Broker Teresa Boardman writes that the lack of transparency from NAR and its leadership has led to a disconnect between agents and consumers. Many perceptions and misconceptions are rampant, and it could spell disaster for the future of NAR.
As the National Association of Realtors continues to stand by Bob Goldberg — and president Tracy Kasper pleads for members to stay true to its mission — one thing is clear: Misconceptions about the organization’s widening scandal are abundant, at least judging by the comments on reports from Inman and others.
And most of it is negative.
In articles published by Inman and other news outlets following The New York Times’ investigation into harassment claims, hundreds of readers have stood up to offer helpful advice to embattled NAR executives — a goldmine of feedback on how consumers and others view Realtors, and how Realtors view NAR.
Let’s take a look at some of those misconceptions and determine, once and for all, who Realtors “R” and what the National Association of Realtors is “4.”
Perception and misconceptions
Here are some eye-opening finds:
NAR’s nonprofit status
Several readers commented on NAR revenue and profits. Yes, it is true NAR is a nonprofit, and nonprofits are allowed to make a profit, but those profits must be funneled back into the organization’s activities.
Other misconceptions that were reflected in comments were around how much Realtors charge.
Some commenters said Realtors charge 4-10 percent. Others believe it’s 12 percent once the buyer side is added in. Commenters suggested that charging commissions is a racket and that homebuyers and sellers are being ripped off.
There are comments about association dues, that we pay thousands each year to the national association. Membership dues were $150 last year.
When we add in local and state association dues it comes out to more than $500, which is still a far cry from thousands.
Some commenters seemed to believe that real estate companies have to be members of the national association. As far as I know, real estate companies are not members. Individuals are members. Membership is voluntary; it always has been. However, as this comment suggests, many depend on the MLS, and there are often NAR strings attached.
Individual brokers belong to the association, and there is a rule that states that if the broker belongs, then the agents must join. In fact, that is how I became a member; it was a requirement of the real estate company that I chose to join.
Members from large real estate companies have a lot of influence. Yet most members belong to small independent real estate companies. Without the small companies, NAR would be less than half the size it is today. We need more of a voice.
Even though NAR has spent millions promoting and protecting the word “Realtor” the public seems to believe Realtor is an occupation rather than a name for members of the national association.
We see and hear the word Realtor in the media and in movies, and it almost always means a person who sells real estate, but that isn’t what the word means. It doesn’t matter how many millions or billions NAR wants to throw at “Realtor,” people will still see it as a job title.
Financial concerns and transparency
Commenters are also requesting an investigation into NAR’s finances. Non-profits pay salaries just like a business does. Salaries are supposed to be reasonable. I am not sure what reasonable is. To me, executive pay in the millions isn’t reasonable. Just examining basic national CEO salary labor statistics, the position appears to be well above the national average. Bob Goldberg, NAR CEO was paid $2.5 million in 2021.
If I were an investigative reporter, I would want to know more about Second Century Ventures and REACH. They are NAR subsidiaries, and the CEO of NAR is the chairman of Second Century Ventures.
I once asked some questions, and the way I was treated because of that is what leads me to believe someone should ask questions.
Individuals are not allowed to benefit financially from the profits a nonprofit makes. Yet sometimes, it looks like individuals do profit. That is why transparency is critical for a large powerful non-profit like NAR. Members, the media and the general public will always be watching and asking questions.
Lack of transparency has created these misconceptions
A non-profit is not allowed to make money from activities outside the goals of the mission of the organization or spend money on anything that isn’t related to the mission. One would imagine there are all sorts of ways to shape organizational goals, so they align with revenue sources and spending too.
Many NAR members don’t understand how members gain positioning, how RPAC works, and how the organization functions as a whole. NAR has done a poor job of educating its membership at large and educating consumers who don’t understand the “R” messaging.
I have seen things at NAR that I believe to be legal, but they are not a good look for the organization, including some hiring practices and how employees can influence member volunteers.
Perception is as important as reality, and with the recent media attention, now is the perfect time for transparency. If the general public doesn’t trust or respect the national association its existence will not benefit members.