Home Real Estate BREAKING: NAR Launches a Political Party, Risks Its Future

BREAKING: NAR Launches a Political Party, Risks Its Future

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At the 2011 Association Executives Institute meeting in Dallas, NAR has put forth a bold if risky plan it is actually calling the “Political Survival Initiative“. In short, NAR will launch a “REALTOR Party” that will go beyond simple issue advocacy to full-blown political support for individual candidates based on issues NAR considers important (e.g., mortgage interest deduction, financial support for housing, state transfer taxes, etc.). Please view the presentation, the talking points memo, and the NAR legal memo on Citizens United if you are interested in detail. Or just keep reading then decide if you are interested.

My initial take is surprise combined with real concern. This Political Survival Initiative could either be the most brilliant thing that NAR has done in decades (having done little to nothing with HouseLogic, that is), or be the first step towards total irrelevance. It’s a big risk. I may have to revise my opinion about NAR 800K to something closer to NAR 400K, which is not necessarily a bad thing, but the face of organized real estate could change rather dramatically, and rather soon.

A Little Background

As the talking points memo says, this did not happen overnight. NAR has already tested out the concept in the 2010 elections. From the Politico post on the subject:

The model: the “Realtors’ Party,” the moniker the National Association of Realtors gave to its $6.5 million election effort, which backed a bipartisan slate of 103 pro-Realtor candidates and saw election of 66 of them.

And even more critically, the REALTOR Party focused on some tough contested races:

It maximized its impact by taking on sizeable roles in just 11 races, including some of the hardest fought contests, and its candidates won in eight of them. Of the candidates selected to receive maximum support from the association, five were Republicans and six were Democrats.

The political establishment notices these things, even if the rest of us are too busy trying to figure out who the next American Idol is going to be.

And where there is victory, there are spoils:

Perlmutter’s post-election calendar has already included several appearances and meetings with Realtor groups in Colorado and in Washington and there is more to come.

Congressman Ed Perlmutter (D-CO) was one of the 8 that the REALTOR Party went to bat for in 2010. Those meetings appear to have paid off:

Washington, DC – Today, U.S. Rep. Ed Perlmutter (CO-07) voted to help communities rebuild areas hit hard by the foreclosure crisis by supporting the continuation of the Neighborhood Stabilization Program. Perlmutter voted against a Republican-led “so be it” bill to end the successful Neighborhood Stabilization Program (NSP) that has made a difference in communities across the country, particularly in Aurora, CO and the 7th Congressional District.

Unfortunately, because of the Republican dominance in the House, Rep. Perlmutter’s “nay” vote was for naught — although the Democrat-controlled Senate is expected to oppose the House’s cuts. Nonetheless, the important point to keep in mind is that the NSP was, and remains, controversial. There is not agreement on all sides. The Republicans, for example, charge that the NSP is wasteful, creates moral hazard, and ineffective in any event:

This program has been plagued with problems since its inception and operates without the proper reporting, oversight, and accountability mechanisms that are necessary to protect taxpayers and ensure funds are being used properly. This program is a taxpayer funded bailout for the lenders, servicers and real estate speculators who made risky bets on the housing market and will now be able to offload their foreclosed properties onto the taxpayers. The NSP does nothing to help homeowners facing foreclosure and instead incentivizes lenders to foreclose on properties rather than attempt to work with homeowners. Rather than continue to spend money we do not have on programs that do not work, Congress should focus on creating the certainty job-creators need for economic activity and hiring.

Whatever the future of NSP and other programs in Washington DC, it does make sense for NAR to expand a program that has proven so successful in the 2010 election cycle.

So it will.

The Expansion: Political Survival Initiative

In the 2010 election cycle, it appears that NAR used only “hard money” dollars for political advocacy raised through RPAC and other vehicles under which individual REALTOR members donate funds specifically for political action. Going forward, NAR will use “soft money” — in other words, the money in its treasury collected directly from member dues — for political action.

As Politico touches on, the Supreme Court’s ruling on Citizens United, will allow NAR and other industry trade organizations to use whatever funds it has and wants to on directly supporting individual political candidates. (Of course, Citizens United was and remains extremely controversial, especially on the Left.) There are some limitations on how such soft money can be used by corporate entities, but for all intents and purposes, Citizens United allows unlimited use of all kinds of funds for political action.

This NAR will do.

Considering that in 2008 (the last year in which I can find a Form 990 for NAR), NAR’s political lobbying expenditures (what we’d normally consider political action) were $18.2 million vs. a total operating expenses of $182 million, the announcement that NAR will start to use its general funds for political action is indeed a game-changer. (Incidentally, NAR itself reports that it spent $12 million in the last election cycle; one would expect that a presidential year, 2012, will be huge indeed.)

And in order to do that, NAR has announced that it will raise membership dues by $40 per year, effective in 2012. Assuming that NAR maintains its 1 million or so membership, that would equate to an additional $40 million for political action, on top of whatever other funds NAR has already invested and will invest. And maybe I’m not reading this right, but the talking points memo mentions that once the $40 increase goes into effect, fully half of NAR’s total budget will be dedicated to political advocacy. Based on 2008 numbers, that means NAR will spend over $110 million a year ($182 million + $40 million = $222 million, and half of that) on local, state, and federal races.

Yeah, that’s a game changer all right.

