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Jack Gately Real Estate and the Online Real Estate Academy

Stephen Webster broker/owner of Success Real Estate has been indicted by the Plymouth County District Attorney for stealing over $11.6 million.

“The comingling of escrow accounts and others used by Webster dates back to at least 2023. State investigators began looking into Success! in March of that year. Webster allegedly showed them a forged bank letter showing an escrow account that held about $1 million. In reality, that account only had about $7,000,” according to Boston dot com.

How should we respond as an industry? Watch my take posted below.

PS Don’t forget new rules on Home Inspectors go into effect October 15th.

This interview was interesting with Atty Ahearn who represent several former Success agents.

We break it all down for you in the videos below, MLSPIN changes went into effect last night and the state is out with new guidance from the Board of Registration and the Executive Office of Housing and Livable Communities.

Bottom line: seek legal advice, I’m not a lawyer (too smart for that), you can only collect a fee from the party you contract with.

As always visit onlinerealestateacademy.com for our salesperson, broker and CE classes. And don’t miss our YouTube channel for the latest updates.

Thank you,

Jack

VIDEOS:

Did you sign up for real estate class but never finish? For most students we've saved your progress. Extend your membership for an additional six months and start 2025 by investing in your future.

Extend you membership for an additional six months for only $99.

Click link here.

Or check out our Not Boring CE Class or Broker Class today.

Now accepting Venmo, PayPal, PayPal Later and any major card.

Thank you,

Jack Gately Real Estate and the Online Real Estate Academy

• Click here for fully interactive map

Wealthy metro west towns outperformed most Massachusetts communities in the spring 2024 real estate market. Wellesley appreciated by a whopping 5.79% since the beginning of the year with other area towns also crossing the 5% threshold including: Needham, Wayland, Sudbury, Concord and Sherborn. Several other communities in the immediate metro-west area were solidly in the 4% range, according to the Jack Gately Real Estate Home Price Tracker.

Rhode Island border towns (or adjacent) also saw strong price growth year to date of 4%+ including: Attleboro, Seekonk, Swansea, Fall River, New Bedford, Freetown and Rehoboth.

During the pandemic Southcoast border towns appreciated near the statewide average, so the strength in the 2024 market is a notable shift up from recent years.

Under performing, but still seeing price appreciation were parts of Cape Cod (maybe some price fatigue after huge increases from 2020-2023), interior Plymouth County and scattered central/western Massachusetts towns.

• Click here for fully interactive map

• Click here for fully interactive map

Cape Cod has seen the largest increase in relative home values since the beginning of the pandemic - Falmouth up 73% - while percentage gains in the immediate Boston area appreciated at slower rates, highlighting a trend away from cities amidst the work from home era, according to the Jack Gately Real Estate Home Price Tracker.

Cambridge values appreciated only 13.16% over the same time period, the lowest rate of growth statewide.

Upper Worcester county and parts of Berkshire county also benefitted from the shift away from cities, but Cape Cod was the clear winner.

A pocket of metro-west towns also did very well, including: Weston, Wayland, Concord, Sudbury and Lincoln.

Top gainers since Feb 2020:

Woods Hole 81.66%

West Tisbury (MV) 79.49%

Wellfleet 74.21%

Falmouth 73.93%

North Falmouth 72.63%

• Click here for fully interactive map

Lowest gainers since Feb 2020:

Chelsea 22.88%

Boston 15.93%

Somerville 15.62%

Brookline 13.28%

Cambridge 13.16%

We believe the policies adopted in this post represent the most conservative path forward and carry the least liability in the current regulatory environment, but remember I’m not an attorney and you should seek your own legal advice.

But tomorrow, Thursday July 25th, MLSPIN will begin to offer new options for posting offers of agency to agency compensation.

We would prefer that MLSPIN, and in fact all MLS systems, cease the publication of compensation data completely.

Since the MLSPIN graphic above (effective June 25, 2024) reflects offers of agency to agency compensation only, not offers of seller to buyer agent compensation, the only acceptable option for Jack Gately Real Estate will be “Unspecified.” Preferably we would prefer to leave all the fields blank, but the artwork published by MLSPIN indicates that “unspecified” is the default answer.

Conversely, in representing a buyer, notwithstanding offers of compensation posted in MLPSIN, our offers we will request payment directly from the seller.

And while we’d prefer MLSPIN to discontinue the publication of all compensation data, we reluctantly look forward to the potential roll out in Q4 that might allow for the publication of seller to buyer broker compensation.

