You may have seen the news stories about the recent proposed settlement from the National Association of REALTORS® (NAR).

Unfortunately, there has been a lot of misinformation in the click-bait headlines.

The proposed lawsuit settlement included two changes to business practices:

1. Removal of the offer of Buyer Agent Compensation in NAR-owned MLSs. 
   
   Sellers may still offer buyer agent compensation, without it being published in MLS. I will encourage (but not require) my sellers to continue to offer buyer agent compensation for several reasons, however, I have reasonable concerns that the removal of advertised notice of compensation could be a step away from consumer transparency and have the opposite effect of what was intended.
    
2. Buyer Agents will also need to have signed agreements, just like how Listing Agents have to have Listing Agreements.

The changes will take place in mid-July of 2024, assuming this proposed settlement is approved,

WILL THIS LOWER HOUSING COSTS?

No. Home prices are determined by supply and demand. Nothing in this settlement addresses the lack of supply or the high levels of demand. It seems obvious that in a particularly high-demand/low-supply market like Boston, prices will still be increasing.

There is no seller that is going to subtract the price of a buyer-agent out of their asking price. In most negotiations, the buyer agent fee will not even be part of the conversation.

Right now, I generally charge a 5% fee (split with the buying agent) for my listing agency services. I generally give the seller a break and charge 4% for a transaction with no buyer agent. If this pans out the way it looks like, I will continue to charge 4% for a transaction of that nature. Not only does it require more time energy and skill to keep a transaction with unguided buyers on the rails (The listing agent cannot legally provide advice), but it opens both the seller and the listing agent to more liability.

Further, at this time, buyer agent compensation is baked into the purchase price, and is therefore financeable. There will need to be significant change in the mortgage industry for this to continue to be the case. I have concern that this change will only benefit cash and institutional buyers and harm the lower income and middle-income buyers, the groups that the DOJ purports to help. These are the buyers that particularly need the benefit of a fiduciary agent and can least afford to pay them.

WHAT IF I HAVE AN EXISTING CONTRACT?

Nothing is likely to change before the July target date. However, we are awaiting the final details of the settlement as approved by the court.

Our current understanding is that the only change to an existing contract is that no offer of buyer compensation from the list agent or seller can be published in the MLS and agents working with buyers will need to have written contracts to represent.

WHAT CONSUMER PROTECTIONS ARE IN BUYER REPRESENTATION?

A Buyer Agent has the responsibility of being an exclusive Fiduciary. Fiduciary duties are all the duties that a real estate agent or broker is legally beholden to when working with a client. These duties, which are in the client's best interest, are: obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care. See more about buyer agency fiduciary obligations.

DOES A BUYER IN THE MARKET NEED BUYER REPRESENTATION?

A buyer does not have to use a Buyer Agent. However, in a low inventory “seller's market”, it is difficult to compete against other buyers who are getting expert advice on offer market conditions, property condition, offer strategies, negotiation, due diligence, and transaction management. See more about buyer agency.

WHAT CAN THE LISTING AGENT NOT DO FOR THE BUYER?

• Offer strategies that have your interests in mind

• Recommend Home Inspectors, attorneys, and other vendors (Under Massachusetts law, only a Buyer’s Agent exclusively representing the Buyer can recommend a Home Inspector)

• Act as your exclusive Fiduciary

• Provide comprehensive Market Analysis interpretation for pricing

• Advocate for you

WHAT ARE THE RISKS WITH A BUYER NOT HAVING A REPRESENTATIVE?

• Not learning about off-market opportunities

• Not being informed and educated about the market or the properties.

• Not having a well-prepared, competitive offer in a multiple offer situation

• Not getting a house

• See more detail on buyer-representation

WILL BUYER AGENCY GO AWAY?

No. Buyer Agency is the way that buyers get expert guidance — from preparation and search, to offer strategy and negotiation, due diligence, transaction management and so much in between. A home represents an important investment — one that continues to be at the heart of financial wellness for most Americans.

My priority as well as Gibson Sotheby's International Realty’s is to focus our resources on those we serve. To my clients, thank you for the privilege of representing your interests and providing outstanding service as you navigate one of life’s most important and complex transactions. I will continue to communicate with you as we understand more about their settlement and the ongoing industry dynamics. Please don’t hesitate to reach out to me with questions.

