be accurate and realistic with their estimates, technology stack selection, and so on, as all of this directly impacts their future work on the project.

MLS software MVP development

MVP stands for minimum viable product, and starting with an MVP encourages businesses to begin with a product or service that satisfies the most critical needs of their target audience.

Custom MLS software development requires a large upfront investment, and not every local real estate organization can afford it. Moreover, there is always the risk of failure, and such failure feels much different when you have invested $20,000 vs $100,000 vs $1,000,000 in MLS software development services.

With MVP development, you can start small and test the waters with essential functionality. This way, you can prove your idea’s viability, get potential MLS users’ attention and feedback, and gather ideas for improvement. Finally, you can invest continuously in product development and immediately see the market response to your app advancements.

Take a look at the custom property management software MVP we built for one of our clients for a great example of how a simple application can improve a real estate agency’s business processes.

Features to include in your multiple listing service MVP

The idea of the MVP is to identify must-have features and focus on delivering maximum utility with minimum functionality.

These are features that you don’t want to miss:

• User management and profile management
• Listing creation and editing
• Search and filters
• Property listings
• Messaging or other contact options for agents and their clients

Also, think of location-based app development to provide specific services based on a user’s current location or location of interest. Consider MLS integration with map services, as this will improve the user experience and may become your competitive advantage.

Remember that the MVP stage is not about developing all features that come to your mind but about selecting essential features and focusing on them first. Time to market is crucial at this stage.

Consider AI integration to improve MLS software capabilities

The features mentioned above are a must, as multiple listing software won’t function without them. But you can also add features that are specific to your MLS and provide much value to users, such as:

• An AI-powered recommendation system
• Property description generation through LLM integration
• Automatic property price suggestions
• Virtual tours powered by AI in combination with AR/VR technology
• Smart tour scheduling

Generative AI implementation is a great step to bring your business to a whole new level.

Artificial intelligence works well in ERP systems for real estate as well. An ERP system can help you gather and organize property information, make predictions, and improve the overall efficiency of your team’s day-to-day activities.

Tech stack for real estate MLS software development

When discussing the MVP, our goal is to select a technology stack that enables fast development while ensuring future scalability.

For this purpose, we encourage you to opt for web app development, as this approach enables you to target all platforms with a single application. Web apps work seamlessly on both Android and iOS devices as well as on any other device with a built-in browser, such as a smartphone, tablet, laptop, or even a smart TV.

Here’s the tech stack we recommend based on our recently completed web projects for the real estate industry:

• Front end or client side of the application
  For user interface development, you have to use a JavaScript frontend framework. We recommend React or Vue.js
• Back end or server side of the MLS application
  For the back end, the choice of frameworks is much larger. However, in our practice, we usually choose Node.js, as it enables us to code the whole application using only JavaScript. Also, in this case you can work with a single team of full-stack JavaScript developers to build both the front end and back end of your application.
• Cloud services
  Hosting your MLS database in the cloud eliminates the need for server configuration and maintenance and makes your app robust and scalable. Our development team works with Amazon Web Services. You can also consider platforms like Microsoft Azure and Google Cloud. Read our overview of the best cloud service providers in 2024 to make an informed decision.

IDX, RETS, and RESO – the choice of data exchange standard

Deciding on a data exchange standard is important if you want to enable integration between your custom MLS and other real estate websites. Your choice will impact how MLS data appears on other platforms. Nowadays, there are three main options to consider: IDX, RETS, and RESO.

We won’t go into the details of all these standards, as they deserve a whole article. However, it is important to mention that in 2016, the Real Estate Standards Organization (RESO) recommended the RESO Web API for multiple listing services. By adhering to RESO standards, MLS software can ensure compatibility, interoperability, and consistency in data exchange with other systems and platforms within the real estate ecosystem.

We recommend you to start your MVP development with this standard in mind.

Maintenance of your MLS software solution

After your app MVP is live, you still need to work on it. The maintenance stage is the longest, as it will last for as long as your MLS exists, with the amount of work varying depending on your priorities. For example, you may decide to build new features based on users’ ideas. But even if you don’t plan to extend your service’s functionality, there’s work to do:

• Fix bugs
  It’s impossible to build completely bug-free software. And even if we strive for 100% test coverage, minor issues may still occur. You have to fix them as soon as you notice them, as they may impact the user experience.
• Monitor for and install updates
  When developing a custom MLS solution, you use multiple tools, libraries, and plugins. The developers of these tools release updates to improve performance and maintain a high level of security. Don’t neglect updates, as doing so may put sensitive user data at risk.
• Check the web app’s performance
  Schedule a performance check for your MLS app to spot slowdowns in a timely manner. This way, you will be able to react quickly and eliminate issues no matter how severe.
• Back up your platform
  Schedule system backups to protect your data and the app’s functionality. This way, you will be able to restore the system in case of any issues.

A custom MLS is a powerful tool, and like any other tool, it needs regular maintenance to perform at its best.

The three stages of custom MLS software development require much attention. We recommend you share responsibility for them with a software development outsourcing partner.

Cost of MLS software development services

You can get a more or less reliable time and cost estimate for MLS platform development after the discovery phase, as this is when the scope of work is formed.

However, we can provide you with approximate figures for typical real estate MLS software development. Each stage will have a different duration and, therefore, cost:

• Discovery phase
  The cost of the discovery phase depends on the deliverables you want to receive. You can start with a small discovery package for $12,000 and get ready for MVP app development in 3–5 weeks. More thorough research during the discovery phase may cost you $25,000, with the phase lasting 8–10 weeks. You can compare different discovery packages and choose the one that suits your business case and budget.
• MVP app development
  The next step is building a minimum viable product for your MLS. If the discovery phase is done right, the MVP application may be ready for release in 3+ months. The cost of a fully custom multiple listing service starts at $100,000.
• MLS app maintenance
  The maintenance stage doesn’t have strict deadlines and a defined scope of work, so it’s impossible to estimate it properly. The good thing is that you will only have to pay your vendor an hourly rate.

We would like to emphasize that the costs mentioned above are approximate and may vary from app to app. You can read our article on project estimation techniques to get an idea of where all the numbers come from. If you want a more accurate estimate, contact us directly and we will calculate the development time and cost for your project.

In conclusion

When getting ready for MLS software development, you have to pay attention to several factors:

• Your competition
  Real estate MLS software development makes no sense in a region where multiple similar services already operate. In this case, you either have to fight in the red ocean or present a truly unique solution that will convince users of established platforms to turn their heads towards your product. However, if there are no MLS mobile apps in your region, you should start building one. This is a proven business model you can adopt.
• Local laws and regulations
  There are many documents that regulate real estate multiple listing service (MLS) operations. You can’t be aware of all of them, so you should contact a legal consultant. Identifying and avoiding legal risks is always cheaper and more effective than facing the consequences of violations.
• Technical team
  A multiple listing service for real estate has its specifics we have covered earlier. When building such an app, you would prefer to cooperate with software developers who have experience in the industry and with the type of software you are about to build. Experienced developers may charge higher hourly rates for MLS software development services compared to teams without experience in real estate, but this spending will convert into significant savings in the long run.

Contact us to discuss the details of developing your MLS app and get an approximate time and cost estimate for your project.