The Wall Street Journal became the latest news source to criticize the National Association of Realtors (NAR) in an article published on Friday. 

The WSJ article states that brokerage executives across the U.S. blame NAR for “failing to convey the gravity of the threat” posed by antitrust lawsuits—especially after the Sitzer/Burnett trial resulted in a verdict that led to a flurry of copycat lawsuits. Dozens of brokerages are now defendants, and more verdicts in favor of the plaintiffs could push many of them into bankruptcy. 

Meanwhile, NAR’s response to the verdict has been less than reassuring. Their survival now depends on either successfully appealing the verdict or reaching a settlement that costs far less than the $5 trillion-plus in damages from Sitzer/Burnett. 

But when the WSJ article characterized the trade association as “hitting rock bottom,” NAR Interim CEO Nykia Wright hit back with a letter posted online and emailed to NAR members. 

“The Real Story” 

Wright’s letter doesn’t directly address WSJ, or any other news outline, but instead highlights what NAR has been doing lately to strengthen the organization and meet the current challenges to itself and to the industry as a whole. 

It starts off with a one-sentence summation of the letter’s focus and the “real story” it’s putting forth in response to criticism:

“The real story is this: NAR recognizes the challenges of the moment, and we are focused on moving our association and our industry forward.

“On the legal front, we recognize that the challenges facing our industry are complex and multifaceted. We’re mindful of the profound obligation we have to guide our industry and organization going forward, especially in ongoing antitrust litigation.

“The stakes are enormously high. Potential outcomes of this case could have a significant impact not just on the real estate industry but on the American people and the economy at large. NAR has the unique responsibility to consider these issues holistically, taking into account the complexities involved in how consumers buy and sell homes. From the beginning, we have been willing to work with industry, government, and other stakeholders to improve our policies and ensure they are in the best interests of our members and the consumers they serve. You can learn more about NAR’s position on these important issues at www.competition.realtor.”

This would not have been an easy letter to write, especially given its potential for exciting a nationwide and largely negative response. Wright chooses her words carefully, focusing on what NAR leadership is doing now and has been doing in recent months to turn around the organization. 

The goal is clearly to remind everyone that NAR is still very much a force to be reckoned with, that there is no crisis it cannot rise to, and that any rival organization has gigantic shoes to fill. This is the second time Wright has publicly addressed criticism of the organization, the first coming at the end of January. Perhaps, after a great deal of silence from NAR, this is part of Wright’sstrategy and turnaround experience to bear in driving this transformation.” 

It ends on a confident note: 

“The real story, then, is progress. NAR will continue to evolve to better serve our members, our staff, and consumers across America – and to lead our industry into the future.” 

The overall message: Focus on what we’re doing now to improve NAR, to serve and advocate for our members, and to support consumer interests. 

The question of whether NAR can afford to appeal Sitzer/Burnett is not included. And even more conspicuous in its absence is any mention of last week’s motion filed by the U.S. Department of Justice (DOJ) on the proposed settlement for the Nosalek lawsuit. 

In that motion, the DOJ proposed an end to sellers paying buyer agent commissions, pointing out a perceived flaw in the Nosalek settlement:

“As long as sellers can make buyer-broker commission offers, they will continue to offer ‘customary’ commissions out of fear that buyer brokers will direct buyers away from listings with lower commissions. When sellers make such offers, buyer brokers need not compete on price to attract buyers. The settlement does not ameliorate these dynamics.” (DOJ filing)

Read the full article on BAM to learn more. While NAR is not a defendant in the Nosalek case, the outcome could impact many other industry lawsuits, including those that involve NAR.

For the most part, Wright’s letter uses broadly focused language to draw attention to what the trade organization is doing to make things better for NAR members, the industry and consumers. But with the DOJ targeting the very hill NAR has been willing to die on, it remains to be seen whether those efforts will be enough to ensure NAR’s survival. 

Stay tuned for further developments. And bookmark the BAM Lawsuit Watch post to stay on top of recent updates.