RE/MAX becomes the third prominent company to disassociate from the National Association of Realtors (NAR)

Wall St Jnl, Raleigh NC: Remax disassociate from NAR, while revealing the specifics of its resolution in the groundbreaking commission lawsuits, the franchisor stated that agents and brokerages “possess the autonomy to establish and/or haggle over commission rates as they deem appropriate.”

Announcing the particulars of its settlement in the groundbreaking commission lawsuits, the franchisor stated that agents and brokerages now possess the freedom to determine their commission rates as they deem suitable.

This development follows closely on the heels of Anywhere Real Estate, with RE/MAX becoming the third major real estate firm this week to distance itself from the National Association of Realtors (NAR). In a statement on Friday, RE/MAX President and CEO Nick Bailey expressed support for both choices regarding NAR membership, pending court approval.

RE/MAX Settlement

One of the most surprising revelations from the proposed settlements of both RE/MAX and Anywhere was the decision by these major franchisors not to require their agents to maintain NAR membership. Both companies have over 100,000 agents, making this a significant departure from the norm.

NAR has been grappling with turmoil for several months, stemming from allegations of sexual harassment and other misconduct by its leadership. The Sitzer/Burnett and Moehrl commission lawsuits, as revealed in the settlement agreements, could pose yet another challenge to the nation’s largest professional organization, which currently boasts approximately 1.58 million members.

Independent Business

In response to these developments, NAR’s spokesperson, Mantill Williams, emphasized that members are free to make their own choices and highlighted the benefits NAR offers to its members. Williams stated, “Brokerages are independent, legal entities that make their own business decisions,” and emphasized the need for REALTOR® associations at various levels to continue delivering value to their members.

One lingering question is whether agents can bypass NAR membership and still gain access to local multiple listings services.

The Sitzer/Burnett lawsuit is scheduled to go to trial this month in U.S. District Court in the Western District of Missouri. NAR, along with Anywhere, Keller Williams, RE/MAX, HomeServices of America, and its subsidiaries BHH Affiliates and HSF Affiliates, are among the defendants in the class-action suit.

RE/MAX Proposed Changes

RE/MAX outlined seven additional proposed changes that it intends to implement upon court approval, which is likely to occur next year. The franchisor noted that many of these proposed changes were already part of its existing practices, and it intends to maintain its current approach.

Among these proposed changes, RE/MAX expressed its commitment to encourage transparency among its brokerages when dealing with buyers and sellers, especially concerning cooperation and compensation. RE/MAX clarified that it would not mandate its agents to make or accept offers of compensation from cooperating brokers, emphasizing that commissions are negotiable and not dictated by law or RE/MAX, LLC corporate policy. This information will be conveyed in listing agreements, buyer representation agreements, and pre-closing disclosure documents.

Similar to Anywhere Real Estate, RE/MAX will no longer enforce its affiliates to adhere to NAR’s Code of Ethics or the MLS Handbook.

Many of the other proposed changes in the settlement were already standard practices for RE/MAX.

Notably, RE/MAX asserted that it admitted no wrongdoing as part of its proposed settlement in the Sitzer/Burnett and Moehrl lawsuits. These lawsuits challenge the commission-sharing structure commonly seen in real estate transactions and are scheduled for trial in the coming months, with Sitzer/Burnett starting in two weeks.

RE/MAX Agency Agreement

Instead, RE/MAX emphasized the importance of its brokers and agents being upfront about the cost of their services and pledged to continue displaying offers of cooperative compensation on remax.com. It also committed to not providing software that filters or restricts MLS listings based on compensation levels unless specifically requested by a client. RE/MAX underscored the professional obligation of its agents to show and market properties regardless of the offered compensation.

RE/MAX reaffirmed that it would not imply a minimum commission requirement in any franchise agreement, thereby allowing its brokerages and agents to maintain their freedom to set and negotiate commissions as they see fit.