Change has Arrived for Boston Area's Real Estate Market
How Will 'Practice Changes' Affect Home Buyers? | Most Expensive Mass. Home | News Nuggets
MLS PIN Reveals Buyer Agent Compensation Options for Listings
The changes coming to the real estate industry are getting real in Greater Boston.
MLS Property Information Network, Inc. (MLS PIN) recently had big reveals for the Boston area real estate community. First, it said it would not join the National Association of Realtors (NAR) settlement and practice changes, and second, it offered a "preview" of its "compensation updates."
On June 20, 2024, MLS PIN emailed its subscribers to inform them it would not join the NAR settlement and immediately allow listing brokers and agents to submit listings to its platform without offering cooperating compensation to the buyer broker.
MLS PIN wrote, "Effective immediately, we can accept listings of property for sale without offers of cooperating compensation. If your seller instructs you not to offer compensation, enter a value of 0 into the compensation fields in Pinergy."
The MLS PIN email also read, "As you are probably aware, MLS PIN and the plaintiffs in the Nosalek class-action lawsuit have reached a proposed settlement. If approved by the court, the proposed settlement will result in several changes to MLS PIN's Rules and Regulations regarding compensation offers to cooperating brokers. As you are also probably aware, the National Association of REALTORS® (NAR) has reached its own proposed settlement with private-party plaintiffs in two separate lawsuits. Like our settlement, the proposed NAR settlement has not yet received final court approval.
"After careful review, MLS PIN has chosen not to join the proposed NAR settlement," MLS PIN revealed. "Instead, MLS PIN has decided to move forward with its own proposed settlement with the Nosalek plaintiffs. Even though MLS PIN's rules changes presented as part of the settlement in Boston are still awaiting final court approval, MLS PIN has decided to start implementing those rules changes now." MLS PIN is one of only a few MLSs standing up to veiled threats of further litigation from the U.S. Department of Justice.
According to Inman, in a May federal court hearing, an attorney for the Department of Justice's Antitrust Division said that the DOJ didn't want to see offers of compensation made "anywhere."
On July 15, 2024, MLS PIN emailed subscribers a preview of its "compensation updates." In late July, compensation fields will be optional and not be required. Subscribers will be able to select several options when listing properties for sale.
• Leave all compensation fields blank;
• Specify buyer's broker compensation as done in the past;
• Specify "Compensation Not Offered;" and
• Specify "Compensation Offered but Not in MLS."
Listing agents working for brokerages that have joined the NAR settlement and adopted the practice changes likely will not offer compensation on the MLS.
MLS PIN said more changes are coming early in the fourth quarter.
• Offers of compensation, if any, will be made by the seller. Listing brokers and cooperating brokers will no longer split commissions.
• Listing agreements must disclose that the seller is neither required to offer compensation nor required to accede to any cooperating broker's request for compensation. The listing broker must disclose this to the seller before the seller signs the listing agreement.
• If a seller elects to offer compensation, the listing agreement must also say that the cooperating broker will be an intended third-party beneficiary of the agreement with the right to enforce the same.
• Before posting a listing, the listing broker must certify, in a checkbox designated for this purpose in Pinergy, that the listing broker has notified the seller of the seller's rights not to offer compensation and not to accede to a cooperating broker's request for compensation.
In another email on July 22, 2024, MLS PIN announced that," Beginning July 25, brokers can specify in Pinergy how their seller-clients wish to handle compensation. Compensation fields will be optional and will not be required in Pinergy (see screenshot above)."
How ‘Will Practice’ Changes Affect Home Buyers?
With all the talk focused on the possibility of lower real estate commissions and absurd suggestions that the NAR settlement practice changes will lower the price of homes, there's been little conversation about the potential negative impacts on first-time home buyers and low- and moderate-income consumers.
Home buyers have a hard enough time saving for a down payment and closing costs. Paying out of pocket for their buyer agent may be an insurmountable hurdle for prospective home buyers.
Without a loyal buyer agent to explain options, some home buyers will skip retaining representation and make costly mistakes. More home buyers will subject themselves to the anti-consumer practice of dual agency, leading to unwittingly paying more for homes.
While acknowledging more transparency helps consumers and is positive for the real estate industry, the National Association of Exclusive Buyer Agents was out front and vocal in the fall of 2023 about the unintended consequences of class-action lawsuits.
Stay tuned; those advocating for these changes will blame the real estate profession in the future for the unacceptable number of first-time, low-income, and protected-class home buyers who purchase without a buyer agent.
Duxbury Home Hits Market For $40 Million
According to BostonAgent magazine, you can buy the 25-acre, 14,000-square-foot home of a former Citigroup CEO in Duxbury, Massachusetts, for $40 million. With 1,060 feet of water frontage, the property has a private pier and sandy beach. If the six bedrooms and seven full bathrooms (two half baths, too) aren't enough in the main home built in 1995, there are multiple homes for family and guests.
"The property's seven outbuildings include the dock house for entertaining, the three-bedroom beach house guest retreat, the barn with caretaker's apartment, a three-bay garage, and a gourmet canning kitchen," Boston Agent reported. Did we mention the golf simulator?
More information is available via a comprehensive property brochure.
News Nuggets
Inventory Rising in Greater Boston: In the 64 cities and towns that comprise the Greater Boston Association of Realtors (GBAR) jurisdiction, single-family home inventory soared 28 percent in June year over year. Home buyers had 17 percent more condominiums to choose from.
While inventory is rising, the monthly supply is still relatively low. About five or six months of inventory is considered a balanced market between home buyers and sellers. Greater Boston had 1.3 months of single-family inventory in June, up from 0.9 in June 2023. There were 2.2 months of supply of condominiums compared to 1.6 months in June 2023.
The increasing inventory has yet to put a lid on price growth. The median sales price for a single-family home rose 8 percent in June to $961,250 from $892,188 in June 2023. The median condo price was flat, rising less than 1 percent to $750,000.
Statewide inventory rose but less substantially. Why? The slightly less expensive communities outside the GBAR area likely had more competition for relatively more affordable homes.
New Hampshire Home Prices Rise: If you're thinking of moving to the Granite State to escape rising home prices, think again. The median price of a single-family home statewide reached $538,000 in June, up 8 percent from June 2023.
Single-family home sales fell nearly 14 percent to 1,206. Inventory jumped 30 percent year over year to 2,152 available houses in June.
New Hampshire condominium sales plunged almost 17 percent in June. The median condo price rose 3 percent to $412,450, and the number of units available soared more than 26 percent to 658.
Additional inventory and fewer sales provide more opportunities for home buyers, but further declines in interest rates could increase competition.
Rhode Island Real Estate Inventory Increases: Despite a 32 percent increase in single-family home listings and a 19 percent drop in sales, the median price rose nearly 12 percent in June to $494,000. The median house price was $442,750 in June 2023 and $430,000 in June 2022.
Ocean State condominium prices moved in the opposite direction in June, falling 6 percent to $352,500. Sales dropped 13 percent to 161, and inventory jumped 29 percent year over year to 333 available units. There were 295 available units in May and 293 in April.