The National Association of Realtors (NAR) will it survive?

This is an insight behind the pending collapse of the NAR

Let’s start from the beginning

NAR is a colossal institution. Since its inception in the 1970s, it has experienced a membership growth of more than three times, now comprising 54 states and territory associations (including Washington, D.C., Guam, Puerto Rico, and the Virgin Islands) along with over 1,000 local chapters.

According to the group’s latest tax filing for 2022, it has generated revenue exceeding $300 million, with assets surpassing $1 billion. Additionally, its lobbying division managed to raise $44 million in the previous year.

By receiving millions of dollars in funding, the political action committee of the organization solidified its standing as the second-largest lobbying spender in the previous year, following the U.S. Chamber of Commerce.

The group’s dominant position in the industry was strengthened for over a century through the implementation of exclusive listing databases and mandatory membership. A significant portion of NAR’s dominance within the industry can be attributed to its authority over Multiple Listing Services (MLS). However, in response to demands for dissociating access from NAR membership, the organization has delegated the decision-making power to local associations regarding whether they should grant nonmembers access to their databases. In Massachusetts you don’t have to be a member of National Association of Realtors to join MLS.

“Niagara falls, Viagra rises.”

The National Association of Realtors is facing numerous antitrust lawsuits and sexual harassment allegations,

In August, NAR experienced a significant setback in its national reputation following the release of an investigative report by the New York Times. The article shed light on a “culture of fear” within the organization, allegedly instigated by Kenny Parcell, the former president, and a pattern of disregarded complaints regarding inappropriate conduct.

“Throughout my time as an employee, I constantly found myself expressing disapproval, stating, ‘This behavior is highly inappropriate,'” Stephanie Quinn, a former staff member, disclosed to the Times. Amy Swida, another employee, admitted to experiencing daily fear when arriving at work.”

Merely sixty days later, a jury in Kansas City, Missouri delivered a verdict against the trade organization in a groundbreaking antitrust lawsuit regarding broker commissions. The final decision is currently pending the judge’s authorization, but it has the potential to hold the organization accountable for a sum of $1.8 billion in compensatory payments.

Following the decision, the group exhibited a rebellious attitude, asserting that the case is far from concluded as they plan to challenge the jury’s verdict through an appeal process.

Real Estate Brokers Leaving NAR

The allegations led to a negative response from certain prominent members of the group. In October, the CEO of Redfin, Glenn Kelman, urged agents within his company to terminate their memberships in markets where such action would not hinder their ability to use listing services.

NAR Reports the First Annual Decline in Membership Since 2012.  Membership for the National Association of Realtors (NAR) In one month, November to December 2023 membership fell by more than 17,000 by the year with a loss of over 26,000 members

The ruling rendered by the jury in the Sitzer/Burnett case initiated a surge of imitative legal actions. Given the ongoing appeal process of the initial lawsuit and the subsequent influx of new litigations, NAR is anticipated to be entangled in court proceedings for many years to come.

The big question for 2024

The National Association of Realtors (NAR) will it survive?

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