The downfall of its ex-president is just one reason why the National Association of REALTORS® is in the spotlight.
For an organization created to support real estate agents, NAR’s support for staff alerting them to the former president’s predatory behavior was conspicuously nonexistent, judging by accusations and comments on the New York Times exposé that led to Kenny Parcell’s resignation.
This week’s episode of The Real Word focused on that and on the response of the real estate industry—agents and leaders alike—to the scandal and to NAR’s handling of it.
We’re at a very critical time. I’ve been saying this for months that we’re going find out if NAR is worth the money that we’re paying them because of the DOJ lawsuits, because of the antitrust lawsuits…Our marketing budget should be zero dollars…All of our dollars have got to go into the best attorneys to protect buyer agency, to protect home buyers in this critical time. Yet where are our dues going? To settle lawsuits for sexual harassment….
This seems an opportune moment to recall the lawsuits against NAR and to ask the question, “Will the National Association of REALTORS® live up to its name—and the reason for its existence—and act in the best interest of its members?”
Because it doesn’t seem particularly adept at acting in the best interest of its employees.
Anti-trust lawsuits targeting NAR’s “Clear Cooperation Policy”
On Monday, August 28th, the U.S. Court of Appeals for the Ninth Circuit in San Francisco revived an antitrust case against NAR’s controversial “Clear Cooperation Policy” aimed at pocket listings.
The appeals court ruling overturned a district court decision to dismiss the suit filed by Top Agent Network (TAN), accusing NAR and the San Francisco Association of Realtors of violating antitrust and unfair competition laws.
The Department of Justice (DOJ) even filed an amicus brief, asking for and receiving permission from the appeals court to speak at oral arguments and expose legal errors that were made by the lower court in dismissing the case (with prejudice). Ultimately, the appeals court made their decision without oral arguments.
It probably helped that the same appeals court handling TAN’s case also reversed a lower court ruling dismissing a similar case by former private listing service, ThePLS.com. Now revived, that case is back to the lower district court and is ongoing.
Class action commission lawsuits against NAR’s “Participation Rule”
Aside from the antitrust lawsuits, NAR also has to contend with class action lawsuits that, if victorious, could upend NAR’s requirement that listing agents allocate a share of their commission to the buyer agent.
Nullifying the “Participation Rule” would essentially change how buyer agents are compensated.
Whatever the outcome of these cases, there’s plenty of room for improvement in the transparency and flexibility of commission agreements.
Speaking to the latter, BrightMLS made some waves recently by allowing listing agents to put $0 in the “cooperative compensation” field.
Previous policy required a minimum $0.01—which, honestly, why even…?
Will they or won’t they?
Given NAR’s less than convincing display of solidarity with its employees after the very public scandal surrounding its ex-president—and even before the NYT article went live—we’ve watched the comments piling up with statements in support of or in response to the allegations.
More than one included the statement, “I can personally attest to this.” And more and more Realtors are speaking up with comments like “I am not happy to learn that our dues dollars are being spent to deflect and defend this issue at the highest level of our trade organization.”
We could ask, “So, what’s NAR leadership going to do about it?” But unless the cost of doing nothing (of substance) exceeds the cost of doing the right thing, I think we know the answer.
As Nicole White pointed out in the same episode of TRW, “This is just the beginning, folks!”
I would be shocked if there’s not significant pressure on the CEO. How are you sitting on the top of this collecting millions of dollars, and you don’t take accountability? The comments from Bob Goldberg seem tone deaf…When you’ve got the NY Times coming after you, you’ve got the Department of Justice coming after you, things will change. And, so, I think [Tom Ferry] had something there. Do we need 1.5 [million agents], or is it 10% of that to serve U.S. and Canada? It’s probably somewhere in between but I’d say TF’s closer to being right than not.
That’s good news for NAR, since they no longer have any reason to funnel tens of millions of dollars on terrible marketing aimed at drawing more people into the real estate business. What will they do with all the money they’ll save?
Here’s hoping they take a more active role in protecting the interests of Realtors—and making it impossible for anyone in their organization to get away with predatory behavior.
According to NAR spokesperson Mantill Williams, his organization “thoroughly investigated the claims” in the lawsuit filed by Janelle Brevard—and ultimately rejected them. We don’t know whether the rejection came as a result of those claims being proven false or simply because the NAR leadership believed they could get away with it, and that a blanket rejection from a nationally-known and respected organization would discredit and silence the accuser.
Seems they miscalculated. And it would be interesting to know just how respected and (ultimately) necessary an organization NAR actually is.
Let’s find out.
