The National Association of Realtors is the second largest lobbying organization in the U.S. In 2023, it spent $52.4 million to support industry friendly policies.
For years, NAR members at every level have fed on a steady diet of proclamations about how powerful the Realtor’s lobbying is. Association dues bills have lines where members can choose to earmark funds for the Realtors Political Action Committee, and members who excel in supporting it are prominently honored at Realtor events.
Money is power. Less money results in less power, the argument goes (and it’s a solid one.)
To be clear, there is a legitimate conversation to be had about how NAR should deploy its vast resources in the pursuit of industry friendly policies, particularly in light of challenges to how commissions are handled by 1.5 million of the trade association’s members. The Realty Alliance said the quiet part out loud last fall when its CEO asked the question on so many NAR members’ minds: If Realtor advocacy is so effective, why is the industry where it is and where does it go from here?
Any debate over NAR’s lobbying effectiveness or tactics should not mean that the real estate industry’s advocacy muscle should be diminished. If that happens, the result will be ugly for NAR’s members – and others not represented by the national association who have just as large a stake in policy making outcomes whether they realize it or not.
It’s time to plan for the future, and a letter filed as part of the Nosalek lawsuit by the Department of Justice on Friday shows the urgency. In the letter, the DOJ dismissed as “cosmetic changes” an offer by one of the lawsuit defendants, MLS PIN, to allow agents to enter zero dollars as an offer of compensation.
In the letter, the DOJ restated its position that commissions must be cleanly negotiated on either side of a transaction, arguing that the MLS’ offer didn’t go far enough to address concerns over anti-competitive behavior. The letter adds to the separate but similarly argued Sitzer case which found offers of compensation were anti-competitive in a decision that involved NAR and several of the nation’s largest brokerages.
If the DOJ prevails the world won’t end, but it will be much more complicated. The degree of complexity will revolve in large part around advocacy.
I worked for years with some of the best real estate lobbyists in the industry while on the staff of one of the nation’s largest state Realtor associations. These professionals taught me a lot about the sausage-making process that shapes policy at every government level.
They would tell you it’s one thing to have a policy.
It’s quite another to craft the rules that support the policy.
Rule making can be messy as the devil truly is in the details. The process is lengthy and tedious, but it really matters, particularly when big business shifts are in the offing.
That’s because other special interests will be involved in the rule-making process which may not have the industry’s or consumers’ best interests at heart. Joining them will be bureaucrats (and even lawmakers) who may mean well but have no real understanding of how policy impacts practice.
Which brings me back to my point: Debate NAR’s lobbying effectiveness and tactics and demand accountability, but don’t opt out of the overall effort to create broker- and consumer-friendly rules which meet evolving standards. Advocacy matters now as much, if not more, than it ever has.
There’s a big difference between calling for a change in tactics than simply walking away from the battlefield altogether, leaving the industry at the mercy of those would hurt practitioners and consumers.