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Realtor membership: Is now the time to make it a choice?

06/22/2016

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In the past couple of weeks, there has been much discussion about the National Association of Realtors on Inman and social media. It began with an Inman article about NAR staff and volunteer leader compensation, followed by Rob Hahn’s insight into how NAR spends marketing dollars, followed by Teresa Boardman’s thoughts on women leaders at NAR (or the lack thereof), followed by Hahn giving his thoughts on the women who NAR should consider as their next CEO.

In addition to the many comments on Inman to each of these articles, there was a flurry of posts on social media where more voices engaged in dialogue on the varied subjects.

Membership ‘tax’

As I read all of the articles and as many of the convo strings I could find, I was reminded of a day that has stuck with me during my involvement in the Realtor organization.

I was just a month in my seat as the CEO of a state Realtor association. I inherited a budget deficit, and we needed to figure out what to do the following year to fix the deficit. Cut expenses or raise dues?

For many reasons, I was in favor of raising dues, and we set out to persuade the membership that this was the better choice. In the process, I received a sincere email from a member (who was on the board of directors) who quite politely but firmly told me that increasing the “tax” on members was a monumental mistake that would lead to the implosion of the organization. In the end, dues were increased, the association did not implode, and all was OK.

But that’s not the point. The thing I will never forget is the member’s use of the word “tax.” It was intentional and used for a reason. As we know, a tax is not something paid by choice. It is imposed by some authority that has the right to impose it.

Taxes are imposed by an authority. Calling Realtor dues taxes is telling.

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Although most Americans pay their various taxes as required, many have negative feelings about that obligation and many times even more negative reaction toward the people who are in charge of imposing the tax.

So what do taxes have to do with unhappy Realtors?

Regardless of whether the recent discussion topic was compensation, marketing spend or too few women in leadership, there were generally three sides to the conversation.

People who were:

Upset with the status quo (and those who were responsible for it) Those who were trying to convince the malcontents that they did not really understand the big picture and if they did, they would feel differently And a chorus of the just-get-involved folks because we all know that if you get involved, you can change things (if I had a smiley face winkie emoji, I would insert it for this last one)

What we are missing is a fourth group. This group wouldn’t respond with negative words because they would have responded with a choice — a choice not to be part of the organization. We don’t have that group because practically, most cannot leave.

Here is what we know: In many parts of the country, access to MLS services is reserved for members of the Realtor organization. And if a residential broker or agent does not have MLS access, he or she is not in the business.

We also know this. In parts of the country where non-Realtors can access the MLS, the NAR broker-centric dues billing policy requires a Realtor broker to pay dues for all affiliated licensees in the broker’s office, whether they join the organization or not.

Most brokers are not going to pay the national, state and local dues for an agent who does not want to be a Realtor. As a result, agents in those areas fall squarely on the horns of a dilemma — pay Realtor dues or leave their brokerage. Most choose the former as that is the path of economic least resistance.

Given the practical realities of membership (either no MLS and/or leave your brokerage firm), one can understand how some feel that their dues are a tax.

To be very clear, I am not suggesting that this group is a majority of members. I know many Realtors who happily pay their Realtor dues and many more who would pay a multiple of their current dues to belong.

Maybe the anti-NAR voices on Inman and in social circles are a loud minority. But even if this group represents only one out of every 10 Realtors, that is still about 120,000 agents across the country.

Given a choice, it seems to me that it’s likely many of them would choose not to belong. And while some would say that the Realtor organization cannot afford to lose these non-supporters (economically and otherwise), the cost of keeping them might be even more detrimental to the broader organization.

Given a choice, it seems to me that it’s likely many Realtors would choose not to belong.

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So are Realtor dues a tax on real estate professionals? I know there is at least one Realtor who believes that to be true and likely, many more.

But the far more interesting question is: should every real estate professional have a true choice as to whether to be part of the Realtor organization, and if so, what are the implications of providing that choice? The answers will come in Part 2.

Formerly Senior Vice President of Industry Relations at realtor.com, Russ Cofano is an industry consultant and speaker with 25 years of executive-level experience in technology, association, MLS, brokerage and law. You can find him at Cofano Consulting or LinkedIn.

Email Russ Cofano.

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