- Real estate's dysfunctional giant: NAR
Real estate's dysfunctional giant: NAR
The National Association of Realtors is the country's biggest spender on lobbying. It's also in disarray right now.
The National Association of Realtors (NAR) has historically held a reputation as one of the most influential trade and lobbying groups in the nation. However, recent events have led some real estate agents to question if the organization has lost its edge.
The tension intensified in August when the New York Times published a report detailing allegations of rampant sexual harassment within NAR. The revelations sent shockwaves through the industry, raising concerns about the work environment and practices within the organization. NAR President Kenny Parcell, who was accused in the article of sexual harassment, quickly resigned.
The turmoil did not end there. In a legal battle that captured the attention of real estate professionals across the nation, a Missouri jury delivered a groundbreaking decision last Tuesday. The plaintiffs in the Sitzer/Burnett buyer broker commission class action lawsuit were awarded an astonishing $1.78 billion in damages. This lawsuit accused major industry players, including Keller Williams, HomeServices of America, and NAR, of conspiring to inflate commission rates and violating antitrust laws. The jury agreed.
After the ruling, the defendants made it clear that they intend to appeal the decision. Nonetheless, the verdict's implications reverberated throughout the real estate landscape. This case has the potential to be a seismic event, setting the stage for years of legal battles and triggering additional lawsuits. The question on everyone's mind is how this ruling will (or won’t) ultimately reshape the real estate industry/agent commissions.
Adding to the already tumultuous atmosphere, NAR CEO Bob Goldberg announced on Thursday he’d step down sooner than expected. Nykia Wright, former CEO of the Chicago Sun-Times, will replace Goldberg. His unexpected exit raised questions about the leadership of NAR and the direction it would take moving forward.
Amid these challenges and controversies, a growing sentiment among real estate agents is that NAR, which held the title of the country's largest spender on lobbying in 2022, is not effectively representing their interests.
Of course, the frustration with NAR is only exacerbated by the fact that we’re amid a historic pullback in existing home sales. In fact, last week mortgage purchase apps hit the lowest level since 1995.
Big picture: The National Association of Realtors (NAR) isn’t going anywhere, but it does confront two significant challenges. One pertains to legal challenges within the industry, while the other involves rebuilding the trust of its due-paying members.
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