BAM Key Details:

  • A letter from Redfin leadership announced the end of the company’s support for the National Association of Realtors® (NAR) for two reasons: NAR’s policy requiring a fee for buyer agent compensation in every listing, and a “pattern of alleged sexual harassment.” 
  • Redfin will require its brokers and agents to leave NAR wherever possible. 

Redfin leadership issued a letter Monday morning with a major announcement: “Redfin is moving to end our support of the National Association of Realtors® (NAR).” 

The letter gave two reasons for Redfin’s decision: 

  1. NAR policies requiring a fee for buyer agent compensation on every listing
  2. NAR’s “pattern of sexual harassment” 

We’ve had many meetings with NAR execs to explore compromises on the policies that would let us continue our support. Since a Redfin-wide initiative to join NAR in 2017, we’ve paid more than $13 million in dues, in an effort to influence NAR to advocate for an open, technology-driven marketplace that would benefit consumers. We’ll now explore other ways to advance those goals.

Redfin statement from CEO Glenn Kelman

The straw that broke the camel’s back?

According to the statement, Redfin leadership already had concerns about NAR’s position on buyer commissions for quite some time. 

When they learned of the allegations of sexist behavior and sexual harassment by former NAR president Kenny Parcell and others, the leadership team decided to take action. In an interview with The New York Times, Redfin CEO Glenn Kelman stated.

When the harassment issues came to light, that’s when it came to another level.

Glenn Kelman

Redfin CEO

It wasn’t lost on Redfin that NAR didn’t take action until after the August NYT exposé—and after the CEO Bob Goldberg was quoted as saying there wasn’t a problem within the organization. 

Even now, after the resignation of Parcell and despite attempted damage control by new president Tracy Kasper, NAR’s problems are far from over. 

With the NAR Accountability Project and the recent letter submitted to NAR leadership with a list of demands, followed by Kasper’s anemic response, Redfin’s decision to leave may be the first of many, although it’s difficult to say whether others in the industry will follow suit. In his interview with The Times, Kelman noted the real estate industry is cautious. 

Redfin had already resigned from the NAR Board

Before the sexual harassment scandal had even gone public with a New York Times exposé, Redfin had already left the NAR board, chiefly because of its policies regarding buyer commission. In June, Redfin’s head of industry relations Joe Rath resigned from NAR’s board of directors. This decision came from Redfin’s leadership team after qualifying for a seat on the 900-person board in 2022. 

In marketplaces governed by NAR policies, sellers are still unable to list homes without reserving a commission for the buyer’s agent. NAR policy also blocks websites from showing for-sale-by-owner listings, thereby depriving the seller of much-needed visibility and cheating potential buyers of the opportunity to see these properties alongside agent-listed homes. 

When Redfin joined NAR in 2017, the goal was to influence the organization’s policies from within. “But we began to feel that we couldn’t,” Kelman told The Times.

Redfin leadership believes it would be in the best interest of consumers to remove those blocks, thereby making more listings available to motivated buyers.  

Redfin will require many of their agents to leave NAR

Redfin leadership will even require many of their brokers and agents to leave NAR. 

Most brokerages are only a loose affiliation of independent agents, and none of us wants to impose a policy that could alienate any of the people who generate our revenue.

Redfin statement from CEO Glenn Kelman

However, not all Redfin agents can leave behind NAR membership dues just yet. In many major U.S. cities, including Houston, Las Vegas, Nashville and Phoenix, Redfin agents will need to remain NAR members in order to gain access to local MLSs. 

In other markets, where the MLS is still accessible without NAR membership, Redfin agents will no longer pay dues to NAR. This includes major markets including Seattle, Boston and New York City. Kelman stated this move will amount to a loss of about $1 million annually for NAR. 

Redfin is asking NAR to decouple NAR membership from MLS access

With so many agents still unable to leave NAR without losing access to listing databases, lockboxes, and industry-standard contracts, the Redfin statement explicitly asks NAR to decouple access to these tools from NAR membership. 

Considering the high percentage of NAR members who joined only because it was required to access the MLS, etc., removing this requirement would likely cost NAR millions of dollars in membership dues.

Agents shouldn’t have to underwrite policies and legal efforts that hurt consumers when most of us got into real estate to help consumers. Redfin’s mission after all is to redefine real estate in consumers’ favor.

Redfin statement from CEO Glenn Kelman

NAR’s Response

Mantill Williams, a spokesperson for NAR, told The Times that NAR respects Redfin’s decision to leave the organization. NAR’s emailed statement also stated agent compensations and the requirements for agents to pay dues are “considered the best value in the world.” 

Hop on any comment section or social media post that references NAR membership dues, and it appears the majority of industry professionals disagree.

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.

Mantill Williams

Spokesperson for NAR

It appears, once again, that NAR is tone-deaf to what agents and members are saying regarding the organization. And again, it seems as though it’s because of a tight-knit circle of leadership that refuses to step down. “There are so many progressive forces within NAR who are yearning to take a stronger pro-consumer stance,” Kelman told The Times. “For the life of us, we can’t understand why NAR is so beholden to a few members.”

As the first major brokerage to announce its separation from NAR, it is clear Redfin is looking for change within the industry. Promises to “do better” from the NAR leadership team are not enough for Redfin. 

We love our industry. We’ve tried to love NAR. But enough is enough.

Glenn Kelman

Redfin CEO