National Association of Realtors (NAR): Role, Benefits, and How It Works

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The National Association of Realtors (NAR) is a U.S. trade association for real estate professionals. Its members include brokers, salespeople, property managers, appraisers and counselors, and only members may call themselves Realtors. NAR does not license anyone to practice real estate. States do that. NAR is a voluntary professional body: it sets an ethics code for its members, publishes widely followed housing statistics, lobbies on property and housing policy, and controls the Realtor trademark.

What Is the National Association of Realtors (NAR)?

NAR describes itself as the largest trade association in the United States, with more than a million members. It is built in three tiers: roughly 1,200 local associations (often called boards), 54 state and territory associations, and cooperating associations abroad, which it has listed as 87 associations in 66 countries. A professional joins at the local level and becomes a member of the state association and NAR automatically.

NAR was founded in May 1908 as the National Association of Real Estate Exchanges, with 120 members, 19 local boards and one state association. Its aim was to standardize real estate practice and unite the industry so it could exert a combined influence on matters affecting real estate. After several name changes, it became the National Association of Realtors in 1972.

Its stated mission is helping members become more profitable and successful. It pursues that by shaping industry standards, advocating for the right to own, use and transfer real property, and developing rules for ethical business practice.

How the National Association of Realtors Works

Membership structure

Membership runs through the firm, not only through the individual. The principal of a real estate firm must join a Realtor association first. A principal can be a sole proprietor, a partner, a corporate officer, or a branch office manager acting for a principal. Only then may the licensed agents, brokers and appraisers affiliated with that principal join as Realtor members. If the principal does not join, none of them can.

Dues and their tax treatment

Members pay dues at the local, state and national levels. Amounts vary by association and change over time. NAR discloses each year the share of dues spent on lobbying and political activity at the state and federal levels. Under federal tax law in effect since 1993, that share is not deductible as a business expense, even when the rest of the dues may be.

The Code of Ethics and the Realtor trademark

The Code of Ethics, first adopted in 1913, is the main thing that separates a Realtor from a licensee who is not a member. It sets duties to clients, to the public and to other Realtors. Local associations handle ethics complaints against members, and members complete periodic ethics training, which NAR offers online.

NAR issues rules on how the Realtor mark may appear in names, advertising and signage. The mark signals membership and a commitment to the code, not a separate license or a higher state credential.

Member resources

Members get business tools, market data, education, designations and discount programs. One member-only tool is Realtors Property Resource (RPR), a national property database built from public record and assessment data. It covers zoning, permits, mortgage and lien information, schools and a large foreclosure dataset. Agents use it to prepare pricing estimates and market reports for clients.

NAR Research and Housing Data

NAR’s research division publishes real estate data and economic analysis. Three of its releases are standard references in housing coverage:

• Existing home sales. A monthly report of national and regional sales volume and prices for previously owned single-family homes, condos and co-ops. It shows the past 12 months and annual totals for recent years.
• Pending Home Sales Index (PHSI). Released around the start of each month, it tracks signed contracts on existing single-family homes, condos and co-ops. Because contracts are signed weeks before closing, it is treated as a leading indicator for existing home sales.
• Housing Affordability Index (HAI). It measures whether a typical family earns enough to qualify for a mortgage on a typical home, using recent price, income and mortgage rate data.

NAR also publishes local market reports, a monthly foot traffic report meant to anticipate sales trends, and the Realtors Confidence Index, which surveys members on market conditions.

Interpreting NAR housing statistics

For the PHSI, a reading of 100 equals the average level of contract activity in 2001, the base year. A reading of 90 means contract signings ran about 10% below that 2001 average. A reading of 110 means they ran about 10% above it.

For the HAI, a reading of 100 means a median-income family has exactly the income needed to qualify for a mortgage on a median-priced existing home. This usually assumes a 20% down payment and a cap on how much of income the mortgage payment may take. Readings above 100 mean housing is more affordable, and readings below 100 mean it is less affordable.

Hypothetical example: an HAI reading of 120 means the median family earns 120% of the income needed to qualify for the median-priced home. If rates rise and the reading falls to 95, that family earns only 95% of the qualifying income. It would need a larger down payment, a cheaper home or a higher income.

These are national and regional aggregates. A single figure does not tell you whether any one neighborhood, price band or property type is moving the same way.

Example of National Association of Realtors Membership

Hypothetical example: Maria owns a small brokerage and is its principal. She employs four licensed agents.

1. Maria joins her local Realtor association. She becomes a member of the state association and NAR at the same time.
2. Each of her four agents may now choose to join. Three do, and they may use the Realtor designation. The fourth stays a licensed agent but cannot call himself a Realtor.
3. Suppose total dues for one member were $800, and the annual disclosure listed 30% as lobbying-related. Then $240 would be nondeductible, and only the remaining $560 could be treated as a deductible business expense, if the member otherwise qualifies.

The 2024 Commission Settlement

On March 15, 2024, NAR agreed to settle class action claims brought by home sellers. The sellers alleged that association rules had inflated the commissions they paid. Under the $418 million agreement, NAR agreed to stop allowing offers of buyer broker compensation on association-affiliated multiple listing services. It also agreed to require buyers working with a member agent to sign a written agreement with that agent.

Payment to a buyer’s agent is no longer advertised on the MLS listing itself. It is negotiated between the parties. Commissions in the United States were already negotiable before the settlement. What changed is where and how compensation is communicated.

Limitations of NAR Membership

• It is not a license. No one has to join NAR to practice. State licensing rules govern that.
• The ethics code binds members only. A complaint against a non-member licensee goes to the state regulator instead.
• Dues stack. Local, state and national dues are charged together, and part of the total is not tax deductible.
• Advocacy reflects member interests. NAR’s policy positions represent the industry’s view, which may not match a particular buyer’s or seller’s interests.
• The research is NAR’s own output. Its widely cited statistics come from a trade association, and each series has its own methodology and revision schedule.

For a full-time agent with an active client base, member-only data, MLS access through the local board, and the Realtor designation can justify the cost. For a part-time licensee, or one working in a market where MLS access does not depend on membership, the case is weaker.

NAR vs. Related Terms

Realtor vs. real estate agent. Every Realtor working in sales holds a license, but not every licensed agent is a Realtor. “Agent” describes a license status. “Realtor” describes membership in NAR.

NAR vs. the MLS. An MLS is a shared database of property listings that brokers use to cooperate on sales. Many MLSs are owned or affiliated with local Realtor associations and follow NAR policy. Others operate independently. NAR is the organization that sets those policies; the MLS is the listing system.

NAR vs. NAREB. The National Association of Real Estate Brokers is a separate organization. It was founded in 1947 by Black real estate professionals who were excluded from many Realtor boards at the time. Its members use the term “Realtist.”

NAR vs. realtor.com. NAR owns the realtor.com domain and trademark and licenses them to an operating company. The site itself is not run by the association.

FAQs

The Bottom Line

NAR membership matters most to agents deciding whether the Realtor designation and its stacked dues are worth paying. Full-time agents with active clients who rely on member-only data and MLS access through a local board can justify the cost. Part-time licensees, or agents in markets where MLS access does not require membership, have a weaker case, and buyers and sellers should read NAR data and advocacy as an industry view.