BAM Key Details:
- Fallout from the NAR sexual harassment scandal and the Sitzer/Burnett trial is affecting both consumers and real estate agents in various ways.
- Results from two different surveys reveal contrasting perspectives on the real estate industry as a whole, as well as the future of the agent commission structure and of the National Association of Realtors® (NAR).
The results of Q3’s BAMx-1000Watt Agent Sentiment Survey are in. And this one specifically addressed how real estate agents across the U.S. view the National Association of Realtors® (NAR), especially in light of both the recent sexual harassment scandal and class action commission lawsuits.
Meanwhile, a fast-growing real estate technology company, Clever, conducted another survey to gauge consumer attitudes toward real estate agents, the industry, and specifically the agent commission structure.
Depending on the conversations you’ve been having lately, what these surveys reveal might surprise you.
Real estate agent perspectives on NAR
High-performing real estate agents are having daily conversations with homebuyers and/or sellers. And those conversations have made them an excellent proxy for consumer sentiment.
Respondents in the October 2023 BAMx-1000Watt Agent Sentiment Survey are aware of the prevailing pessimism among U.S. homebuyers, indicating a drop in consumer sentiment from 5.25 on a scale of 1-10 in July 2023 to a score to 4.56 in October.
Seller sentiment also saw a slight drop from 6.66 in July to 5.89 in October.
Agent sentiment toward the National Association of REALTORS® (NAR)
The remainder of the BAMx-1000Watt survey centered around the National Association of REALTORS® (NAR), specifically how NAR leadership handled the sexual harassment scandal, why agents joined NAR in the first place, and whether they would leave if they could still retain access to the MLS and lockboxes.
For reference, the Sitzer/Burnett trial and verdict had no impact on survey results given the survey was conducted before the trial began.
Here are five of the questions asked, followed by the survey results:
Question #1: “On a scale of 1 to 10, with 1 being “not valuable at all” and 10 being “extremely valuable,” how do you value your NAR membership?
Overall, real estate professionals responding to the survey do not find a high level of value in their NAR membership. Nearly one-third (31%) gave a score of 2.
The average score, on a scale of 1-10, was 3.75.
Question #2: “What is the #1 reason you joined NAR?
For 58.75% of all respondents—including solo agents, agents on a team, and team leaders—the number one reason for joining NAR was the need to obtain MLS and lockbox access. The second most selected answer, at 27.23%, was “My brokerage required me to.”
In third place, a small percentage (4.64%) selected “To support NAR’s political advocacy on real estate issues,” while 4.29% chose “For the value the REALTOR® brand adds to my business,” and 3.15% chose “Other” for various reasons.
Question #3: “Which of the following statements about NAR’s handling of its recent sexual harassment do you agree with most?”
Across all roles, the majority of respondents (64.20%) disagreed with how NAR handled the recent sexual harassment scandal. Only 5% expressed support for NAR leadership’s handling of the situation.
Question #4 “Generally speaking, how do you view this issue at NAR?
Speaking again of the sexual harassment scandal, 44.38% of respondents belive the issue reflects “deep, institutional problems” within the organization that can only be solved by making drastic changes to NAR leadership.
A smaller but still significant percentage (22.95%) view the issue as evidence of “a few bad actors” within the organization—and as an unfortunate situation that ultimately does not impact their support for NAR.
Question #5 “If you could cancel your NAR membership and still have MLS/lockbox access, would you?
Nearly three-quarters (71.70%) of respondents indicated they would “probably” or “definitely” cancel their NAR membership if they didn’t need it to access the MLS/lockbox.
That percentage increased among agents on a team (81.56%) but dropped among team leaders (66.46%).
For more survey results, check out the full report on BAMx.
Consumer Perspective on Commission Structure
Clever is a free service that matches buyers and sellers with full-service real estate agents from top brokerages—including Keller Williams, Coldwell Banker, and RE/MAX. One of its key selling points, according to Real Estate Witch (powered by Clever), is that it “offers commission savings and doesn’t charge any hidden fees.”
Marketed as the top service “for most sellers looking for a low-commission Realtor,” Clever conducted surveys of 1,000 Americans to gauge public sentiment toward real estate agents and commissions, revealing some striking misconceptions in the mind of the U.S. consumer.
Clever’s survey doesn’t directly ask consumers what they think about NAR—but it does shed some light on what the average American knows about the industry’s commission structure.
Here are the survey results, in a nutshell:
- 66% of non-homeowners, along with 42% of home sellers, believe home buyers are responsible for paying their own agent’s commission fees.
- This could explain why 65% of respondents think buyers can save money by choosing not to work with a real estate agent.
- 55% of home sellers say they should not bear the burden of paying for the buyer agent’s commission, but only 46% know the actual costs and 34% overestimate them.
- 91% of homeowners say avoiding high real estate agent commission rates is an important priority when selling, with over a quarter of them (28%) choosing not to hire an agent to save money on fees.
- On the other hand, 72% of home sellers who’ve worked with a real estate agent believe a good agent is “worth every penny of their commission.”
For a full breakdown of the survey, read the results from Clever.
Takeaways for real estate agents
Agents across the U.S. are wondering how the outcome of Sitzer/Burnett, along with other lawsuits against NAR—not to mention all the copycat lawsuits being filed—will impact the agent commission structure.
It’s safe to say, though, that the industry as a whole could do a better job of making the agent commission structure more transparent, so consumers know who pays what and how working with skilled agents contributes to the best possible outcomes for both buyers and sellers.
The best agents in the industry are already working on that. Join BAMx to find out how.