Best,
Joe Wolvek

 

Thinking about buying a home? If so, you're probably wondering: should I buy now or wait? Nobody can make that decision for you, but here's some information that can help you decide.

What’s Next for Home Prices?

Each quarter, Fannie Mae and Pulsenomics publish the results of the Home Price Expectations Survey (HPES). It asks more than 100 experts—economists, real estate professionals, and investment and market strategists—what they think will happen with home prices.

In the latest survey, those experts say home prices are going to keep going up for the next five years (see graph below):

 

 

Here’s what all the green on this chart should tell you. They’re not expecting any price declines. Instead, they’re saying we’ll see a 3-4% rise each year.

And even though home prices aren’t expected to climb by as much in 2025 as they are 2024, keep in mind these increases can really add up over time. It works like this. If these experts are right and your home's value goes up by 3.78% this year, it's set to grow another 3.36% next year. And another 3.87% the year after that.

What Does This Mean for You?

Knowing that prices are forecasted to keep going up should make you feel good about buying a home. That’s because it means your home is an asset that’s projected to grow in value in the years ahead.

If you’re not convinced yet, maybe these numbers will get your attention. They show how a typical home’s value could change over the next few years using expert projections from the HPES. Check out the graph below:

 

 

In this example, imagine you bought a home for $400,000 at the start of this year. Based on these projections, you could end up gaining over $83,000 in household wealth over the next five years as your home grows in value.

Of course, you could also wait – but if you do, buying a home is just going to end up costing you more. The bottom line is if you're thinking it's time to get your own, and you're ready and able to do so, buying now might make sene. Your home is expected to keep getting more valuable as prices rise.

To get started looking for your next Boston area home or condo, please get in touch.

Joe

 

 

If you’re gearing up to sell your house this spring, one of the early conversations you’ll have with your agent is about how much access you want to give buyers. And you may not realize just how important it is to make your house easy to tour.

Spring is the peak homebuying season, so opening up your house to as many showings as possible can really help you capitalize on all the extra buyer activity we see at this time of year.

Since buyer competition ramps up in the spring, buyers are going to want to move fast to see your house once they find your listing. And, if they see it and fall in love with it at a time they know they’re competing with other buyers, you may be more likely to get the offer you’re looking for on your home.

It’s understandable you want to keep the disruptions to your own schedule to a minimum, and you may be stressed about having to keep it clean, but it’s worth it. As an article from Investopedia explains:

“If someone wants to view your house, you need to accommodate them, even if it inconveniences you. Clean and tidy the house before every single visit. A buyer won’t know or care if your house was clean last week. It’s a lot of work, but stay focused on the prize.”

 

As an article from U.S. News Real Estate says:

“Buyers like to see homes on their schedule, which often means evenings and weekends. Plus, they want to be able to tour a home soon after they find it online, especially if they're competing with other buyers. If your home can be shown with little or no notice, more prospective buyers will see it. If you require 24 hours’ notice, they may choose to skip your home altogether.”

That said, 24 hours notice usually works pretty well, and I'll help you find the right path forward based on your schedule. And if you’ve got a hardline on granting buyers more access or have interested out of town buyers that just can’t be there in person, we will get creative and explore other options like video tours, virtual showings, and more. 

The bottom line is that when it comes to selling your house, you want to be sure to get as much buyer activity as you can. Let’s connect to talk about which level of access helps make that possible.

Joe

 

 

If you’ve been thinking about buying or selling real estate in MA, you’ve more than likely heard the term, “closing costs.” Sounds like a vaguely mysterious black box, and maybe a little ominous too, right? Obviously, no one likes paying these, but at least we can spell out what it is that you are paying for, and roughly how much.

All costs are approximate. These costs are different for sellers and buyers. They will vary somewhat by the price of the property, the municipality, the law firms involved, and type of property. 

