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Midyear Report: Reflections on REALTOR Party Political Initiative, Part 1 – Wartime NAR

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This post, and this series of reports and opinions from NAR Mid-Year 2011, brought to you by:

Thanks again to Zillow for sponsoring the series. I walked around one full day at Midyear with a Zillow shirt, as promised in my Ebay sponsorship listing. Got more than a couple of comments as a result, ranging from “You guys need to do XYZ” to “Uh-oh!” and so forth. I do believe they think I work for Zillow. ūüôā ¬†And I do believe Zillow needs to do some more outreach and more sweet-talking.

In any event, I know that I witnessed history on Saturday. But the impact of that history-making is a bit less clear now that I’ve had the benefit of sleep. A few details keep sticking in my mind, which I thought I would share with you all, if for no other reason than to get my own thinking clearer. As E.M. Forster said, “How will I know what I think until I see what I write?”

Core Strength

One detail that just keeps popping up in my mind, suggesting that perhaps this detail is far more important, is that I detected a fairly widespread sentiment amongst the “NAR Core” — the term I’ll use to mean those Directors, Association people, committee volunteers, vendors, consultants, etc. etc. — that one unspoken reason to pass RPPI (I’m dropping “survival” as per the motion to strike the term) is to “thin the herd.”

There are two components of this sentiment. The first is that anyone who can’t come up with $40 a year — less than $0.12 a day — shouldn’t be in business. The second and more important component is that those who were opposing RPPI were not committed to the mission of NAR, to the organization, and are mere freeloaders whose opinions don’t really matter, and losing them would not hurt the NAR much at all.

I can’t forget the one gentleman at the Treasurer’s Budget Forum who said that his state association looked at every single piece of email that came into the Association in opposition to RPPSI, and that not one of the opponents had ever given a single dollar to RPAC. His sentiment was that these people are freeloaders, who aren’t doing their fair share, and the Association might be better off without them. That statement was applauded in the room. Turns out, this gentlemen was Nestor Weigand, former President of NAR.

That sentiment — that maybe some of members ought not to be encouraged to stay members — is surprisingly widespread. I don’t think I’d go so far as to say it’s a majority opinion among the attendees here, but I don’t think it’s a tiny minority either. One gentleman said in a meeting that going forward, membership in NAR should be premised entirely on political activism and political support (i.e., RPAC contributions). He acknowledged that there are quite a few members who are members only because they want MLS access, and saw little value in having such members. ¬†Turns out, he’s a major contributor to RPAC, a powerful trustee, who has given tens of thousands of dollars in contributions and hours and hours of time.

From an organizational standpoint, one such member is worth (quite literally) thousands of members who absentmindedly drop $5 into the RPAC hat at some wine tasting event.

Now, I know that many of you — who were and remain opposed to RPPI — have already pointed out the dissatisfaction among the “membership” that the “leadership” is out of touch. NAR has a tin ear, NAR doesn’t care, NAR decisions are made in smoke-filled back rooms, etc. But that’s rhetoric; the reality is perhaps more profound.

Threats, Wartime Footing, and Unity

Any organization, from nations to basketball teams, naturally develops a “us” vs. “them” mentality. In fact, a primary reason to organize at all is to create this differentiation from everybody else and the select few. We see six year old kids doing it on the playground, and we see sixty year old women doing it at churches. It is as natural as breathing for humans to want to form groups, tribes, sub-groups, clans, teams, etc.

When an organization feels threatened, the natural and very strong tendency is to draw in together, get tighter, and seek strength in unity. What might have once been a social club suddenly takes on characteristics of a militant activist organization, etc. Where membership once was wide open, easygoing, and the organization sought to bring as many people in as possible, when threatened, the organization wants committed members, who are true believers, who would sacrifice, and go fight for the organization. Loyalty becomes an extremely important factor.

I believe that the #RPPI vote represents exactly this transition of NAR from a confident organization that felt as if it was on top of the world into an embattled group that is looking at defeat after defeat right in the eye. The “Option A” vote — the strongest possible response to perceived threat — was essentially a declaration of martial law.

Frankly, NAR has reason to get on a wartime footing, raising the threat level all the way to RED. A scant couple of years ago, the widespread perception was that the mortgage interest deduction (“MID”) was untouchable, a “third rail” of American politics that no politician dared touch. Today, there are Congressmen of both parties who are seriously contemplating eliminating or limiting the MID, and the Obama Administration is not exactly a friend of the MID. Last year, when I started sounding the alarm about the Federal policy shift away from homeownership towards “Sustainable Homeownership” and Renter Nation concepts, I was told by numerous people privately and publicly that I was crazy. No one would dare.

