If you’ve been keeping an eye on recent real estate developments, you’ve likely heard about the National Association of Realtors (NAR) settlement and its potential impact. With these changes going into effect just two days ago, it’s crucial to understand what they mean for agents, buyers, and sellers in Greater Boston.

What’s the NAR Settlement All About?
In essence, the NAR Settlement focuses on how commissions are negotiated and disclosed in real estate transactions. The promoted goal was to enhance transparency and competition, particularly regarding how commissions are shared between agents - and of course to achieve a substantial payday for the plaintiffs' attorneys.

Impact on Real Estate Agents
For real estate agents, there are two main changes to note:

1. Buyer Agency Agreements: Agents must now have a formal agreement with buyers outlining the services provided and the associated fees.
2. No Advertising of Cooperating Compensation: Seller’s agents can no longer advertise cooperating compensation (or buyer's agent incentives) in the MLS.

At Board & Park, we’ve long required buyer agency agreements, so we’re already ahead of the curve. Transparency and clear communication have always been our priorities, and we’re committed to continuing this approach to ensure our clients remain well-informed.

What About Buyers?
As a buyer, you’ll now be more aware of what to expect in terms of agent compensation before you even tour a property. You’ll need to sign a buyer's agency agreement that details the services your agent will provide and their fees. Despite media headlines suggesting otherwise, offers can still include a provision for the seller to cover the buyer’s agent’s fee. This fee will typically be part of the purchase price, as it always has been, and negotiated into the terms of an offer.

Sellers, Here’s What You Need to Know
Sellers might hear that they no longer need to pay buyer agents, but that’s a misunderstanding. Sellers have always had the option to negotiate the terms of agent compensation. The real change is that you won’t see this compensation advertised in the MLS anymore. Instead, you should expect to discuss this as part of the offer process. We advise sellers to evaluate any offer based on the net price and be prepared to cover buyer’s agent compensation if it’s part of the negotiation.

A Note About Our Local MLS
You might be wondering about MLSPIN, our local Multiple Listing Service. Unlike some other MLSs, MLSPIN isn’t bound by the same terms as the NAR settlement because it’s resolving a different case and is not a Realtor-owned MLS. However, we as Realtors, are still required to follow new rules, such as not advertising cooperating compensation in MLS and continuing to use buyer agency agreements.
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How We’re Adapting
All of the agents and brokers at Board & Park are prepared and committed to embracing these changes while maintaining our high standards of service and transparency. If you have any questions or need more details, don’t hesitate to reach out. We’re here to help you navigate these changes and ensure you have the best possible experience in the real estate market.

The recent news surrounding the National Association of REALTORS® (NAR) settlement agreement has certainly stirred up a lot of chatter within our real estate circles and among the public. With so much misinformation floating around, it's important set the record straight and shed some light on what this settlement really means for our industry, clients, and colleagues.

First, let's clear up one of the biggest misconceptions making headlines: NAR has never been in the business of dictating, or even suggesting commission rates. Contrary to what many reports suggest, commissions have always been up for negotiation between brokers and their clients. This settlement doesn't change that fundamental aspect of how real estate transactions work.

It's worth noting the irony of the situation when it comes to the attorneys who spearheaded the litigation against NAR. While they accused NAR of price-fixing, their own professional association has specific fee recommendations prominently displayed on their website. This glaring double standard highlights the importance of scrutinizing accusations and ensuring consistency in standards across all industries.

Now, about the settlement itself—it's currently awaiting judicial approval and involves a sizable payout by NAR over four years, as well as several policy changes. NAR's goal in settling was to put an end to the litigation surrounding broker commissions and pave a smoother path forward for the industry. While it does seem that there would have been a strong case for an appeal, the settlement puts an end to the class action suits brought on by opportunistic attorneys, and will allow the industry to focus on what really matters—serving our clients.

One key takeaway from the settlement is the preservation of consumer choice. Cooperative compensation—a system where sellers' brokers offer a slice of their fee to the buyers' broker who brings in an accepted offer—remains intact. However under the proposed changes, these offers of compensation would now have to be communicated off the MLS.

