Will the NAR lawsuit change the way we buy Boston condos for sale?
Will the NAR lawsuit change the way we buy Boston condos for sale?
UPDATE Jury awards $1.8B in realty case that could shake up brokerage commissions.
It’s a new day for real estate agents in the wake of Tuesday’s bombshell ruling, a disruption in the eyes of Redfin chief executive officer Glenn Kelman.
One day after a jury found the National Association of Realtors and a pair of residential brokerages guilty of colluding over commissions, the chief executive teed up how the suit, and other legal issues down the line, could change the industry.
“I think there’s a world coming where cooperation may really crumble,” Kelman said, according to Inman. “It’ll affect whether we have an open marketplace. It’ll affect whether there’s two agents instead of one.”
Updated: Boston condo for sale website 2023
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My thoughts on the NAR lawsuit on the future of the Boston condo for sale market
The National Association of Realtors clearly underestimated the chances of losing this case – and the one to come in Boston. They must have thought that touting their 100-year old Code of Ethics was all that was needed to impress the judge, and instead they found out that it doesn’t.
It is a common belief that Boston condo for sale realtors are overpaid.
Not just Boston condo for sale brokers, but all real estate brokers nationwide.
Take for example Joe Kernen, a guy who works 15 hours per week and gets paid between $3,000,000 and $22,000,000 per year (depending on the website), he’s regularly on CNBC, like today, with his declaration that 6% commissions are too much, and 1% would be more like it.
This misinformation is what needs to be addressed.
The final real estate judgement
The judge and/or the Department of Justice will rule on future sellers paying the buyer-agent commission. If sellers are allowed to pay a commission to the buyer-agents, then their listing agent can counsel them properly on what rate to offer, and the status quo will endure.
But it will be a game-changer if the sellers are no longer able to offer ANY commission to buyer-agents.
With the former, the listing agents will have to discuss the pros and cons in detail to the sellers, and agree to a comfortable amount.
With the latter, the buyer-agents will have to create a presentation to convince their buyers to pay them directly. This will be a new practice, and they won’t be very good at it.
The real estate sharks are out
By the end of the day yesterday, I had already been notified of three different seminars being offered about using the Buyer-Broker Agreement. It sounds simple enough to the Harvard business types – just get your buyers to pay you the commission!
Agents aren’t jumping at the chance to work with buyers in the current market.
In this Boston condo for sale market it could take months for buyers to find the right home at the right price, and sometimes the abuse from the listing agents is mean and nasty along the way.
If The National Association of Realtors lose
The 2024 Selling Season will begin with buyer-agents pleading with their prospects to sign a contract to pay them a commission. It will only take a few months for this practice to get exposed. The buyers will be reluctant to sign, and those that do sign a contract will find out that it won’t change the outcome. It is still going to take months to find the right Boston condo for sale, at the right price.
There will still be the typical aggravations and shenanigans with the listing agents – most of whom will insist on buyers providing a bank statement and lender pre-approval letter just to see a Boston condo for sale.
Because the local inventory is will be ultra-low, the desperation will cause buyers to blame their agent. It is a fact of life with both sellers and buyers – if they don’t get the outcome they want, it’s too easy to blame their agent.
The final outcome that I see if NAR loses
Stage 1 – The industry will gravitate to the lowest common denominator – single agency, where buyers go direct to the listing agent, and the benefits of buyer-agency are slowly forgotten. Next year will be the phase-out stage.
Stage 2 – The next step will be towards auctions becoming the way to sell Massachusetts homes and Boston condos for sale.
I hope for all the Massachusetts realtors out there that I’m wrong.
