A Phil Hall Op-Ed: We are two days into what some media outlets have dubbed as the “seismic shift” in the real estate world – specifically, the practice changes that were part of the National Association of Realtors’ (NAR) $418 million settlement in the Sitzer/Burnett case.
From an empirical viewpoint, it doesn’t appear that the real estate profession has imploded in the two days since the settlement’s Aug. 17 date went into effect. Nor does it appear that home prices have magically dropped over the weekend, despite the insistence of some media observers that changes to the commission structure would somehow inspire sellers to cut thousands of dollars from their asking prices. Even President Biden bought into that fiction, at one point babbling that high home prices were caused by elevated real estate agent commissions.
If anything changed – and this change occurred long before Aug. 17 – it is the perception of NAR from both within the industry and the wider economy. The organization was hobbled by a skein of bizarre scandals that were magnified by hostile news coverage – and that situation was further exacerbated by the organization’s abrupt retreat from its defiant declarations to fight the Sitzer-Burnett verdict.
While no one has requested my opinion on how NAR can go forward in the post-Aug. 17 era, I would like to offer three ideas that might fuel the organization out of its current state into a more vibrant and respected standing.
First, NAR’s needs re-establish itself as the voice of the profession. There is a start-up rival called the American Real Estate Association (AREA) that announced the launch of its membership drive last week. AREA is run by Jason Haber, a New York City-based agent with Compass, and Mauricio Umansky, the Los Angeles-based founder of the luxury brokerage The Agency and a celebrity from his appearances on several reality television shows.
Personally, I am skeptical that AREA is going to become a serious rival to NAR – Haber and Umansky are brilliant in calling attention to themselves, but they are putting forth AREA in a conspicuously incomplete state. Whether AREA gets off the ground is anyone’s guess, but NAR can ill afford to have a rival organization run by media-savvy individuals know how to put themselves in the spotlight as the thought leaders of their industry.
Second, NAR needs to listen to its members and respond to their concerns and needs. If you read the comments section on this website’s articles related to NAR, you will find a surplus number of real estate professionals who are angry over how the organization operates. And, quite frankly, some of these comments are truly jolting. The organization should conduct a long-overdue conversation with its members where it will listen and respond in accordance with their needs.
Third, NAR needs to prioritize what is truly important to the profession. In today’s announcement that interim CEO Nykia Wright was named the permanent chief executive, the organization emphasized how Wright was “guiding the implementation of NAR’s Culture Transformation Commission … which was established to identify and break down impediments to being an inclusive, welcoming and respectful organization for all individuals and to ensure that the association meets the evolving needs of members well into the future.”
To be blunt, a “Culture Transformation Commission” is not the priority initiative that the real estate profession needs. If anything, NAR should have leadership that is going to speak out clearly and forcefully in favor of the profession and its importance in both the housing market and the wider economy. This has not been apparent lately, especially in the wake of the Biden-Harris administration’s hostility to realtors. (Seriously, why is Merrick Garland’s Justice Department trying to void its 2020 commission investigation settlement with NAR?)
NAR’s future will be difficult if it doesn’t respond to the problems that it now faces. The ball, according to the old tennis cliché, is in NAR’s court – let’s see what they do with it.
Phil Hall is editor of Weekly Real Estate News. He can be reached at [email protected].
;
Somebody appears to be a DEI hire
NAR is practically worthless to the average real estate agent. I doubt AREA will be any different.
The NAR proved it’s worthless, when it did not allow the members to have a voice, to have a vote, or any aspect of a decision in this matter and their useless frivolous settlement! When the average realtor across America makes $52,000 a year this was unnecessary and actually offensive to the professionals working every day for the benefit of their clients to earn a living. Quite frankly, we have many of us in this profession that see very little benefit, of remaining a member of NAR.
https://www.nar.realtor/sites/default/files/documents/nar-settlement-agreement-download-2024-04-19.pdf
All Realtors should READ the settlement “practice changes” and file their own class action suit . LAW- An Agreement between a Realtor and a Buyer – has 2 parties – neither of those parties is the Seller – therefore no NAR SETTLEMENT- can mandate that a totally unrelated agreement between 2 other parties – the SELLER and a cooperating Realtor- Or a third agreement between the Seller and the listing agent can be limited by what agreement is between an agent and a buyer. The agreements all stand on their own – they have different “parties” and can’t be used to bind or limit one another. A seller can sign an agreement to pay a cooperating realtor to sell his home and no unrelated buyers agreement can limit that
The NAR did not represent ME in their negotiations! I truly don’t see value in my forced dues! Were ANY members asked to provide input prior to their landmark settlement?
