Ever get the feeling, “I know this, I’ve heard this before”, but can’t put your finger on it? The Department of Justice (DOJ) is in a war with the National Association of Realtors. How dare they, don’t they know NAR represents over 1.2M Realtors? They do, and that’s the point. The DOJ is questioning if NAR is really about those 1.2M Realtors, or more about their way of life and the governmental influence it can buy. Does anyone actually believe Rupert Murdoch owns Realtor.com because he likes websites with pictures of houses?
NAR takes the position they know what’s best for their industry. Hmmm. This is the same position the State Bar Associations throughout the United States had when they banned lawyers from advertising their services directly to consumers. Prior to 1977, lawyers were NOT allowed to advertise. Too crass! Now, 35 years later we have, “one call that’s all”.
Doctors, prior to 1977, they weren’t allowed to advertise either. The American Medical Associates set the rules because they, “knew what was best”. Bates v State Bar of Arizona, which was the case responsible for the legal community being able to advertise, was also cited in the cases against the AMA. The AMA at the time thought advertising was, “derogatory to the dignity of the profession”. Adorable!
We have seen this before and we know how it ends. NAR is holding a losing hand. The days of “Associations” yielding great power and controlling their membership have long been over. It’s amazing NAR has been able to keep their industry more or less entombed since the 1970s.
The position of the DOJ is the real estate industry operates like a cabal with dated rules, old technology and blatant favoritism toward the franchise Brokerage system. That and, the sky is blue.
The reason for this “war” is because NARs “practices” have transcended the DOJ. There is no white knight at the DOJ leading the charge for change. Rather, the DOJ is merely reacting to tens of thousands of consumer complaints, over decades. According to a recent Harris Poll, 75% of Americans think the real estate industry’s practices are unfair. In today’s “alternative fact” world, you can’t get 75% of Americans to agree on the time of day.
Sixty five percent (65%) of Americans feel agent commissions are undeserved. Sixty (60%) of Americans feel they lost out on massive equity appreciation because of NAR’s promoted business practices. If you play with spreadsheets, this is where the numbers go crazy. Over the lifetime of the consumer, who on average buys/sells 7-8 homes, they will lose tens of thousands of dollars because of this NAR controlled “system”. If the consumer had been able to bank that lost commission money, the compounding interest over decades would have easily translated to six-figures.
NAR has always taken the position they are protecting the livelihoods of their 1.2M members. But, upon further review they really aren’t.
The United States Department of Labor has run multiple studies on the labor force needed to transact between 6-7 million homes a year. They put the estimate at 250,000 full time real estate professionals. Ok. But, if we give the system some fat and leeway and upgrade the estimate to requiring 400,000 real estate agents, it only proves how unbalanced and bloated the industry is.
NAR lives off this “bloat”. Their mandatory yearly dues on a 1M real estate agents who are forced to pay creates a never-ending bowl of political contributions. Throw on all the crap NAR gets to sell to this captive audience and it’s hard to believe it’s 2021? How does this monopoly still exist?
Today, 100% of NAR’s membership pays their dues. Make NAR membership “optional”. What percentage do you think would stick around?
NAR – Read the Room!
Consumers think your methods are unfair. The DOJ thinks your methods are unfair. For the most part, agents don’t like you. So, other than Politicians, who exactly is pro NAR?