# National Association of Realtors (NAR): What It Is and How It Works

## What Is the National Association of Realtors (NAR)?

The National Association of Realtors (NAR) is a national organization of [real estate](https://www.investopedia.com/terms/r/realestate.asp) brokers, known as [realtors](https://www.investopedia.com/terms/r/realtor.asp), created to promote the real estate profession and foster professional behavior in its members. The association has its own [code of ethics](https://www.investopedia.com/terms/c/code-of-ethics.asp) to which it requires its members to adhere.

As of 2021, the NAR has over one million members worldwide. It has 54 state associations (including D.C., Guam, the U.S. Virgin Islands, and Puerto Rico) as well as more than 1,600 national and international [affiliate](https://www.investopedia.com/terms/a/affiliate.asp) organizations.

### Key Takeaways

*   The National Association of Realtors (NAR) is the professional organization for real estate agents and other industry professionals in the U.S. and abroad.
*   Members, known as realtors, have access to a variety of benefits and tools designed to enhance their real estate businesses.
*   The organization also works to protect private property rights, promote home ownership, and lobbies to maintain reasonable credit and other standards at the federal level.

## Understanding the National Association of Realtors (NAR)

The NAR's membership increased to just under 1.4 million. It claims to be the largest trade association, comprising real estate brokers, salespeople, [property managers](https://www.investopedia.com/terms/p/property-manager.asp), [appraisers](https://www.investopedia.com/terms/a/appraiser.asp), counselors as well as others in the real estate industry. Members belong to one or more of the 1,200 local associations/boards and 54 state and territory associations of Realtors or to one of 87 cooperating associations in 66 countries.

The NAR was founded as the National Association of Real Estate Exchanges in May 1908, with 120 members, 19 Boards (local associations) and one state association. Its objective was to standardize real estate practices and to “unite the real estate men of America for the purpose of effectively exerting a combined influence upon matters affecting real estate interests.” The NAR Code of Ethics was adopted in 1913.

Over the years, the association’s name changed several times until, in 1972, it became the National Association of Realtors. Today, its mission is “to help its members become more profitable and successful,” by "influencing and shaping the real estate industry"; advocating for "the right to own, use and transfer real property"; and developing standards for efficient and ethical real estate business practices.

## Who Can Join

The principal of a real estate firm must join a realtor association before any non-principal in the firm can join (principals can be sole proprietors, partners in a partnership, corporate officers or branch-office managers acting on behalf of a principal). After the principal has joined a realtor association, all agents, brokers and appraisers who are licensed or affiliated with the principal have the option of joining as members of the association. (If the principal does not join a realtor association, none of the individuals affiliated with the principal can become realtor members of the association.) Members of local associations are automatically given membership in the state and national associations. For a list of local and state associations of realtors, see the [NAR website](http://www.realtor.org/).

Annual NAR membership dues ($150 per member for 2020 and 2021, with a $35 assessment for the NAR's Consumer Advertising Campaign) are billed through the members’ local associations and are pro-rated monthly for new members. In accordance with the Tax Reform Act of 1993, any portion of dues attributable to lobbying and political activities at the State and Federal levels is considered nondeductible for income tax purposes – this portion is disclosed annually to members. 

NAR members receive a variety of benefits, business tools, real estate market data, research and statistics, educational opportunities and discount programs geared towards helping real estate professionals succeed in business. For example, only realtors have access to the [Realtors Property Resource (RPR)](https://www.investopedia.com/terms/r/realtor-property-resource-rpr.asp), a national database of information on every property in the U.S., built from public-record and assessment data. It includes facts on zoning, permits, mortgage and [lien](https://www.investopedia.com/terms/l/lien.asp) data, schools and a large database of [foreclosures](https://www.investopedia.com/terms/f/foreclosure.asp).

> **Important**
>
> The use of the realtor trademark by agents is heavily regulated by the NAR which issues strict rules and guidelines.

## NAR Research Division

There is a research division that collects and disseminates real estate data and conducts economic analysis. Delivery of this information takes place via [press releases](https://www.investopedia.com/terms/p/pressrelease.asp), reports, presentations, and daily blog posts about the overall economy and housing market.

