Redfin – oh, it’s so confusing!!!

NAR in a letter published on Redfin’s website. The letter was authored by CEO Glenn Kelman and signed by seven other members of Redfin’s leadership team.

“Redfin is moving to end our support of the National Association of Realtors for two reasons: NAR policies requiring a fee for the buyer’s agent on every listing; a pattern of alleged sexual harassment,” the letter said.

Redfin will require many of its agents to leave NAR. The brokerage, which joined NAR in 2017 and has paid more than $13 million in fees since then, according to the letter, resigned its NAR board seat in June.

“Redfin told us in June they were planning to separate from NAR, and we respect their choice to do so,” NAR said in a statement provided by Mantill Williams, vice president of public relations and communication strategy for the association. “The U.S. model of local MLS broker marketplaces has long been — and still is — considered the best value in the world. NAR stands by its pro-consumer, pro-competitive guidance for affiliated local broker marketplaces that ensure equity, efficiency, transparency and market-driven pricing options for homebuyers and sellers.

“Agent compensation is set between brokers and their clients and has always been negotiable at any point in the transaction.”

Sex harassment allegations

NAR President Kenny Parcell resigned in August after The New York Times published a report detailing allegations of sexual harassment at the association. Parcell had previously served on the NAR executive board for about 15 years.

In June, Janelle Brevard, who had served as the chief storyteller for NAR, filed a lawsuit against her former employer, alleging she was harassed by Parcell after ending a relationship with him. Brevard said she lost her job after filing an official complaint about Parcell. NAR rejected Brevard’s claims, and her lawsuit was withdrawn July 6.

In August, The New York Times published its investigation, citing accounts from 29 former NAR employees who alleged a culture of harassment. The accounts also detailed further allegations against Parcell, including: The president sticking his hands down his pants at a 2018 conference, texting a picture of his crotch to two employees and regularly requesting hugs at meetings.

Idaho-based agent and board member Tracy Kasper immediately replaced Parcell as president of NAR.

Last month, several NAR employees sent a letter to human resources demanding NAR’s leaders step down, claiming they protected the leaders accused of creating a toxic workplace, Inman reported. A petition on Change.org calling for the resignation of NAR CEO Bob Goldberg, plus other executives, now has more than 800 signatures. The NAR Accountability Project, as it’s titled, was started by New York-based agent Jason Haber.

“Although we do not understand these views to be representative of the majority, we take the issues raised seriously, and we will continue to engage with all employees as we take action to further strengthen NAR,” Williams told Agent Publishing in response to a question about the NAR employees’ letter.

Fees and requirements

Redfin’s letter noted it will require brokers and agents to leave NAR “everywhere we can.”

However, Redfin said, “most brokerages are only a loose affiliation of independent agents, and none of us wants to impose a policy that could alienate any of the people who generate our revenue.”

In 2022, Redfin had more than 2,400 lead agents and about 8,700 partner agents, according to Rubyhome.com. The company’s exit from NAR will reportedly cost the association $1 million annually in dues.

Redfin said NAR has “forced an all-or-nothing choice on us,” and it would therefore “choose nothing.”

“NAR rules require us to leave local and state associations even when our only beef is with the national association,” the letter continued. “The rules require that for a broker to be a member, she must pay dues for each of the agents under her supervision, regardless of whether an agent wants to be a member. The rules further say that if a broker isn’t a member, no agent under her supervision can be a member.”

Redfin said in some markets, such as Houston, Dallas and Phoenix, “we can’t quit NAR individually or en masse, because NAR membership is required for agents to access listing databases, lockboxes, and industry-standard contracts. It’s impossible to be an agent if you can’t see which homes are for sale, or unlock the door to those homes, or even write an offer.”

In its letter to NAR, the brokerage asked the association not to make local access to those tools contingent upon support for the national association.

“Our disagreement is with NAR, not with our industry,” Redfin continued. “Brokerages can compete on price and still cooperate to show all the homes for sale. Redfin will continue our full support of the MLSs that brokers use to share listing data, and we’ll remain friends with the many fine people working at NAR and its local affiliates on economics, diversity and pro-housing policies. We love our industry. We’ve tried to love NAR. But enough is enough.”

Updated: Boston Real Estate Blog 2023

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A reader just left this comment:

Hi there I read your blog quite regularly and find it very interesting – thanks for your information and your perspective.

This business about Redfin and the TN area Realtors finding ways to block them out concerns me. I think that this is already on its way to happening here in Boston. Redfin has only been here a few months, and from where I sits not going so well. Ive been hearing that clients and potential clients of Redfin are having a really hard time getting local agents to understand the Redfin concept.

Even agents who have never heard of Redfin are having problems with them. Is not the company name and reputation that is the issue, its the business model.

These agents are so ingrained in the classic ways of real estate, that they cant wrap their heads around what Redfin clients tell them. It seems like the biggest problems are happening when Redfin clients are trying to gain access to properties by going through the listing agent. If there is no open house, Redfin clients are encouraged to call up the listing broker and schedule a showing through them. These listing agents get all riled up when they hear that these home buyers ARE working with a buyers agent, but that they want the listing agent to show the house w/o the buyers agent present. Its as if a afœdoes not compute, does not computer? flashing red sign goes off in the listing agents head! To them this is just ALL WRONG.

These agents are used to things working a certain way – if THEY show someone a house, then THEY are entitled to the commission for doing that. Plain and simple. They are doing the work?, so the money goes in their pocket. They don’t care that its actually Redfin that will do all the work from that point on and that it will still result in them getting their selling commission.

When I first heard about Redfin, I thought the potential danger would be that the Redfin name would be smeared all over town and that is how word of mouth would get out and Redfin would be blacklisted. But it actually seems like the process is what is being shut down, not the name!

I hope what happened in TN does not happen here, but if it does, I certainly won’t be surprised.

What do you think?

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