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2011-05-04 16:00:52

What does NAR Do?

In a recent letter to State Association Executives, Dale Stinton, CEO of the National Association of REALTORS®, “offered some information and thoughts about the Realtor Association Management world in which we live, and the Realtor industry itself.” 

Stinton’s stated purpose in offering his thoughts was not to sell the audience on anything, but rather “simply to create a conversation around where we’ve come from, where we’re at, and where I think we’re going.” What follows here are key points from CEO Stinton’s letter, along with links to two supporting documents. They offer an insight into the NAR way of thinking and planning. 

Stinton first addressed the core question of what is NAR’s value proposition. “Current market forces causing us all continuing distress requires us to take a deeper harder look at who we are, and what we should be doing. To do this the only way I know how is to bring information from behind the curtain to front and center.  Perhaps it should have been ‘out there’ a long time ago and more often, and you may find a better way to express or present it, but here goes.  Attached to this letter is a document titled ‘NAR FIVE YEAR REPORT TO THE MEMBERS, 2006-2010 EXECUTIVE SUMMARY’.  I used 5 years because that’s when I became CEO and it’s a ‘report card’ of sorts on me and staff but also my incredibly dedicated volunteer leadership.  I am certain you are no less loyal and dedicated to your volunteers. 

The document is a compilation of major ‘deliverables’ categorized through the following guiding principles:

  •           Protecting Private Property Rights
  •           To Support your Ethics and Professional Standards
  •           To Help You in Your Business
  •           To Develop Consumer and Property Owner Relationships on Your Behalf 

“So where are we now?  Changes happen more rapidly at NAR now (we have not always been accused of being particularly fast or fluid) and 2011 and beyond look much different than they did just a few short years ago.  To try to bring a more day-to-day point of view, I offer you a document titled “NAR MONTHLY REPORT TO THE MEMBERS – March 2011”.  It tries to follow the same format as the 5 year report and again is fundamentally an expression of our ongoing value proposition.  Imperfect as it is (I know it seems long and perhaps wordy), it is a pretty accurate representation of a typical month at NAR.  What it doesn’t show is some of the internal decision making regarding staff and what we/you call overhead items.  For example, during the town hall meeting President Ron Phipps hosted last week, I was asked to provide NAR’s costs related to occupying two buildings, one in Chicago and one in DC.  The short answer was (and is) that between the two buildings our annual cost of occupancy for space is roughly $3/ft.  This is because we rent out over half of the buildings to outside tenants and that outside rent (which they pay roughly $25/ft in Chicago and $45/ft in DC) basically pays for most of our occupancy. 

The other internal decision that was made in January (as we were updating our budgets for 2011, 2012, & 2013) was to eliminate 33 staff positions, reduce staff benefits, and freeze salaries.  Combined with other program reductions or eliminations, we are cutting (it’s already started) about $18mm out of the ‘12 and ‘13 budgets.  Why? - We had to.  Membership is projected to be down 5-10% in 2011 and carryover into 2012.  That’s a big number to cover.  We also needed to prioritize our activities and operationalize some critical second century initiatives which here to fore had been funded out of reserves.  As a result, we managed to cover the membership shortfall and prioritize the initiatives within the confines of the budget that $80/mbr gets us.  

And now where we are going?  The most important question of all.  I say this with 30 years of experience at NAR – we are headed for very difficult times.  For openers, even the cock-eyed optimists of us would allow that this country is changing in fundamental ways.  For good or evil, the world is going to look very very different in five years.  The blessing and curse of the internet is that it has exponentially sped up the movement of our society to one seeped in individualism yet, ironically, still thirsting for community.  These communities come and go, form and reform, in the most ‘virtual of ways’. 

My question for you is what is to become of our community.  Are there core principles that can hold us together and perhaps even make us stronger?  Have we had a ‘good run’ for the last 105 years but with a nod to a ‘business like Darwinism’, we are headed for extinction? (with the only argument being over how long it will take!)  How will new unfriendly business models affect our members.  How will ever increasing and ubiquitous consumer access to real estate information change the landscape.  What about a millennial generation who prides itself on ‘disintermediating’ any thing in its’ path. 

Will we think at all three levels that we are better off without each other (yes, I’ve heard that).  Large brokerages and small struggling to answer the ‘value’ question themselves.  No secondary mortgage market.  No MID.  No 30 year mortgages.  Four (or less) big banks (and a few banks from other world powers) controlling every aspect of our individual and industries financial futures.  Unbridled and rampant regulatory intrusions on the real estate industry bordering on “bullyism” (it’s already starting and actually may be the greatest threat we face in DC). 

Or will we figure it out!  Will we come together and know what those who came before us so fundamentally and instinctively knew – ‘that together we have a chance – apart we will surely fall’. 

With respect to the upcoming Midyear Meetings, CEO Stinton noted that “Much has been said and much more will be said about the Realtor Party Political Survival Initiative (RPPSI).  There are many moving parts to this proposal and we have tried to provide as much detail regarding the philosophical, operational, and financial issues that we can.  There are many many FAQ’s, a mountain of correspondence both physically and on-line about the efficacy of the initiative, and a number of spreadsheets offered to explain where the money is going.  Our transparency on the initiative has been both applauded and derided at the same time.  And so it goes!”

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