Brokers to NAR: Fix these 6 core areas to ‘restore trust’ 

Editor's note: This is the second part of a two-part exclusive look at the efforts a newly formed group of brokerage leaders is taking to compel changes at the National Association of Realtors for the benefit of its members and the industry. Read part one here.

The National Association of Realtors has been through a tough few years, and not everyone in the industry is happy with its handling of issues including harassment allegations, lawsuits and divisive policies. That discontent has shown up in member surveys and even spawned an alternative trade group.

It also drove the formation of the Pro-Agent Restore Trust in NAR Working Group: 15 brokerage executives — representing about 100,000 agents — who came together six months ago with the goal of compelling NAR to address key issues affecting real estate professionals and the industry at large. 

In an exclusive interview with Real Estate News, United Real Estate CEO Dan Duffy — the group's current spokesperson — outlined six core concerns the group has presented to NAR as well as steps they believe the association should take to better serve its members.

The Clear Cooperation Policy

In a letter, Duffy and his working group told NAR it believed the Clear Cooperation Policy "exposes NAR, brokerages and agents to future litigation," and the new "Multiple Listing Options for Sellers" policy, which introduced a delayed marketing option, does not alleviate that risk.

They asked NAR to schedule "a working session" with members of NAR's legal team, an outside antitrust lawyer and a cross-section of industry representatives — brokerage leaders, agents, portal execs — to discuss the CCP and "arrive at a solution that addresses the exposure, ensures transparency, benefits all consumers and allows for consumer choice."

The group also noted that none of its members were included in the meetings that gave rise to the new policy "despite collectively representing a significant portion of NAR's membership," which the group said was "a problem" that contributes to "the lack of trust and positive engagement by the overwhelming majority of our agents and brokers."

NAR's three-way agreement  

Another policy that could expose the industry to litigation? NAR's three-way agreement requiring membership in local, state and national Realtor associations. Already, several agents and brokers have sued NAR over membership requirements, and some associations have spoken out against the rule. 

"From our perspective, tying agreements like these are not appropriate, especially when the parties have monopolistic control over access to a market," the group said, recommending a similar "working session" approach to come up with solutions.

Restructuring and transparency

The group next addressed NAR's finances, requesting more transparency to "restore trust that NAR is back on the right track."

In May, the group asked NAR when its 990 tax form for 2024 would be made public; NAR said at the time that it would be available "in the next few months," Duffy told Real Estate News.

The group also requested a restructuring plan that included, among other things, how NAR was reorganizing its finances, operations, structure and staff.

"Clearly articulated written plans and targets … are essential in quieting the masses that believe that NAR is lip servicing the changes being made," the group wrote.

Additionally, the group asked NAR to provide interim financial data and resume publication of its membership numbers, which were removed from its website in early 2024.

While NAR didn't comment on the specific requests, the association said its annual report "will add additional context to our 2024 990 filing, including details on NAR's operations and priorities throughout 2025" — but stressed that it "will not have the same level of financial details as a publicly traded company's annual report."

Independent governance

NAR has a paid leadership team of eight people; a board of directors of some 1,000 member volunteers; and 95 committees, forums, councils and boards — but no "true independent board members," according to the working group, something it characterized as neither "sufficient nor appropriate." 

"Independent governance is the cornerstone of all high performing, on purpose organizations," the group wrote. "Without it, organizational drift occurs at best and fiduciary alignment breaks down at worst."

The group asked NAR to outline its structure and oversight measures, and explain how it plans to move toward more independent governance.  

NAR's balance sheet  

NAR ended 2022 with $1 billion in assets and $747 million in net assets. By the end of 2023 — the year NAR suffered a loss in the landmark Sitzer/Burnett trial — net assets had diminished to $363 million. But the working group believes that's still "excessive" based on NAR's working capital needs and compared to other nonprofits.

Having deep pockets also makes NAR "a target for future class action litigation," the group said, suggesting three ways for NAR to reduce its balance sheet:  

• Lower agent fees for a set number of years — which would also show "NAR is aligned with its affiliated agents and the challenges they face in a challenging market"

• Reimburse a portion of the legal and settlement costs incurred by brokerages not covered by NAR's settlement

• Offer a dividend to agents whose dues collectively exceeded NAR's working capital needs

Second Century Ventures (SCV) 

During its meeting with NAR leaders, the group said it was told by a representative of SCV — NAR's for-profit venture capital arm — that "NAR has little to do with Second Century and there truly are no economic threads that connect NAR, former executives or current executives or staff to their investments and interests."

The group asked Wright to confirm that assertion, and said if there are any financial ties, that information should be disclosed.

"There is a belief, which may or may not be founded in fact, that self-enrichment has been standard practice at NAR both in internally approved compensation and severance plans, consulting agreements and luxury fringe benefits and with the SCV activities," the group said. 

"You have a great opportunity to clear the air and make changes as you see fit." 

Another concern? That NAR doesn't benefit from the relationship with SCV despite the association's "extremely valuable" promotion of its portfolio companies. If that's the case, the group said, "we strongly recommend that NAR initiate talks to formalize its relationship and specify what NAR and its member agents get from the relationship."

An NAR spokesperson responded to a request for comment with this statement to Real Estate News: "SCV is a wholly owned subsidiary of NAR. SCV has never been funded by NAR member dues. SCV empowers and plays a critical role in advancing NAR's innovation mission of shaping the future of real estate technology in a way that benefits our members. We clearly articulated this to Dan and the other leaders participating in this meeting."

Supporting NAR's path forward

While the working group's letter focused on areas of improvement, it also emphasized a desire to contribute positively to NAR's efforts to restore trust.

"NAR can and must remake itself and recommit to its member agents," the group said.

Miss part one? Find it here.