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National Association of Realtors President Kevin Sears stepped on stage at the Aria Resort & Casino in Las Vegas Tuesday, looked out at the crowd of spectators — many of them NAR members — and sent a message of resilience in the face of industry-derailing commission lawsuits and scandals from within.
“I hope — at the end of the day, at the end of the two-year term — to be able to look back and say there was some stability and calm brought back into our organization and our industry,” Sears told a crowd of hundreds of onlookers in his first public appearance at an Inman Connect event.
His message to ICLV attendees came in response to a direct question about the very nature of his job at NAR, raised by moderator Clelia Warburg Peters, a managing partner with ERA Ventures, during a session entitled, “Okay, Seriously: What Now?”
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Sears’ aim was to offer transparency to members in the audience and share his accomplishments since being named president of the 1.5 million-member organization six months earlier. And he had to do it in front of an audience with strong or mixed opinions about how beneficial NAR has been for dues-paying members.
The tension was on display when Peters asked Sears to explain his job requirements.
“I’m asking that in part because I think a lot of people feel you haven’t done the job,” Peters said, prompting cheers and modest applause from the audience 2 minutes into the on-stage interview.
“The job is to be the voice for real estate,” Sears said in answer to Peters’ question. “I’ve been getting on the road and having conversations with members. God willing, I’ll be president for two years.”
“It’s been very tumultuous over the last 12 to 18 months,” he added.
Sears took the reins at the organization in surprise fashion in January after the abrupt and mysterious resignation of Tracy Kasper. Kasper had been in the top job of the nation’s largest trade organization for just four months when she resigned under threat of blackmail.
Sears was the third NAR president in a four-month span, as Kasper had assumed the office early following the resignation of former president Kenny Parcell.
During his tenure, Sears and members of leadership at NAR brokered an agreement to settle a wave of litigation that targeted the status quo of how Realtors get paid.
NAR must pay $418 million and the industry must make sweeping changes to settle the cases. In exchange, the group covered about 1 million of its members from liability in the existing and future lawsuits and provided a pathway for other brokerages and members to settle, as well.
It’s still not clear how NAR will pay the settlement, and Sears said there would be pain ahead for the organization. (“What I said to staff is, unfortunately this is going to hurt everyone, but we can’t cripple anyone,” Sears said.)
And that’s not the only force posing a threat to the organization, Realtors and the industry broadly.
The Department of Justice has been sending signals around the type of marketplace it wants to see moving forward. It has continued to push to reopen investigations into NAR policies.
Sears pointed out that Assistant Attorney General Jonathan Kanter specifically asked to meet with him and other members of NAR leadership.
That’s when he began to earn applause lines of his own.
He said NAR will remain focused on its efforts around advocacy and education on behalf of the real estate industry. He took sole credit for the Department of Veterans Affairs changing its long-standing rule blocking veteran buyers from paying any compensation to a broker. (“Do not let somebody else, some other group, try to take credit for this,” Sears said. “This was done solely by the National Association of Realtors.”)
“I can tell you we are very, very effective in our advocacy,” Sears said. “
Sears took issue with statements by DOJ attorneys who want commissions to be “decoupled,” or completely separated between the seller and the buyer.
“But it’s expressly allowed by law in over 40 states. If they don’t like it they should do the hard work of going to state legislatures and change the law,” Sears said to applause from members in the room.
“Commissions have always been negotiable,” Sears said. “We’re going to continue to have the conversations with buyers and sellers about how we’re going to get compensated. We need to educate, especially the seller and consumer.”
Work with the DOJ will continue, and Sears said Realtors need to stay focused on the value and benefits they provide to consumers. That, he said, was the “common ground” that NAR and the DOJ have broadly agreed on.
“Their vision of what is good for the consumer might be a little different than ours, but so long as our focus is on the consumer, that’s going to be a helpful defense with the Department of Justice,” Sears said.
He sent a warning to any agents or brokerages that might find ways to operate in ways that aren’t in line with the settlement agreement, possibly referencing a wave of new startups that are offering brokers ways to market offers of compensation.
“Don’t get cute,” he said. “Don’t try and do an end-around when it comes to commissions, offers of compensation, that sort of stuff. Look at the letter of the settlement and the spirit of the settlement. Be consumer-centric and that will be your ultimate defense.”
“Unfortunately, I think the Department of Justice is going to be looking very closely,” Sears said. “I don’t want to see any of my members and any of my brokerages get caught in their crosshairs.”
The crowd gave Sears two more rounds of applause during his appearance, including once when Peters thanked him for getting on stage at Inman Connect and facing hundreds of members after a rough patch for the organization.
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