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Why did Redfin leave the National Association of Realtors?

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If you’re looking to buy a house or if you’re just curious about what the inside of your neighbor’s house looks like, you probably know about Redfin.

But the Seattle-based online real estate brokerage isn’t just for looking up pictures and list prices and daydreaming about winning the lottery.

Redfin employs licensed real estate agents, which makes Redfin’s recent announcement that it’s walking away from the National Association of Realtors, also called N.A.R., extremely complicated.

N.A.R. is a highly influential membership organization in real estate. They even own the trademark on the term "Realtor."

New York Times real estate reporter Debra Kamin wasn't surprised that Redfin left the National Association of Realtors.

"N.A.R. had a rough summer and they've had a lot of bad publicity. I have been the reporter on some of that publicity," Kamin said. "There are a lot of people within the industry who are not very happy with them at the moment."

Kamin broke a story in August about sexual harassment allegations at the National Association of Realtors. Those allegations along with how N.A.R. responded to them, were one of the two reasons Redfin cited in its decision to step away from the association.

The other reason has to do with the way that N.A.R. sets commissions for brokers.

"Essentially, [the N.A.R.] set rules that if you're a member, you have to follow," Kamin said, "and if you buy and sell a home, there's a commission of 6%, which is fixed, that you have to pay."

Redfin said the association was essentially a monopoly in the industry and they were dissatisfied with the group's terms.

In the short term, it will be incredible difficult for certain Redfin agents to leave the N.A.R. In some cities, agents and brokers need to be a member of N.A.R. to access MLS, the home listing database. Redfin acknowledged that not all of its employees will be able to leave N.A.R. because of these restrictions.

Listen to Soundside’s full conversation with Debra Kamin by clicking the play icon at the top of this story.

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