{"id":4733,"date":"2023-10-03T20:14:49","date_gmt":"2023-10-03T20:14:49","guid":{"rendered":"https:\/\/preprod.realtrends.com\/blog\/2023\/10\/03\/industry-reacts-to-redfin-nar-split-its-a-crack-in-the-wall\/"},"modified":"2025-03-13T02:53:08","modified_gmt":"2025-03-13T02:53:08","slug":"industry-reacts-to-redfin-nar-split-its-a-crack-in-the-wall","status":"publish","type":"post","link":"https:\/\/preprod.realtrends.com\/blog\/2023\/10\/03\/industry-reacts-to-redfin-nar-split-its-a-crack-in-the-wall\/","title":{"rendered":"Industry reacts to Redfin-NAR split: \u2018It\u2019s a crack in the wall\u2019"},"content":{"rendered":"\n<p><strong><a href=\"https:\/\/preprod.housingwire.com\/tag\/redfin\/\" target=\"_blank\" rel=\"noreferrer noopener\">Redfin<\/a><\/strong> put the real estate industry on notice Monday morning, <a href=\"https:\/\/preprod.housingwire.com\/articles\/redfin-breaks-with-nar-in-wake-of-sexual-harassment-allegations\/?cx_testId=11&amp;cx_testVariant=cx_1&amp;cx_artPos=0&amp;cx_experienceId=EXAPB9I50LOS#cxrecs_s\" target=\"_blank\" rel=\"noreferrer noopener\">announcing<\/a> that it will require agents to cancel&nbsp;their&nbsp;<strong><a href=\"https:\/\/preprod.housingwire.com\/tag\/national-association-of-realtors\/\" target=\"_blank\" rel=\"noreferrer noopener\">National Association of Realtors<\/a><\/strong>&nbsp;membership where possible.<\/p>\n\n\n\n<p>While Redfin\u2019s news certainly surprised the industry and seemingly drew a line in the sand, Joe Rath, the firm\u2019s head of industry relations, said the decision was a long time coming.<\/p>\n\n\n\n<p>\u201cWe started this process back in June when I resigned our NAR board seat, which are appointed to the top 50 brokerages in the country,\u201d Rath told <strong>HousingWire<\/strong> in an interview Tuesday. \u201cThat is really when we started the process of evaluating where we can drop memberships for our agents. There is a lot of unwinding to do there.\u201d<\/p>\n\n\n\n<p>Rath cited the same two reasons for the decision as Redfin executives highlighted in their open letter: \u201c<a href=\"https:\/\/preprod.housingwire.com\/articles\/re-max-settles-buyer-broker-commission-lawsuits-for-55-million\/\" target=\"_blank\" rel=\"noreferrer noopener\">NAR policies requiring a fee<\/a>&nbsp;for the buyer\u2019s agent on every listing\u201d and \u201ca pattern of&nbsp;<a href=\"https:\/\/preprod.housingwire.com\/articles\/nar-ignores-sexual-harassment-instills-culture-of-fear-dozens-of-women-tell-nyt\/\" target=\"_blank\" rel=\"noreferrer noopener\">alleged sexual harassment.<\/a>\u201d&nbsp;<\/p>\n\n\n\n<p>\u201cThe through line between both of these subjects was really that NAR is antithetical to our mission and who we are as a real estate company,\u201d Rath said. \u201cWe exist to give customers a better deal and we aim to be real estate\u2019s best employers, so really at that point, it is like <a href=\"https:\/\/preprod.housingwire.com\/tag\/glenn-kelman\/\" target=\"_blank\" rel=\"noreferrer noopener\">Glenn<\/a> said, \u2018<a href=\"https:\/\/www.redfin.com\/news\/redfin-is-leaving-nar\/\" target=\"_blank\" rel=\"noreferrer noopener\">Enough is enough\u2019<\/a> and that is why we actually took action this week.\u201d<\/p>\n\n\n\n<p>In response to Redfin\u2019s letter, NAR\u2019s Vice President of Communications Mantill Williams told <strong><a href=\"https:\/\/preprod.housingwire.com\/category\/hwmedia-hq\/\" target=\"_blank\" rel=\"noreferrer noopener\">HousingWire<\/a><\/strong> that Redfin had informed NAR of their decision to leave the trade group and that NAR \u201crespects their choice to do so.\u201d<\/p>\n\n\n\n<p>\u201cThe U.S. model of local <a href=\"https:\/\/preprod.housingwire.com\/tag\/mls\/\" target=\"_blank\" rel=\"noreferrer noopener\">MLS<\/a> broker marketplaces has long been \u2014 and still is \u2014 considered the best value in the world. NAR stands by its pro-consumer, pro-competitive guidance for affiliated local broker marketplaces that ensure equity, efficiency, transparency and market-driven pricing options for home buyers and sellers,\u201d Williams wrote in an email.&nbsp;\u201cAgent compensation is set between brokers and their clients and has always been negotiable at any point in the transaction.\u201d<\/p>\n\n\n\n<p>So far, Rath said the response from the industry to Redfin\u2019s choice has been respectful.<\/p>\n\n\n\n<p>\u201cI am at an MLS conference this week and I was thinking I might be that kid sitting alone in the school cafeteria, but as it turns out, this is something that other industry folks are excited to talk about,\u201d Rath said. \u201cOne thing we want is for the MLSs to be allowed to make their own decisions and not be bound by national rules set by a trade organization.