The National Association of Realtors (NAR) has a high-profile defector. Yesterday, the residential real estate listing site and brokerage Redfin announced that it plans on canceling NAR memberships for its 1,800 brokers. The reason that Redfin cited on their website was explained that the recent allegations of sexual harassment and “culture of intimidation and retribution” were the last straw for the brokerage. The sexual harassment allegations against the organization are certainly damning, but they alone are not the reason Redfin split.
Redfin has been able to share listing data on its website thanks to an Internet Data Exchange with each individual MLS. These MLSs require membership to NAR as part of their dues. That has added up to $13 million dollars since they joined in 2017, according to Redfin. This is why Redfin also asked the NAT “to decouple local access to these tools, including the listing databases known as Multiple Listing Services, from support for the national lobbying organization” in their statement. NAR’s power at certain MLSs is the reason the Redfin isn’t able to pull all of their agents out of the NAR. “In about half the U.S., including in cities like Charlotte, Dallas, Houston, Las Vegas, Long Island, Minneapolis, Nashville, Phoenix, and Salt Lake City, we can’t quit NAR individually or en masse, because NAR membership is required for agents to access listing databases, lockboxes, and industry-standard contracts,” the statement said.
There are also other issues that Redfin has with NAR. These include the stipulation that if a broker wants to join NAR, every agent they work with must do so as well. Likewise, if an agent wants to join NAR, their broker must be a member too. Redfin offered this colorful analogy to illustrate its point: “This is like eating at a restaurant that requires you to buy food for your entire family even when you come in alone, and that also says no family member can dine there if you ever stop dining there too.” Redfin has other complaints as well, like how a buyer’s agent’s compensation is determined and how listing brokers are attributed for listings.
So now Redfin will try to find a way around NAR. This will not be an easy undertaking, but their hope is that the loss of revenue and bad press that this decision creates will force NAR to change. I honestly applaud them for this move. I have been outspoken about my concerns over NAR’s stranglehold over the MLS system. But what I have an issue with is how they seem to be using the sexual harassment change as the main reason for their decision. Sure, these are very serious charges. But to NAR’s credit, they have appointed a new president who has been very forthright with her actions to address these incidents.
In the end, blaming the misconduct of some of the people in charge of NAR comes off as a bit disingenuous. If you want to change the way that NAR operates, then just say that. Many in the industry will support it; every broker I know has an opinion about the organization. But don’t use the hurt that the sexual misconduct inflicted on a few unfortunate people to advance your own agenda. They have their fight, and you have yours. Good luck.