Key takeaways

  • NAR, short for the National Association of Realtors, is a trade organization for real estate professionals.
  • All real estate agents are licensed, but not all are Realtors — to have that title, you must be a NAR member.
  • A lawsuit involving NAR and several large brokerages has been settled and will result in changes to the way agents’ commissions are paid.

The National Association of Realtors, often abbreviated as NAR, is a professional organization with around 1.5 million members who work in residential and commercial real estate. It is America’s largest trade association, composed mostly of real estate agents and brokers. But its membership includes a range of others involved in buying and selling homes, like appraisers, attorneys and property managers.

Members don’t belong only to the National Association of Realtors. To become a NAR member, they first must belong to one of approximately 1,200 local real estate associations. By joining NAR, members agree to abide by its code of ethics — standards of practice designed to ensure that they act in their clients’ best interests. Recently, the organization has made headlines for a $418 million legal settlement that is set to change the way real estate commissions are paid, and more, in the second half of 2024.

History of NAR

What is the National Association of Realtors? It was originally founded in 1908 in Chicago as the National Association of Real Estate Exchanges. In 1916, the organization rebranded as the National Association of Real Estate Boards, operating under that name until 1972, when it adopted the current name.

One important milestone in the organization’s history occurred in 1949 and 1950, when it registered the term Realtor with the U.S. Patent and Trademark Office. That’s why you typically see the word capitalized, or even sometimes in all uppercase letters: It’s a registered trademark. Nowadays, the term is often used synonymously with “agent,” but they’re not exactly the same thing. Not all real estate agents are Realtors — to earn that title, you must be a NAR member.

How NAR works

Anyone who joins the National Association of Realtors must pay membership dues: In 2024, the cost is $156 per year plus a $45 per year assessment. That’s in addition to any dues owed to state and local associations.

Like most professional associations, NAR lobbies on behalf of its industry to address issues that impact real estate. In 2024, the organization has been actively supporting initiatives to clear some red tape for expanded housing production, for example. Outside of those advocacy efforts, NAR also acts as a source of continuing education for its members by offering courses about everything from writing contracts to financing investment properties.

Homebuyers and sellers may come across research data from the organization, too. NAR publishes monthly reports that highlight median home prices, housing inventory levels and more information about the market.

Realtors — or anyone interested in buying or selling a home — can consult its housing trends data to help set realistic expectations about the amount of money it takes to buy a home and the amount of time it will take to close on the transaction.

The NAR lawsuit

In the fall of 2023, a federal jury determined that NAR and some of the country’s biggest real estate brokerages worked together to keep agent commissions high. All defendants have now settled, including NAR: In March 2024, NAR agreed to pay $418 million and implement some changes to the way the commission process works.

These changes represent a seismic shift in an industry that has not seen many major disruptions. Starting this summer, home sellers will no longer be automatically responsible for paying the buyer’s agent’s commission. In addition, the commission split (what percentage goes to which agent) can no longer be displayed on the MLS, where agents compile listings of for-sale homes. Several big brokerages, including RE/MAX, Keller Williams and Redfin, are no longer requiring their agents to be NAR members.

Is it worth it to work with a Realtor?

All licensed real estate agents can offer professional advice and guidance on buying or selling a home. Working with one who joins NAR to get that capital “R” logo next to their name is often a smart decision, and it doesn’t cost any more to work with a Realtor than with an agent who isn’t a Realtor.

In addition to passing the usual licensing exam to professionally represent parties in real estate transactions, as all agents must, NAR members often have additional acronyms next to their names. These distinguish their efforts to learn more and become certified experts in particular areas. Some designations include:

  • ABR (Accredited Buyer’s Representative)
  • SRS (Seller Representative Specialist)
  • CIPS (Certified International Property Specialist)
  • SRES (Senior Real Estate Specialist)
  • LHC (Luxury Homes Certification)

However, the Realtor title shouldn’t be the deciding factor in determining who to represent you in a transaction. Whether you’re buying or selling, be sure to interview multiple candidates to find the pro you click with best. An agent who’s a Realtor isn’t a guarantee of a great fit, and one who isn’t is still a licensed professional whose job is to work in your best interests.