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Boston Real Estate commission

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Boston Real Estate commission

All eyes have been on a landmark verdict on residential broker commissions handed down in October, but the drama is just picking up in another key case.

The Department of Justice signaled opposition to a proposed settlement in Nosalek, a commissions case unfolding in New England, Inman reported. This is the second attempt at a settlement between the home seller plaintiffs and MLSPin (Property Information Network), a multiple listing service operating in six New England states.

The 2020 lawsuit seeks class-action status and alleges that commission sharing between listing and buyers’ brokers inflates seller costs and violates antitrust law.
The case resembles Sitzer/Burnett v. the National Association of Realtors and other prominent antitrust cases regarding the commissions rules required for access to multiple listing services. Nosalek is one of a few cases that doesn’t name NAR as a defendant and is instead taking aim at local industry authorities.
Under the original settlement proposal, MLS PIN agreed to overhaul its commission structure, pay $3 million and cooperate against other defendants in the lawsuit, including Anywhere, RE/MAX, Keller Williams and Home Services of America.
The Department of Justice filed an opposition to the settlement, claiming it still established a protocol that would regulate buyer-broker commissions and didn’t go far enough to change procedures. Among the changes proposed was eliminating the requirement that home sellers offer compensation to buyers’ brokers.

Boston Real Estate commission

The NAR is presently in a lawsuit.

What’s at stake?

While the settlements give us a peak into what may be part of the outcome of the trial, such as monetary relief, removing the mandate that company-owned brokerages, franchisees, and affiliated agents belong to NAR, follow NAR’s Code of Ethics or the MLS Handbook, and mandatory disclosure of the fact that commissions are negotiable, the true potential impact and outcome is unknown.

What’s at stake may be much bigger than that. According to an investor report by Keefe, Bruyette & Woods, they expect “litigation to reshape the residential brokerage industry’s commission structure and the broader housing market should a court-ordered injunction unbundle commissions, eliminating the long-standing practice of listing agents and sellers setting and paying buyer’s agent commissions.”

In addition, the analysts at KBW believe that “the annual commission pool could decline by upwards of 30% over time as these changes bring additional transparency to consumers around commission rates.”

The true result remains to be seen and a verdict will likely be appealed. However, many brokers aren’t waiting for that to happen before preparing agents, implementing buyer-broker agreements, and training agents on transparency in how commissions are paid and negotiable.


Updated: Boston condo for sale website 2023

Boston Beacon Hill Sales Office Location


Real estate commissions have risen has been in the news lately.  According to a RealTrends article published April 2023:

“Over the past three years, the average commission rate has been creeping up from an all-time low of 4.94% in 2020 to 5.32% in 2022, which is the highest it’s been since 2013.”

Home prices have also gone up quite a bit since 2013. I would argue that agents are getting paid more without raising the percentage charged. In other words, a 5% commission on a house sold in 2013 was less than a 5% commission on a house sold in 2022.

I would think commissions would go down due to the fact that there is less work for more agents this year.  On the other hand if agents have less business they may need to charge more in order to make enough money to stay in business.

Often clients tell me that there is a “going rate” and they “know” what that rate is. They almost always quote a rate that is higher than 5.32%. Those homeowners probably end up paying more.

It is important to understand that commissions are always negotiable. When agents won’t negotiate it might be because they lack negotiation skills and that might mean that they won’t know how to negotiate with buyers or buyers agents when an offer comes in.

Heck some of them just say “highest and best” offer rather than negotiating at all but that is the subject for another time.

Agents who are new to real estate tend to charge about the same amount as experienced agents charge. I am here to tell you that experience matters. In fact, it is all that matters.

If you are looking to sell a house and to use the services of a real estate agent choose one with experience and don’t be afraid to negotiate a commission and fees that you are comfortable with.

Average Real Estate Commission in Massachusetts | Updated for 2023

Source: Boston Real Estate Updated 2023

Boston Real Estate commission

Boston real estate agent commission

The ongoing commission battle has a recent report calling for some major changes in how commission rates are determined, but is that the right choice?

How much commission agents earn for selling a home has been a hot topic for some time now. Some say it’s not right that homebuyers end up paying toward these commissions as part of the purchase price and that there’s no room to negotiate since the agent’s commission is generally set by the sellers. 