The Good

First, let’s look at the positives of this initiative. It is a very clear expression of the fact that NAR and the local and state boards exist primarily as a political organization. As any Association leader will tell you, political participation by the membership is absolutely dismal. Most Association members join not because they care all that much about political issues, but because they “have to” in order to get access to the MLS. Some have expressed the fear that if they’re not a member of the Association, other REALTORS in the market area will blacklist them in clear violation of various antitrust laws, but impossible to prove.

Associations spend a great deal of time and money thinking about, talking about, and offering various services that enormous chunks of their membership couldn’t care less about — from social media training to networking events. They talk a good deal in public about the Code of Ethics and professional standards, but the few ethics violation complaints appear to have little to nothing to do with consumer protection… and the proceedings are all sealed and top secret in any event, even to other REALTORS, so no one actually has any clue what the Association is doing to enforce professional standards.

As a result, it’s often difficult to know what exactly it means to be a REALTOR. With this initiative, it is finally clear. Being a REALTOR does not mean higher standards, more training, more consumer focus; it means a real estate licensee who is politically engaged, a member of the REALTOR Party. So you can be a member of the Democratic Party,  the Tea Party, and the REALTOR Party.

Furthermore, 2010 did show that direct political action works. NAR won the 8 of 11 campaigns, and 70 of 92 other races, and boasts a 76% win ratio in 2010. With even more money to pour into the 2012 election cycle, a presidential election year, NAR will be a formidable player on the state and federal scene. There is little doubt in my mind that various politicians and their advisors will be thinking long and hard about voting to kill Fannie Mae and Freddie Mac anytime soon.

The Bad

On the other hand, I’m uncomfortable with some aspects of this initiative from a purely strategic standpoint. The focus on the money might be slightly misplaced (or it might not be, as a defensive measure).

Citizens United does mean that NAR can spend corporate funds from dues on supporting candidates. That’s true. But it also means that other deep-pocketed organizations, corporations, and entities can do the same. The Politico article already speculated on such things as the Ethanol Party. And while $110 million is quite a huge sum of money, George Soros alone could outspend NAR if he chose to.

One issue comes to mind. This is pure paranoid speculation, mind you. For years, I’ve heard that one of the signal achievements of NAR was keeping the banking industry out of real estate brokerage after the Federal Reserve proposed to allow it after the Gramm-Leach-Bliley Act of 1999. Indeed, the power of NAR is on full display here:

The controversy is so important to members of Congress that FY2003 Treasury appropriations were frozen and could not be used to promulgate the proposed regulation. Congress again expressed displeasure at the prospect of banks engaging in real estate brokerage and management when it again prohibited FY 2004 Treasury appropriations from being used to finalize the proposed regulation.

If money were the deciding factor in influencing policy, then what stops Bank of America, JP Morgan Chase and Wells Fargo — any one of whom could outspend NAR out of its corporate treasury — to finally push through legislation enabling real estate brokerage services to be offered out of their local banks? Applying for a mortgage, are you? Let me introduce you to our in-house real estate agent… who by the way is free, if you get the mortgage from us.

Furthermore, in light of the importance — and the sure-to-follow controversy as detailed below — the way that NAR is rolling out this program is questionable. A change this monumental likely needed quite a bit more public debate and efforts to convince existing NAR membership that this was the way to go. As it is, I predict that announcing it at the AEI meeting as a fait accompli is going to cause quite a bit of unhappiness among the membership. The timeline for approving the initiative — May 14th at the NAR Mid-Year Board of Directors meeting — means a scant two months or so for NAR members to comment one way or the other about the initiative.

I have deep reservations about that, considering how disengaged and apolitical most of the current membership is. People who otherwise paid no attention whatsoever to political issues will first hear “$40 dues increase” — and for many, that is all they will hear.

The Ugly

Which leads us to the truly worrisome part of the Political Survival Initiative: NAR is quite likely going to start shedding members left and right.

Human beings are rarely single-issue voters. Politics, for those who are interested in it, is a complex, multi-issue thing. No candidate is ever perfect on all of the issues; thoughtful voters (and supporters) simply do a pro-con analysis and decide to support a candidate despite disagreements. For example, I am a huge fan of Chris Christie, but I think his push to make solar energy viable in New Jersey is a fool’s errand.

Traditional cash contributions are so valuable not only because of the money, but because someone who is motivated enough to donate to a candidate can be counted on as a true believer, who will go far beyond just writing a check. Candidates can count on donors to tell their friends, convince family members, put up signs, volunteer for them, go door-to-door, and do all of the retail politicking that they need beyond money for advertising.

With RPAC and the way that NAR has traditionally done political advocacy, it wasn’t simply the enormous sums of money that candidates had to court, it was also the votes and the support of those thousands upon thousands of politically engaged REALTORS, especially back in their home districts.

What the REALTOR Party does is eliminate quite a bit of that grassroots support element. In fact, it subverts it.

Let’s say that in 2012, there is some Senate election that will be hotly contested. Let’s throw in some stereotyped candidates here for discussion purposes. The Republican candidate is a warmongering, anti-abortion, cut government at all costs Tea Partier opposing gay marriage who wants the Mexican border patrolled by giant robots with machine guns; he had Sarah Palin and Glenn Beck in to campaign for him. The Democrat is a global warmist who supports Obamacare, wants to downsize the Department of Defense, thinks that teachers, cops, and firefighters shouldn’t have to pay a dime towards their healthcare or retirement, hasn’t met a welfare program he didn’t like, and not only wants to keep the borders open, but put in rest stops in the desert to make sure the illegal aliens aren’t thirsty along the way.