You are correct… NAR has far bigger problems than its culture. Their focus is totally misguided. Most agents believe this is nothing more than enforced unionization for us.
Reminiscent of Jimmy Hoffa and Teamsters. Why is Garland continuing? Uhhh NAR is dangerously similar to the Teamsters practices
Read chapter 58 of the practice changes- NAR SOLD OUT BUYERS AGENTS –
58. i. eliminate and prohibit any requirement by NAR that listing brokers or sellers must make offers of compensation to buyers brokers or buyer reps either directly or through buyers and eliminate and prohibit any requirement that such offers, if made are blanket or unconditional. “ So they are saying that they won’t REQUIRE them to offer compensation. Fine! Plenty of boxes are left blank when listing a property on MLS – all they needed to do is not require it to be filled- leave it blank IF THE SELLER WANTED IT BLANK!!!! If the seller wants to notify buyer agents they are paying- that is the free market ! They can offer $1 ; they can offer $1000 they can offer 3% or they can offer Nothing – but 58ii now PROHIBITS willing, and able participants from offering to pay whatever they agree to pay! So this is PREVENTING free market payment of an agent by the seller for bringing a buyer – that is a service the AGENT is providing to the seller and for which the seller may want to pay – and advertise his willingness to pay – but this settlement opens the door to CIVIL RIGHTS VIOLATIONS – when a seller can arbitrarily offer to compensate one realtor for less than another – it could be motivated by a whole host of CIVIL RIGHTS VIOLATIONS! If the seller is paying to sell their home- the compensation to an agent for providing that buyer- and ensuring that buyer is paying the escrow deposit, applying for the loan in time to qualify and close on time – getting insurance and making sure an appraisal , survey and inspection is ordered- all these things are done TO ENSURE THE SELLERS HOME SELLS – so the agent is paid on the profit he makes on the sale of his house – Bottom line – the Buyers agent might REPRESENT the seller- but they are WORKING ALSO FOR THE BUYERS BENEFIT – and no settlement is legal to prohibit 2 parties from entering a contract for work – or limiting the commission a seller can pay a buyer agent if the two parties agree. THAT’S WHY A JUDGE HAS NOT SIGNED OFF ON FINAL APPROVAL OF THIS – not til End of November does a judge rule… why did they rush this ?!?!
Thank you T Powers… well said!!!
Well put. And you mention only some of the can of worms this entire settlement opened up!
The only reason 95% of agents are members of NAR is because they are forced to do so to be a member of the MLS. They are really a union and not a trade organization. NAR has lived long past its useful life. I don’t support it or nearly anything it does. It’s now just another liberal, woke organization using my money to fight against what I believe. Given how this lawsuit decoupled commissions, maybe a suit from real estate agents against NAR could decouple the MLS system from NAR.
👏 👏👏👏 @steve. Exactly how I feel.
That is exactly how I feel…. the realtors have a class-action lawsuit if anybody does. We have a license just like an auto mechanic, an attorney, etc., and yet, we are discriminated against severely. We are forced to maneuver the Buyers and Sellers to make sure we don’t work for nothing, which could well be the case. Also, this is forcing Buyers to possibly be devious and go around their agent if they want a property bad enough and the Seller is not compensating their agent. I think we are going to see lawsuits galore in our industry. I do not NAR fought this hard enough or made a good case for we, as professionals, that are paying tremendous dues; hours of hard work; paying for photo shoots; spending three-four hours setting through inspections; negotiating with the Buyers and Sellers to negotiate TRR agreements and try to hold together a deal for both. I think we have only seen the beginning of many more lawsuits. Sad day for realtors who work so hard!
