This account is based on 20 interviews with current and former National Association of Realtors staff and members, as well as thousands of pages of court records, and internal NAR documents introduced as part of numerous court proceedings. NOTUS also reviewed 10 years of nonprofit filings, campaign finance records and corporate ownership documents to understand the extent of NAR’s political power, advocacy and spending. The account of former NAR President Kenny Parcell in the Bahamas and Tetons is based on interviews and a memo written by a NAR executive. In statements to NOTUS, NAR emphasized the organization is “fully committed to transforming its culture,” and that a legal settlement reached by NAR over antitrust claims “maintains consumer choice and protects members to the greatest extent possible.”
By most accounts, the retreat in the Bahamas in the spring of 2022 began fabulously well.
Guests, who had earned their seats by donating to political campaigns supported by the more than 1.5 million-member National Association of Realtors, attended lectures in the morning and enjoyed Nassau in the afternoon, lounging by the pool and admiring the flock of pink flamingos that stud the Baha Mar resort. They were treated to speeches from two former Trump administration officials, Mike Pompeo and Kellyanne Conway. At night, there were boozy parties with entertainers who breathed fire and danced on stilts. The association’s top brass stayed out late gambling before retiring to rooms that, unlike the other guests’ rooms, had been upgraded to suites.
It all looked like another successful gathering of the National Association of Realtors. Realtors are a dominant force in American life, even if you only ever think about them when you’re buying or selling a home. NAR is flush with cash, with an annual revenue of more than $300 million — bigger than the Chamber of Commerce and the Business Roundtable combined. It is the second-largest spender on federal lobbying in the United States and doles out tens of millions of dollars on elections each cycle, throwing its weight behind school board candidates, judges and a litany of races for mayor, governor and Congress. This political heavy-hitting is about much more than the real estate profession: Property owners’ rights, rent control and environmental regulations are all central to the Realtors’ agenda.
As the U.S. housing market boomed, driven by years of falling interest rates and a shortage of suitable homes in many markets, Realtors took a 5% to 6% cut of most homes sold in America — an estimated $100 billion in commissions annually, some of which flows to NAR in dues to national, state and local chapters.
The retreat in the Bahamas was one perk for Realtors who went above and beyond to help NAR’s political machine. It may have also been a swan song.
In the two years since, there have been two public reckonings at NAR: a surprise verdict in a case alleging a Realtor conspiracy to inflate commissions and a scandal over sexual harassment allegations that former employees believe was teed up by NAR’s old-fashioned and opulent culture.
To hear critics tell it, NAR and its more than 1,000 state and local affiliates have exploited their influence over real estate transactions to gain more money, which they spent building a gigantic political influence apparatus that secured their status. But behind the partying and spending, NAR has been facing existential risk since the advent of the internet. And over the last two years, it has started to come crashing down.
Kenny Parcell, the association’s elected president for 2023, was at the center of it all. Parcell spent decades climbing his way from gym-loving Realtor from Utah to the association’s upper crust. His tenure is now remembered for a sexual harassment scandal that shook the industry. But during the trip to the Bahamas, Parcell’s hot-and-cold nature was becoming clear to staff serving under him during his presidency.
In the Bahamas, Parcell was already getting antsy about another big Realtors’ party. He told an aide tasked with event planning he was nervous about an upcoming trip to a dude ranch in Idaho near the Tetons where Parcell and his inner circle were scheduled to kick off his year as president.
Parcell said he had noticed errors with booking air travel and rooms. He said he needed an association staffer who was making mistakes booted from the project. And then Parcell started to cry. If his year as association president didn’t go well, he allegedly said, he would have to kill himself.
The NAR staffer in question was removed from the planning, and Parcell’s weekend out West went off without a hitch. But NAR staff started to complain to each other and to their managers about him, all eventually culminating in a memo sent to NAR’s head of talent. The memo was first reported by the real estate trade publication Inman. The problems culminated the following summer when one employee filed a sexual harassment lawsuit and nearly 30 others spoke about Parcell and other Realtors to The New York Times.