Is there any doubt that even amongst REALTORS, opinion would be sharply divided and polarized? But because the Democrat supports maintaining the mortgage interest deduction, keep Fannie and Freddie around for decades more, and other sundry issues that the REALTOR Party likes, it will run political advertising supporting Mr. Democrat against Mr. Republican.

How many of NAR’s Republican members in that district will remain NAR members afterwards, knowing that their dues dollars went to support a candidate they passionately oppose? Or if it went the other way, and REALTOR Party dollars went to the Republican who votes to make abortion illegal, how many NAR members would throw an absolute fit?

People can get extremely passionate about big issues. And not all big issues are real estate issues. In some cases, REALTORS may recognize that self-interest as a REALTOR might dictate one thing, while their other ideals dictate a whole different response. I know for a fact that there are conservative Tea Party Republican REALTORS; such members just might be willing to sacrifice the mortgage interest deduction for the sake of fiscal sanity.

As long as NAR only used hard RPAC dollars, which required that the member had to write a check personally, thereby agreeing to support that candidate or that party, member dissatisfaction can be controlled: you didn’t like Candidate XYZ that we supported, but you didn’t contribute to Candidate XYZ so chill out. After this initiative, that answer is no longer availing to NAR and the state Associations. Because that member’s dues did go to support a candidate she thinks is a disaster on many levels.

From a timing standpoint, 2010 marked a point where millions of previously disengaged Americans came out in droves to get involved in politics. Politics is now an important part of everyday conversation, because what is happening in state capitols (public unions, pension problems, etc.) and Washington DC ($15 trillion debt) has engaged the American mind.

The ugly result is that NAR will lose members. How many and how quickly is unknown, but if this plan goes forward, it will happen. Politics is too passionate, too incendiary, too divisive in the United States today for it to be otherwise.

And once NAR loses members, instead of increasing them, and Citizen United allows other big-money interests to unleash their funds for direct political action… it becomes a bidding war to see who can buy the politician’s votes. On that front, I’m not sure that NAR has the advantage over the banks, the unions, commercial multifamily developers, and others.

The Essential Error

I think the essential error is a fundamental mistake by the NAR leadership: that economic self-interest trumps all. I don’t believe that. With this initiative, NAR has elevated the importance of fundraising over that of increasing political awareness and involvement amongst its membership, on the assumption that all REALTORS, of every party, of every political belief, would be united in wanting government support for housing, and that they would sacrifice other deeply held beliefs — about immigration, about abortion, about gay marriage, about size of government, about foreign affairs — to defend support for housing.

Time will tell.

But a final caveat and warning. Woe betide the REALTOR Party if the national mood in 2012 is sharply against government spending and government subsidies, and the Tea Party really does take over the Republican Party (as they are doing right now). Congressional Republicans are already shutting down quite a bit of housing-related government programs. If NAR goes against them, and the GOP has another historic election as it did in 2010… all of NAR’s friends on the Hill will end up being in the minority.

And there will be payback then.

So… there we have it. A bold move, but a risky venture. This promises to be an interesting year.

-rsh

 

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67 COMMENTS

  1. Wow. Seriously, thanks for taking the time of share the story with us. There really isn’t anywhere else to get these kinds of heads-up knowledge and commentary. Thanks.

    Also, your American Idol blast and machine gunning Robo Cops were a falt out awesome writing bonus.

    • I’d expect to see a movement like that… or, serious anti-trust lawsuits brought by pissed of politically active agents who nonetheless feel that they HAVE to join NAR to get access into the MLS….

  2. I can’t fathom that Realtors’ coalesce around enough of the same core issues to form a party. Ultimately, our interests are the same, and are as diverse as the population. Should we expect to see a American Medical Association Party to promote only the economic self-interest of doctors? American Bar Association Party for lawyers? The Professional Electricians Party? Cat Groomers Party? Where does it end?

    Maybe I just don’t get it, but I believe that most of us would be violently opposed to this level of political activism by NAR. I agree with your ‘Ugly’ scenario.

  3. A well described prediction that I have to agree with, real estate listing services are now on the precipice of becoming democratic and free speech. MLS could go the way of the yellow pages within the next couple years and thus would also go the one remaining reason to pay dues.

  4. Ken, great analysis! Thanks. Having been a liaison for many years in the late 80s to mid-90s for an AZ Representative for NAR/AAR, then membership was crabby when the state Association came out with recommendations, one candidate over another. At one time I can remember a member saying at a legislative meeting that the REALTOR “R” did not stand for Republican.

    My point: Are we to become like the Unions? A herd mentality? I think not. REALTORS are free-spirited, free-thinkers who, when all is said and done, want NAR to represent their business interests, but totally? Hmmm. I personally will not like paying $40/yr to have NAR vote the way it wants.

  5. I am active on NAR committees (The MLS Issues and Policy Committee, 2011 Chair of the Business Technology and Information Systems Forum, Forum – Conference Program Subcommittee, and the IDX Data Use Work Group). I spend my personal time (and not insignificant personal resources) on the committees and groups because I think it’s important to participate and try to affect change and historically the way to do that in a bureaucracy of the size and scope of the NAR is from the inside.

    Until a couple of weeks ago, I had never given a nickel to RPAC. But at the AAR Winter Conference I was tricked into donating $5, so technically that non-donation streak ended.

    I don’t donate to RPAC because I don’t want to spend my money telling people who to vote for. Many times “the chosen ones” are not someone I’d vote for — so I’m certainly not going to pump my money into their coffers.