Excellent POV. Just like AMA has screwed up doctors and hospitals with health insurance agencies being the only beneficiaries, now NAR has to pay their liability suits! I would not want to be a home buyer or first time home buyer today!!
Good comment Steve! Every institution, organizations, including corporations have been infiltrated by one world order, leftie ideology and NAR is no exception. Right after the Benghazi mess, NAR chose Hillary Clinton as the key note speaker. The year after that Collin Powell. The year after that the stupid Gifford woman & so called astronaut hubby both anti-2nd Amendment. Then the NAR site selling rainbow merchandise- I knew then NAR was a globalist player & we members were suckers paying them to virtue signal & sell us out to the realtor dot com zillows of the world. How many surveys NAR sent to its members asking about international real estate & working w foreigners. WTH? That told you dear NAR member, they didn’t give a ratz azz about you or about the American Dream.
Precisely why I went inactive at the beginning of 2021. I had no problem with people I worked with from all walks of life. When I realized that they began applying the CoE to *all* a Realtor’s personal life, and that I could be fined up to $15k and possibly lose my license if someone got hurt feelings about me speaking out against drag queen story hour, that was it. I’ll post what I like on any social media platform I deem appropriate, and I’ll have any public or private conversation about my views now, without fear from NAR, or the local affiliate. Consider me retired.
I use the comments section of the surveys to diss the NAR. It’s not much but it’s something.
As a Realtor for over 40 years i say you are RIGHT ON!
I totally agree with you Steve.
Agreed. We all need to find a way to opt out.
I refuse to pay NAR another dime.
Ding, ding, ding, we have a Winner! Totally spot on Steve. Every year when I write my $500+ check to NAR I always ask how being associated with NAR benefited me? And every year I could not come up with any answers.
WHY do we HAVE to join NAR? Too bad the DOJ lawsuit didn’t go one step further and disband NAR, just like any other monopolies in the past like AT&T, etc.
NAR is nothing but a forced monopoly. Great democracy we live in huh?
Our associations are expecting us to pay the combination of fees that are due by September 30. What would happen if Realtors paid all those fees EXCEPT for NAR? The organization has proven itself to be not only useless, as far as doing anything to represent the membership, but also has demonstrated that it is a liability in wimping out on the court case. Caving in on the settlement, throwing Realtors under the bus and putting our hard work in jeopardy and tossing our clients into their chaos – enough is enough. Membership needs to be optional and each MLS should be independent – not tied with ball and chain to NAR. Money talks and it is the unseen Controlers behind this court case and also NAR who orchestrated the legal assault that has been downloaded onto us. They went after the banks with Dodd-Frank…and then the settlement companies. It was only a matter of time before we found ourselves in the crosshairs – and this is how they accomplished painting us as targets. As the leadership of WEF (World Economic Forum) has so frequently stated, it is there goal that we will “own nothing and be happy” with a doled-out universal income and Central Bank Digital Currency. A flourishing real estate industry stands in their way.
I had been a Realtor for decades until we were told if we put anything on our social media for which anyone was offended could cause the loss of our designation I dropped out. That decision costs me a LOT of money because, even though I did have access to the MLS at twice the rate of a member, I did not have access to the Supra keybox. This was supposedly one of the four reasons the DOJ went after the NAR. A lawyer told me this is called a ‘tying agreement’ between the NAR and Supra (or any other company offering keyboxes exclusively to Realtors) and is a violation of the Sherman Anti-Trust Act. I’m curious if anyone can confirm or deny this. I recently had to rejoin the NAR, and even though I used to mostly represent buyers, I will now concentrate on listings.
I absolutely agree! I’m ONLY a NAR member because I’M forced to be! A change in MLS FORCED NAR membership would affect their bank account! This might need to be the swift kick they need to communicate with and represent their members!