Who’s crazy now?

The other major issues — the Qualified Residential Mortgage rule, requiring a minimum 20% down payment, and the future of the GSE’s — are both ones that were not even on the radar a couple of years ago. These are the kinds of issues that the all-powerful NAR of the past would have ensured would never even come up on the agenda, by working with Congress, the White House, and the DC bureaucracies behind the scenes. Today?

I am on record stating that while we in the industry sat around talking about Facebook and WordPress plugins, the foundation of real estate industry was being weakened. It’s as if we were busy putting in granite tiles in the guest bathroom, and forgot about the termites eating away at the foundation.

I don’t know if RPPI is exactly the thing NAR needs to do, but it had to do something. NAR and the industry as a whole — whether member REALTOR or not, whether a loyal Director or a tar-and-feathers rebel — are facing the kinds of changes, kinds of threats that we have not seen for generations.

In retrospect, considering the external situation, the vote was inevitable. NAR had to do something. That something had to shift the organization from one concerned mostly with networking, education, and socializing into one that was going to be all about political warfare. Unity, loyalty, and commitment are far more important to an organization on a wartime footing than big tents, harmony, and loving feelings.

I think that is what I saw this past week, over and over again, in one form and another. The Core membership essentially feels embattled, and wants commitment and loyalty from everyone. And push comes to shove, if someone is unwilling to get with the program, I think NAR Core is unwilling to make a whole lot of compromises to get them onboard — since the value of dissenters is pretty low in a wartime footing situation.

Path Towards Harmony?

At the same time, an organization under attack welcomes allies wherever they can be found. United States and Soviet Union, after all, were allies at one point. Without FDR, the USSR does not survive.

The path forward towards harmony might need to start with the dissenters, because the NAR Core feels threatened. And rightfully so. So where do we begin?

We begin with talking about the Threats. If the Dissenters agree with the Core that yes, the industry is facing serious and significant threats, then we have a background of agreement upon which to build and work towards consensus. Maybe running independent expenditure TV ads for a specific candidate is not the method everyone can agree on, but there may be agreement that NAR should do more issue advocacy (instead of candidate advocacy). Maybe people can differ on ways to get to the mountaintop, while agreeing that (a) there is a mountain, (b) there is a top to the mountain, and (c) the top is the same for both of us.

What NAR could do, after this historic vote, is to redouble efforts to reach out to the dissenters. They feel as if they’ve been steamrolled, that their opinions do not matter one bit. It might have been better to do this at the start, but better late than never. The Core Members could relax their vigilance for a bit, and do a series of town halls, online forums, blog posts, whatever, and seek opinions.

But they must demand and get agreement from the Dissent that (a) there is a problem, and (b) the problem is serious. Just because RPPI passed does not mean that NAR will immediately start running ads for Nancy Pelosi and Michele Bachmann. There is still time to consider what tactics NAR will use.

The Dissenters, for their part, must start with that premise: there is a problem, and it is serious. So now, what can we do about it? Given the mood of NAR and the Core Members, I believe they will listen to anyone who shares their concerns about the threats to the industry, even if there might be disagreement on what to do about the threat.

If, on the other hand, the Dissenting position starts from the premise that NAR is the root of all evil (as Greg Swann of Bloodhound Blog believes), then there is no hope for reconciliation and there never was. And the Core… couldn’t care less what such people thought, “member” or not. Let them go their way, would be the likely response.

This is not to say people are not entitled to their own opinions; of course they are. It is to say, however, that differences at these base philosophical levels can never be resolved.

Enter CFORE

After RETech South conference, I started to organize, with Chris Nichols (@utahrepro) the seed of something. We’re calling it CFORE for now, and it stands for the Committee on the Future of Organized Real Estate. The first step is to hold a meeting/conference [NOTE: it’s set as a private event; msg me for invite] for those who might be interested in going beyond just complaining about the problems we see.

I think CFORE might be a good place for both the NAR Core and the Dissenters to start establishing common ground for moving forward. Even if we differ on approach, if we agree on the basic problems and issues, I feel we can make progress towards solutions.

The event is scheduled for Friday, August 26th through Saturday, August 27th. If you are interested, visit the event page on Facebook, or send me a message (or leave a comment here, find me on Twitter, whatever). I now believe this would be a good mid-point between the passions of Mid-Year and what steps might be taken at Annual in November. Whether you are a NAR Director and a true believer, or one of the disaffected, if you care to work towards a solution, consider attending. The event is free, but you’re responsible for all your own costs. And if you just want to come and throw bombs, don’t bother. I’d like to try to explore solutions, not just point fingers and get mad and fight each other.