    Well, until 2012 that is, when my wife and I send the NAR an additional $80. They will then turn right around and hand my money to someone that I might — or might not — vote for.

    I’m a big boy, and my wife’s a big girl. If we want that $80 to go to a candidate(s), then we’ll give it to them ourselves. Directly.

    The NAR has a lot of nerve demanding my money to hand-off to a political candidate.

    But I have no choice. If I want MLS access, I have to join the NAR.

    Voluntary organization my ass. Now this involuntary organization comes with an involuntary political donation?

    I feel a blog post coming on….

    As always Rob, thanks for your analysis and thoughts.

    • I totally agree you and have never given to RPAC. The single issue support philosophy is maddening. The good news for us in the Denver area, is we do NOT have to be members of a REALTOR association to garner MLS access (albeit I have been a dues paying member for 20 years)

  6. One errant year, before anybody explained to me what RPAC does, I crossed the RPAC contribution off on my membership renewal form. Shortly there after, I took the time to find out what my money went for, and I have given ever since. RPAC has helped me and my peers here in Michigan enormously.

    I have even found myself reconsidering my vote after learning about RPAC’s endorsements. I find they have been incredibly fair and well researched. Like you said above Rob, the endorsements are split between party lines.

    I may be in the minority, but I don’t have a problem with replacing an RPAC donation with an increase in dues. I will still give more to RPAC than that minimal amount. I see how RPAC has protected me and my business through it’s powerful ability to influence political decision makers.

  7. What bothers me about this is the concept that a professional organization such as NAR is no longer about creating value by it’s service to it’s members and the professionalism that it stands for but as a conduit to the public trouth.

    The idea that the best thing that the NAR can do with it’s members dues is to buy favoritism by through political donations tells me that the true purpose of the organization is to protect it’s self interest.

    So any statement that NAR is an organization to set professional standards will no longer be accepted by me nor should it be by the general public.

    And I expect once the NAR PARTY get’s enough power it will start to demand higher commissions mandated, more protections against competition, and the stifling of innovation to protect the membership.

    And that is not a good thing for the real estate industry as a whole.

    • Tom,

      NAR has always been a lobbying group first and foremost. One could argue that NAR’s self-interest is also yours. Home many homes do you think you would sell if the mortgage deduction went away tomorrow? The “Realtor Platform” is almost entirely one plank – protect mortgage interest deduction. Do away with that and you wont need NAR as a trade organization for the handful of agents left standing wont need a trade group.

      This is about one thing, and one thing only. In this situation, you are casting your vote with your money.

  8. A thoughtful look at a troubling development. While I agree with Maureen Francis that RAPAC has done some good work and I do contribute regularly, I don’t like the idea that I’m being compelled by NAR to ‘donate’ (which implies it’s freely given)an additional sum . What resonates with me is the concept that those who do DONATE willingly are also the most fervent in their support of a given candidate or issue. They may be shooting themselves – and by extension, us-in the foot.

    • I agree, and I personally would not vote for many of the NAR backed candidates. NAR should not have the right to force us to give money and back candidates that we would not vote for. If the local state races have candidates that Realtors choose to back that is one thing, but NAR should have no right to force us to donate money to politicians that we would never vote into office for other reasons, not just how they stand on Realtor issues.

  9. I understand NAR reached out to you to help them launch this information to the public. Are you being compensated in anyway by NAR, monetarily or otherwise?

    • Nope, but thanks for asking — I should have made that perfectly clear.

      I think NAR wanted to trigger precisely this response, because they’re not bad people over there. They’re really good, well-intentioned people, who do want to hear from all sides. I think they know that I’m not exactly a cheerleader, and speak my mind.

      Where I have any client-relationships, or payment, I disclose them.

    • remember some of us have no choice – to be a member of my MLS you must be an association member, a state member and a NAR member – $40 is not going to thing the herd – but it certainly can tick a few of us off – with the course that NAR is heading and the lack of focus on it’s members – I wish I could walk away from them – but we do not have a choice.

  10. If I was to guess why NAR needs $30 Million more for their political machine it would be the fact that so many incumbents were defeated and will be defeated in the next election. Therefore, they will have to give money to everyone in order to ensure we back a winner. Much like banksters.

  11. After several years of being involved with RPAC, I can see on a local or state level the good it has done for both my industry and the consumers. However, I am not sure this is a step in the right direction.

    I just wish more members were involved in RPAC so that they could voice their concerns. Especially if it is over decisions such as this. And I wish that many many more members were aware of what RPAC is and does.

    We need to focus on raising the awareness of the members about issues our industry or consumers are facing and what RPAC is doing about it.

  12. When a trade association that spends over 25% of its budget on advocacy proposes to up that portion of the budget to over 50%, then the message is loud and clear – the focus will be on defending the status quo. I would agree with NAR 400k sooner or later.

  13. Locally, I think 90% of the candidates we supported won their elections – and party affiliation was about 50-50.

    Nationally, I think the NAR has a pretty impressive (need to verify this) of picking the winners – and that matters in politics.

    I’ve long grudgingly supported RPAC, mostly because of our impact at the local level.

    Years ago when I was in our local political affairs meeting and I mentioned how distasteful I found (and still find) giving money – buying access – to politicians, the story was boiled down to this:

    They’re doing it so we have to do it.

    I don’t like it, but I also recognize that politics are dirty. They’re expensive and they are necessary.

    I hate it, but it’s really that simple.