Parcell ultimately resigned, called the Times report “false and defamatory” and said his organization “turned its back on me and made me the scapegoat to avoid retribution.” But the scandal was quickly overshadowed by another that seemed to take NAR by surprise. In October, a jury awarded $1.8 billion in damages to homebuyers in Missouri who alleged NAR was engaged in an unlawful conspiracy that, along with brokerages, has artificially propped up real estate commissions and cost home sellers billions of dollars.
The threats to NAR are snowballing. The Justice Department has walked away from a settlement with NAR negotiated during the Trump administration, prompting a lawsuit from NAR. The department is examining the organization’s control over real estate data, among other issues, according to people at NAR. Meanwhile, two well-known real estate agents have launched a rival association and the online brokerage Redfin quit NAR last fall.
The Justice Department’s moves could be the most significant development for Realtors yet; some say it would lead to the end of the Realtors’ association as it’s existed for more than a century. It could also make selling a home tens of thousands of dollars cheaper for many homeowners.
Because as even NAR knew, the notion that people living in our digital age need a real estate agent to find a home probably isn’t true. A 2015 report warning of threats to the industry that NAR commissioned said as much.
“Home buyers don’t always want to use an agent, but they think they have to,” the report warned. “Wait till they discover they don’t have to.”
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Realtors — especially those representing buyers — once looked poised to go the way of travel agents and bank tellers: made obsolete by the self-serve nature of the internet.
Those predictions underestimated the steps the real estate industry would take to protect itself.
“There is a war being waged to control the data of our industry and provide real estate services at the lowest price possible. This battle is going on between internet-based companies and every brick-and-mortar industry in North America,” Gary Keller, founder of the real estate firm Keller Williams, said in an email to colleagues in 2017. “And it is a relentless battle that won’t stop until every piece of data has been captured and every commission dollar has been wrung from the agent’s pocket.”
As Keller recognized, Realtors’ biggest value proposition has always been their data: information on what homes are for sale, when they’ll hit the market and what nearby homes have sold for.
Before the internet, Realtors showed Americans homes for sale in paper binders known as the Multiple Listing Service, which was then and is now exclusively available to Realtor association members. Information in the MLS was collected by regional Realtors’ associations and dropped on brokers’ doorsteps, who shared the information with home shoppers. The Realtors’ control over access to information about homes for sale and local taxes made Realtors valuable, making the Realtors’ associations that collected that information indispensable.
The internet seemed poised to revolutionize the system: Buyers could go online to do their own research, eliminating the need for brokers with giant binders. But as discount brokerages started offering cheaper services amid the dot-com boom, Realtors resisted. NAR-affiliated listing services withheld their listings from discount brokerage websites, making it difficult for those sites to offer lists of properties for sale.
The Department of Justice sued NAR in 2005, alleging anticompetitive behavior, and the Realtors reversed course. In 2008, the DOJ and NAR entered into a 10-year settlement agreement where Realtors agreed to share MLS data with online brokerages, setting up a system where online sites like Redfin and Zillow are still mostly reliant on the Realtors and are brokerages in their own right.
Yet the upstarts that have challenged the system have so far been crushed.
A start-up called REX, founded by former financial industry executives in 2015, tried to challenge the MLS monopoly by simply listing and marketing homes directly to consumers. But REX claimed they struggled due to a NAR rule that prohibited sites like Zillow from “co-mingling” most MLS listings with REX listings. Beginning in 2021, REX homes were not listed on Zillow’s main page showing homes for sale; they were relegated to a hard-to-find “Other” tab on Zillow’s website that few consumers knew to check. (Homes for sale by owner are similarly buried on sites like Zillow.) REX sued Zillow and NAR in 2021 but ultimately lost at trial. It ceased operations in 2022.
REX’s struggle shows how Realtors and brokerages still benefit from being the gatekeepers of data.
NAR has said that without the MLS, home listings would be “outdated” and contain “unverified, inaccurate and unreliable property information.” From the Realtors’ perspective, listings would be messier and less complete — more like marketplaces on Craigslist or Facebook — if they weren’t maintained professionally. Buyers’ agents, meanwhile, do much more than just provide listings: They schedule showings, provide guidance and negotiate offers on the buyers’ behalf.
