The CEO of the country's most influential real estate association says the group is being unfairly attacked, saying the group is paying fees that home buyers and sellers pay to change the title of a home. refutes claims that it is in control.
Nikia Wright, interim chief executive officer of the National Association of Realtors, posted a video Wednesday to “set the record straight,” saying the real estate industry has been “maligned by some plaintiffs' lawyers and sensationalized by several reporters.” and misrepresented by people who know little about this business.”
Wright also said, “The idea that the National Association of Realtors controls the compensation of real estate professionals is simply false.”
NAR “does not set fees,” Wright continued. “That never was and never will be. Period. End of story.”
The video appears to be a response to a high-profile lawsuit against NAR that has the potential to overturn long-standing practices surrounding broker commissions and how they work in the United States. The outcome of this lawsuit could affect the wallets of millions of home buyers and home sellers.
The CEO's message comes amid a turbulent period for the 100-year-old NAR, which has endured sexual assault accusations against its chairman and an onslaught of lawsuits accusing it of anticompetitive conduct and price fixing. Several executives at NAR have quit or taken early retirement.
An important case affecting millions of people buying and selling homes was Sitzer/Barnett. In November 2023, a Missouri jury ordered NAR and several real estate companies to pay $1.8 billion in damages. This has led to multiple counterfeit lawsuits across the country.
The lawsuit centers on fees paid by homeowners selling their homes to the buyers' real estate agents. Although these payments are not specified by the NAR, they are informed to some extent by his NAR's rules that require listing agents to include fees for buyer's agents when listing properties for sale.
Most real estate agents are members of NAR. Membership gives you access to multiple listing services, a group of databases containing information about homes for sale and the primary way buyers and sellers find real estate.
Plaintiffs alleged that NAR and brokers colluded to increase the fees home sellers paid to buyer agents. Commissions are often built into the sale price of a home, and many homeowners selling a home are unaware that they are paying his 5-6% of the home sale price to the agent as a commission. There is a possibility.
Big names in the real estate industry want to launch an alternative NAR.
As NAR enters a period of turmoil, two real estate brokerages have launched a new trade group to compete with the National Association of Realtors.
This organization is called the American Association of Realtors and is positioned as an alternative organization for real estate agents to NAR. AREA is led by real estate agent Mauricio Umanski, founder of luxury real estate firm The Agency and star of the Netflix show “Buying Beverly Hills,” and Compass agent and founder of the NAR Accountability Project. It was founded by Jason Haber. A grassroots national organizational reform movement.
More than 1,500 people registered to participate in AREA less than a week after it was first announced, according to its founders.
“The enthusiasm is incredible,” Haber told MarketWatch. “The energy, the excitement that people bring is amazing. And it goes hand in hand with the kind of culture and community that we want.”
Umansky told MarketWatch that the group plans to refocus on lobbying and advocacy, with an emphasis on helping local agencies do business with city councils and state legislatures. Create a national unified listing service to replace multiple listing services. and a focus on continuing education for real estate professionals.
“We need a Marshall Plan for housing in this country,” Haber said. “Everyone talks about this housing shortage, but no one talks about solutions. We have to develop real solutions for this country.”
However, the new group, AREA, did not specify how brokerage commissions would be structured.
“There's no need to fix it, period, end of story. It's up to the market to decide, or buyers and sellers to negotiate,” Umansky said. “It's negotiated, and it's whatever the open free market is willing to pay.”
NAR says competition 'welcome'
NAR's CEO addressed Umansky and Haber's new group, saying in a video that he “welcomes competition from anyone who can match our influence and provide the value that we bring.”
But one consumer advocate expressed skepticism about Haber-Umansky's efforts.
“NAR's code of conduct, despite its flaws, prevents real estate agents from engaging in blatantly anti-consumer conduct,” Stephen Brobeck, senior fellow at the Consumer Federation of America, told MarketWatch. Ta.
“We fear that an alternative to NAR without formal ethical standards will lead to even more unethical conduct than is reported in the NAR-sponsored risk report,” he added.
The hazard report is a 164-page document commissioned by NAR. Published in 2015, this book details the threats, risks, and challenges that the real estate industry faced then and will continue to face in the future. The report highlighted the industry's large number of unethical and untrained agents, The Washington Post reported at the time.