    Here’s a few ways that RPAC helps Realtors:

    Locally, we have helped elect politicians that listen to us. Property rights, eminent domain, landlords’ rights, agency at the state level (we are thisclose to getting an historic agency bill signed into law), and nationally I presume the MID is going to be fought for by the NAR, house energy ratings are being discussed …

    Politics matter; generally, realtors are better served by the NAR being involved in advocating for us.

    The greater question that I wish I could find time to write about is this –

    How can the NAR say that they are advocates for both homeowners and NAR members?

  14. Advance disclosure: I’ve been a Sterling “R” contributor to RPAC for 12 years now.

    I believe before anymore knee jerk, “Hell no, I’m against it” comments get posted, those opposed and anti-RPAC folks need to take an in-depth look at NAR and what it does for you in the national, state, and local political arenas.

    Just last year in my state of New Hampshire, our RPAC Trustees (that’s the state group that decides who gets contributions) interviewed 50 candidates for our state senate. We elected 18 out of the 19 candidates we chose to support.

    Why? Because they were the most real estate and Realtor friendly candidates. Candidates that were willing to make a commitment to support homeownership, housing affordability.

    NAR does the same thing on the national level. They’re not necessarily Republicans, or Democrats, but rather candidates that are friendly to real estate issues, keeping homeownership affordable, keeping us in business selling houses.

    Last year the Supreme Court ruled that the government may not ban political spending by corporations in candidate elections. The immediate problem that creates for NAR’s lobbying arm is that our opponents can outspend us with political ads, support, and other avenues, and potentially defeat the candidates we choose to support.

    Currently 70% of RPAC funds go back to the state they came from to support local candidates and issues. WE, you, me, and our fellow Realtors, make the decisions about who to support and what to spend our money on.

    If this new initiative, which involves a $40 annual dues increase, passes, then 2/3rds of that money will return to your state for state and local elections, much as it does now.

    The NAR Directors, which again are our fellow Realtors, I’ve been one and I’m betting lots of you have too, will be making the decision about this dues increase. It will pass or it won’t but I’m betting it will pass.

    And BTW, if you haven’t made your RPAC investment this year there’s still lots of time.

    • If I’m forced to give to NAR political whims, my donations to the RPAC will be reduced by the same amount. What does that spell for RPAC?

    • OK Folks full disclosure here too. I am a former chair of the NH RPAC campaign, and was a NH RPAC trustee for 4 years. I’m one of those people that spent 4 or 5 days interviewing candidates from both parties to see who we would fund. I have been a Sterling R before and have always been at least a 99 Club member. And if RPPSI passes I will never donate one red cent to RPAC again. I have ZERO confidence that 2/3 of the funds that NH donates would come back to the state, and even if they did it would be a waste. Why do I say that, because it is now 6 months after the last election and 18 months before the next one and here in NH we have $173,000 sitting unspent in our RPAC account. If we gave the maximum allowable to every NH state senator no matter how they vote, both of our Congressmen and their opponents, and both of our US Senators who arn’t even running this next election, we would still have money left over! This is nothing more then a slush fund of money for NAR leadership to dole out how they see fit. RPAC donations will fall, membership will leave, and in my opinion it will destroy our association.

  15. Wow! NAR wants to FORCE us to support their candidates and issues by paying an additional $40. It’s not like $40 breaks the bank, but in no shape or form do I want my $40 to increase funds for NAR. I am an independent contractor that has to pay a broker, a St. Louis RA, and MLS dues. I think I’ve paid enough for being so “Independent”. I can’t have MLS access without NAR. Oh, and since I am from Missouri, the initiative to stop transfer taxes was not merely by NAR; NAR was practically silent compared to the TONS of other groups opposing transfer taxes. I am an RE investor and if I want a bill to be or not to be passed, we ring loud and clear without NAR. Grassroots means a movement comes from the bottom to the top, not the other way around, and not with a forced fee. The $40 hike infuriates me!

  16. Atlanta has two MLS services. One Board owned and one independant. Therefore, we do not have to be a member of a Board of REALTORS to have MLS access. Our non-Board owned MLS had 12% non-REALTOR membership at the end of 2009. At the end of 2010 that number grew to 19%. A dues increase, especially one that idenitifies itself to an always polorizing topic such as political activism, will cause more to become ‘non-REALTOR’.
    NAR – think carefully.

  17. Good Morning Rob, gonna leave a similar comment on Jay’s Blog as well, since I am not a Realtor(c), nor do I belong to N.A.R. so my perspective may be a bit different than most. first off, I love what your post (and Jay’s) has done for the subject. Mostly through the comment stream. The power of Blogging is evidenced by this very outcome =)

    Since my main responsibility is to “Educate” and “inform” the Agents of Coldwell Banker Coastal Alliance in Long Beach and Coldwell Banker Alliance in Whittier, as their Internet Coach I may be a bit biased in my love of those two words (Educate & Inform), but it is what I think the Industry as a whole lacks so greatly. This topic just amplifies that concern. N.A.R. & C.A.R. (We are in Cali) are absolutely horrible at sharing the amazing tools and benefits available to their members regarding my area, and apparently they are also horrible at communicating the benefits of RPAC as well.

    I can’t (in good conscience) weigh in on the basic issue of weather or not this $40 is good or bad, though your comments streams are doing a great job of debating that, but I can say that someone at N.A.R. has to take a serious look at the way they communicate with their members. In today’s world of Facebook, Twitter, Blogging, Flickr, YouTube…ect it is mind numbing that they can’t get that done!

    and as an aside, though I am certainly used to your propensity to write “Novels” for Posts, Jays post length caught me by surprise and brought to light, perhaps, another issue…Can anyone “synopsize” this topic, so the other 97% of Realtors will read it? No offense, but I know that most will use the “F” pattern, we all love from the Heat Maps, and miss allot of the subject matter. Thereby making the whole educate and inform thing moot!