Today, nearly every American who shops for a home does so online — and they often find homes without the assistance of a real estate agent. Yet nearly 90% of homebuyers still use an agent to buy their home.
Behind closed doors, even Realtors recognize that their dominance feels tenuous. A report commissioned by NAR in 2015 identified one of the biggest and most likely threats as “entry by a new player” into the real estate market. “A large company like Google could fall in love with real estate, along with its many resources. With a market cap of $356 billion and an insatiable appetite for acquiring companies, buying a large real estate portal and becoming a dominant player in the MLS or portal world is not too big of a stretch,” the report warned.
The system is self-perpetuating. Realtors pay dues to NAR and its more than 1,000 state and local affiliates for access to the MLS, and the dues feed a sprawling political apparatus that keeps the money flowing.
Public records, internal documents and NAR’s own statements show that a central part of this strategy is political spending. NAR spent more than $67 million during the 2022 midterms alone through a dizzying network of PACs, money handed out to state and local real estate associations and a network of anonymous-sounding groups with names like “Alliance for a Better Pennsylvania” and the “American Property Owners Alliance.” The $67 million figure is, in reality, a sizable undercount of what Realtors spent swaying elections: State and local real estate associations pour tens of millions more of their own into races each cycle, and people who list themselves as working in the real estate sector are the second-biggest group of professionals contributing to federal elections after investors, according to the nonprofit OpenSecrets.
One focus is installing Realtors and their allies in elected positions, which NAR pursues both via a training program for aspiring politicians who work in real estate and by spending millions each election cycle helping candidates. Thousands of Realtors serve in some form of public office, according to NAR. In a 2011 article in the association’s in-house magazine, “How and Why to Get Members Elected,” an Illinois real estate association official explained how getting Realtors onto his local village board had been helpful when it comes to city planning, zoning and ordinances for posting signs: “It makes my job a million times easier,” the official said.
NAR gives heartily to both Democratic and Republican politicians, but those donations don’t tell the whole story: During the last midterms, a group fully funded by NAR passed $4 million to two dark money groups that promote Republican policies, American Action Network and One Nation.
NAR takes a holistic approach toward Realtors’ interests, trying to protect not just the profession but also the real estate market and property owners’ rights. Those priorities, too, often align with Republican interests: The association joined a lawsuit to block President Barack Obama’s Waters of the United States rule, which tried to expand protections for wetlands but can make it more expensive to build nearby homes.
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More than a quarter of Realtors own or manage rental properties, by NAR’s estimates, and the association advocates for both increasing America’s housing stock and avoiding restrictions on landlords. NAR pushed to end Biden’s pandemic-era eviction restriction and has spent millions fighting rent control movements in states.
In Orlando, Florida, rents jumped 25% year over year between 2021 and 2022, prompting lawmakers to put a rent control measure on the ballot. The Florida Association of Realtors threw its weight against the initiative, filing a lawsuit alleging it was illegal under state law. A PAC funded largely by NAR spent at least $2 million fighting the Orange County initiative alone, buying ads and quietly slipping more than $300,000 to a separate pro-veterans group, Housing for Hometown Heroes, that then took out its own ads.
Nine months after it was approved for the ballot, the Florida Supreme Court knocked down the rent control proposal. The Realtors did not stop there: Florida’s real estate association worked to get a ban on all local rent control ordinances introduced in the state Senate. Gov. Ron DeSantis signed it as part of a larger housing bill last March.
Cementing power in Washington was a particular focus for Bob Goldberg, who became CEO of NAR at the outset of the Trump presidency. In 2018, he revamped NAR’s political team, starting by hiring Shannon McGahn, a former counselor to then-Treasury Secretary Steven Mnuchin and wife of then-White House counsel Donald McGahn. They brought on other highly connected Washingtonians like Sydney Barron Gallego, a former Hillary Clinton campaign aide and wife of now-Arizona Senate candidate Ruben Gallego.
McGahn frequently talked of taking NAR beyond the old-school wining and dining that’s ubiquitous in Washington and making it into a cutting-edge policy machine. One of NAR’s first victories during her tenure came the following spring when then-President Donald Trump spoke at NAR’s conference. It was the first time a sitting president had attended in years.