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-mls-decoupling-from-realtor-associations-is-a-thorny-issue\">MLS &#8216;decoupling&#8217; from Realtor associations is a thorny issue<\/h2>\n\n\n\n<p>Redfin\u2019s desire for a world in which Realtor organizations and the MLSs \u201cdecouple\u201d may not be as simple as it seems.<\/p>\n\n\n\n<p>According to industry analyst Rob Hahn, NAR has won all but one lawsuit requiring Realtor association membership for MLS access. Following the loss of the Thompson suit, NAR changed its policy, eliminating the requirement that participants in Realtor-association MLSs must be Realtor members.&nbsp;<br><br>As a result of this policy change, MLSs can choose whether non-NAR members may or may not be allowed to participate in the MLS.<\/p>\n\n\n\n<p>\u201cIn short, NAR\u2019s response to Redfin will be (and should be), \u2018We already did that.\u2019&nbsp;<em>NAR has already decoupled MLS access from REALTOR membership<\/em>. Requiring REALTOR membership is an&nbsp;<em>optional<\/em>&nbsp;rule,\u201d Hahn wrote in the Oct. 2 edition of his <strong>Notorious ROB<\/strong> email newsletter. \u201cAccordingly, I think Redfin will be told to go lobby hundreds of local MLSs to remove the REALTOR-only requirement. Which \u2026 will be met with \u2026 shall we say&nbsp;<em>resistance<\/em>?\u201d<\/p>\n\n\n\n<p>Hahn concedes that it&#8217;s possible a local Realtor association will allow Redfin and its agents to join an MLS despite not being Realtor members. However, it would mean a major loss in dues for the local Realtor association.<\/p>\n\n\n\n<p>\u201cIn fact, most regional MLSs I know of use a &#8216;wholesale-retail&#8217; model in which the MLS actually sells its services to the local Association, and the only way to purchase MLS subscriptions is through the local Association,\u201d Hahn wrote. \u201cThey\u2019re all going to give that up? Maybe. I doubt it, but maybe.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Redfin&#8217;s public divorce from NAR sets stage for future battles<\/h2>\n\n\n\n<p>Due to this, Hahn believes Redfin\u2019s choice is more symbolic than anything else. But when coupled with the <strong><a href=\"https:\/\/preprod.housingwire.com\/articles\/anywhere-real-estate-settles-buyer-broker-commission-lawsuits\/\" target=\"_blank\" rel=\"noreferrer noopener\">Anywhere<\/a><\/strong> and <strong><a href=\"https:\/\/preprod.housingwire.com\/articles\/re-max-settles-buyer-broker-commission-lawsuits-for-55-million\/\" target=\"_blank\" rel=\"noreferrer noopener\">RE\/MAX<\/a><\/strong> buyer-broker commission lawsuit settlement agreements, which many believe include a provision no longer requiring Realtor membership for brokerages or agents, Hahn says this could be the start of something more.<\/p>\n\n\n\n<p>\u201cRedfin\u2019s decision and letter is the first move in a longer conflict. It sets the stage, as it were, for bigger and more important battles ahead involving far more than just Redfin,&#8221; Hahn wrote.<\/p>\n\n\n\n<p>He continued: &#8220;It gives permission to other brokerages \u2014 including those who will be subject to a settlement agreement with money-hungry lawyers \u2014 to think about NAR in a very different way. In a real way, symbolism can be important. Redfin is like the child who noticed that the emperor has no clothes &#8230; and&nbsp;<em>said so<\/em>. That\u2019s symbolic too, but boy, did those words matter. Sometimes, noticing and speaking are revolutionary acts.\u201d<\/p>\n\n\n\n<p><a href=\"https:\/\/preprod.housingwire.com\/tag\/steve-murray\/\" target=\"_blank\" rel=\"noreferrer noopener\">Steve Murray<\/a>, the co-founder of <strong><a href=\"https:\/\/preprod.housingwire.com\/tag\/realtrends\/\" target=\"_blank\" rel=\"noreferrer noopener\">RealTrends Consulting<\/a><\/strong>, shares a similar sentiment.<\/p>\n\n\n\n<p>\u201cThere is likely to be some other certain brokers in certain markets who are going to drop their membership now,\u201d Murray said. \u201cI don\u2019t know how widespread that will be, but it is significant \u2014 it\u2019s a crack in the wall. It is just the beginning, and we don\u2019t know how far it will go.\u201d<\/p>\n\n\n\n<p>As for right now, Rath said Redfin is continuing to explore its path to leaving NAR, while still ensuring agents have access to all the tools they need to do their jobs. <\/p>\n\n\n\n<p>\u201cWe feel pretty confident that we can get out of about half of our top-20 markets by the end of this year,\u201d Rath said.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Redfin took the real estate news cycle by storm Monday announcing its split from NAR, but the brokerage said it was a long time coming.<\/p>\n","protected":false},"author":34740,"featured_media":4822,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3255],"tags":[],"coauthors":[1760],"class_list":["post-4733","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-archive"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.4 (Yoast SEO v26.8) - 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