    Keep it up! See ya Soon

    TheRECoach
    Eric Bryant
    Coldwell Banker Long Beach & Whittier

  18. Good Morning Rob, gonna leave a similar comment on Jay’s Blog as well, since I am not a Realtor(c), nor do I belong to N.A.R. so my perspective may be a bit different than most. first off, I love what your post (and Jay’s) has done for the subject. Mostly through the comment stream. The power of Blogging is evidenced by this very outcome =)

    Since my main responsibility is to “Educate” and “inform” the Agents of Coldwell Banker Coastal Alliance in Long Beach and Coldwell Banker Alliance in Whittier, as their Internet Coach I may be a bit biased in my love of those two words (Educate & Inform), but it is what I think the Industry as a whole lacks so greatly. This topic just amplifies that concern. N.A.R. & C.A.R. (We are in Cali) are absolutely horrible at sharing the amazing tools and benefits available to their members regarding my area, and apparently they are also horrible at communicating the benefits of RPAC as well.

    I can’t (in good conscience) weigh in on the basic issue of weather or not this $40 is good or bad, though your comments streams are doing a great job of debating that, but I can say that someone at N.A.R. has to take a serious look at the way they communicate with their members. In today’s world of Facebook, Twitter, Blogging, Flickr, YouTube…ect it is mind numbing that they can’t get that done!

    and as an aside, though I am certainly used to your propensity to write “Novels” for Posts, Jays post length caught me by surprise and brought to light, perhaps, another issue…Can anyone “synopsize” this topic, so the other 97% of Realtors will read it? No offense, but I know that most will use the “F” pattern, we all love from the Heat Maps, and miss allot of the subject matter. Thereby making the whole educate and inform thing moot!

    Keep it up! See ya Soon

    TheRECoach
    Eric Bryant
    Coldwell Banker Long Beach & Whittier

  19. I was searching all over the NAR website to post my opinion on the subject matter of the $40 mandatory fee (to go towards political action). There is no place to make comments on ANYTHING on their website. For an organization that represents me, I should be able to post comments on the members only site. You at least get to vote in a Union, but we can’t even post comments! NAR is nothing more than a Mandatory Union. I have nothing against Unions when they are voluntary, but this is not (if you want MLS in Missouri). If somehow I am missing a spot to voice my opinion on the NAR website, let me know because I’m not seeing any.

  20. Rob, how about a two question poll?

    Question 1: Are you in favor of keeping the home interest tax deduction?
    Question 2: Are you in favor of paying an additional $40 annually to support NAR’s lobbying and political efforts?

    I’m betting the results will be polar opposites and will illustrate that real estate agents want, but dont recognize the only real purpose of NAR.

    That said, if the interest deduction goes away, NAR will be terminal.

  21. The NH RPAC committee currently has about $173,000 in its checking account. If we gave the maximum allowable by law to every state Senator, no matter how they vote on real estate issues, 4 candidates for congress, and every REALTOR member of the NH house, we would still have money left over. This is nothing more then a $ arms race to see who can collect the most. The problem in politics is not that there is not enough money. The problem is there is too much! This will fundamentally change the meaning of what a REALTOR is. I have no interest in being a part of what will become nothing more then a K Street lobbying firm. This will not “buy us a seat at the table”, but rather it will end the relationship of the individual agent with what was once one of the brightest lights in real estate education and ethics. Under this proposal $153,120 (5800 members X $40 X 2/3) is supposed to come back to the state of NH. According to the NAR talking points it is separate from RPAC. So who controls it? Who determines what it is spent for in our state? Who vets the candidates and issues? So now we will be faced with over $300,000 looking for a place to be spent! A recipe for abuse, mismanagement, and disaster in my opinion. RPAC donations will fall off a cliff. Currently the NAR dues break down is as follows, $30 to legislative/regulatory advocacy, $15 to consumer and member relationship building, $10 to state and local association services and support, $6 to economic and tech research, $6 to publications, $5 to commercial/international alliances, $4 to Code of Ethics/legal policy and enforcement, $4 to customer service and product suite, totaling $80. As you can see legislative/regulatory advocacy (or lobbying) is twice as much as any other item. Under this new proposal everything but legislative/regulatory advocacy says the same and it goes up to $70 (30 + 40). A 133% increase! And ethics training stays the same? We sit and proclaim how important ethics are. It seems that’s all the entire image campaign talks about, but we fund it the least!
    The banks, insurance companies, and lawyers will ALWAYS have more money then us. But what we have is individuals in every community ready to talk to their representatives. When we beat the banks on their getting into real estate they outspent us 3 to 1 and they had the chairman of the banking committee in their hip pocket. Through a lot of hard work by our members we beat them because we were able to get thousands individual REALTORS to tell their reps how important this was. Let’s play to our strengths and not our weaknesses. As a former NH RPAC chair and former NH RPAC trustee I think this is very worst thing we can do. It is not in accord with the REALTORS pledge or our mission statement. I will do everything I can to see this is rejected by the membership.
    Richard Whitney
    Mariner Realty
    Durham NH

