Boston condo brokers and the forthcoming 0% commission
Boston condo brokers and the forthcoming 0% commission
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Okay, let me explain the above headline. Currently, every listing agent is required to offer some sort of buyer-agent compensation on MLS.
The vast majority of our Boston condo for sale listing agents are still obtaining 5% commissions, and offering 2.5% to the buyer-agent.
Next, the seller’s Boston condo agent will market the property which includes the practices of the:
Three-P marketing plan:
Put on their website,
Put it on the MLS,
and Pray.
What will happen if NAR loses the lawsuit?
The decades-old way of selling Boston condos could change dramatically if plaintiffs in two class-action lawsuits prevail, potentially putting multiple listing services out of business and erasing billions of dollars in future broker commissions.
There are hundreds of multiple listing services in America. So far, only a few have removed the requirement of offering a buyer-agent commission.
If NAR loses the lawsuits big changes will happen, and soon every MLS will permit 0% commissions to be offered to the buyer-agents (hoping buyers will pay their own agent).
Discount Boston real estate companies that have little or no respect for the industry will keep offering Boston condo buyer agent lower and lower commissions. Eventually, their rate will get down to zero or close.
Will Boston condo sellers figure it out this will hurt them?
Boston condo sellers tend to focus on the total commission. They don’t do enough transactions to know that most Boston condo sales are co-broke, this ruling will have a major impact on Boston condo seller sales. When the Boston condo for sale market conditions are soggy, like now, it is better to pay buyer-agents more commission, not less.
In the lawsuits, they will discuss agents steering their buyers to homes that pay higher commissions. It’s why the search portals publish the commission rates now so buyers can track whether their agent shows any bias based on the commission rate being offered.
In my 20 plus years in the industry, I’ve never seen a broker steer a buyer away from one listing to another over a commission.
However:
Eventually, the DOJ will probably step in and insist that ALL sellers pay 0% commission to the buyer-agents to insure there is no chance of steering.
At the same time, the listing agents will be encouraging buyers to avoid paying a buyer-agent commission altogether by coming directly to the listing agent instead.
My thoughts on how this going to play out
What I think will happen, listing agents will just offer Boston condo buyer agents commissions under the table especially in a softer market or when the property has been on the market for more than 30 days. Because they will need to sell before they lose the listing entirely.
Boom!
Mark my words – this is going to be an earthquake for Boston condo brokers and agents including Boston rental agents if the NAR loses this lawsuit.
Boston condos for sale and the bottom line
I’m glad I’m retiring in a few years.
More Boston condo information on NAR lawsuit
More information on Boston condo buyers agent commission – NAR defending real estate commissions
More information on the Boston condo buyers agent commission – This could be the end of Boston condo commissions