But even if you can’t make the event, once the emotions cool off a bit from the historic RPPI vote, I hope all those concerned about the future of the industry might have these important conversations and discussions locally.

These may be the most important conversations you can have, in these moments of history.

-rsh

16 COMMENTS

  1. The changing paradigm of the NAR was beautifully expressed in this post. The one dichotomy that jumps out at me though is the symbiotic relationship between the NAR and the MLS access. 

    If the NAR determines that it going on a war footing and only wants the true believers with them then having a large part of the organization beholden to them only for access to the MLS may not be the best long term move. Sure the dues money coming in is great and will aid the cause, but by creating a bright line between the factions they could end up undermining their cause. 

    Like a union shop that demands everyone paying dues, the NAR is demanding political dues to enable access to the MLS. If enough people disagree with this there may be a counter revolution (way too strong of a term but the best I could come up with) that would split the membership and weaken the position of the NAR. 

    There are battles that need to be fought with Washington to protect the health of the real estate industry. Keeping the mortgage deduction is huge as is avoiding the 20% down payment rule. But if the NAR keeps running the vanilla “It’s a great time to buy” ads and acting oblivious to the realities of the market it will be hard for them to be taken seriously as true advocates for the health of the real estate industry.¬†

    I guess this is a long winded way of saying, until the NAR shows they have the best interests of the real estate industry and real estate agents in their cross hairs, there will be many who will think that the extra dues are just to feather bed the headquarters and lobbying arms of the organization. 

    • I have a longer piece coming on this, but I’ve already predicted that the Franchise IDX issue will converge with the RPPI issue to create what could be a major problem. I was floored that (I think it was) Bob Moline of HomeServices would plainly say that NAR members join for the MLS, and then threatened to create a private MLS.

      I think in the long-run, if this wartime footing is to be a permanent shift, then NAR will likely have to look at separating the MLS and the Association. Of course, having recommended precisely that in the past (RETSO speech), I’m hardly unbiased on that strategy.

      I hope people like you can make the CFORE meeting, Tom. And I hope both the Core and the Dissenters can acknowledge that there are well-intentioned good people on both sides, who are trying to solve the same problems. That way is the path forward. 

  2. ¬†The¬†dissatisfaction among the ‚Äúmembership‚ÄĚ that the ‚Äúleadership‚ÄĚ is out of touch, in my opinion, is the other way around.¬†Many members are totally out of touch. Every agent who calls themselves a “REALTOR” should step up to the plate and support the leaders locally, statewide, and nationally. If they can’t do that after the elected officials have debated and voted then maybe they should hit the road. Interesting comment on “not one of the opponents had ever given a single dollar to RPAC” who sent¬†those letters opposing. Keep the good news coming Rob, maybe we’ll “raise the bar” yet.those letters opposing. Keep the good news coming Rob, maybe we’ll “raise the bar” yet.

    • Mike, hope to have the chance to talk this out with you one day soon. I respect your thinking generally, but disagree on this one.

  3. Rob,

    If what you say is true about the desire¬† so-called “core” of NAR wanting to thin the ranks and banish those who may disagree with the core mission of NAR [whatever that is}, it is a very sad day for NAR. That is the over-bearing arrogance that I experienced when trying to talk about the issues with NAR folks, and one that, in my opinion, will bring NAR to its knees surer than hell. I heard once too often how I was misinformed and not appreciative of all the work so and so was doing for me and the industry. The implication being, “you don’t understand, let me handle this”.

    Anyone who thinks the primary source of the opposition to RPPI had to do with the $40 bucks has his or her head up his or her . . . well, in the sand.

    There are serious issues facing the housing industry in America. They will not be solved by an organization that demands on penalty of banishment that everyone march blindly in lock-step with the “leadership”. The health of the housing industry is not an isolated issue. It is deeply intertwined with the country’s financial system, the health of the job market, consumer confidence and the overall economy.

    Plus, applying a bit of common sense to the situation, banishing anyone who is willing to pay dues is just silly. Everyone can’t be a leader, decision maker or opinion maker. They can, however, be supportive financially and from many that is all that is needed.

    Mr. Wiegan’s reference to freeloaders is appalling. I have been active in politics most of my addult life (including elective office at the local level) and as a matter of personal prefence I do not give to PACs. I give to candidates directly (which, by the way, is much easier with the advent of the Internet). And next time you see him let him know that Tyler Webb is not a freeloader!

