Evolving Beyond the Three-Way Agreement

NAR operates under a three-way agreement with state and local Realtor associations, creating a structured relationship that mandates membership across all three levels. This structure is now considered outdated and is often criticized for several reasons. Agents are required to join all three tiers, even if they find little value in one or more levels. This requirement leads to additional membership fees, as agents must pay dues to all three levels, which can be burdensome for smaller brokerages or individual agents.

Mandated membership needs to end, and support of the Realtor association, on any of the three levels, must be earned. Sunsetting the three-way agreement would allow brokers and agents to independently decide whether they wish to join a state, local, or national association—or all three. This shift would necessitate associations selling their value to constituents, much like agents must demonstrate their value to clients. Allowing professionals to choose their affiliations offers several key benefits:

• Freedom of Choice: Professionals can align their membership with associations that reflect their values, needs, and goals.
• Accountability and Quality: Optional membership compels associations to continually demonstrate value, enhance services, develop better programs, raise standards, and foster greater innovation.
• Cost Efficiency: With optional membership, professionals can manage expenses more effectively by joining only those associations that directly benefit their business.
• Encouraging Competition: Voluntary membership encourages competition between associations, leading to improved offerings, more focused services, and a wider range of choices for professionals.

Optional membership across all association levels will create a healthier, more committed, and transparent environment, where associations become more relevant and responsive to their members. This marks a significant shift in association thinking, which has traditionally focused on headcount. It will require a reconfiguration of the Realtor structure, value proposition, and operational model.

The Realtor ecosystem plays a critical role in a thriving industry, and by streamlining and focusing the responsibilities of each layer, consumers, brokers, and agents will benefit from more agile and dynamic services.