Calling real estate commission rates just “one step below fixed,” a Consumer Federation of America report recently called for some changes. Among them is the uncoupling of both seller and buyer agent compensation, something the report says will help spur price competition, reduce the commissions consumers are paying and align agent compensation to a much greater extent with agent service. 

The report recommends federal agencies and courts prohibit the tying of listing agent and buyer agent commissions, so buyers can negotiate buyer agent compensation rather than having it set and paid for by listing agents and sellers.  

But the National Association of Realtors says the uncoupling of both agent buyer and seller compensation could be detrimental to first-time, low- and middle-income buyers. NAR officials told Chicago Agent that many consumers may not be in a position to pay the extra funds that would result from uncoupling broker commissions. 

“Uncoupling broker compensation would require buyers to come out of pocket to pay real estate broker commissions, and that could freeze out many from the homebuying process,” Mantill Williams, NAR’s VP of communications, told Chicago Agent. “Or could lead to those going into the homebuying market without representation.”   

This isn’t the first time the issue of commissions has raised its head. The Justice Department was involved, investigating commissions, and President Biden in July signed an executive order asking the Federal Trade Commission to adopt new rules to address unfair or exclusionary practices. 

“The American real estate system is set up to create a win-win for both buyers and sellers,” Williams said. “The buyer benefits because they do not come out of pocket for real estate services, and the seller benefits because the proceeds from the sale — which comes from the buyer — pays for the seller’s representation.”

Williams added that the current system creates more competition because it allows all types of buyers (first-time, low- and middle-income buyers) the opportunity to participate in the homebuying process. “And in addition, that would result in the largest pool of buyers for the sellers,” he said. 

Last November, the National Association of Realtors, took steps to ensure transparency for buyers by approving several MLS recommendations including listing the broker’s compensation on each active listing on consumer-facing websites and in MLS data feeds. 

NAR President Leslie Rouda Smith told Chicago Agent the NAR believes the guidance regarding cooperative compensation that appears in the organization’s Handbook on Multiple Listing Policy serves the best interests of both consumers and brokers. She says it gives consumers and listing brokers the freedom to choose how much commission to offer the buyer broker, including as little as one penny. 

“This broker cooperation keeps local marketplaces from fracturing, which would be paralyzing to consumers and small businesses,” she said. “It also encourages buyer and seller brokers to share their information in their local, independent broker data hub, enabling maximum options for consumers and allowing even the smallest brokerages to compete with the largest brokerages.”

Because of this policy, Smith said the result is the largest, most accessible and most accurate source of housing information available to consumers. “Without it, the lack of complete, transparent and accessible data for all would mean smaller brokerages have to piecemeal information and couldn’t offer as many options to sellers and buyers,” she said.

Boston condos for sale
Boston condos for sale in 2022

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Updated: Boston Real Estate Blog 2022

Average Massachusetts Real Estate Agent Commission Rate

Many local real estate markets throughout the state of Massachusetts are experiencing strong seller markets. Of course, not every city in the state is the same. No matter what the local market is like, it takes the knowledge and expertise of a top performing real estate agent to successfully sell a home for top dollar. Condo sellers in Massachusetts should choose to work with an experienced agent to sell their home fast and for a great price. If you’re curious about commission rates, we have some interesting information.

When it comes to commission rates, 5% is usually the average, but recently I’ve been seeing a wide range of rates, from 3% to 6%, with 5% being the most popular. Commission rates are negotiable, but they are not the only aspect to focus on. So you should interview multiple agents, and make sure you ask detailed questions. The New York Times quoted UpNest (formerly known as LessThan6Percent) CEO Simon Ru regarding how letting agents compete for your business can help drive down commission costs, helping homeowners save thousands when selling their home.

Boston, MA$630,841$6,308
Acton, MA$456,415$6,846
Grafton, MA$352,574$3,526
Marlborough, MA$397,083$3,971
Tewksbury, MA$434,915$4,349
Natick, MA$592,033$5,920
Burlington, MA$561,229$11,225
Milton, MA$788,692$7,887
Quincy, MA$415,975$4,160
Lowell, MA$254,179$2,542

Knowing an what your home is worth is a good first step towards deciding if selling is the right decision for you. Being equipped with the right market knowledge will help you hire the best real estate agent and be ready to counter offer buyer offers when your home is listed for sale.

For more information please call me at 617-595-3712.

Commission - Definition, How It Works, Advantages and Disadvantages

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