National Association of Realtors

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This article is about a real estate trade association. For general information about real-estate brokers in the United States, see Real estate broker.
Logo of the National Association of Realtors.

The National Association of Realtors (NAR), whose members are known as Realtors, is the largest trade association[1] and a powerful lobbying groups in North America. It has over 1.2 million members[2] (as reported November 2008), including NAR's institutes, societies, and councils, involved in all aspects of the residential and commercial real estate industries. NAR also functions as a self-regulatory organization for real estate brokerage. The organization is headquartered in Chicago.


National Association of Realtors building on New Jersey Ave, NW, Washington DC

The National Association of Realtors was founded on May 13, 1908 as the National Association of Real Estate Exchanges, the founding group being located in Chicago, Illinois. In 1916, the National Association of Real Estate Exchanges changed its name to The National Association of Real Estate Boards. The current name was adopted in 1974.

NAR's members are residential and commercial real estate brokers, real estate salespeople, immovable property managers, appraisers, counselors, and others engaged in all aspects of the real estate (immovable property) industry, where a state license to practice is required. Members belong to one or more of some 1,600 local Realtor boards or associations. They are pledged to a code of ethics and standards of practice, which was adopted in 1913.[3]

The National Association of Realtors building is triangular in shape, due to the configuration of the streets which border it.

Local associations are required to enforce the code of ethics through a Professional Standards Council or Committee. Trained members of the association form hearing panels charged with the responsibility of hearing testimony and evaluating evidence from complaints filed by the public or other members against association members for alleged violations of the code of ethics. If the panel finds the member in violation, disciplines recommended may be one or more of the following: a letter of warning or reprimand, educational courses, suspension or expulsion of membership, fines up to $5,000 and probation. All recommended disciplines by professional standards hearing panels are subject to the ratification by the association's board of directors before the discipline takes effect.[citation needed]

The National Association of Realtors is also a member of The Real Estate Roundtable, a lobbying group in Washington, D.C.[4]

Trademark status[edit]

The NAR building and the United States Capitol in the background.

Realtor is a frequently used word in many countries to describe any person or company involved in the real estate trade, regardless of their NAR status or American residence.[citation needed] However, in the United States, the National Association of Realtors in 1949 and 1950 obtained registrations for the words "REALTOR"[5] and "REALTORS"[6] as collective trade marks.

In 2003, Jacob Zimmerman, a student who was not a member of NAR, petitioned the U.S. Patent and Trademark Office to cancel the trademarks, on the ground that "REALTOR" and "REALTORS" were generic terms rather than a trademark. On March 31, 2004, the USPTO's Trademark Trial and Appeal Board denied the petition.[7]

NAR and Multiple Listing Service (MLS) systems[edit]

The NAR governs the Multiple Listing Services (MLSs) which are the information exchanges used across the nation by real estate brokers. However, there are many MLSs that are independent of NAR, although membership is typically limited to licensed brokers and their agents; MLSPIN[8] is an example of one of the larger independent MLSs in North America.

Through a complicated arrangement, NAR sets the policies for most of the Multiple Listings Services, and in the late 1990s, with the growth of the Internet, NAR evolved regulations allowing Internet Data Exchanges (IDX) whereby brokers would allow a portion of their data to be seen on the Internet via brokers' or agents' websites and Virtual Office Websites (VOW) which required potential buyers to register to obtain information.

These policies allowed participants—whether they were individual one-person brokers or large regional companies—to limit access to some or all of the MLS data by individual brokers (whether they were brokers operating solely on the Internet or local competitors). In 2005, this prompted the Department of Justice to file an antitrust lawsuit against NAR alleging its MLS rules in regard to these types of limitations on the display of data were the product of a conspiracy to restrain trade by excluding brokers who used the Internet to operate differently from traditional brick-and-mortar brokers. (For a description of the DOJ action, see Antitrust Case filings for US v. National Association of Realtors.[9]) Meanwhile various real estate trends such as expanded consumer access and the Internet are consolidating existing local MLS organizations into larger and more statewide or regional MLS systems, such as in California and Virginia/Maryland/Washington DC's Metropolitan Regional Information Systems.

In response to the case, NAR had proposed setting up a single Internet Listing Display system which would not allow participants to exclude individual brokers (whether of a bricks-and-mortar type or solely internet-based) but require a blanket opting out of display on all other brokers '​ sites.[citation needed] This system became the IDX system. Although IDX allows the public to view MLS listings, it still requires the listing brokerage information to be placed on the listing every place it appears (brokers legally "own" the listings of their brokerage), to prevent misrepresentation of the listing information, and to place accountability for the information on the broker as the law dictates.

The antitrust lawsuit was settled in May 2008.[10] The agreement mandates that all Multiple Listing Service systems allow access to Internet-based competitors.[10][11] The NAR will be required to treat online brokers the same as traditional brokers and cannot exclude them from membership because they do not have a traditional business model.[12] The NAR admitted no wrongdoing, and it paid neither fines nor damages as part of the deal.[12] The settlement will not be official until a federal judge formally approves it, most likely in 2008.[12] While the general counsel of the NAR believes that the settlement will have no effect on the commission paid by the general public, a business professor at Western Michigan University predicted that the increased competition would cause a 25 to 50 percent decrease in commissions.[12]

