Unlike some of their competitors, two prominent Seattle-based real estate firms will maintain their ties to the National Association of Realtors for now despite the ongoing controversies rocking the national trade group.
Zillow said it has “worked to affect change at the local and national level” since joining the national association in 2020.
“We believe part of the current path for modernizing the industry is through engaging at the local and national level with both [multiple listing services] and NAR,” Zillow spokesperson Merritt Talbott said in a statement to The Seattle Times.
Windermere, the largest residential brokerage in the Puget Sound region, also plans to stick with the National Association of Realtors.
“We recognize that there has been turbulence at NAR in recent months and there is no question that they need to address some very serious allegations made against the organization, as well as some potential operational issues,” Windermere CEO Geoff Wood said in a statement to The Seattle Times. “But abandoning ship is not the answer to us. We would rather stay and help affect the changes that need to happen to make NAR stronger.”
Those comments stand in contrast to Redfin, a Seattle-based discount brokerage that announced earlier this month it would require its agents to leave NAR in markets where that is feasible.
Redfin CEO Glenn Kelman declared “enough is enough,” citing sexual harassment allegations at the organization and a controversial NAR policy on agent fees.
Redfin’s agents can’t leave the trade group in every market because in about half the U.S., agents are required to have NAR membership to access listing databases, lockboxes and other materials, Kelman said.
Based in Chicago, NAR is the real estate industry’s primary lobbying group and a powerful force in the process of buying and selling homes across the country. The group owns the trademark on the term Realtor, requiring real estate agents to be members to use the term for themselves.
A former NAR employee sued the association in June for racial and sexual discrimination and harassment, and the New York Times reported in August that two other women alleged the organization’s then-president also sexually harassed them. The president, Kenny Parcell, denied the allegations and resigned. The former employee withdrew her lawsuit after reportedly reaching a settlement.
The allegations came on top of criticism of an NAR requirement that listing agents, who represent sellers, offer fees to buyers’ agents during home sales. Those costs are typically passed on to the seller.
Critics say that arrangement can inflate costs. Supporters say the fee structure benefits buyers, who may struggle to afford agent commissions on top of down payments and other costs of buying a home.
In Western Washington, the Northwest Multiple Listing Service in 2019 stopped requiring sellers’ agents to offer compensation to buyers agents, although the practice remains common. (While many multiple listing services in the country are affiliated with NAR, the NWMLS is independent.)
Redfin had already resigned from NAR’s 900-member board in June, before coverage of the sexual harassment allegations.
The company joined NAR in 2017 “in an effort to influence NAR to advocate for an open, technology-driven marketplace that would benefit consumers,” Redfin’s Kelman wrote in an open letter earlier this month.
“In the many marketplaces governed by its policies, NAR still blocks sellers from listing homes that don’t pay a commission to the buyer’s agent, and it blocks websites like Redfin.com from showing for-sale-by-owner listings alongside agent-listed homes,” Kelman wrote. “Removing these blocks would be easy, and it would make our industry more consumer-friendly and competitive.”
Zillow, which unlike Redfin does not employ its own agents, joined NAR when it began joining many multiple listing services to access their listing data. Zillow employees joined NAR committees on fair housing and other policies.
“If we determine we can no longer affect change for the good of the industry and consumers, then we will re-evaluate our approach,” Zillow said in its statement to The Seattle Times.
NAR faces two antitrust lawsuits targeting the organization’s broker payment requirements. Two brokerages that were also named in those cases, Re/Max and Anywhere Real Estate, have already settled. As part of those settlements, those brokerages will no longer require their agents to be NAR members, the New York Times reported. Anywhere Real Estate includes Coldwell Banker, Sotheby’s and other brands.
NAR has previously defended the practice. “The practice of the listing broker paying the buyer broker’s compensation saves sellers time and money by having so many buyer brokers participating in that local marketplace and thus creates a larger pool of buyers for sellers. For buyers, these marketplaces save them the burden of extra costs at closing, enable them to receive professional representation and make homeownership possible for more people,” the association said in September.
But the group advised its staff last week that while sellers’ agents are required to offer payment to buyers’ agents, that offer can be $0, according to reports in industry publications and the New York Times.
In a statement Tuesday, NAR said the settlements with Re/Max and Anywhere would “not change how our case is presented in court” and defended its guidelines for Realtors.
“Brokerages are independent, legal entities that make their own business decisions,” NAR Vice President of Communications Mantill Williams said in the statement.
“It’s an independent business decision of each brokerage to determine whether it wants to join the local [NAR association]…If these brokers continue to find value in belonging to the association, then they will choose to belong,” the statement said.