I feel that NAR didn’t fight for us. They threw in the towel to save themselves money at the cost of the real estate profession. Honestly, I don’t want to give them another dime, but they have my hands tied.
I totally agree I already informed my broker over the weekend that I will be joining
My State MLS & AREA
NAR & Statewide MLS are together you don’t have to be with them as a licensed Realtor an the more this gets out realtors will make the move buyers can’t afford this sellers always had a choice on what they want to pay it’s always factored in we work very hard as realtors on both sides I find the NAR insulting along with the mls
Go woke go broke !! We don’t need them
I totally agree, Tristan!
The NAR has failed its members … SPECTACULARLY.
Also, what organization that’s worth ANYTHING appoints a PERMANENT CEO ?!
It’s time for members to look at how those dues are being spent ( to cave-in on lawsuits) and consider an alternative. When you surrender as easily as NAR did in the recent law suit you can expect your adversaries to come back again for another bite of that tasty ( cash-rich) apple.
Could not be more unhappy with NAR …weak, weak, weak leadership…bunch of pussies
I just screen shot the WRE news article about Michigan agents suing the NAR for conspiracy and anti trust violations …. more good news for the ‘Permanent’ CEO of this Organization.
The NAR just looks and acts weak in retrospect … No help from them.
More work for agents, and more heartache for buyers battling cash offers from billion dollar investment firms.
I feel that they did nothing for us nar they did not fight for us. They gave up too easily. They sold us down the river and I feel as a Realtor they should have fought harder for all of us. They should never had agreed to take the compensation out of the MLS it’s been that way for a 100 years and was working fine now they screwed everything up because they decided to throw all of us under the bus.
How do I join those Michigan agents suing the NAR for conspiracy and anti trust violations?
To any at all realtors that are reading this I’m hoping that somebody comes up with an idea or we all move over to the competition and just move on with our lives. I don’t know why we need the NAR. It’s simply data and they gave away all of our intellectual property for free. They sold us out on this settlement. They’re really not in our best interest to be with them and they love taking our dues every chance they get.
You don’t need them join
AREA an mystate mls
I totally agree on what I’ve seen so far in the comments. I think n a r had out lived it’s time. there probably should be a national MLS system that’s maybe not even part of nar. we have the technology n a r simply collects tons of fees and produces nothing. I don’t even think the attorneys that represented nar did anything to protect Realtors fees. seems to be a worthless crew of attorneys they sent to Missouri. maybe there should be a march on the nar headquarters in Washington saying we don’t want this anymore.
It would take far more space than afforded herein to defend NAR, but if I may, I agree with Phil that they must take the lead in being the professions voice.
Be careful what some of you re apparently wishing for by beating down the trade organization which is known in politics as one of the most influential groups, bar none.
The Biden-Harris Administration put their finger on the scale against all of you via their Justice Dept. If you solidify and demand professional leadership who are business savvy along with being politically astute, you will come out on top. Allow yourselves to become fragmented and you’ll accelerate your demise.
So, “influential” … in what regard now? If they can’t or won’t fight big government on behalf of their agents, how are they influential?
I hear you, but when things gets a certain level of corruption it’s time to clean the slate and start over. They abandoned their membership. Can I say fiduciary.
A positive response Chris!
Thank you!
Buyers fees paid to their agents (thru the purchase price of the property they purchased) have NEVER been negotiable for the buyer.
Time to show your value to the buyers you represent.
Time to stop complaining that the listing agent can no longer set your fee to “properly incentivize you”.
Offering an incentive to the BUYER is good.
Offering an “incentive “ to a buyers AGENT is a bribe.
If real estate agents want to improve their credibility this change needs to be made.
You work for buyers every day now with no written agreement. They owe you no loyalty after showing them 15 houses in two weeks. Why would you do this?
Explain your value.
Get a buyer’s agreement in writing stating how you will be paid so you are paid.
Submit your offers to the seller requesting to be paid.
Let the negotiations begin.
If your offer is not accepted, you’re going to have to raise the offer or move on.
A professional agent will figure it out.
Those who don’t….?