Here in Greater Boston, our local MLS, MLSPIN, isn't under the ownership of NAR. So, it remains to be seen how MLSPIN will respond to the new regulations outlined in the settlement but assuming they adopt the changes, it will add a bit of complexity and unfortunately less transparency for buyers and their agents. As a brokerage we'll remain committed to ensuring clear and consistent communication for all of our clients throughout the process.

The other policy change is that buyers' agents will be required to have a signed buyer agency agreement in place with a client before showing a property. This is one positive resulting from the proposed settlement, as these agreements will ensure that all buyers working with a Realtor will have clarity on what to expect from their agent and how that agent will be compensated.

It's important to note that not all brokerages and agents work as Realtors, and would therefore not be bound by any of the proposed changes. NAR is a professional organization and the new regulations would apply to their own rules for members, which are distinct from state licensing laws. This adds another layer of confusion for the general public, as policies won't be consistent across the industry. Our role as brokers and agents will be to help clients understand their options and which regulations we're required to follow.

With the exception of the requirement of buyer agency agreements, a large part of the proposed changes actually takes us back to old ways of doing business that were in place before current consumer protection policies came into play. Change is nothing new in this industry, and as a local, independent brokerage, we're dedicated to supporting our clients and colleagues through the changes. We'll always be here to provide reliable guidance and assistance as we navigate this evolving landscape together.

There has been a LOT of news in the real estate industry lately so this month's blog post is a roundup of some of the most important stories to watch, whether you own property in Massachusetts, work as an agent in the Boston area or are interested in what's going on in the overall economy as it relates to residential real estate.

• First up is the possibility of a title insurance waiver. The Biden administration is seeking ways to reduce borrowing costs and this proposal would eliminate the requirement of title insurance for government backed mortgages for refinances. As mortgage rates come down, this could save homeowners thousands of dollars if and when they choose to refinance into a lower rate loan. Learn more: Proposed Title Insurance Waiver 
• Next is the latest development in the class action suits that have been garnering national attention. The local MLS serving Greater Boston and Massachusetts recently reached a settlement agreement aiming to alter the requirement for sellers' agents to offer a minimum compensation to buyers' agents from $.01 to zero. However, the Department of Justice has issued a statement of interest suggesting a significant shift. They propose that sellers' agents should no longer have the option to incentivize buyers' agents by offering any compensation whatsoever. Interestingly, decades-old consumer protection policies were implemented to ensure that buyers' agents worked exclusively for the buyer's interests, rather than the seller's. Now, the recommendation is to return to policies that discourage the ability of buyers' agents to advocate for their clients. Read more here:  MLSPIN Commissions Case
• For some positive news for homebuyers, there are some and changed first time buyer programs available providing funds for down payments, closing costs and more for condos, single family homes and multifamilies up to 4 units. Here are the details: Mass Housing Down Payment Assistance
• Finally, the Federal Reserve's Beige Book weighs in on the housing market here in Boston with some optimism on increased numbers of homes for sale and lower mortgage rates but still highlights that inventory remains too low and home prices are continuing to rise. For details head to page 7 here: Federal Reserve Beige Book

In a strong sellers' market it can be tempting for homeowners and investors (and, unfortunately, a few agents) to skip going the extra mile in preparing a home for sale. After all, the home will likely get offers with or without things like staging, professional photos and a strategic marketing plan. The difference, though is in how strong those offers are and how quickly they come in. That difference can equate to tens of thousands of dollars and more.

Buyers tend to develop feelings for a property, either positive or negative, very quickly after seeing the first photos or stepping through the front door. The way a home is styled and furnished has a huge impact on this first reaction, and ultimately the offers that buyers will make.

With an occupied or already furnished home, a professional home stager or knowledgeable seller's agent can provide the owner with room-by-room suggestions on exactly what to clear out, rearrange, and specific items to add. Cleaning and decluttering alone makes a major difference but it's almost always worth going a step further and making some minimal investments in a few key up-to-date accent items in the right places or repainting a certain room in a more neutral color.

Vacant properties can see an even more substantial impact on the bottom line when they're at least partially staged. We recommend staging at least a living room, dining room and primary bedroom and adding a few accessories or accent pieces to the kitchen and bathrooms. Good agents will have recommendations for home stagers who can supply and install everything needed and remove it in time for closing. Some investors choose to purchase inexpensive furniture and resell it just before closing or offer it to the buyers of the home. Others, especially those who build or renovate several properties per year, find that it's worth keeping their own inventory of staging supplies. This of course does require some design expertise and knowledge of current trends. 