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Our firm remarks will state: “Seller may or may not entertain compensation to buyer brokers, requests for buyer broker compensation should be made in writing at the time of offer.” In other words the seller’s inclination to pay a buyer broker fee is variable upon the quality of the offer. For purpose of exaggeration, on a $500,000 listing if a buyer broker submits a $600,000 offer with a 3% fee, the seller would most likely agree to pay the fee. But the seller will be much less likely to pay a buyer broker fee on a $400,000 offer.

The key here is that the buyer broker will now be forced to consult with the buyer directly on the size of the fee. The fact that the buyer and buyer broker don’t know what the seller might be willing to accept or what other potential bidders might offer, will result in the appropriate downward pressure on buyer side fees sought by the DOJ, to the ultimate benefit of the consumers we are pledged to serve.

Unlike MLS systems that opted into the NAR settlement, MLSPIN will continue to publish “agency to agency compensation” [not seller to buyer broker compensation as previously reported] starting Thursday, but the fields will no longer be required inputs.

Seller to buyer broker compensation fields will NOT be added until Q4.

Existing listings in MLSPIN will retain their current data, including agency to agency compensation information.

Which begs the question, as of August 17th, if you’re a Realtor, do you need to change your listings so that you are no longer offering compensation on the MLSPIN to be compliant with the NAR settlement?

Remember I’m not your lawyer, I’m not a lawyer at all.

MLSPIN will delete the required existing “agency to agency” compensation fields and replace those fields with completely optional “seller to buyer broker” compensation fields on Thursday.

MSLPIN is a defendant in the now stayed antitrust lawsuit Nosalek vs. MLSPIN case, pending the outcome of the Sitzer bombshell commission lawsuit that the National Association of Realtors lost in October of last year.

The rule change does not indicate how active “for sale” listings might be impacted by the change. For instance, if a broker takes no action on Thursday, will the data previously entered simply be transferred to the new listing fields or will each active listing need to be manually updated?

Several other MLS systems have taken a seller concession approach, most notably CRMLS. Even though a Department of Justice attorney told Judge Patti Saris this spring that it was the opinion of DOJ that “offers of compensation should not be made anywhere, but certainly not on the MLS.”

Additionally, since most listing agreements only carry language reflecting agency to agency compensation, if a seller now elects to offer direct buyer broker compensation, will listing agreements need to be amended to reflect the change? Importantly, off-MLS agency to agency compensation remains allowable under the NAR settlement of the Sitzer case.

Lastly, will the new seller paid buyer broker compensation fields be syndicated to partner sites such as Zillow and Realtor.com?

We’ve contacted MLSPIN seeking clarification.

The current version of the Massachusetts Association of Realtors forms conflict with the new MLSPIN policy announced Tuesday that state “Listing brokers and cooperating brokers will no longer split commissions.”

Specifically the “Authorization to Offer Buyer Broker Compensation Addendum #709A” which is referenced in Section 5 of the MAR Exclusive Right to Sell Listing Agreement, provides for agency to agency compensation. Most agents using this form will most likely be posting their listing to the MLSPIN. However MLSPIN changes announced earlier this week only allow for the posting of commissions if paid by the seller, not the list agency.

Agency to agency compensation and buyer broker fees paid by seller are two different things.

Consequently if a Realtor uses the Addendum, and then fills out the MLSPIN form using the numbers in the Addendum, as is bound to happen probably on a widespread basis, the Realtor is conflating the two distinctly different concepts.

I’m not sure of the legal implications, remember I’m not a lawyer or Realtor (doubly thankful).

Important note, not all MLSPIN customers are members of the Massachusetts Association of Realtors. The inverse is also true.

MLSPIN has not announced the details of the new policy, including how existing listings will be impacted or updated and if the new information will be syndicated publicly or available to agents only.

Mar Buyer Broker Add

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Compensation Changes Flyer 2024 07 12 Final

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During a livestream last week I struggled for a moment in describing my relationship with my MLS. I couldn’t help but wonder, was I an MLSPIN member or subscriber? I wasn’t sure, but I did have a sense that neither word properly described our relationship, especially for a product that is a near monopoly.

In a changing technological and regulatory landscape could a single broker hope for more?

Then by absolute chance I stumbled upon a blog post from WAV Group Consulting: “Are you treating your MLS subscribers as the Customers they are?”

WAV Group suggests, changing the way MLSs think of their paying customers is: “Just one of the subtle, but important changes MLSs need to make if they want to position themselves as the technology service companies they really are.”

