NAR

New NAR Logo was only $250,000

$250,000 for this?

You’ve got to be kidding me.

I’m no stranger to differences of opinion with other real estate agents. I run my business differently than most and have never been shy about calling out the shady, deceptive, and down right annoying business practices that are pervasive in this industry.

But, last week, I found what is probably the most common ground I’ve ever experienced since I started selling houses in 2005. I’m annoyed as hell about it, which puts me in the same camp and just about every other Realtor in the United States.

The National Association of Realtors (NAR), in their infinite wisdom and unwavering mission to innovate, decided that an update to the Realtor logo was necessary.

And they paid $250,000 for it.

nar logo.png

One quarter of one million dollars for something I could have ordered on fivver.com and had delivered in 48 hours for under $100. Shoot, Jason Walle over at Chain Reaction Studios probably could have turned it around in an afternoon for a few hundred dollars more.

The reason? According to the NAR:

“The roll-out of this work truly enables the REALTOR® brand to better compete and thrive in the marketplace in a way that is clear, credible, and compelling, while leveraging equities that NAR has earned over the past 45 years, and evolving our brand so that we can continue to lead the real estate industry over the next 45 years.”

LEAD THE REAL ESTATE INDUSTRY?

Ummm, bullshit.

The NAR has a damn monopoly over the real estate industry, courtesy of the MLS.

Not a monopoly over the public, but rather a monopoly over broker access to the data in the MLS.

Quick lesson for my non-realtor friends: there are “real estate brokers” and there are “Realtors.” The former is one who holds a license to work as real estate broker, the latter is one who holds a license AND has joined the NAR.

To join the NAR you have to also join a state association as well as a local association and, of course, pay dues to all three.

So if you can work in real estate without being a member of NAR, why join? It's simple: you can’t get access to the MLS to list homes for sale without being a member. The fees vary by state and local association but in 2018 the national association dues were $120 + $35 for a Consumer Advertising Campaign special assessment.

So that’s $155 per member.

Right now there are 1,289,206 members.

So for 2018 NAR received a total of $199,826,930.  Read here to see where the money goes. 

Just shy of $200M.

Basically the NAR is a big, dumb company. And like any other big, dumb company they make big, dumb decisions.

Call me crazy but I don’t see spending $250,000 on $100 logo as an effective means to “lead the real estate industry.”

NAR to do something about sub-par Realtors (yeah, right.)

About this time each year my inbox gets flooded with messages from folks "in the business" with seminar offerings, new gimmicks for picking up clients, offers to join one of the Big Box Brokerages, market & industry predictions, and more.  

In the "industry predictions" category I received, among other predictions, from Robert Hahn in this article the prediction that in 2017 the NAR (the National Association of Realtors) would "do something about sub-par agents.  Specifically he said,

I think we see a significant step forward in terms of ethics, competence, requirements for advocacy and the all-important requirement to be dedicated to the art and craft of representing consumers in the largest transactions of their lives

I beg to differ.  NAR has never done anything about incompetent, unethical, or uneducated agents. The NAR exists not to protect consumers or provide training or improve the overall industry of real estate.  Rather it exists to make money. And they make lots of it.

Membership has blossomed from 1,646 members in 1908 to 1,233,704 in 2016 and each of these members pays $155 every year to NAR. This is the basis of my prediction that there's no way that the NAR is actually going to "do" anything about sub-par agents.  If they did they would cease to exist because the hard truth of the matter is that the majority of agents are sub-par.  As I've written about many times this industry is rife with greed & unethical behaviors and it's full of sub-par agents and it doesn't take a rocket scientist to figure out why: mediocre income and lack of training.

The training issue is simple: there really is none.  In North Carolina you take a 75 hour class and pass an exam and, BAM, you are licensed.  Join a firm and pay your dues and, BAM, you are a Realtor. The licensing training has nothing to do with being an effective broker and can be passed by anyone who can memorize basic facts. And the "sales training" offered at the Big Box Brokerages is just that - training on how to cold call, email, knock on doors, etc - in order to get clients.  None of the training I've ever seen has anything to do, at all, with actually serving clients. 

For income, the median gross income of Realtors in 2015 (the last year available as of this writing) was just over $39,000.  Folks - that's GROSS income - as in before they pay their expenses.  Before they've paid for gas, computers, cell phones, business cards, advertising, etc.  That stuff isn't cheap.  After expenses (including paying NAR for membership) the "median Realtor" is flirting with the poverty line.  And, consider this: in 2015 the typical Realtor earned their income with 11 transactions.  This means that 1/11 of their entire income comes from each of the 11 transactions. It's easy, from that perspective, to see how greed and ethics could come into play.  If one of those transactions falls apart the agent is missing more than a months' income!

So we know why we have so many sub-par agents - training and income - why do I say that NAR won't do anything about it?  Because they can't.  And even if they could they wouldn't because they would lose too much money.  On the training they could offer more training on how to better serve clients but unless they offer it at no cost not many people are going to take it. And they can't fix the income problem because the low barrier to entry in the profession means we have too many Realtors.  There aren't enough home buyers and sellers to go around for 1,233,704 Realtors to all earn a high income. 

It's been said that if you're looking for an answer to follow the money. The bigger issue, and the real reason they won't do anything about it, is how much money they would lose. 2017 dues are $120.  That's $148,044,480! Plus there's a $35 assessment for a Consumer Advertising Campaign which adds up to another $43,1179,649. So we're talking about an organization that's taking in nearly $200M annually in dues and assessments.  The question then becomes, where is all the money going?  Check out these charts from this article published on Inman earlier this year and ask yourself this question: if these salaries are being paid by the dues that are collected from Realtors and the majority of Realtors are sub-par can we really expect the National Association of Realtors to do anything about?  I think the answer is obvious - you decide for yourself. 

These figures provided by Inman News originally reported  here .

These figures provided by Inman News originally reported here.

These figures provided by Inman News originally reported  here .

These figures provided by Inman News originally reported here.