Yet few seemed to recognize the peril that a growing number of antitrust lawsuits might hold for the organization.
Despite its vast resources, only a small number of NAR staff were working on the issue, according to people in both Washington and Chicago. The association did hire one lobbyist of dozens, a former chief counsel to the Senate Judiciary Committee, to lobby Congress, the Federal Trade Commission and Department of Justice on competition issues in 2018.
But for most of the time the lawsuits existed, NAR executives like Goldberg took a straightforward stance on the cases in conversation with staff: Realtors would win. And if at some point they didn’t win, they would appeal.
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To survive the bevy of legal and organizational challenges brewing from regulators, plaintiffs and its own staff, NAR would need deft organizational leadership and legal savvy.
Instead, NAR leadership was overconfident about its ability to fend off antitrust threats and increasingly enmeshed in internal personnel drama.
NAR staff who had previously worked at cash-strapped nonprofits were now spending freely, renting out sports stadiums or an entire theme park at Universal Studios for members — especially those who made political donations. John Legend and Hall & Oates performed at Realtor conferences in recent years. In Miami, the local Realtors’ association once hired performers dressed as towering, LED-lit robots for a dance party at the famous Fontainebleau hotel.
As CEO, Goldberg urged staff to take a “members-first” attitude, especially prioritizing the needs of NAR’s board and other VIPs. Like many associations, NAR has both professional staff who run the day-to-day operations, like the CEO, and elected volunteer leaders who make the high-level decisions, like the president and board. But at NAR, staff felt they could not dissuade the elected leadership from pet projects, no matter how expensive, ill-conceived or irrelevant to the mission they were. Goldberg did not respond to requests for comment.
NAR’s elected leaders loved having this leeway over the goings-on at the organization. One year, an incoming president commissioned a Nashville-based musician to co-write a song about Realtors. “Own it,” the chorus said. “Claim it for yourself.” Another year, a NAR president asked to have a tree planted for each of the over 1.5 million Realtor members as a symbol of NAR’s commitment to the environment — a request that was met with eye rolls from staff but ultimately fulfilled.
But the work also had a darker side. There were for years public warning signs that NAR and the broader real estate industry had a sexual harassment problem.
NAR was an old-fashioned workplace where meetings often started with men shaking hands and giving women a kiss on the cheek. During major conferences, the association would frequently rent hotel suites where NAR leaders could invite colleagues for informal networking and expect mostly female staff to keep the suites stocked with liquor (on NAR’s dime) and tend bar for the VIPs, sometimes late into the night.
At times, the job felt embarrassing. One former employee who was then in her mid-20s recalled walking through a NAR party and feeling the hands of men graze her back as she crossed the room. She never raised it with superiors, saying that NAR had no culture of looking out for its employees or disciplining misbehaving members, who, after all, were dues-paying members NAR had no real ability to punish.
In 2016, a broker wrote a blog post recounting attending a real estate conference in San Francisco where she and female colleagues had heard unnamed, high-profile men in the industry speaking lewdly on a bus.
“Are you ladies learning something up there?” one man allegedly said to the author, Stacie Perrault Staub, and her friends. “Don’t ever cheat on your man or he has every right to fuck you up.”
Then a former executive at Move Inc., a NAR partner that runs real estate listing websites like Realtor.com, sued her employer in 2020, alleging she had “suffered as a result of the sexually charged atmosphere.” The allegations included an executive at Move asking her, “Should I have to cover Tylenol on an expense report just because you got cramps or something?”
The lawsuit referenced a sexual harassment report about an unnamed NAR executive, as well as a separate complaint against a now-retired vice president. It settled out of court. But NAR’s troubles only escalated.
NAR had received complaints about Parcell even before he became president, according to court documents. Staff told NOTUS he was handsy and asked probing questions about who was single. Still, in 2022, he was elected to lead the Realtors the following year.
Parcell embraced the role with zeal. He took a shining to being in the spotlight: When he was president-elect, he was asked to travel to a real estate conference in Romania and used the opportunity to tack on a self-appointed five-day goodwill mission to Ukraine, where Parcell posed in front of a tank wearing a blue-and-white “Realtors” T-shirt. The photo later appeared in an article about him in NAR’s in-house magazine.