Well-known national and regional housing statistics include existing home sales, [pending home sales index](https://www.investopedia.com/terms/p/pending-home-sales-index.asp) and the housing [affordability index](https://www.investopedia.com/terms/a/affordability-index.asp). The organization releases existing home sales monthly, providing national and regional price and volume statistics. The data is for the past 12 months along with annual totals going back three years. It is broken down into existing single-family homes, condos and co-ops. The first week of each month, the NAR releases the pending home sales index, considered a leading indicator for housing activity. The index measures signed real estate contracts for existing single-family homes, condos and co-ops. The housing affordability index measures whether a typical family earns enough income to qualify for a mortgage loan on an average home based on recent monthly price and income data.

The NAR also provides a host of [research reports](https://www.investopedia.com/terms/r/research-report.asp), including a monthly report on [foot traffic](https://www.investopedia.com/terms/f/foot-traffic.asp), which attempts to predict future sales trends. Others are local market reports, which analyze a host of data, and a confidence index.

> **Important**
>
> On March 15, 2024, the National Association of Realtors settled a class action lawsuit by homeowners who alleged that the NAR had illegally inflated the commissions charged to realtors. As part of the $418 million settlement, the NAR agreed to stop allowing broker compensation offers on its listing platforms. The change is expected to dispense with the traditional 6% commission, giving homebuyers more freedom to negotiate agent compensation.

## Strategic Plan and Benefits

The NAR annually updates its strategic plan to reflect the challenges and opportunities that the association and the real estate industry expect to confront during the next three to five years.﻿﻿

A member of the National Association of Realtors has access to certain benefits, business tools, real estate market data, educational opportunities and discount programs. The National Association of Realtors also has an educational program, including an online ethics course.

## What Is the Purpose of the National Association of Realtors?

The National Association of Realtors acts as a trade association for real estate professionals. It publishes research on the real estate market, compiles statistics, and provides the [multiple listing services](https://www.investopedia.com/terms/m/multiple-listing-service-mls.asp) that are used to sell properties in different real estate markets. It also advocates for public policies that benefit members of the NAR.

## Is It Worth Joining the National Association of Realtors?

Professional real estate agents may benefit from joining the National Association of Realtors, which provides access to market data and property listings on its multiple listing services as well as access to local realtor associations. For full-time professionals with many clients, these services can be well worth the $156 annual membership fee. However, there is no requirement to join the NAR to work in the real estate industry; the only requirement is to meet your state's licensing requirements.

## Do You Need a Real Estate Agent to Sell Your Home?

There is no requirement to hire a real estate agent to buy or sell a property, and their commissions can be costly. That said, hiring a real estate agent gives you access to a larger market of potential buyers or sellers, allowing you to find a match more quickly and at a better price. In addition, real estate agents are familiar with the different financial and legal complications of a real estate transaction, potentially avoiding further problems down the road.

## The Bottom Line

The National Association of Realtors is the largest trade association in the United States, representing the interests of 1.4 million agents, brokers, appraisers, property managers, and other real estate professionals.  

> **Article Sources**
>
> 1.  National Association of Realtors. "[Overview of NAR](https://www.nar.realtor/realtorae.nsf/pages/BCwhatisNAR)."
>     
> 2.  National Association of Realtors. "[NAR at a Glance](https://www.nar.realtor/about-nar/nar-at-a-glance)."
>     
> 3.  National Association of Realtors. "[History](https://www.nar.realtor/about-nar/history)."
>     
> 4.  National Association of Realtors. "[National Policies & Structure](https://www.nar.realtor/state-and-local-leadership/national-policies-structure)."
>     
> 5.  National Association of Realtors. "[Fair Housing](https://www.nar.realtor/fair-housing)."
>     
> 6.  National Association of Realtors. "[Dues Information](https://www.nar.realtor/membership/dues-information)."
>     
> 7.  National Association of Realtors. "[What Is the Realtors Property Resource (RPR)?](https://www.nar.realtor/articles/what-is-the-realtors-property-resource-rpr)"
>     
> 8.  National Association of Realtors. "[Background](https://www.nar.realtor/research-and-statistics/housing-statistics/pending-home-sales/background)."
>     
> 9.  National Association of Realtors. "[Housing Affordability Index](https://www.nar.realtor/research-and-statistics/housing-statistics/housing-affordability-index)."
>     
> 10.  National Association of Realtors. "[National Association of Realtors Reaches Agreement to Resolve Nationwide Claims Brought by Home Sellers](https://www.nar.realtor/newsroom/nar-reaches-agreement-to-resolve-nationwide-claims-brought-by-home-sellers)."