    You have captured in your recent posts the true essence of the cross-roads with which NAR is confronted. I look forward to your further thoughts and can assure you I will have more to say down the road.

    Tyler

    • The problem with the need for more money is that the opinions of the NAR will not carry the day anymore. Instead of being so popular that the government has to take the opinions of the Realtors into account, the NAR feels that they need to buy their way into the conversation.¬†

      The symptomatic corruption of Washington and the inability of the NAR to articulate their position means that tribute is the only way to get the legislative positions heard. 

      That is a sad commentary of both the NAR and the government of the United States. 

  4. ¬†“I can‚Äôt forget the one gentleman at the Treasurer‚Äôs Budget Forum who said that his state association looked at every single piece of email that came into the Association in opposition to RPPSI, and that not one of the opponents had ever given a single dollar to RPAC. His sentiment was that these people are freeloaders, who aren‚Äôt doing their fair share, and the Association might be better off without them. That statement was applauded in the room. Turns out, this gentlemen was¬†Nestor Weigand, former President of NAR”

    Huh. Silly me. I thought that my participation in local, state and national association committees and workgroups — at a fairly significant cost in both personal time and money — meant something to this “core”. That I was… contributing… to NAR; helping them help us.

    Apparently not in Mr. Weigand’s mind. Nor in his supporters.

    I’m also stunned to find out that Mr. Weingand, and those that applaud his remark. have access to my personal financial records showing what I’ve contributed in hard dollars, to both candidates and causes the NAR supports. Why do those dollars mean any less if they are not funneled through RPAC?

    I am a freeloader? Personally, I find Mr. Weigand’s remarks, and those that applaud them, highly offensive.

    If all the NAR wants is RPAC money, and contributions such as serving on committees mean nothing, they need to freaking man up and say so. 

  5. This floors me => “One gentleman said in a meeting that going forward, membership in NAR
    should be premised entirely on…
    (RPAC contributions). He acknowledged that there are quite a few
    members who are members only because they want MLS access, and saw
    little value in having such members”.

    …………………

    That’s easy to say now dude, because I am basically forced to pay NAR dues whether I want to or not.¬† We’ll see how ya feel when (not if) we have options.¬†

    These is no arrogance like the arrogance of a monopolist.

  6. Oh BTW. I would love an invite to this CFORE clambake. Not sure if I could make it, probably depends on location and how hard/easy it is to get there.

    @top20reos:twitter

  7. > We’re calling it CFORE for now, and it stands for the Committee on the Future of Organized Real Estate.

    Brilliant. Rotarian Socialism, The Sequel. There is only one reason for businesspeople ever to organize: To conspire against their own customers, employees and suppliers.

    “It’s not often that one has the chance to witness the birth of a felony.” –Ayn Rand

  8. I must say, the remarks that Mr. Weigand’s said have spurred a response on a subject I typically would pass on.¬† I do have to admit, I guess I am one of the “free loaders” Mr. Weigand’s refers too in his comments.¬† Rob, after reading into this more in detail I strongly feel you are right, you did witness history.¬† Although only a $40 increase per agent or broker, you are talking a large sum of dollars in total.¬† Very good points on both sides of this.¬† As a “free loader”, it is about the “blood suckers” wanting more money$$. As an agent & business owner, I want to see my dollars hard at work for me.¬†

    We live in a country where we have the right to unite and be heard.¬† I truly feel that for those who are business owners and not just your “part time” agent, things went as they should.¬† Whether or not you agree, “to bad so sad”, your voice was heard and that is why you live in this great country. Now those “free loaders” who are upset over the RPPI,¬† we may pay a little more attention as to what and who is going on in our local, state & national boards.¬†

    Thanks for bringing this all to light for us Rob.¬† I am truly a fan and would love to be an observer to the forum.¬† I will become more involved in my local association and weigh in much more as my education on this subject deepens.¬† Here’s to you and your knowledge!

  9. >His sentiment was that these people are freeloaders, who aren’t doing their fair share, and the Association might be better off without them. That statement was applauded in the room.  

    This sentiment came up in the Town Hall, and I think that’s absolutely true. The Association would be better off without dissenters, and especially¬†if they¬†are looked at as freeloaders. Why any organization would want to harbor people they hold such open disdain for is beyond me…¬†

    At any rate, this all gives me hope because in an association, the attitudes at the top tell the story. Such animosity at the leadership level is not a sustainable or viable business model. Effective leaders don’t feel that way about the little guys, and ineffective leaders don’t last. Should be a very interesting next few years…

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