His presidency started with the weekend retreat for his leadership team in the Tetons, where guests were given “ranch names” and gifted custom cowboy boots, and continued on to an inaugural gala and a multimillion-dollar cross-country bus-and-motorcycle tour to promote the Realtors’ profession. For the tour’s finale, Parcell and NAR threw a party for members of Congress by renting out the entire Nationals Park, complete with batting practice and photos with the Nationals’ racing president mascots.
Behind the scenes, Parcell had formed unusual relationships with women at NAR, according to interviews and documents. In June 2022, as Parcell was gearing up to take the mantle of president, NAR Chief of Marketing and Events Victoria Gillespie sent an extensive memo to a NAR senior vice president describing problems her staff was having with Parcell.
The memo included photos Parcell had taken of his crotch, ostensibly to show off a Western-style belt buckle he’d designed for his presidency emblazoned with the Realtor’s “R” logo, and sent to employees. It described Parcell asking staff to stay at his home in Utah while filming a biographical video to help launch his presidency — then growing angry and eventually canceling the trip after one employee who had initially agreed, NAR Chief Storyteller Janelle Brevard, decided she’d rather stay at a hotel.
The memo described a close relationship between Brevard and Parcell that had turned contentious and started to affect the work of the entire events and production staff. And it noted that multiple female staff members had already complained to their superiors about Parcell’s behavior.
NAR began investigating complaints about Parcell as early as 2021, the same year he came onto the national leadership team as First VP, according to a lawsuit later filed by Brevard. Brevard was interviewed as part of one of those investigations in the fall of 2022, where she told the law firm doing the investigation that she had had sexually explicit conversations with Parcell and that he had requested sexual favors, the documents show.
In response, she was fired from NAR for failure to disclose a relationship with Parcell, the complaint said. Parcell, who was then president-elect, was not disciplined.
Brevard sued, then settled, in 2023. The lawsuit attracted little attention outside industry circles — until The New York Times published an exposé of its own. NAR officials had a history of sexual harassment detailed by a number of women who spoke to the paper, and multiple women said they had filed internal harassment complaints.
Parcell denied engaging in any sexual harassment and said he had never been told by NAR he’d behaved inappropriately. He resigned soon after, a move he later said in a statement provided to NOTUS was “in no way an admission of guilt.”
“It was a good faith effort to put NAR and its members first,” Parcell said. “But after my resignation, an organization that I have devoted the last 15 years of my life to turned its back on me and made me the scapegoat to avoid retribution.”
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The high-flying lifestyle — the trips abroad and robot-fueled ragers at the Fontainebleau — was ultimately funded largely by dues from regular, rank-and-file Realtors. Those Realtors are usually required by their brokerages to pay dues to their local, state and national Realtors’ associations, and in exchange they get access to the MLS.
This has been how single-family homes have been bought and sold in America for decades. Over time, a handful of people looked at the system and saw rotten apples.
The fact that real estate agents essentially must belong to a professional association to do their basic day-to-day jobs is unusual for a profession. So is the consolidation around a single set of databases, locking out any real estate agent who doesn’t want to abide by the MLS’ rules. Then there’s the practice of the seller publicly posting the commission they would pay to a buyer’s agent, an unusual sales practice that could create a conflict of interest for the buyer’s agent.
Critics like Linda O’Connor saw an anticompetitive system hiding in plain sight. A former NAR volunteer leader, she tried to warn the Realtors more than a decade ago but got the brush-off.
O’Connor had a 35-year career in real estate on Massachusetts’ North Shore, outside of Boston. She has been named Realtor of the year twice locally and has been honored as a life member. She had served on various Realtors committees, including service as VP of legal affairs until a cancer diagnosis forced her to step back from association work.
In 2012, she warned NAR that she believed the way agents representing sellers set and disclose compensation for the homebuyer’s agent through the MLS was an antitrust violation. Her warning to the organization was made public at trial and in court documents as part of one of the antitrust suits against NAR.