  22. Personally I do not want someone else voting for me. We have a bunch of politicians that voted for what we could not live without because they knew better than we what we needed to flourish. The result is that we have massive debt and they still want to spend more. Our focus might be a litter narrow for the items that NAR wants to champion on our behalf. Maybe we get a transfer tax defeated and in return they vote for another trillion dollars in expenditures. I know many business people and like myself we understand that we can not spend more than we bring to income side of the ledger. It can be done if we borrow but that adds interest expense to the expense side of our ledger. At a point in time the banks look at your expense to income and say we cannot lend you anymore money. We’re the bank and we have to tell the politicians that our ledger is out of whack and they cannot have anymore loans. How did those politicians vote on the spending issues that NAR supported. I see the overall results and I do not like them. I do not want someone else voting for me. The independant in the independant contractor just might be the operative word. Jeff Daley

  23. I have not only served as an RPAC chair at my local association, I have always supported RPAC and contributed financially as well as my talent and time. Yes, our business is the business of politics – because we must as an industry have a voice at the table to protect individual property rights. At my local association, our membership number is dropping and I turly believe that a $40 increase in dues may be the “straw” that depletes our membership more. I understand NAR rational behind the increase, because yes we have to be “players”. My concern is, they are basing the expected revenue generated from this dues increase on today’s membership numbers and I’m not certain if they realize how this increase will impact our future membership numbers. To have this large of an increase at a time that a lot of our members income is substantially less, I simply question the timing – not the logic.

  24. Rob,

    All I have to say is that I am incredibly proud of you my friend for writing this to educate the Realtor population. great post and I believe you have opened the eyes of many an individual. I believe it is our job to take education like this and pass it on so that others can make informed, and educated decisions.

    Nice work
    Matt

  25. Let me start by saying I love being a REALTOR. I’m very involved in my local association and have been a consistent supporter of RPAC efforts however the Political Survival Initiative is not a good idea, not now for many reasons.

    NAR has multiple issues with membership about which they seem completely out of touch, from my perspective. Members that I hear from are VERY disappointed in the value that they receive from paying their NAR portion of their dues. The perception is that NAR has become a bloated organization seeking more money on all levels to sustain the salaries of its own giant bureaucracy. WE have all had to cut back on local and state level and yet we have seen no cut backs with NAR staffing.

    Here are the areas I see as big disappointments:

    NAR failed to be effective on any level to help REALTORS with regard to short sales for years. We were asking for some representation as if we were a national force and yet we got nothing. Lenders continue to make realtors appear powerless and ineffective. We look like fools to the public when the answer to so many questions with regard to short sales is “It doesn’t make any sense but that’s the way it is”. I realize the difficulty involved with corralling all the powers that be to any kind of consensus but no attempts were made for the first 3 years that I know of.

    NAR has been spewing misinformation with regard to MID and that has hurt NAR’s credibility. To the best of my knowledge the only thing that was proposed was either limiting the deduction to 80% of interest paid or limiting the amount you can deduct for a mortgage over $500k or on second homes. NAR made it sound as if the sky was falling in. Only 34% of Americans itemize deductions at all.

    We asked NAR for help with health care and we got a credit union. Who needs that? I’m not sure how many of us had a problem figuring what to do with their money, if they were lucky enough to have any to deposit.

    NAR inflicted Sentrilock on us. I can’t tell you how much damage this caused on in PR and on an economic level to our members. They had to cope with affording 2 lockbox system during the worst economic times. We lost a fair amount of members over this issue. We loved our Supra system. “It wasn’t broke and it didn’t need fixin”. The fact that NAR owned Sentrilock made it appear as a conflict of interest and nothing more than another profit center for NAR. The lockbox systems have not gotten cheaper since NAR introduced Sentrilock as was the goal. Sentrilock is far inferior to Supra system technology and reliability.

    NAR totally missed the boat on the MARS regs. It is my understanding that NAR has a staff of 70+ folks whose job it is to watch for new legislation that affects Realtors they must have all been asleep at the switch. The attorneys got themselves exempted. NAR seems to have assumed that we would be too. When we were not they failed to notify members of their legal requirements to disclose. As a holder of SFR wouldn’t it have been nice if NAR notified me and provided sample disclosures?

    I hear many members saying if they had an option they might choose not to pay the NAR portion of their dues. NAR needs to get to work to earn the portion they already get. I am a huge supporter in volunteering my time to my local association and I support RPAC as well because I can see the money is spent effectively locally. Sadly I have no faith that would be the case with NAR. NAR seems to have lost touch we the fact the REALTORS are struggling. I think it is absolutely the wrong time to propose a mandatory dues increase for any purpose. Local associations are struggling to keep members. They don’t have the option to raise dues for fear they’d lose members, so why should NAR feel so free to propose such a thing. Is NAR aware that 30% of our area members have closed less than 2 transactions in the last 12 months? $40 is a big deal to them. NOT a good idea, not now!

    Last but not least I firmly believe that the power of RPAC comes from the fact that it is voluntary. This translates to votes for prospective candidates and they know it. If mandatory, it speaks for nothing. If it were mandatory it would lose the clout it now has. Local associations are doing a much better job of showing members what they get for their voluntary RPAC contributions than is NAR. Locally our percentage of participation has been rising despite hard times. That is because we have demonstrated to members the value. This mandatory across the board $40 will hurt our local initiatives.