The investment in staging (usually between $1,000-$7,000) can really pay off. According to research by the IAHSP, staged properties sell between 5-11 times faster than others. Not only is a faster sale far less stressful for sellers than spending months on the market, early offers tend to be much higher in price than those that come in after a property has been listed for a while. An NAR study found that staging equated to a 1-5% increase in sales price; definitely a solid return on investment.

How Not to End Up Homeless After Selling a Home in a Sellers' Market

​The competition for available homes on the market in the Greater Boston area (and across the country) has never been higher. What this means for lots of would-be sellers is that they're faced with the very real possibility of selling their current home without having found a new one. This is not a position anyone wants to be in, and luckily there are ways around it.

Because demand from homebuyers is so high, sellers are in an excellent position to dictate the terms they want. What many don't realize is that this goes beyond simply suggesting an offer that comes in at a great price. A good seller's agent will guide potential buyers to draft an offer that's both strong in price and terms that allow the sellers some time and flexibility in figuring out their next steps. 

One strategy is to sell subject to sellers finding suitable housing. In a seller's market, it is MUCH better to ask buyers for this accommodation than vice versa. Making an offer on a new home subject to a home sale contingency is very likely to go nowhere in this type of market. However buyers, especially those who are currently renting or have flexibility in their closing timeline, are often very willing to move forward with a purchase knowing that it may take some time before closing for the sellers to get an offer accepted on a new home.

A second option that can be more appealing to buyers since it allows them to close and lock in an interest rate sooner is to request that they lease the house back to the sellers for a period of time after closing. While this does come with an eventual end date it can often give sellers 60-90 days between the offer and closing plus the agreed upon lease period which is often up to 60 days after closing. Having this 4-5 month cushion plus the advantage of having the proceeds from the sale in hand before closing on the new house can make a huge difference in having both the time and budget to close on the new home.

With careful planning and strategies like these it is entirely possible for homeowners to take advantage of high sale prices while minimizing the risk of not finding a new home. As with any major transaction, it is always important to discuss pros and cons with your agent before moving forward.

With extremely low inventory levels in early 2022 (just take a look in changes in inventory for both condos and single family homes in Massachusetts) and slight increases in interest rates doing little to dampen record levels of buyer demand, getting an offer accepted in the Greater Boston market is no easy feat.

Over the last year our agents have seen multiple offer situations where the winning bid has included terms like free lease-back periods for the seller, all expense paid vacations, uncapped escalation clauses and of course waiving all contingencies. The good news is that there are ways to get an offer accepted that don't involve selling your firstborn child. Here are 7 of our favorite strategies, but it's always important to discuss the details of any terms you're considering with your agent:

• Revisit homes that have been on the market for a couple of weeks or more. Some of these were priced too high and buyers who may have otherwise been interested passed them up, expecting they'd sell even higher. Others may have been overlooked for things like poor - or no - photos or lack of staging but due to no issues with the house itself.
• Ask your buyer's agent to look for homes available off-market. Some sellers prefer to sell privately and this often results in fewer buyers making offers. 
• Always make sure your agent finds out what, besides price, is important to the sellers. It may be that something like a specific closing date makes a significant difference.
• Consider decreasing the amount of your mortgage contingency or offering to cover an appraisal gap up to a certain amount. If the house does appraise at purchase price you can still put less down depending on what loan product you're approved for, but if it doesn't the sellers will be assured that you'll still be able to close.
• If you have a back-up plan such as cash or hard money as an option, there is decreased risk in waiving a financing contingency. This can sometimes allow the offer to beat a higher financed offer, plus you still have the option of getting a mortgage.
• If you're planning on a home inspection (which is ideal, especially given the age of our housing stock in Massachusetts), include a repair threshold; this still provides the protection of having a home inspection but gives sellers a level of certainty that you won't be negotiating minor repair items.
• Use an escalation clause, where you agree to increase your offer by a certain dollar amount over the next highest offer, up to what you're comfortable with as a maximum purchase price. Since the seller has to provide proof of the next highest offer, this ensures you aren't bidding against yourself or paying more than necessary to win the property.