“My contention is that the traditional method of compensation of the seller and broker ‘setting’ compensation to be paid to a cooperating agent’s company or firm is the ultimate form of restraint of trade and indeed represents price fixing in a free market,” she wrote. O’Connor suggested some minor technical tweaks to NAR’s code of ethics in the short term but hoped they would “open a meaningful and industry-altering dialogue.”
As she saw it, posting commissions, a near-universal practice, could be viewed as price-fixing and she floated what she called the “blasphemous” suggestion that the Realtors stop doing it.
Agents are paid commissions that are set via an unofficial — but pervasive — system that reinforces an industry-wide 5% to 6% standard even though NAR does not technically control what commissions are paid to Realtors, a point the association would repeatedly make in court. NAR policies prop up this system, however, and Realtors and the brokers that employ them — like Century 21, Coldwell Banker and Better Homes and Garden — all have policies that establish 6% or higher as the industry standard.
Documents introduced in court show that Realtors are coached to accept nothing less than the standard 6% rate, which comes pre-filled in on many of the forms that Realtors use with their clients. Brokerages give their agents similar scripts to deploy if asked by a client to negotiate: “I could not cut my commission because I would not offer you less than my very best,” reads one script. “If I reduce the commission to agents with potential buyers, we may not be sending the message that will get your home sold,” said another.
But with more than 1.5 million Realtors out there, some of them have occasionally been a bit more blunt. Allan Dalton, then the CEO of Real Living Real Estate, had a better script. On a real estate podcast, he said he’d heard it deployed to great effect by one of the best saleswomen in the country.
The technique? A tirade along the lines of: “There’s no bleeping bleeping way I’m going to cut my bleeping bleeping commission. What do you think, I’m a bleeping bleeping hooker standing outside the Lincoln Tunnel at three o’clock in the morning giving bleeping bleepings to sailors? If you think I’m going to cut my bleeping bleeping commission, you can take this home and shove it up your bleeping bleeping. And I know that it will fit.” In an email to NOTUS, Dalton said “the quote had nothing to do with fee negotiations” and pointed to the video recording of the podcast.
NAR never took up O’Connor’s resolution. “Her proposal was not considered any further,” said NAR’s associate general counsel later in testimony.
But she wasn’t wrong. As the lawyer who would ultimately win a nearly $2 billion judgment against NAR told the jury in his opening statement: “If they had listened to her voice, we wouldn’t be here.”
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Before going to law school, Doug Miller got a real estate license. He worked briefly in Wisconsin for a Realtor who was also serving as the president-elect of NAR. What he saw disturbed him. “I was disgusted with the things I was learning from my so-called mentor,” Miller said. And so he spent nearly 40 years amassing material that he believed showed how the real estate industry was corrupt. He worked as a real estate attorney and started a nonprofit to educate consumers, occasionally bringing suits against the industry.
“It’s a cartel on steroids,” Miller said about the Realtors. “There’s no good reason for a listing broker to be paying a buying broker. In any other scenario, it would be called commercial bribery.”
In 2018, he approached a large class-action firm with the idea of filing a lawsuit against the Realtors on behalf of people he believed had paid too much in commissions. Miller’s neighbor had volunteered to be the first plaintiff. The result was Moehrl v. National Association of Realtors — a landmark complaint that spawned dozens of copycats across the country.
One of them beat Miller to trial in Kansas City, Missouri, last fall. Over the course of two weeks, NAR denied all wrongdoing as plaintiffs’ lawyers pounded the theme that the Realtors had stacked the home-buying process in their favor.
The jury delivered a shocking verdict: It found NAR and several residential brokerages guilty and liable for $1.78 billion in damages. And that was just the liability to homebuyers in the western half of Missouri. Dozens of other similar cases were pending across the country.
At the time of the verdict, NAR said it would appeal. But in March, the association said it had reached a surprising — and ground-shaking — $418 million settlement that included an agreement to end certain policies around commissions. A judge gave preliminary approval to the settlement in late April, which would resolve all antitrust claims against NAR nationwide, including Miller’s.
The settlement’s real-life ramifications, which affect both NAR and several major brokerages, are still coming into focus, but it will undoubtedly change the home-buying process and potentially how NAR derives its political power.
