Brokerages Leaving NAR: A Growing Trend in the Industry

In recent years, a growing trend has emerged in the real estate industry: brokerages leaving the National Association of Realtors (NAR). This shift is significant, as it affects the way brokerages operate and interact with clients.

Several high-profile brokerages have already made the move, including Redfin, which left NAR in 2021. This decision was likely influenced by the association's stance on issues like commission rates and data sharing.

The reasons behind brokerages' departures from NAR vary, but many cite a desire for greater autonomy and flexibility in their business practices. Some brokerages may also be attracted to NAR's rival, the National Association of Estate Agents (NAEA), which offers a more streamlined and cost-effective membership model.

As more brokerages consider leaving NAR, it will be interesting to see how this trend continues to unfold and what implications it has for the industry as a whole.

Redfin, the online real estate brokerage, has left the National Association of Realtors (NAR) due to allegations of sexual harassment within the group.

The NAR has 1.5 million members and over $1 billion in assets, making it the largest professional organization in the US. It also owns the trademark to the word "Realtor", which affects a real estate agent's ability to call themselves a Realtor and buy/sell homes.

Several brokerages have left NAR, including Redfin, Coldwell Banker, Century 21 Real Estate, Sotheby's International Realty, and Re/Max. These companies have been dissatisfied with NAR's policies and practices.

Redfin's CEO, Glenn Kelman, was frustrated with NAR's refusal to change its policies on broker compensation. Redfin's head of industry relations, Joe Rath, resigned from NAR's board of directors in June.

The NAR is facing multiple lawsuits that claim its policies violate antitrust laws and inflate fees for home sellers. Re/Max and Anywhere Real Estate settled these lawsuits for $83.5 million and $55 million, respectively.

Brokerages are now choosing to leave NAR due to its declining influence and reputation. As Mantill Williams, a NAR spokesman, said, "Brokerages are independent, legal entities that make their own business decisions."

Here's a list of some of the brokerages that have left NAR:

Several of the country's largest real estate brokerages, including Coldwell Banker, Century 21 Real Estate, Sotheby's International Realty and Re/Max, are leaving the National Association of Realtors (NAR) due to a combination of factors.

The NAR has been facing criticism for its handling of sexual harassment allegations against its top leadership, which has damaged its image and influence.

The organization has also been involved in class-action antitrust lawsuits, which have led to significant financial settlements. Re/Max and Anywhere Real Estate, the world's largest real estate brokerage franchiser, settled these lawsuits last month, agreeing to pay $83.5 million and $55 million respectively.

If this caught your attention, see: Largest Insurance Brokerages in the Us

Brokerages are exiting the National Association of Realtors (NAR) in large numbers.

Several of the country's largest real estate brokerages, including Coldwell Banker and Century 21 Real Estate, have severed their allegiance to the NAR.

A combination of sexual harassment allegations against the NAR's top leadership and class-action antitrust lawsuits has battered the organization's image and influence.

Broaden your view: Real Brokerage Stock

The NAR has 1.5 million members and over $1 billion in assets, but its grip on the real estate industry appears to be loosening.

The organization owns the trademark to the word "Realtor", making a real estate agent's ability to call themselves a Realtor contingent upon the payment of membership dues in much of the country.

Re/Max and Anywhere Real Estate, the world's largest real estate brokerage franchiser, have settled class-action antitrust lawsuits and will pay $83.5 million and $55 million, respectively.

As part of their settlement agreements, Re/Max and Anywhere will also abandon the requirement for NAR membership.

Brokerages are independent, legal entities that make their own business decisions, according to Mantill Williams, a spokesman for the NAR.

The NAR's requirement for membership is no longer a necessity for brokerages, and many are choosing to leave the organization.

Here are some of the brokerages that have left the NAR:

Redfin's departure from NAR was largely due to ethical concerns, including a sexual harassment scandal involving NAR's leadership. This incident was a major red flag for Redfin's CEO, Glenn Kelman.

NAR's commission structure was also a point of contention, with Redfin disagreeing with the way it was handled. This disagreement ultimately led to Redfin's decision to leave NAR.

Other brokerages, such as RE/MAX and Coldwell Banker, have expressed a desire for more autonomy and flexibility. They want to move away from NAR's traditional structures and policies, which they find too restrictive.

Some brokerages are looking for a more flexible approach to real estate, one that allows them to operate independently and make their own decisions. This desire for autonomy is a key reason why some brokerages are leaving NAR.

Here are some of the brokerages that have expressed a desire for more autonomy and flexibility:

Leaving a traditional brokerage can be a liberating experience, allowing you to pursue independent policies and innovative business models. This departure can potentially lead to more consumer-centric practices.

By breaking free from the constraints of a traditional brokerage, you can tailor your approach to better serve your clients' needs. This autonomy is a major advantage of leaving a traditional brokerage.

One key benefit is the ability to create policies that are truly in the best interest of your clients. Departing from a traditional brokerage allows you to pursue independent policies, potentially leading to more consumer-centric practices.

This independence can also enable you to experiment with innovative business models that might not be feasible within a traditional brokerage.

The consequences of brokerages leaving NAR are already being felt, with over 100,000 agents having lost their MLS access as a result. This has led to a significant disruption in the real estate market.

The loss of MLS access has caused many agents to struggle with finding and sharing listings, with some even resorting to using outdated and less reliable methods. This has resulted in a decrease in productivity and efficiency for these agents.

The impact on consumers is also significant, with many buyers and sellers facing longer search times and reduced access to listings. This has led to increased frustration and dissatisfaction among these groups.

The cost of NAR membership is becoming a significant financial consideration for brokerages. Substantial dues and fees are prompting brokerages to reevaluate the value they're getting for their money.

Brokerages are looking for ways to maximize value for their agents and clients. This might involve negotiating better deals or exploring alternative membership options.

The financial viability of NAR membership is being questioned. This is especially true for brokerages that are seeking to minimize their expenses and stay competitive in a crowded market.

Here are some key financial considerations for brokerages to keep in mind:

Legal Pressures are a significant concern for brokerages associated with NAR. Antitrust lawsuits have been a major issue, with ongoing legal challenges and class-action lawsuits alleging antitrust violations and inflated commission fees.

These lawsuits have prompted brokerages to reassess their association with NAR. The sheer number of lawsuits is a clear indication of the severity of the issue.

Here are some key aspects of the antitrust lawsuits:

The presence of these lawsuits is a major reason why brokerages are rethinking their affiliation with NAR.

The implications of NAR exit are significant, especially for real estate agents. Agents in markets where NAR membership is required for MLS access may need to retain their membership.

This requirement can limit their flexibility and choice. On the other hand, in markets where NAR membership is not required for MLS access, agents will have more freedom to decide whether or not to join the NAR.

Brokerages leaving NAR might face challenges in accessing MLS and other essential tools controlled by NAR in some markets, which could impact their ability to conduct business effectively.

Brokerages may not have the same level of access to industry tools and resources as they did when they were part of NAR.

Some brokerages may need to find alternative solutions to access MLS and other tools, which could be time-consuming and costly.

In some markets, brokerages may need to establish new relationships with local MLSs or other industry organizations to gain access to these resources.

Brokerages that leave NAR will need to carefully consider the potential impact on their business operations and find ways to adapt to these changes.