Membership implies exclusivity and some sense of cooperative ownership, which infers I’ll have some type of democratic opportunity to voice my opinion about the future of the organization. I’m not aware of my MLS formally asking my opinion, there isn’t an annual semi-democratic meeting of everyone that pays into the MLSPIN. There are stockholders, I have no idea who they are, but the Directors are posted on the MLSPIN.com website.

I’m clearly not a member, like I would be, if I were a member of a golf club with a codified voting power, even if predominately symbolic.

Am I a subscriber? Well, I guess that word is sufficient, but also indicates a certain level transactional distance, with no voice in the relationship. It’s a simple choice, give us your money and we’ll give you a product.

“Its just, er, MLS, nothing more”

But I want more out of this relationship. Do I need butterflies, like Carrie? Well, let’s not gooooo that far. Yet, every quarter when I pay my dues, I see myself in the reflection of Samantha Jones walking home alone from the Meatpacking District early on a Sunday morning.

“Customer”, hmmmmmm, that’s a thought. Customer implies that if I don’t like a product or service I can take my business elsewhere. A near monopoly certainly wouldn’t want people getting that idea would they!!

Customer implies an intrinsic value to the company, after all, aren’t companies established to ”serve” customers?

And here’s a word of warning for all MLSs, the technology landscape is changing, nationwide or regional MLSs aren’t that far away, your current “subscribers” may soon have more choice in the matter than you’ve become accustomed to.

WAV Group: “Let’s also think about the mindset of calling your subscribers a customer versus a member. With customers you have to EARN their loyalty and trust. You have to assume they have a choice whether to be your customer or not. Since brokerages representing nearly 600,000 agents cannot require NAR membership any longer as one of the terms of the proposed settlements, MLSs are going to have to think about how to earn their customers and provide an open subscription available for all licensees. “

The California Association of Realtors has dropped a controversial phrase from its listing agreement that may have facilitated the off-MLS sharing of commissions between agencies, amidst a newly launched formal inquiry by the Department of Justice. But the contract itself still suffers, maybe even more so now, from reading comprehension challenges that burdened the prior version of the form.

Car Listing Agreement

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Car Mls Add

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A key sentence has been deleted according to Inman News: “Optional additional compensation, if any, to Seller’s Broker to be offered to Buyer’s brokers.”

Consumer Federation of America described the first version of the form as such: “No seller will read this monster of a document—much less be able to understand it.”

“It is unrealistic to think that the average seller will understand anything more than, perhaps, 20% of this document...There is no reason why a listing agreement needs to be virtually indecipherable.”

And now the form has grown to a whopping nine pages with the addition of a two page MLS addendum also obtained by Inman.

California has become ground zero in an ever evolving game of Whac-A-Mole being played by the industry, that goes something like this: Sure we lost the bombshell commission lawsuit in KC, but hey can’t we just tweak the forms to accomplish the same thing and Ketchmark, the DOJ and CFA, won’t notice? Or at least it will take years and years to sue us again?

Are these esteemed industry “leaders” that dumb/reckless or just so used to getting their way over decades that can’t wrap their head around the new reality?

Here’s a final thought floated in Wednesday’s Industry Relations podcast: Is having a form designed by an association of 180,000 competitors in and of itself an anti-trust violation?

In the fall of 2016 I was operating a small real estate school near the Cape Cod Canal, my classroom might have fit 25 students.

Then by pure chance I happened to read that the Commonwealth of Massachusetts was just about to authorize online real estate education. The state would be accepting applications in less than two days. I mastered the new regulations and submitted my application. Clearly some other school owners had been pushing and organizing the change unbeknownst to me.

I recognized the rule change for what it was, a chance to go statewide with a product that up until then was restricted to in person instruction and dominated by schools that could afford classroom space in or near Boston.

By May of 2017, I was the first school to close my physical classroom and go all online and now I operate a very successful statewide online real estate school. Several of the legacy schools which failed to embrace the new regulatory environment are either gone or struggling.

The price of real estate school is half of what it was in 2016. But I’m not complaining, I’m fishing with a much larger net from a much larger boat. Smaller fish, for sure, but many many more.

And this is the opportunity we have ahead of us in regard to flat fee buyer agency, especially in markets which feature open houses for most new listings.

The flat fee buyer agency is a very similar opportunity and no it won’t be for everyone, but it doesn’t have to be.

The model is simple. The buyer locates the home they wish to purchase, most likely by attending an open house (in other words, you the agent can be almost anywhere, as long as licensed in the state).

Since you have a Buyer Agency Agreement with the buyer, they contact you: “Hey, we just came from the Open House at 123 Main Street, can you help us write up an offer? And oh by the way, what is a fair price for the property? Also list agent says the seller is looking for a short term sale-lease back, can you help with that too?”