    Thanks for offering members a voice. I hope NAR listens

  26. You may know that I am a NAR Director for my company, a Big Broker, Coldwell Banker Bain. I am newly on the 2011 NAR Communication Committee and I have a role and responsibility in educating REALTORS about the upcoming initiative which the NAR Directors will vote on in May at the REALTOR Meeting in WA D.C. I have tried to wade through all of this info (think communication), provided by NAR, WA REALTORS, videos, lots of social media messages and articles and conclude that I am in favor of this $40 increase (which takes our NAR dues from $80 to $120 annually). I agree that the playing field has changed and we deserve to earn the political clout to attempt to get Homeowner’s (and our, of course), political agendas met.

    This is important and it is about increasing the dues and there are lots of conversations floating around and there has been talk of trading the Public Awareness campaign for this Initiative’s $40 a year and I think they are different issues and should not be tied together and to do so only confuses the conversation about the merits of each. I believe both are needed and are BOTH critical to our industry. The Public Awareness Campaign adds value to our members and consumers specifically by helping promote market activity (think tax credits), as well as helping consumers “get” homeownership. NAR says that this campaign has been rated as high as second, just behind advocacy, as a reason members found value in our membership. NAR also says that the cost of the Public Awareness campaign ($35.00 annually), will net more than 8 billion consumer impressions. This is NOT the time to cut back and we all KNOW this—in softer markets we should increase our spending to remind our consumers that we are and we will be there for them in any market—and this is no different but on a grander scale. And, although re-thinking this $35/year campaign has not formally been introduced as far as I know, I do not think we should cut back on this campaign. I recommend we continue to support this, too.

    And, as the EO of Washington REALTORS, Steve Francks says: We can’t sit back and not even try to fight, not even try to have influence. And let’s face it, the monetary price of political involvement has gone up. Way up. Others are playing at that level. Can we afford not to? I say we cannot!

    So, I say yes to this initiative and yes to keeping the Public Awareness Campaign safe and funded. Lastly, I would just like to remind everyone that $40 a year is $3.33/month and the cost (dare I say it), of 1 Latte. I intend to vote YES in May.

    THX for listening.

    Terry Miller, NAR Director

  27. Thank you for your insights! My favorite line so far in my research on this is “NAR cannot assume that THEIR best interests are MY best interest. I can still run my business without NAR, but without the members…NAR becomes irrelevant.” I have been involved in the political arm of my Associations at each level since I joined as a REALTOR. This just offends my sensibility as a Volunteer REALTOR. I have served as RPAC Chairman many years and have raised the $$ for the cause, interviewed candidates, walked for them, been on the hill, etc. I believe in RPAC, I also believe in the right of each member to Choose if they participate in that process or not. I have also seen the participation levels of the membership in RPAC. It’s no where near 100% and to mandate a fee for this purpose just floors me. Forcing this membership to donate to the cause they couldn’t get them too by asking is not the answer. If this passes, RPAC will disappear as we know it. You think those that would give their fair share and more are going to give it and a mandated fee too. It’s not going to happen. So, what becomes of RPAC? In case you all have missed it RPAC has accomplished nearly everything it has set out to overcome with Grassroots efforts and those RPAC donations made willingly by the membership of their own FREE will. I am proud to say I have participated in RPAC at every level. I however, refuse to bully any one of my fellow Realtors into doing the same and have already heard several of them tell me that they will never give another dime to RPAC because of this proposal. If NAR’s interest is to just get the $$ and fund which every candidate and lobbyist to the point that they owe us and have no one to answer those Calls To Action or in the halls on those special days to fill the floors, elevators and offices of those government buildings…you’re on the right track. IF this were a bill on the floor, we would be rallying against it. I will defend RPAC and it’s methods until it’s death probably somewhere in May 2011. NO NAR, No to the Dues increase. I think you have lost touch with the local agent. IT Will become an ongoing expense just like the Image Campaign. I can run a local ad for the same $$ and get better results on my phone.

    As you can tell I am So NOT in favor of this. I created a facebook page called ‘Say NO on Rppsi ~ NO NAR Dues Increase’ and a picbadge that you can wear on FB, Twitter, etc to show that you are also opposed to the proposal. Please go Like the page, post your comments, wear the badge. If we Fail in making our voices heard on the subject, it will pass. Since most association have very few NAR Directors and the meeting is far away from the local street beating Realtor, we have to make our point with them. All due respect to my NAR Directors, please Listen to the Realtors you represent, they don’t want this, some are afraid to even say it out loud.

  28. As an appraiser who needs MLS access, I must also be a member, but to think my hard earned money in this age of precipitously declining appraisal fees, an HVCC that accomplished NOTHING, and already hints that the Dodd/Frank bill defending Reasonable and Customary appraisal fees has already been castrated, what has the NAR done for ME lately? I can get my MLS access through other appraisers, thus minimizing the number of appraisers who are forced to contribute. I’m one of those who belongs only because I HAVE to. If the NAR insists on being a heavy handed “union” type of organization, they can kiss my a$$ goodbye…

    Any money spent in the political arena should be toward raising awareness among its members and keeping us aware if what is going on in D.C., not throwing money at the corruption…

    Regards,
    Mikus

  29. Angry that NAR will use $60-$70 million of our hard-earned money to fund the most progressive candidates/socialists possible? That we have no vote how they use our money to support the very people who got us in this mess and hate our industry? Then organize!!

    http://www.TeaParty4Realtors.com

  30. I think for us, the NAR has its purpose in making sure agents do not become obsolete, like what you mentioned with mortgage lenders offering free agents to their loyal customers. But if they take members dues and use it for political endeavors, it doesn’t make sense. Then they have to take money from somewhere else, right? Or charge us more.

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