The CEO of the most powerful real-estate association in the United States this week said the group is being unfairly attacked over the real estate commissions.
In a video posted on the NAR website on Wednesday, interim CEO Nykia Wright said they hope to "set the record straight" and pushed back on claims that they control the fees home buyers and sellers pay when a house changes hands at the end of real estate transactions.
"The notion that the National Association of Realtors controls what real estate professionals get paid is wholly untrue," Wright said. "[The NAR] does not set commissions. It never has, and it never will. Period. End of story."
Wright also said the NAR has been unfairly "vilified by certain plaintiffs' lawyers, sensationalized by a few reporters, and misrepresented by people who know little about this business."
In addition to pushing back on the lawsuits, the NAR also addressed claims that there are online tools available to homebuyers that could help them reduce the cost of using a buyer's agent.
"The internet can be a tool, but it is not a replacement for the essential services agents who our Realtors provide. A real estate transaction is not a simple click and purchase, like buying a plane ticket online," Wright said. "Most Americans choose to use a real estate professional when buying or selling a home not because they're required to, but because of the help that one provides in navigating the challenges that are part of the process of buying or selling a home."
What Led to the NAR's Response?
The NAR's video seemed to be a response to a high-profile lawsuit filed against the NAR and several other brokerages accusing them of conspiring to stabilize or increase the commissions paid to real estate agents.
The NAR lost $5.3 billion in that class-action lawsuit in Missouri known as Sitzer/Burnett in October. The group may lose more as it is also a defendant in nearly two dozen additional commission lawsuits across the country.
Commission payments are not specified by the NAR. However, the group's Participation Rule previously required listing brokers to offer buyer brokers a commission in order to list a property on the MLS. This rule was later changed to allow listing brokers to offer buyer brokers $0 in compensation when listing a home on any Realtor-affiliated MLS.
