A danger foretold: NAR’s waning dominance
The DANGER Report spelled out risks for MLSs, state and local Realtor associations, and NAR — which has weathered unprecedented challenges to its authority.
Key points:
- The National Association of Realtors commissioned The DANGER Report a decade ago, and many of the risks identified in 2015 have become today’s realities.
- The report took an unflinching look at the industry and suggested that associations could lose their dominance.
- Private listings were identified as “one of the greatest legal risks facing Realtors.”
Editor's note: Our series on The DANGER Report tells the story of a remarkable document, and assesses the accuracy of the "black swan" risks it said to watch out for in the future — which is now.
The NAR brand has lost its shine and its place as the leading voice of real estate, while associations push back on the three-way agreement and face the loss of MLSs as a vital revenue source.
Yes, this reads like a description of recent events, but it also was a vision of the future painted a decade ago in The DANGER Report, a deeply researched assessment of the 50 most significant risks facing the residential brokerage world.
The report, which was commissioned by the National Association of Realtors and authored by influential industry strategist (and Real Estate News founder) Stefan Swanepoel, described NAR as "the voice of real estate" for its members but also for homeowners and would-be homeowners — nearly everyone, essentially.
"With that stature, NAR has done an incredible job of becoming the leading advocate for homeownership and in creating huge recognition in the media," the report stated.
But it also identified other entities, like Zillow, that were emerging as prominent voices, and the report put the odds of a shift in NAR's dominance at 90%.
Swanepoel was even more direct when reflecting recently on the DANGER Report: Ten or 20 years ago, NAR was unassailable, he said. "Now people question what they say."
An NAR settlement, and an unsettled association landscape
Realtors have gone from being true believers to being uncertain about the value of membership, especially in the wake of shakeups in NAR leadership and — most significantly — the deal that NAR reached to settle commissions lawsuits filed by sellers across the country.
Some have been frustrated by the terms of the deal, which took effect in mid-August and required offers of compensation to be removed from MLSs while also mandating that agents get would-be buyers to sign agreements before even touring a home.
One thing the report did not foresee was a wave of antitrust lawsuits filed by home sellers, though it did identify risks around commissions and perception of agent value.
It called out similar risks for Realtor associations, saying that these organizations are in the challenging position of needing to provide "programs, products, training and services that have high relevance and high value to their members' businesses and career." But they must also "be seen as more than just the products/services they deliver."
That was true in 2014, and today. Also true today: "The size of local associations ranges dramatically from fewer than 10 members to many tens of thousands. The leadership skills, abilities and mindsets of association leaders vary significantly across this large spectrum." And the resistance to consolidation described in the report still exists, as recent events in Fort Worth show.
Fewer associations, but just as many dues
There are now approximately 1,250 Realtor associations, down from 1,341 in 2014. The number of associations peaked with 2,012 in 1984 and has dropped by around 10% per decade since.
In 2014, The Danger Report warned of the "growing confusion regarding dues paid and the partitioning thereof between national, state and local associations," saying this could also "impact the relevancy" of Realtor associations.
And in 2024, the burden of three sets of dues was cited as a major reason that the Alabama Association of Realtors made a move to free its members from the requirement that they join state, local and national associations — and was also at the heart of a lawsuit filed in Michigan in August.
While NAR continues to stand by its "Three-Way Agreement," it has said it will review the Alabama association's request.
MLS dangers? Ownership changes and legal risks
Another danger for associations intersects with the world of MLSs: A loss of the revenue that MLSs provide.
This is something that Denver Metro Association of Realtors (DMAR) and South Metro Denver Realtors Association (SMDRA), the former owners of REcolorado, are facing now that they've sold the MLS to a private entity.
But they are facing it with optimism, with DMAR CEO Brendan Bailey saying the new leadership of the MLS "promises to create exciting new opportunities for the real estate community, enabling us to better serve our clients and succeed during this pivotal time for the industry."
On the MLS front, the report identified such threats as security breaches and private listings, a hot topic made hotter with discussions of the Clear Cooperation Policy.
The DANGER Report called out the use of off-MLS listings as "one of the greatest legal risks facing Realtors today." It described the potential of a class-action lawsuit "involving a breach of fiduciary duty resulting from the use of an off-MLS listing without fully detailing the impact to the seller."