NAR’t so easy: MLS control means partners can’t make a clean break

Redfin is ditching the National Association of Realtors.

The Seattle-based company is now requiring agents to pull their membership from NAR, according to an announcement by CEO Glenn Kelman. A letter published this week took issue with the group’s rules requiring buyers’ agents fees on every listing — policies that are also at the center of two landmark antitrust lawsuits filed in the Midwest — and rules preventing Redfin.com from showing for-sale-by-owner listings alongside agent listings.

“Redfin does not want to underwrite policies and legal efforts we oppose,” the firm wrote in an emailed statement.

Its breakup with NAR has been a long time coming, Kelman wrote in the letter. The online brokerage resigned its national board seat in June. But the final straw in its membership was sexual harassment allegations against leadership at the trade group. 

“When the harassment issues came to light, that’s when it came to another level,” Kelman told The New York Times.

Despite its sweeping objections against the group, which counts a reported 1.5 million members and $1.5 billion in assets across the United States, the brokerage isn’t able to make an entirely clean break. 

At the heart of a likely messy and protracted breakup process are local Multiple Listing Services, which fall under control of the trade group, and as Kelman said, “impossible to be an agent.”

Without membership in the local chapter — which requires agents also belong to the state and national associations — agents will lose access to the MLS, as well as other services like lockboxes and industry-standard contracts. 

This is the case for about half of cities in the U.S., including Dallas, Houston, Long Island, Nashville, Charlotte, Phoenix and Salt Lake City, where leaving NAR would be detrimental to agents’ business.

“It’s impossible to be an agent if you can’t see which homes are for sale, or unlock the door to those homes, or even write an offer,” Kelman wrote in the announcement, where he said the firm was “asking NAR to decouple local access to these tools” from support in all markets. 

For agents, equation of cost vs. benefits

In the markets where the MLS is decoupled from NAR agents can access listing services without being a registered Realtor, and drop their membership without a threat to business. 

In Miami — the home of the nation’s largest association of Realtors with 60,000 members — agents are allowed to subscribe to local MLS without belonging to the national organization. 

CoreLogic runs the service for the Miami association. Christopher Zoller, former board of directors chairman of the Miami Association of Realtors, said non-Realtor agents in South Florida can also pay a fee to join MLSs in other cities outside their jurisdiction.

Though NAR membership isn’t required to access listings, Zoller said the organization provides other benefits like a connection to industry lobbying and oversight to safeguard its established code of ethics. 

“I believe he’s shooting himself in the foot,” Zoller said of Kelman and his decision to withdraw his firm from NAR. “If I was not a Realtor, there’s no professional standards. Nobody’s looking over my back. Nobody’s policing my actions.”

But NAR isn’t the only national organization that imposes industry standards. 

In New York, where the Real Estate Board of New York operates its own Residential Listing Service, the independent governing body is a member of the Council of Multiple Listing Services and the Real Estate Standards Organization, both of which have policies pertaining to business practices. 

Mike Pappas, president of the Miami-based brokerage Keyes Company, agreed that the benefits of NAR membership extends beyond just MLS access, but acknowledged the recent upheaval at the organization is likely foreshadowing a shift in its relationship with listing services across the board.

“We’re in a new era of MLS-NAR relationships, which will eventually get sorted out,” Pappas said. “My dad used to say, ‘Everybody’s for progress, but nobody’s for change.’”

In the case of a broker like Redfin, which had to pay roughly hundreds of dollars for each associate, “we’d probably all make the same decision,” Pappas said.

As for others that could follow Redfin’s lead away from the group, a spokesperson for the brokerage said it didn’t want to speculate on what other firms would do.

Zillow, which joined NAR in 2020, is planning to continue its relationship with NAR and local listing services. 

“We believe part of the current path for modernizing the industry is through engaging at the local and national level with both MLSs and NAR,” a spokesperson for the tech platform wrote in an emailed statement. “If we determine we can no longer affect change for the good of the industry and consumers, then we will re-evaluate our approach.”

Redfin also acknowledged that it was easier for the firm to pull its agents out of NAR, as they’re employees and not independent contractors. 

“We hope this begins a conversation in the industry about decoupling NAR and MLS access,” the Redfin spokesperson wrote. “We also would like to see more flexibility in terms of membership options that would allow individual agents to decide for themselves if they want to join a local, state or national association.”

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