Whether it’s refining your business model, mastering new technologies, or discovering strategies to capitalize on the next market surge, Inman Connect New York will prepare you to take bold steps forward. The Next Chapter is about to begin. Be part of it. Join us and thousands of real estate leaders Jan. 22-24, 2025.
The National Association of Realtors has to rebuild its relationships with agents and brokerages, the trade group’s CEO told its board of directors Monday morning.
In a wide-ranging speech, Nykia Wright, who will mark her one-year anniversary at the organization this month, addressed 986 directors (886 in person, 100 online) at the trade group’s annual conference, NAR NXT, which took place in Boston and ended Monday.
Wright’s speech during the board of directors meeting both emphasized the need to change how the trade group interacts with its members and the outside world and doubled down on NAR’s governance, particularly it’s so-called “three-way agreement,” which requires agents and brokers to join a local, state and national Realtor association in order to qualify for membership in any of those NAR affiliates.
“One thing is for certain, if the industry is changing, we must lead and change with it,” Wright told NAR’s board.
She said NAR would be taking its cues from surveys and focus groups at the conference to redefine the member experience.
“Through the use of those surveys, we are going to understand a lot more about what people need on the ground and meet them where they are and organize ourselves accordingly,” Wright said.
“Certainly, we need to redefine our relationships with brokerages — large and small, public and private,” she added.
“Within the next month or so, I plan on announcing a special advisor to me who will actually help me turbo charge and add rocket fuel to getting around the country re-establishing those relationships.”
In March, NAR reached a proposed settlement to resolve antitrust claims nationwide related to commission lawsuits. The settlement covers about 1 million of NAR’s 1.5 million members, but not its largest member brokerages — those who transacted more than $2 billion in sales volume in 2022. That move has lead to some ill will toward NAR among those known as the “$2 billion club.”
Wright said NAR was looking to “work with brokerages to provide support in ways that allow them to focus on their competitive advantage and less on their business and cost.”
She said she reads the financial reports and annual reports of the publicly-traded companies that are members of NAR.
“The first thing I do is I go to the risk factor section and I see in some cases where NAR helps support close to or nearly half of the risk factors that these companies list as impediments to their success,” Wright said.
“There’s publicly available information that really shows the value of NAR, and so it’s our job to continue to promote that to these bigger brokers and to independent brokers, [to] let people know that this is a partnership, and instead of trying to cannibalize the things that we do internally, why don’t they allow us to do these things?”
But NAR understands that trust needs to be there in order for the brokerages to do that, she added.
Wright also said the trade group needed to improve its relationships with agents.
“Some of you have heard rumblings of the challenging of the three-way agreement,” she said.
“Well, we are here to make sure that those rumblings subside because it is our duty to make sure that people understand what happens at the local level, the state level and the national level, and really make sure that people understand that there isn’t a cannibalization of services, but it really is working together … to make things work.”
The three-way agreement, which requires agents and brokers to join a local, state and national Realtor association if they want to join one, has come under fire of late, in part due to antitrust litigation.
In August, two brokers and an agent filed an antitrust lawsuit against NAR, state and local Realtor associations, and Michigan’s largest multiple listing service over the requirement that they join Realtor associations at each level in order to access the MLS. Another, similar suit was filed in Illinois that same month and subsequently withdrawn, but is expected to be re-filed.
In September, the Alabama Association of Realtors called on NAR to end the three-way agreement, responding to member concerns and the suits challenging the membership requirement. In October, a broker in Pennsylvania subsequently filed a similar suit.
There are other signs attitudes toward the three-way agreement are changing. Agents have expressed their frustrations with the requirement to NAR rival the American Real Estate Association. A local Realtor association in Utah has informed NAR it won’t enforce its pocket listing rule, the Clear Cooperation Policy, challenging NAR’s authority over rules for Realtors nationwide.
In its recently-released Opportunity Report, real estate consulting firm T3 Sixty recommended NAR sunset the three-way agreement and reform NAR’s governance structure.
Wright did not elaborate further regarding the three-way agreement, but said NAR also wanted to “rebuild our relationships with many partner organizations” without specifying which ones.
“This is a very, very large ecosystem in residential and commercial real estate, and there are a lot of people in organizations that do things a lot better than the association,” Wright said.
“We want to acknowledge that and leverage that.”
She also emphasized that NAR wanted to show its appreciation to its volunteer leaders.
“When we are talking about going into a budget-constrained environment, it’s super important for us to understand now the purpose of the many people …. we have on the ground,” she said.
She said it was time to change the “narrative” around the size of NAR’s governance structure, which includes a board of directors larger than the U.S. Congress, to instead talk about its “effectiveness.”
“So it is our implicit and explicit oath to you all that we will continue to do that, so that we will make sure that people around the nation, consumers and Realtors and agents alike understand our purpose, and make sure that people are not discussing negative narratives about us,” Wright said.
Wright stressed that the trade group would “reposition” its staff of 300 to “meet these ever growing needs” along with the organization’s thousands of volunteers.
“It is our job to make sure that that ecosystem is working the right way,” Wright said, pointing to NAR’s recent hiring of a chief human resources officer “for the first time in our history.”
To NAR’s senior leaders, Wright said, “There’s some … things that we did yesterday that we have to stop doing.” She did not specify further on that point.
Wright also referred to a risk assessment of NAR’s current policies that she announced last month, noting that NAR had hired a Washington D.C. firm in order to understand the future legal risks of NAR’s rules.
“Recently we’ve been taking each pitch as it comes and we have not been winning those ballgames,” Wright said.
“What we want to do is look outside and see what those risks are and understand how we can better manage and not be caught in the antitrust world again.”
She said NAR would have some findings to share in the middle of December or early January “to help us as a governing body understand what we need to do going forward.”
The trade group wants to leverage its governance structure to facilitate “thoughtful discussions and reach conclusions that are in the best interest of most parties,” Wright added.
“I underscore ‘most’ here because we will not satisfy everyone’s objectives, but we are here to make sure that the entire ecosystem benefits from most of our decisions.”
Regarding the NAR settlement, she urged the NAR BOD to help the trade group disseminate its consumer guides explaining the deal’s details.
“Not only is it important for people to understand what are the results of the settlement, but when we were sitting across from the DOJ [Department of Justice] it appeared that they were implicitly indicting us for not educating the consumer,” Wright said.
“So to the extent that you all can continue to hand out those guides, we don’t want to be sitting across from the government with that type of accusation in the future, even though we know internally what we do every single day.”
Wright left the podium to long applause from the directors and conference attendees present.
Email Andrea V. Brambila.
Like me on Facebook | Follow me on Twitter