Seller closing costs

(Click here for buyer costs)

I. GOVERNMENT FEES AND TAXES

1. Excise/Deed Stamp: The seller pays $4.56 per thousand of the sale price to the state.
2. Mortgage discharge recording: $105. if you have a mortgage.
3. Mortgage discharge tracking fee: $50-$150+- depending on the lender. For services rendered by the lender/closing attorney to ensure that your loan is properly paid and recorded within a few days of your closing
4. 6(d) recording: $105: The 6(d) is a document procured from the homeowners association (if a condo) to ascertain that all regular and special assessments have been paid. If the association is professionally-managed, the management company may charge you for documentpreparation.
5. Town/city smoke/CO detector certification. $50 in Boston, more in some other places. There may be additional charges relating to services rendered in procuring this certificate. May appear as a reimbursable charge to your broker if they have already paid for it.
6. Final water reading: $25 for a one to 3 family structure in Boston. May be more in some other cities or towns. May appear as a reimbursable charge to your broker if they have already paid for it.

II. PROFESSIONAL FEES

1. Broker fee: As per agreement. Generally 5% of the sales price.
2. Attorney fee: $750-$2,000+-. Usually a flat fee, depending upon the complexity of the transaction.

III. MISCELLANEOUS

1. 1. Wire and courier fees: $125+-

Buyer closing costs

I. GOVERNMENT RECORDING CHARGES

These are the fees that the Mass Registry of Deeds charges to officially record the transaction.

1. Recording the deed: $155+-
2. Recording the Municipal Lien Certificate (MLC) $80. This certifies exactly what is owed for taxes. It’s important because the city/town taxes will have to be pro-rated from the time of purchase
3. Recording the Mortgage: $205
4. Recording the Homestead Declaration (if any): $35. A homestead estate provides limited protection of the value of the home, up to $500,000, against unsecured creditor claims. There are potentially other fees, but these are the most common.

II. TITLE CHARGES

1. Title Exam: $250+-: A qualified title examiner goes through all the records for this home and any previous structure at that address as well as the land it is built upon, in order to ascertain to the extent possible that there are no title issues and that the title is clear

2. Rundown fee: $50+-. The title rundown is a is a continuation of the title search for the day of closing. The searcher checks the records for the time period from the date of the title commitment to the date of closing.

2. Title insurance. Between $3.65 and $4.00 per thousand. Even though you’ve had a title exam, sometimes nasty things from the past crop up, and you don’t want to have to cure those things because sometimes these can be very expensive. So based upon a $1m sale, that’s $4,000+. The buyer pays for a policy to cover the lender’s portion. That’s mandatory. They also pay at closing for a policy to cover their own equity, which is optional. But you should definitely get it.

3. Buyer attorney fee. The buyer attorney is also generally the closing attorney.  Generally between $600 and $1500 (or possibly more) as a flat fee depending upon the law firm and the complexity of the transaction.

4. Obtain Municipal Lien Certificate (MLC) $25-$50+- depending upon the municipality.
5. Obtain a plot plan. $175+-. Mostly for single-family homes, but might be obtained for a condo purchase if relevant.

II.MORTGAGE RELATED CHARGES

1.  Loan origination fee: Up to about 1.5% of the purchase price. Sometimes on a closing statement, you will see it broken up into the categories of processing, document prep, and underwriting.

2. Appraisal and related review: $600-$1,500+- depending upon the size of the property.

3. Credit report: $30-100+-

4. Flood Certificate: $3.75-$5+-. Provides lender with flood status of the location of the property.

5. Property taxes: Usually a 2 month impound by the lender. The municipality is first in line to take the property if the taxes are not paid, so the lender has a very large interest in this.

6. Prepaid interest. Interest that will accrue on the mortgage from the closing date until the first monthly mortgage payment is due.

IV. PRO-RATA

1. R.E. Taxes: You will pay the pro-rated remaining quarterly taxes.

2. Condo fees: You will pay the pro-rated remaining condo fee for the month.

IV. MISCELLANEOUS

1. Buyer attorney fee. The buyer attorney is also generally the closing attorney as well.  Generally between $600 and $1500 (or possibly more) as a flat fee depending upon the law firm and the complexity of the transaction.

2 Condo fees to reserve: If you are buying new construction, you may be asked to pay in 3 months condo fees to contribute to the association’s reserve. 

3. Wire, FedEx, courier, tracking fees. $50-$200+-

If you have any questions, or would like to discus this or any real estate need, please get in touch!