So what is the agent selling? Expertise and negotiation, which are really the only things that matter right?

Maybe as part of your agreement you attend the home inspection and the closing. And you can do this for a lower price over a much much larger territory. Sound familiar?

Customer acquisition, as always, is crucial, but here I think some agents will shine as their expertise (and their ability to communicate that expertise) will become the greatest variable of success. And since you’ll be doing more deals, you’ll also be gaining more experience (and referrals) - cue the snowball effect.

Start thinking like an entrepreneur not a real estate agent and you’ll be just fine.

Last week blowhard real estate YouTuber Ricky Carruth falsely claimed “the new rules being forced on real estate agents on August 17th are unconstitutional though their blockage of home sellers freedom of speech by preventing them from communicating about offering a buyers agent commission even if they wish.”

Well, actually Ricky, no. What the new rules prevent is the list agency from offering cooperating commission to an agency representing a buyer on the MLS.

No impact to the “home sellers freedom of speech.”

In fact, the seller’s first amendment rights are well protected and the seller retains the right and ability to offer compensation to an agency representing a buyer.

Remember I’m not a lawyer, too smart to go to law school and plus I like to actually accomplish things.

The opportunity is so large several companies have launched to provide non-MLS information including: Nesthook, ListingSplit, and Gitcha.

As pure satire, I launched CommissionPost.com driven by a ridiculously simple google form and spreadsheet, if only to demonstrate the enormity of the NAR settlement loophole.

Full disclosure: Aside from the satirical CommissionPost.com, I have no relationship, sponsorship, investment or interest of any kind in the companies mentioned in this article.

The Department of Justice and NAR are significantly concerned that these “work arounds” might defeat the reform efforts (lower buyer side fees) intended by the NAR settlement of the Sitzer case.

NAR President Kevin Sears was quoted by Inman on July 2: “To be clear, NAR — and I personally — oppose any attempts to circumvent the settlement,” Sears wrote. “The practice changes should be implemented fully and in good faith, in the service of promoting consumer empowerment, consumer choice, and healthy competition.”

Those practice changes apply to NAR members only and do not apply to individual sellers.

If a “work around” powered solely by sellers shared effectively the same commission information the industry has become accustomed to, that “solution” would be beyond the purview of the Association, the Sitzer settlement and most likely the DOJ as it would be protected by the First Amendment.

It would also have the net effect of maintaining inflated buyer side commissions.

Nesthook as currently configured, is agent centric and would immediately run afoul of Sears and the DOJ. Gitcha is a marketplace according to its website to “browse or post in a live feed where buyers and renters publicize exactly what they’re looking for” but also includes an agent component. Founder Dan Cooper admitted to Inman that the settlement was “serendipitous” to his business.

Only, ListingSplit is seller centric and as such has the potential to “circumvent the settlement” According to the website: “We've created systems that work in harmony within the newly established guidelines of the NAR. ListingSplit.com is real estate’s leading site for sellers to incentivize buyers.”

Get it? “Sellers to incentivize buyers” It should actually say to incentivize “buyer agents.” Somewhat problematically, ListingSplit.com will allow the the seller to add the list agent to their account and then the listing agent can add the incentive on their behalf and have the “seller approve the incentive before it goes live.”

“This provides you with one degree of separation while adding an extra layer of protection.” Will the DOJ see it that way?

In any case, if a purely decentralized seller centric solution were to gain widespread acceptance, it is hard to envision how the DOJ would apply anti-trust law to such an approach.

As Andy Dufresne observed in the Shawshank Redemption “Everybody is innocent in here, don’t you know that?” And so we have yet another stellar example of denial and blame shifting in the world of residential real estate.

Allan Dalton, star of the infamous Tom Ferry podcast video shown in the Sitzer case told Anthony Lamacchia in late June that the real estate industry was effectively a victim of left leaning political ideology which influenced the verdict: “alot that's going on in the world, people think there is the oppressed and the oppressor and so this this also comes under the the purview of like justice and social justice…minority home ownership is lower than 50%, white ownership is 74%.”

Dalton added, “So putting aside whatever the plaintiff’s motives were, whatever whatever, degree of mercenary motivation they had, the setting was was perfect to redress what's happening in the world, so sociologically okay, so the industry was very vulnerable but it wasn't culpable.”

Dalton also seems to misunderstand the central theory of the case, which was not that the Realtor Association fixed prices at a particular rate, but rather the conspiracy elevated prices:

“Anthony I think the industry was very vulnerable but it wasn't culpable it wasn't guilty, in all my years I never attended any situation with you or anyone else, okay, where anyone talked about what fees should be,” Dalton added.