I totally agree with Steve. And the whole purpose of MLS was to offer co-brokerage.
Now that we can’t do that what are we paying them for?
Not feeling one bit of love for NAR at the moment – they sold us out and threw us under the bus… what kind of half as_ed legal counsel do they have anyway? They can – and should – have the best! I’d argue that they don’t… we need another way as this organization has apparently decided to follow Bud Light, Harley Davidson and the rest down the DEI Woke rabbit hole to hell. I’m not going down the hole with ’em.
I was in the real estate business before home computers, Zillow, Realtor.com and other sites.
We as Realtors held ALL of the information and controlled it’s dissemination.
When those organizations were created, we were led to believe it was going to really benefit us.
In reality the sharing of OUR information to others really just created a cash cow to those with whom we shared it with allowed others to profit from our information.
This allowed others who were silicon valley companies to access OUR data and to profit from it by selling buyer’s information to the highest bidder, therefore creating several internet monopolies themselves. Maybe they should be investigated or sued. They make massive amounts of money from OUR data.
Me too Steven, It was so dissappointing when NAR could not do a better internet program than its now competitors – who make money selling agents back the buyers they should have gotten in the first place because they pay for the MLS and Data by paying our local dues. This has really hurt buyers too as they do not get the most knowledgeable and qualified local agents -they don’t know any better so they click on the competitors websites and get agents that pay fees to be on their websites – many times out of the area and have never seen the home in the first place. My buyers are always surprised when I explain to them why they clicked on a listing and talked to J Doe, who did not have a clue what they were asking.
Trust me, the NAR is neither liberal or woke. They are the opposite. I agree that I was forced to become a member by a couple of different brokers that I joined, and I agree that we got nothing for all the fees we’ve paid, and I really don’t want to do it anymore. Also, the MLS systems charge fees I don’t agree with and every time I turn around someone wants another fee or charge from, and I am constantly bombarded by companies that want money from me for leads, logos, referrals, low-cost health insurance for agents, ad infinitum. Well, if nothing else, all these folks will leave me alone because our fee structure will not be the same.
I personally have NEVER steered buyer clients away from properties where the seller was offering less than a 3% fee. EVER! Lots of bad, shady, unethical agents out there have. And now we all pay.
I think we should stand up to NAR and say to any fees – what do we get?
Amen brother Phil. The NAR does not appear to have the best interest of it’s members at heart.
NAR was created”To Protect the Public” from their members. That is their mission statement. Monopolizing the industry with local, state associations & MLS is how they funded all their organizations. That’s the Realtors, funding the monopoly.
NAR basically stabbed many of its members in the back with the settlement. Had anyone truly read the DOJ’s initial complaint? It’s chilling what’s coming as a result of the new rules.
First, no broker EVER forced sellers to pay the buyer agent, this fee was always freely negotiated between the listing broker and seller.
Second, many buyers can’t afford to pay their buyers agent. Many sellers will now believe buyer agents will show their homes, even if the buyer agent calls the listing agent and told the seller is not paying buyers agent compensation.
Three, the buyer’s agent informs the buyer the seller isn’t paying a fee. The buyer tells his agent not to show them the home. This starts happening across the country.
Four, sellers start getting upset again and the DOJ and lawyers start going after buyer agents for “steering.” Steering buyers away from sellers who aren’t paying compensation. Steering not because of violations of race, creed, color, nationality, religion, sexual identity and more, but simply because buyers can’t afford it and buyer agents can’t afford to work for free.
If one reads the complaint and settlement, steering is a big issue, yet now they’ve created a much bigger steering problem.
And NAR did NOTHING to protect their members except raise their members liability for getting sued, not to mention their zero- tolerance policy and immediate fines they almost giddily cite.
I recently had a Zoom meeting held by a member of our state’s Realtor Board and brought up the “steering” issue that WILL raise it’s ugly head just beyond the unseen horizon. Incredibly, we were informed, “Just tell your buyers not to show properties where the seller is not offering to pay compensation.”