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One recent weekend, shortly after the settlement was announced, NAR VIPs convened again, this time in Miami, where a woman circulated in the crowd wearing a feathered headpiece and bell-shaped metal skirt holding up dozens of glasses of sparkling wine for the taking.
The party is not over for the Realtors — at least not yet. The association continues to press on in Washington, taking out ads in Politico Playbook and plowing ahead with its annual May fly-in for Realtors to meet with members of Congress. On Capitol Hill, lawmakers recently formed a Bipartisan Congressional Real Estate Caucus with support from NAR and others. But the organization’s future has never been more in doubt.
After Parcell resigned, two other top executives, Goldberg and longtime head of human resources Donna Gland, each announced early retirements in November, shortly before a major NAR conference. The organization swiftly made an outside hire as its new interim CEO and launched a commission with more than 70 members tasked with gathering input and reforming NAR’s culture that will present its final findings this fall. “The real story is this,” NAR’s new interim CEO said in a letter to members in February. “NAR recognizes the challenges of the moment, and we are focused on moving our association and our industry forward.”
Some people currently and formerly involved with NAR are still skeptical of whether the organization’s culture problems, which stem in part from the power imbalances between dues-paying members and paid staff, will be fixed. But there is another, more existential question afoot: whether the settlement, coupled with an ongoing investigation from the Department of Justice and a challenge from an upstart Realtors group, will drain NAR’s largest source of cash — its Realtors.
In addition to paying damages, the settlement requires that Realtors no longer post the commissions that will be paid on the MLS, which could encourage negotiating and move the industry away from the 6% standard. During the Missouri antitrust trial, the plaintiffs’ lawyers estimated that Americans would save $50 billion a year if U.S. real estate commissions were brought in line with international norms.
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A new system may be on the horizon that saves consumers significant money, real estate experts say, one where homebuyers and sellers negotiate their Realtors’ commission, landing on a figure that reflects the Realtors’ skills — or where it’s more common for buyers and sellers agents to not use agents at all.
Less commission money would mean less work and lower profits for Realtors, potentially driving some out of the business. And two industry veterans, celebrity broker Mauricio Umansky and Jason Haber, who criticized NAR heavily during the harassment scandal, recently launched their own real estate association, which could further damage NAR’s singular status.
Asked about the efforts to start a rival organization, NAR spokesperson Suzanne Bouhia countered that “our members have always appreciated and thrived in a competitive environment.” Bouhia pointed to the machine NAR has built as evidence of its value: expansive advocacy wins coupled with “industry leadership, innovative tools, educational opportunities, leading economic research, national property data, and other benefits.”
Though commissions won’t be posted on the MLS, the practice of having a seller’s agent pay a buyer’s agent is still valuable, Bouhia said, “particularly for first-time and first-generation home buyers” who might lack money to pay agents themselves.
The practice can “help make professional representation more accessible, decrease costs for home buyers to secure these services, increase fair housing opportunities, and increase the potential buyer pool for sellers,” said Bouhia.
The settlement in Missouri did not break Realtors’ hold on the MLS services — but the Department of Justice might.
The DOJ has been in conversations with Realtors about the MLS amid its reopened antitrust investigation, according to people within NAR. Breaking real estate associations’ hold on the MLS could give a boost to home sellers who do not belong to their local association, like discount brokers and owners who sell themselves.
It could also have a massive impact on NAR: If Realtors have more options for what to do with their listings and what — if any — professional association to belong to, NAR’s membership could plunge to levels more akin to the American Medical Association or the American Bar Association, crushing the organization as we know it.
The changes could save consumers money, but the association’s mistakes might be felt most acutely by the rank-and-file Realtors who put their trust — and dues money — into the organization for years, assuming the association would protect their industry.
“These are good, hardworking people for the most part. And then there’s this weird nebulous organization above them that takes their money and has these very public problems like lawsuits and sexual harassment,” said Valerie Garcia, a former real estate agent who has spoken at NAR conferences. “And these poor Joe Schmoes are left holding the bag.”
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Maggie Severns and Byron Tau are reporters at NOTUS.