U.S. Brokerage and Discovery Site Redfin to Leave NAR

The Seattle-based brokerage and discovery site operator Redfin is to leave the National Association of Realtors (NAR) in a shock move.

The New York Times broke the story this morning with an official post from Redfin CEO Glenn Kelman confirming the break a few hours later via a blog post.

The brokerage boss said that Redfin was quitting the influential industry association due to a disagreement on its rule that requires a fee for the buyer’s agent on every listing as well as "a pattern of sexual harassment".

The NAR is a powerful industry organization which collects dues from its member agents and brokerages in exchange for advocacy, lobbying and regulation services. Members must abide by the NAR's strict rules.

Redfin is one of the top ten brokerages in the United States by transaction volume. Thanks to the unique market dynamics of the North American housing market the company has become one of the United States' most popular portal sites in its own right.

A public disavowal from one of the industry's top companies comes at a poor time for the NAR.

The industry association is facing accusations of sexual harassment after a New York Times article exposed alleged aggressive and abusive behaviour from its President, Kenny Parcell.

The accusations seem to have been the final straw for Kelman, who wrote:

"We’d already been uncomfortable with the NAR’s positions on commissions when we read reports of sexist behavior and sexual harassment, by the NAR’s president and others, based on interviews with 29 former NAR employees."

The CEO went on to explain the disagreement with the NAR's rule that, he believes, stifles competition.

"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. Removing these blocks would be easy, and it would make our industry more consumer-friendly and competitive. "

The same NAR rule landed the portal and NAR member, Zillow in court. When it became an NAR member in 2021, the company was forced to show non-MLS listings on a separate tab on its results page, provoking a loss in traffic and leads to discount brokerages. One such brokerage, Texas-based REX, took Zillow to court over the issue with the matter finally settled this week in the portal's favour.

Another gripe that Redfin has with the NAR is that membership is required to obtain access to MLS listings databases. In some areas, agents must be members of NAR to have access to listings, something both Zillow and Redfin want to see changed.

"We’re asking NAR to decouple local access to these tools, including the listing databases known as Multiple Listing Services, from support for the national lobbying organization. Agents shouldn’t have to underwrite policies and legal efforts that hurt consumers when most of us got into real estate to help consumers. Redfin’s mission after all is to redefine real estate in consumers’ favor."

Whether Redfin's shunning will be enough to incite change at the NAR remains to be seen but the negative headlines seem set to continue as it is a defendant in two legal cases which allege that its policy of mandatory seller commission is anticompetitive.