Some of the nation’s largest real estate brokerages, including Coldwell Banker, Century 21 Real Estate, Sotheby’s International Realty, and ReMax, are part of the Association of Realtors, a powerful trade group that controls the real estate industry. Trying to sever allegiance to the association. Loose.
Chicago-based NAR is the largest professional organization in the United States. He has 1.5 million members, his total assets are over $1 billion, and he owns a trademark for the word “Realtor,” so real estate agents call themselves his Realtors and are known in many areas. You will be able to buy and sell houses subject to the payment of membership fees. Country.
But in recent months, the company’s image and influence have taken a hit following sexual harassment allegations against its top leadership and two antitrust class action lawsuits. Re/Max and Anywhere Real Estate, two of the world’s largest real estate brokerage franchisors whose brands include Century 21 Real Estate, Coldwell Banker, Corcoran Group and Sotheby’s International Real Estate, settled their lawsuits last month. Everywhere you pay $83.5 million. Re/Max, $55 million; The companies also announced that they will also waive the NAR membership requirement as part of the settlement agreement.
“The brokerage firm is an independent legal entity and makes its own business decisions,” NAR spokesperson Mantil Williams said in an emailed statement. “It is incumbent on all real estate agent associations, local, state and national, to provide real value to their members and continue to communicate. If these brokers continue to find value in belonging to the association, If so, they will choose to belong to an association.
“The proposed settlement does not change how we present our cases in court,” he added.
A coalition of home sellers sued NAR and several brokerages in 2019, challenging NAR’s policy requiring listing agents to pay commissions to buyer agents in home sales transactions, which are almost always paid by home sellers. will be transferred to
Agents who are members of NAR must follow the organization’s policies when buying, selling, and listing homes. That includes policies that led to what home sellers described in lawsuits as violating the Sherman Antitrust Act by inflating seller costs.
Also on Friday, NAR Chief Legal Officer Katie Johnson sent an internal message to staff clarifying the organization’s own interpretation of the agency’s fee rules. In the message, obtained by The New York Times, he said that while NAR policy requires listing agents to offer compensation to the buyer’s broker, the offer could be as little as $0. Ta.
A lawyer for the plaintiffs in the antitrust case told real estate news site Inman, which first reported the change, that the change amounted to a “stunning admission of guilt.” Anywhere and Re/Max were named as defendants along with NAR and signed the agreement. A joint settlement of both lawsuits was reached last month. On Friday, Anywhere disclosed the terms and announced that as part of the agreement, approximately 200,000 real estate agents will no longer be required to maintain NAR membership. Additionally, Re/Max, which employs more than 140,000 real estate agents, also announced that it would waive NAR as follows: There is a similar provision in the agreement.
NAR said it does not intend to participate in the settlement with Anywhere and Re/Max and instead plans to head to federal court in Kansas City on Oct. 16 (the plaintiffs are based in western Missouri). ). Keller Williams and HomeServices of America are also named as defendants.
The departure from NAR comes just days after Seattle-based online real estate broker Redfin announced it would require many of its agents to sever ties with NAR. Redfin CEO Glenn Kelman said NAR’s impending antitrust battle played a key role in his decision, but the New York Times revealed in August He said he was also troubled by allegations of widespread sexual harassment within the organization. Former NAR President Kenny Purcell, who was the subject of many of these allegations, resigned from his position two days after the Times report was published.
Compass real estate agent Jason Haber, who has been at the forefront of calls for reform of the NAR since the Times published its report, said the NAR is at a tipping point.
“Lawsuits and sexual harassment are inextricably linked as they expose NAR’s flaws. As anyone in the real estate industry knows, the strength of a family lies in its foundations. “The house had been neglected for so many years that it had too many cracks, and now those cracks are exposed,” he said in an interview. “The only way to save it is to rebuild it from the ground up.”
On Friday, leaders within the NAR also said they were seeing such rifts.
“We’re in a perfect storm,” North Carolina broker Lee Brown, a member of NAR’s national board of directors, said of the issues currently surrounding the organization. “NAR is bloated, its staff is arrogant, and at the same time its members are trying to figure out whether they can function without NAR, and we are trying to figure out how our business model works for the average consumer. We’re defending whether it works or not.”
But Brown said he believes class action lawsuits are short-sighted. This is because without home sellers having to compensate buyer agents, many buyers would be left alone to navigate the housing market, making them vulnerable to exploitation. “It’s structured this way to ensure that consumers are protected,” she said.