What happened to the Boston Condo Commission Armageddon?
Boston Condos for Sale and Apartments for Rent
What happened to the Boston Condo Commission Armageddon?
When the National Association of Realtors agreed to implement rule changes around commissions last year, the response was apoplectic.
Studies suggested buyer agent commissions could be cut by as much as half. The Oppenheim Group’s Jason Oppenheim said it could amount to “armageddon.”
Commissions return to pre-settlement level in Q2
The average U.S. buyer’s agent commission has returned to the level it was at when the National Association of REALTORS® agreed to change its rules governing commissions in a March 2024 settlement, Redfin said.
The increase brought the average commission from 2.41% in the first quarter to 2.43% — the same as it was when the rule change was announced. The average commission fell to 2.36% when the change was implemented in September 2024 and has now risen for three quarters in a row since then, according to Redfin.
The rule change was part of a settlement in Burnett vs. NAR, which was brought by home sellers who argued the practice of having sellers pay commissions for both their real estate agents and buyer’s agents artificially inflated commissions. The NAR agreed to prohibit posting buyer commissions on the MLS, require signed buyer’s broker agreements before any showings and pay $418 million in damages.
Despite the initial drop in commissions, fears that the settlement would lead to a dramatic shakeup in agent compensation have not materialized. Buyer’s agents are now being paid at their pre-settlement level, thanks in part to the negotiating power buyers enjoy in many parts of the country, which had 500,000 more sellers than buyers in June — the greatest disparity since 2013, according to Redfin.
With a dearth of buyers in many markets, sellers are more willing to pay buyer’s agents higher commissions to close deals, the brokerage explained.
Commissions were up across all price levels, with agents in transactions of $500,000 or less seeing the highest commissions as a percentage of deal value. Buyer’s commissions in this bracket rose from 2.50% in the first quarter to 2.52% in the second quarter, while they rose from 2.31% to 2.34% for transactions between $500,000 and $999,999 and from an all-time low of 2.19% to 2.21% for sales of $1 million and up.
Courtesy of Redfin.
In the quarters following the announcement, buyer commissions ticked down to a nadir of 2.36 percent in the third quarter of last year before turning back around. Last quarter, buyer agent commissions were 2.41 percent.
But commissions haven’t recovered to the same degree across all price tiers.
For homes that sold for under $500,000, the average buyer’s commission was 2.52 percent, the highest at that price point since 2023 and seven basis points higher than last year. Homes that sold for over $1 million had an average buyer commission of 2.21 percent, down from 2.24 percent a year earlier.
The listings giant has documented in the quarters following NAR’s Aug. 17, 2024, deadline for the changes to take effect that buyer agent commissions remained nearly unchanged. But some agents have said that they still see a difference in buyer behavior, even if it’s not showing up in the commission data.
One would assume that in a less competitive market for buyers, a seller is going to be more motivated to offer a commission, and arguably even a higher commission, as a way to incentivize buyers.
Updated: Boston Real Estate Blog 2025
Boston Beacon Hill Condos for Sale
New Update 2025
Due to the new MLS rules we can now list your Beacon Hill condo for 2%. Our fees are lower than Redfin ! More info call 617-595-3712.
Updated: Boston Real Estate Blog 2025
Condo Broker 137 Charles St. Boston, MA 02114
Visit our office at 137 Charles Street Rear, Beacon Hill MA 02114
Beds
Baths
SqFt
The property listing data and information, or the Images, set forth herein were provided to MLS Property Information Network, Inc. from third-party sources, including sellers, lessors, landlords, and public records, and were compiled by MLS Property Information Network, Inc. The property listing data and information, and the Images, are for the personal, noncommercial use of consumers having a good faith interest in purchasing, leasing, or renting listed properties of the type displayed to them and may not be used for any purpose other than to identify prospective properties which such consumers may have a good faith interest in purchasing, leasing or renting. MLS Property Information Network, Inc. and its subscribers disclaim any and all representations and warranties as to the accuracy of the property listing data and information, or as to the accuracy of any of the Images, set forth herein.
Beacon Hill Condos for Sale
Ford Realty Beacon Hill – Condo for Sale Office