An interview Dalton conducted, while he was with Berkshire Hathaway Home Services, with Tom Ferry was a central piece of evidence in the trial last fall. Ferry deleted the video during the trial but an anonymous YouTube account re-published the video shorty thereafter.

Lamacchia has become a de-facto spokesman for the Realtor cause via his YouTube channel, even debating plaintiff Attorney Michael Ketchmark. And while the National Association of Realtors and Lamacchia have denied any message coordination, the president of NAR, Kevin Sears, just this spring merged his Springfield Massachusetts agency under the Lamacchia Realty brand.

Earlier this week Judge Patti Saris in Boston stayed (put on hold) the MLSPIN vs Nosalek class action lawsuit pending final approval of the NAR settlement, scheduled for November. But Tuesday’s ruling came five days after MLSPIN issued new rules going into effect “soon” according to MLSPIN.

Consequently, the rules expected to go into effect for NAR members differ from the soon to be MLSPIN rules and might place Realtor subscribers of MLSPIN out of compliance with the NAR settlement as of August 17th.

MLSPIN opted out of the NAR settlement.

Specifically, the MLSPIN rules do not require buyer agency agreements as the NAR settlement does. Importantly, MLSPIN is broker-owned, not Realtor owned, but it is widely believed that the majority MLSPIN subscribers are Realtors (not me).

Will MLSPIN broker subscribers, who are not members of an organization found guilty of a vast price fixing scheme, have a competitive advantage over Realtor MLSPIN subscribers who must use buyer agency agreements to comply with the NAR settlement?

Is it possible and/or even legal for MLSPIN to require buyer broker agreements for all subscribers regardless of Realtor membership? What would the reaction be from non-Realtor MLSPIN subscribers to a buyer agency agreement mandate from MLSPIN? In any case, how could such a rule be enforced?

[remember, I’m not a lawyer, too smart to go to law school]

Additional details are needed regarding seller offers of compensation under the new MLSPIN rules.

The MLSPIN rule announcement of June 20th indicates that “soon, we will roll out additional changes set forth in the proposed settlement. First and most importantly, offers of compensation, if any, will be made by the seller.” The announcement does not indicate how these offers may or may not be communicated on MLSPIN if at all. The implementation of seller offers of compensation raise similar NAR settlement compliance issues for Realtor subscribers of MLSPIN.

The NAR settlement prohibits offers of compensation on the MLS but allows off-MLS offers as long as those offers do not commingle with aggregated data from an MLS feed.

However, in a verbal statement to Judge Saris in May, an attorney for the Department of Justice stated that offers of compensation should not appear “anywhere” and the Department of Justice has not issued a written statement on the proposed NAR settlement.

This ambiguity coupled with a federal court ruling out of Pennsylvania recently that allowed an anti trust case to proceed, even though the MLS defendant opted *into* the NAR settlement, raises the question of whether the proposed NAR settlement itself is compliant with the Sherman Anti-Trust Act.

Reality TV star Mauricio Umansky and Realtor activist Jason Haber announced the creation of the American Real Estate Association today, formed as an alternative to the National Association of Realtors according to a report in the New York Times.

Umansky and Haber intend to announce AREA at Inman Connect NYC this week. Haber is the force behind the NAR Accountability Project and Umansky sued the National Association in 2020 in a database listing dispute.

Umansky told the NY Times that members of the new association will have access to the MLS via National Listing Service.

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The Redfin Home Price Index is similar to the S&P CoreLogic Case-Shiller Home Price Index but published a full month ahead and covers the three months ending December 31, 2023.

December sales reflected properties placed under agreement in October or November at or near the mortgage rate peak which may have depressed prices according to Redfin Senior Economist Sheharyar Bokhari.

“Homebuyers can take solace in the fact that prices are unlikely to balloon again like they did during the pandemic homebuying frenzy, but they probably won’t fall any time soon, either,” Bokhari said. “That’s because supply isn’t growing enough to bring prices down, and mortgage rates are no longer falling enough to drive prices up significantly.”

Redfin also pointed to a ever so slight increase in supply, up .01%, for the slower rate of price growth “Still, housing supply remained far below pre-pandemic levels, preventing home prices from dropping as buyers compete for a limited pool of homes.”

Prices dropped the most in Austin -1.1% and rose the most in Chicago +2.6% out of the 50 metros studied by Redfin.

The debate will be moderated by Sarah Wheeler, Editor in Chief of HousingWire.

Sign up for the webinar here.