When most people think about real estate, they think about homes, communities, and the dream of property ownership. What often goes unseen is the vast web of regulations shaping every transaction. From local ordinances to federal laws, regulation impacts everything from closing paperwork to housing affordability. In a recent episode of The Advocacy Scoop, NAR’s Chief Advocacy Officer Shannon McGahn and Patrick Newton pulled back the curtain on how NAR works to make sure members—and their clients—are protected and empowered.
Real Estate: The Most Regulated Transaction in America
Buying or selling property is not just the largest financial transaction most Americans will ever make—it’s also one of the most heavily regulated.
- Residential closings often involve 100–300 pages of documents.
- Commercial deals can easily exceed 1,000 pages.
These requirements stem from federal, state, and local regulations that aim to protect consumers, ensure compliance, and prevent fraud. REALTORS® play a critical role in helping clients navigate this complexity.
How NAR Engages on Regulation
NAR’s advocacy team, led by experts like Brian Green (formerly with HUD), monitors regulations across every level of government. The work spans dozens of subject areas, including:
- Federal laws like RESPA, TILA, Dodd-Frank, and the Fair Housing Act.
- State-level oversight of agents, brokers, appraisers, lenders, and title companies.
- Local ordinances on zoning, property taxes, rental rules, and environmental standards.
Every year, state legislatures alone introduce tens of thousands of bills affecting real estate. NAR’s “A to Z” issue tracker provides members with quick updates on each one.
Balancing Consumer Protection and Affordability
A key theme in McGahn’s discussion was the balance between protecting consumers and ensuring housing remains accessible. Regulations are vital—but they also add cost. Studies show:
- 25% of the cost of building a home is tied to regulatory compliance.
- For multifamily housing, that figure can rise to one-third of total costs.
NAR works to identify when regulations serve the public interest and when they unnecessarily drive up costs.
Examples of NAR’s Recent Wins
NAR’s advocacy team doesn’t just monitor regulations—they shape them. A few highlights:
- Veterans Compensation Fix: Quickly secured a change at the VA to ensure veterans could continue to hire real estate professionals, followed by a legislative fix for long-term protection.
- Independent Contractor Status: Pushed back against federal proposals that threatened REALTORS®’ ability to remain independent contractors.
- FHA Condo Rules: Modernized outdated lending requirements to expand access for first-time buyers.
- Energy Efficiency Mandates: Advocated for voluntary, cost-effective measures instead of rigid federal mandates.
- Housing Supply Accelerator: Partnered with the American Planning Association and National League of Cities to promote 40 policy solutions to boost local housing supply.
Why This Matters to REALTORS®
As McGahn put it, “This is the most expensive financial transaction—but it’s also the most heavily regulated.” NAR’s advocacy ensures regulations strike the right balance:
- Protecting fairness, transparency, and safety.
- Preserving private property rights.
- Promoting housing affordability and supply.
And while members may think of Washington as the center of regulatory action, much of the work happens at the state and local level—where NAR supports associations like NCJAR every step of the way.
Stay Connected
To stay informed:
- Explore the A to Z Advocacy Issues at advocacy.realtor.
- Visit advocacyimpact.realtor for stories on how NAR’s work directly benefits members.
- Watch for updates from NCJAR on how national, state, and local policy shifts may affect your business.
Bottom line: REALTORS® don’t just help clients buy and sell homes—they operate in one of the most regulated industries in America. Thanks to NAR’s advocacy, those regulations are continually monitored, shaped, and improved to protect both consumers and professionals.