Another major anticompetitive practice is supported by various state laws which prohibit the "sharing" of commissions with unlicensed individuals. In broad interpretations, this is deemed to prevent a buyers' agent from providing a credit to his or her buyers from commissions received. Currently, there are 10 states where real estate agents and brokers are barred from offering homebuyers or sellers cash rebates or gifts of any kind with a cash value more than $25. Various Realtors in such states have successfully contested this interpretation in states which now allow the practice (notably, Patrick Lea, a Realtor in Ohio, and numerous agents in Kentucky). The Kentucky case was ultimately tried with the United States Department of Justice as the plaintiff and the Kentucky Real Estate Commission as the defendant.[13]

Antitrust lawsuits[edit]

In 2005, the United States Department of Justice filed a formal complaint against the National Association of Realtors for violating Section 4 of the Sherman Antitrust Act.[14][15] The complaint sought to enjoin the National Association of Realtors "from maintaining or enforcing a policy that restrains competition from brokers who use the Internet to more efficiently and cost effectively serve home sellers and buyers, and from adopting other related anticompetitive rules.[14]

The DOJ challenged NAR's MLS rules that inhibited competition from Internet-based brokers.[14][16] On November 18, 2008 the Court entered a Final Judgment approving a settlement against NAR.[16] Under the Final Judgment, the NAR agreed to the policies challenged by the United States and replaced those policies with rules that do not discriminate against brokers who use the Internet to provide low-priced brokerage services to consumers.[14][16][17]

In 2012, American Home Realty Network, Inc. the operator of NeighborCity filed antitrust counterclaims in response to a pair of copyright lawsuits, alleging that the "copyright lawsuits filed against it by two multiple listing services with financial backing from the National Association of Realtors are part of a concerted effort by NAR to drive the company out of business and eliminate it as a provider of services to real estate brokers."[18] The counter-claims also allege that the copyrights asserted were never properly registered.[18][19] In the Minnesota case, which recites claims against the NAR but does not directly name the NAR as a counter-defendant, AHRN filed a second amended counter-claim adding Edina Realty and Home Services of America as Counter-Defendants in the anti-trust and unfair competition claims.[20] Edina Realty is a subsidiary of HomeServices of America, Inc., a Berkshire Hathaway company, which owns real estate brokerage firms in states across the country, including Minnesota, Maryland, North Carolina, Georgia, Washington, Oregon, Arizona, Rhode Island, Connecticut, Iowa, Nebraska, Ohio, Illinois, Kansas, South Carolina, Missouri, Pennsylvania, Indiana, Kentucky, Alabama, and California.[18][20][21][22][23] Earlier in 2012, the mid-Atlantic multiple listing service Metropolitan Regional Information Systems, Inc. (MRIS) and St. Paul, MN-based Regional Multiple Listing Service of Minnesota Inc. (NorthstarMLS) filed copyright claims against NeighborCity.[18][19] The National Association of Realtors said it would provide financial support for NorthstarMLS and MRIS legal expenses.[22][24]

Other national real estate associations[edit]

See also[edit]


  1. ^ National Trade and Professional Associations (2008), 43rd ed., ISBN 978-1-880873-56-4
  2. ^ NAR's current membership report
  3. ^ NAR's 2007 code of ethics and standards of practice
  4. ^ "Lobbying Spending Database : National Assn of Realtors : 2007". Retrieved 2008-10-25. 
  5. ^ United States Patent and Trademark Office, reg. no. 519,789, "REALTOR"
  6. ^ United States Patent and Trademark Office, reg. no. 515,200, "REALTORS"
  7. ^ Jacob Zimmerman v. Nat'l Ass'n of Realtors, Cancellation Nos. 92032360, 92040141, U.S. Patent and Trademark Office, Trademark Trial and Appeal Board, 70 U.S.P.Q.2d 1425 (March 31, 2004)
  8. ^ MLSpin website
  9. ^ United States v. National Association of Realtors. United States District Court for the Northern District of Illinois, Eastern Division. 2008-05-27. Retrieved 2008-05-27.
  10. ^ a b Bartz, Diane. Realtors to open listings to settle lawsuit. Reuters. 2008-05-27. Retrieved 2008-05-27.
  11. ^ Jordan, Lara Jakes. Settlement opens listings to online real estate agents. Associated Press. The Mercury News, Silicon Valley. 2008-05-27. Retrieved 2008-05-27.
  12. ^ a b c d Lichtblau, Eric. Realtors Agree to Stop Blocking Web Listings. The New York Times. 2008-05-28. Retrieved 2008-05-27.
  13. ^ "COMPETITIVE IMPACT STATEMENT: U.S. v. KENTUCKY REAL ESTATE COMMISSION". United States District Court for the Western District of Kentucky. 26 July 2005. 
  16. ^ a b c "United States v. Consolidated Multiple Listing Service, Inc.". US Department of Justice. Retrieved 19 April 2013. 
  18. ^ a b c d BRAMBILA, ANDREA. "NAR, MRIS hit with antitrust suit". Inman. Retrieved 19 April 2013. 
  19. ^ a b "Fight Over Real Estate Listings Escalates As NeighborCity Counters Copyright Claims With Antitrust Accusations". Techdirt. Retrieved 19 April 2013. 
  21. ^ Fuller, Matt. " alleges NAR, MRIS, NorthstarMLS violate anti-trust laws: op/ed". AG Beat. Retrieved 19 April 2013. 
  22. ^ a b "MLS says no thanks to NAR funds for MRIS v. NeighborCity". Aim Group. Retrieved 19 April 2013. 
  23. ^ "HomeServices of America, Inc. Announces Acquisition of Prudential Georgia Realty". Home Services. Retrieved 19 April 2013. 
  24. ^ BRAMBILA, ANDREA. "NAR helping MLSs cover costs of NeighborCity copyright suits". Inman. Retrieved 19 April 2013. 

External links[edit]