A Potential Path Forward for NAR.

Disclaimer: This article is blunt, but I am neither angry nor bitter. We, the real estate practitioner population, have grown weary of the quagmire and bad publicity when all we are trying to do is earn a living and feed our families the best we can. These comments are strictly my own and may or may not reflect anyone else’s or any organization with which I am associated. I’m just willing to say out loud what many others are thinking and feeling.

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The National Association of REALTORS? is in trouble, and a revolt is brewing in the village. In the view of this 22-year practitioner, NAR lost sight of its core mission a very long time ago and everyone knows it. In the view of many of us out here in “fly-over country” the recent shenanigans have destroyed the last shreds of the organization’s credibility.

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Gradually at first, and then suddenly, this group lost sight of the fact that, like any trade organization, it exists primarily to serve the interests of the majority of the dues-paying membership. Serving the membership is the raison d’etre. It is not to social engineer, not to serve the Ladies and Lords in leadership, and it is most certainly not to serve various cliques of special interests. This organization exists to serve the greater membership. Period. Yet it has morphed into a self-aggrandizing, self-perpetuating-at-any-cost, maladroit organization that is so inwardly focused as to become completely tone-deaf to the needs of the membership. In short, it has lost faith with the greater membership.

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The simmering revolt gained notoriety this week with the announcement by a national real estate brokerage (whom I refuse to name) of their withdrawal from NAR membership. Reading through the press release, I can agree with some of their statement and disagree with some. Frankly, it struck me as one social engineer calling out another social engineer as “misguided.” Interesting.

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The statement offers as a primary reason for departure being because NAR requires a uniform offer of compensation with all NAR-owned MLS listings. This, from a company who boasted about a $1million ad campaign a couple of years ago pushing a 1% listing fee, but only if the client let this company serve as their buyer agent on a purchase. They still offer it today. From their website: “…[our] agents have the expertise to sell your home for top dollar, and you’ll pay a low 1% listing fee when you buy and sell with us.” Which means they are not only hoping for but are counting on receiving a commission by representing buyers. Hmmm.

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This brokerage’s comment about surrendering their Board seat (pointedly, way before the recent scandals) is curious. As if that move indicates prescient leadership. It was ONE seat of over 1000. What possible impact could the removal of ONE opinion make in a room of over 1000 voices??

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Regardless, it does bring to light an important cause of the dysfunctionality of NAR. In the real world there are, oh, ZERO publicly traded companies with a Board of Directors larger than about 25 seats. So, the fact that NAR’s board is over 1000 deems it ludicrously unwieldy. Further, I know of zero publicly traded companies whose board is made up almost exclusively of appointed industry practitioners. If a board member has never started and grown a sizeable enterprise, and never had to make a payroll, how can their input be considered valid in understanding real business issues? We don't need another committee, we don't need another taskforce, we need to fix the board.

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To be sure there are some good things that NAR does. Albeit some make one cock the head sideways like a puppy and say “Huh?” simply because they appear to have been created happenstance and almost in a vacuum. The leadership of this organization is so completely detached from the membership that the clear message is a “let them eat cake” attitude. You’re either IN the circle, or you don’t exist.

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Follow the money. Go look up IRS form 990. The most current one I could find online is for the year 2021. These “volunteer” leaders are all paid nearly $300k per year, for multiple years, and yet they can’t seem to keep their pants on (WTH?). While at the same time these people railing at the membership that if they utter one word of disparagement of another member or step out of line one inch, they will be punished mightily. The headman is paid nearly $3,000,000 per year and is unable (or unwilling) to smack the hands that wonder. Did you know that NAR spent nearly $5million that year on just travel expenses? They like to boast about being the 2nd largest lobbying organization in the country, but the members don’t have adequate group health insurance. Why? “The laws don't allow it” they say – well get the law changed! You just bragged to us about having the 2nd largest lobbying organization in America. Ugh. Credibility blown. Lack of leadership fully exposed.

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Were it not for the monopolistic control over the MLS, this organization would have self-destructed a long time ago, much like what is currently happening. The Realtor brand means no more to the consumer than “xerox” or “band-aide.” (“Can you make me a xerox of this please?” “So-in-so is my realtor.”) The trademark is now 100% generic. Allowed to become so by NAR in the interest of increasing dues revenue plain and simple.

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The state affiliate associations have steadfastly refused to engage with the legislatures to raise the barrier to entry in this profession (like the mortgage profession did) much less increase the requirements to remain in this industry. All necessary requirements to raise professionalism. A few years ago, I and others presented such a proposal to our state association – and they killed it twice in government affairs committee. If NAR truly wanted to improve professionalism, they would stop with the niggling rules and raise both the dues and the requirements for entering and remaining in this industry. They would also push for a dramatic increase in requirements for being a supervising broker. There is not a single professional out here that would balk at paying $3000 per year IF it really meant something. As I said though, given the current state of credibility, clearly that is an uphill battle.

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For the life of me I cannot fathom why we have one national association + one state association + NINE local associations in the Greater Nashville Area. Each with dues to pay, rules to join, and all with a seemingly constant bombardment of membership emails and calls that for the most part provide little to no value to our lives. Why can we not have just ONE association in each state, broken into 3-4 regions, and call it done? As a businessperson who just happens to be in the real estate industry, these are the things that make no sense to me. More importantly they detract from what should be our sole mission: serving our clients while providing for our families.?

If NAR wants to survive, they must refocus on serving the membership. Work with the state legislature to increase the requirements for entering this business, remaining in this business, and for heaven’s sake VASTLY increase the requirements for becoming a supervising broker. Spend some of that $84million in lobbying efforts on bringing the membership real benefits, such as group healthcare. And what about some sort of retirement packages similar to a 401K, (dare I say it) with an organization matching contribution. The organization possesses the clout – let's USE it to serve the members. You want to win back the membership? Get out of the MLS monopoly business and GIVE us reason to once again be proud of the REALTOR? brand.?

I could go on, but I won’t. NAR is reaping what it has sown, and the chips will fall where they may with or without my input. My sole interest is elimination of the requirement of NAR membership to access the MLS. We little ones on the front lines, trying to feed our families need to be able to earn a living without bowing down to some detached, bureaucratic organization off in an ivory tower somewhere that keeps sucking money out of our pockets for its own purposes of who-knows-what, only because we must have access to the MLS. Remove the requirement of NAR membership to have access to the MLS, and the world changes tomorrow. There. I said it.