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At the National Association of Realtors’ midyear conference last week, the trade group’s leaders made clear that — despite a multibillion-dollar jury verdict and nine-figure settlement — neither NAR nor its members had done anything wrong in regards to major commission lawsuits and, if consumers thought they had, there was one primary entity to blame: the media.
This viewpoint was starkest at one of the Realtors Legislative Meetings’ most consistently popular sessions, the Residential Economic Issues and Trends Forum, which was livestreamed to NAR members on May 7. There, NAR Chief Economist Lawrence Yun started off his presentation by praising Realtors for coming to Washington, D.C., to “participate in democracy” and counteract the power of the media, which was “vilifying our profession.”
“[The] Wall Street Journal … says Realtors have way too much political power,” Yun told a ballroom of thousands of attendees.
“Well, if the Realtors do not have power, then who has? The media. So we either have Americans participating in the democracy, or we can let the media dictate. So thank you very much for coming to Washington.” The crowd applauded and some cheered.
It is unclear who NAR’s leaders are referring to when they mention “the media.” An Inman analysis of several mainstream media outlets’ coverage of the commission suits found that the track record was mixed in terms of accuracy.
A NAR spokesperson told Inman that “NAR regularly engages with media to educate on our policies, trends in real estate, and, recently, our proposed Settlement Agreement. We continue to work productively with media to provide essential information to help buyers and sellers as they navigate the housing market.”
The midyear conference is held every year in the nation’s capital so that Realtors can lobby their congresspeople about issues important to their work. This year, the event attracted 8,000 attendees. NAR boasts it is the largest trade group in the U.S. at 1.5 million members. The association spends multimillions on lobbying every year, making it a formidable political force, and charges its members a $45 special assessment annually — adding up to $74.4 million in 2023 alone — for its consumer advertising campaign.
The biggest antitrust lawsuits lodged against the trade group, known as Sitzer | Burnett and Moehrl, were filed in 2019 — meaning each side has had five years to not only plead its case in court but also to educate consumers about its view. Sitzer | Burnett went to trial in October, but despite spending millions defending itself, NAR failed to convince a jury, which awarded full damages to some 500,000 homeseller plaintiffs who said they were harmed by the trade group’s conspiracy to inflate broker commissions.
At trial, the homeseller plaintiffs who took the stand made clear that they were satisfied with the services of the seller’s agent they hired, but that they thought requiring sellers to pay buyer agents was “unfair.” NAR’s cooperative compensation rule, also known as the Participation Rule, requires listing brokers to offer compensation to buyer brokers in order to submit a listing to a Realtor-affiliated multiple listing service.
During his presentation, Yun seemed to conflate the two issues, however, and stressed that “the media” was not depicting reality.
“We all know that your past clients are super happy,” Yun told the audience.
“The media is somehow portraying that you overcharged your past clients. But nobody’s complaining. Your past clients view you as almost like a best friend. They trust you because the way you conduct your business, you know you never cut corners.”
NAR Chief Economist Lawrence Yun at the Realtors Legislative Meetings Residential Economic Issues and Trends Forum in Washington, D.C., on May 7, 2024. Photo credit: Andrea V. Brambila
Yun pulled up a chart showing agent satisfaction ratings for homebuyers.
“This is one of my favorite charts given the lawsuit settlement that occurred,” Yun said.
Despite “two unhappy homeowners in Missouri … this chart is showing millions and millions of satisfied homeowners. There is no better satisfaction rating than to say, ‘I want to work with the same Realtor again for my next transaction. I would recommend my family members, my business colleagues to this Realtor.’ This is a 90 percent satisfaction rate. Of course, it’s not 100 percent.
“So even though the media is trying to disparage what you have been doing, please understand that your clients are super happy with your service. They treat you like extended family members and they truly value you, according to this survey, which we have been conducting consistently year after year from the 1980s onward. Every year, a 90 percent or so satisfaction rating.”
To be clear, NAR’s settlement purports to resolve antitrust claims from homesellers, not homebuyers. The named plaintiffs for the multiple cases that the settlement covers also number far more than two and the cases that have received class-action status represent millions of homesellers. Thus far, nearly 200,000 homesellers have filed claims to recover funds from settlements reached with franchisors in the same cases.
Yun also took aim at the media’s coverage of NAR’s membership drop in 2023. He said that having 26,000 fewer members among the trade group’s ranks was a sign of the industry’s “dynamism” because people come in, try it, and exit when it’s not right for them.
