Transparency? Not Today. Nar Delegates Reject Referral-fee Disclosure Rule

The National Association of Realtors’ (NAR) Code of Ethics will not be getting the makeover many initially anticipated at the close of the Board of Directors meeting on Monday, at the end of NAR’s 2025 NXT conference in Houston. 

During the board meeting, the directors approved an amendment to Article 6 of the code, which would have required Realtors to obtain a client’s consent any time they receive any money, rebate or profit from referrals. The proposal was initially approved with 83.55% of directors voting in favor and 16.45% opposed. 

However, just a few hours later during the Delegate Body meeting, the group of local delegates rejected the proposal. 

“When Article 6 was amended in 1999, it may have been reasonable to exclude real estate referral fees from the articles’ disclosures obligations,” Todd Beckstrom, the chair of the NAR committee that proposed the changes, said during the meeting Monday morning. “However, the committee now sees no valid reason to continue this exclusion, and believes that clients and customers have the right to be aware of any financial benefits a Realtor may receive when recommending products and services.”

In a post on LinkedIn, James Dwiggins, the co-CEO of NextHome, called this move by the delegate body “A VERY BAD POLICY DECISION.” 

“I can’t remember a time any of my lawyers said NOT disclosing information decreases your risk of litigation or builds trust,” he wrote. “In case anyone hasn’t noticed, there have been nonstop lawsuits filed the last few years that have gotten close to bankrupting the entire industry. Complete transparency is essential for our industry to survive long term and for the public to trust us. It’s really this simple… if you feel uncomfortable disclosing how you are compensated or can’t clearly explain your fees to homebuyers and sellers, then it’s either time for you to leave the industry, or join an organization who can help you do that. Not all brokerages are the same and consumers deserve better.”

While Realtor associations and brokerages have yet to come under fire for not disclosing referral fees. Zillow is currently at the center of a lawsuit filed by the same plaintiffs’ attorneys who filed the Moehrl commission lawsuit, in which Zillow is accused of driving up the cost of homebuying through the referral fees it charges agents in its Zillow Flex program. 

It is unclear how this proposed rule change would have impacted Zillow Flex agents. 

NAR did not immediately return HousingWire’s request for comment on this decision by the Delegate Body.