Great, when the steering lawsuits start dropping, a good attorney will ask the buyer agent at deposition or on the stand, “Did you recommend to your buyers to tell you not to show them properties where the seller is not paying compensation?”
Buyer’s Agent: “Yes.”
Result, guilty.
Of course NAR in their settlement circumvented any organizational liability while leaving their members wide open to individual liability.
NAR basically stabbed many of its members in the back with the settlement. Has anyone truly read the initial complaint? It’s chilling what’s coming as a result of the new rules.
First, no broker EVER forced sellers to pay the buyer agent, this fee was always freely negotiated between the listing broker and seller.
Second, many buyers can’t afford to pay their buyers agent. Many sellers will now believe buyer agents will show their homes, even if the buyer agent calls the listing agent and told the seller is not paying buyers agent compensation.
Three, the buyer’s agent informs the buyer the seller isn’t paying a fee. The buyer tells his agent not to show them the home. This starts happening across the country.
Four, sellers start getting upset again and the DOJ and lawyers start going after buyer agents for “steering.” Steering buyers away from sellers who aren’t paying compensation. Steering not because of violations of race, creed, color, nationality, religion, sexual identity and more, but simply because buyers can’t afford it and buyer agents can’t afford to work for free.
If one reads the complaint and settlement, steering is a big issue, yet now they’ve created a much bigger steering problem.
And NAR did NOTHING to protect their members except raise their members liability for getting sued, not to mention their zero- tolerance policy and immediate fines they almost giddily cite.
I recently had a Zoom meeting held by a member of our state’s Realtor Board and brought up the “steering” issue that WILL raise it’s ugly head just beyond the unseen horizon. Incredibly, we were informed, “Just tell your buyers not to show properties where the seller is not offering to pay compensation.”
Great, when the steering lawsuits start dropping, a good attorney will ask the buyer agent at deposition or on the stand, “Did you recommend to your buyers to tell you not to show them properties where the seller is not paying compensation?”
Buyer’s Agent: “Yes.”
Result, guilty.
Of course NAR in their settlement circumvented any organizational liability while leaving their members wide open to individual liability.
Our associations are expecting us to pay the combination of fees that are due by September 30. What would happen if Realtors paid all those fees EXCEPT for NAR? This organization has proven itself to be not only useless, as far as standing up for members, but it has also demonstrated that it is a liability by wimping out in the court case. I expect a professional organization to fight for its members. By caving in on the settlement, throwing Realtors under the bus, putting our hard work in jeopardy and tossing our clients into the chaos they created – their credibility is shredded. Enough is enough. NAR membership must be optional and each MLS should be independent – not tied with ball and chain to NAR. It is the unseen Controllers behind the Plaintiffs in this court case, with cooperation from NAR, who orchestrated the legal assault that has targeted us. They went after the banks with Dodd-Frank…and then the settlement companies. It was only a matter of time before we found ourselves in the crosshairs. As the leadership of WEF (World Economic Forum) has so frequently stated, it is their goal that we will all “own nothing and be happy” with a doled-out, monthly universal income and Central Bank Digital Currency tied to our social credit score. Home ownership and a flourishing real estate industry stands in their way.
My comments most likely will get blowback from lots of agents so be it. Years ago I have sold a few homes for friends along with my own properties. Too much liability and paperwork with little return selling individual homes.
Majority of time has been spent selling hotels, subdivisions, apartments, land and warehouses. For past 15 years I work for the seller: never the buyer!
Some buyer agents find my advertised listings and want 1/2 the commission representing “their” buyer, who the majority of time already has the property information formatted and sent to “their” buyer from me. Depending what commission the seller and I agree determines what IF anything I will pay another experienced commercial agent or residential agent.
Real Estate Agents are licensed by each state and are only affected by this verdict if they are members of NAR. Solution, leave NAR. The settlement no longer applies to you. This verdict probably dooms the MLS in it’s present form.
Form a new association, not named NAR (could be AREA, maybe not) and put up a shared listing system using block chain technology to market properties through. Don’t include commissions as part of the listing system.