“You know how competitive it is,” Yun said. “Full-service, discount, iBuyers, and if the consumers are unhappy with the Realtors, do-it-yourself. That’s an option that you always have available, or find another Realtor.”
He said NAR’s membership turnover is like that of the restaurant industry, which is also competitive.
Slide from NAR Chief Economist Lawrence Yun at the Realtors Legislative Meetings Residential Economic Issues and Trends Forum in Washington, D.C., on May 7, 2024
“Just in case you had a bad experience, please do not sue the restaurant and bring a trial lawyer,” Yun said, prompting laughter from attendees.
“You can always go to the next restaurant. You have consumer choice in America.” The audience clapped.
Last month, without explanation, NAR scrubbed decades of membership data from its website, rendering it no longer available either to members or to the public, though the trade group says the data will be available to members again at some point in the future.
Yun was not the only NAR leader complaining about the trade group’s news coverage. In at least two conference sessions, NAR President Kevin Sears accused “the media” of spreading “misinformation” and “half-truths” regarding the commission lawsuits. At the event’s Idea Exchange Council for Brokers Forum, Sears said NAR had been “pumping out information on a daily basis, multiple times a day.”
Kevin Sears | NAR President
“We’re giving data, good stories, but we can’t force the media to print it,” Sears said.
He said NAR’s new Chief Communications Officer Suzanne Bouhia had had “hundreds of meetings with different media outlets to talk with them about where they got things wrong, to correct the record,” but that corrections don’t make as big an impact as original headlines.
He pointed to NAR’s media surrogate program, in which members are designated to speak to the media on NAR’s behalf.
“Try not to pay attention to the national media,” Sears said. “For me, what I really care about is the local media. We’ve got over 400 Realtor members across the country who have said, ‘We’re willing to be a media surrogate and help tell our story and connect consumers with the media so they can tell their stories.’”
‘Deny any wrongdoing’
When a conference attendee asked Sears why anyone would think it’s a good idea to remove buyer broker compensation from the MLS — a requirement of the settlement — Sears was blunt.
“It’s not,” Sears said. “It’s so transparent [to have it in the MLS] that our MLS is currently the envy of the world. The plaintiff’s attorney did a great job convincing the jury in Missouri. It’s not good. It sucks that it has to change.”
NAR’s legal team made similar points throughout the conference.
“We disagree with how our practices and our rules have been presented,” Matt Troiani, NAR’s senior counsel, told attendees at the conference’s Risk Management Issues Committee meeting.
“We deny any wrongdoing and we have stood by and defended offers of compensation as transparent, efficient, effective and pro-competitive and pro-consumer for sellers and buyers alike.”
Matt Troiani
According to Troiani, the settlement had accomplished NAR’s two main goals: releasing as many NAR members as possible from antitrust claims and preserving offers of compensation as an option for consumers.
“We would like to be very clear that we believe in offers of compensation,” Troiani said.
“We believe them to be equitable, to be efficient and to be in the best interests of sellers and buyers. So we’re not giving up on offers of compensation.”
He detailed ways that listing brokers could advertise offers of compensation to buyer brokers outside of the MLS, including sign-riders, marketing materials, and listing brokers’ websites for their own listings. Troiani also encouraged buyer agents to contact listing agents prior to showing a property to ask if there is an offer of compensation.
Charlie Lee, also senior counsel at NAR, made similar remarks at the trade group’s MLS Forum.
Charlie Lee
“NAR continues to deny any wrongdoing in connection with the MLS cooperative compensation rule,” Lee said.
“Consumers continue to have the choice to decide what works best for them in the sale and purchase of their home and to be able to work with a real estate professional,” he added.
Johnny Mowad
Johnny Mowad, chair of the Multiple Listing Issues and Policies Committee, struck a defiant tone as he adjourned the committee’s meeting, which was held immediately after the MLS Forum.
“Hear this loud and clear: The MLS has done nothing wrong,” he said, loudly tapping the podium in front of him. “We will continue to focus on serving the consumer and the public. Our resolve remains unshaken. Our dedicated support to NAR is strong.”
He encouraged attendees to “harness the power of our collective action” and “stand with us shoulder to shoulder as we forge ahead, stronger, bolder and more determined than ever. Together we will prevail, shaping the future of real estate with unwavering commitment.”
NAR held a legal update during the conference that was open only to members who attended the event and closed to the media. The association originally informed members that the update would be livestreamed so that non-attending members could see it, but, just before the event, removed it from the sessions that would be livestreamed. NAR did not respond when asked why.