So how does your Realtor association measure up?
RISMEDIA, March 9, 2007-Non-profit associations still have to make sufficient money to provide a meaningful service for their members and in a declining market with a confused membership, that's not an easy task. If you add a few disgruntled members with political agendas and personal opinions the job gets even harder. And that doesn't even consider the channel conflict that results from the changing make-up or the fluctuating size of the membership.
Indeed, the real estate industry itself is experiencing the birth of many new business models, the consolidation and restructuring of the MLS, shifting home buying patterns and the emergence of a new generation whose thought processes are quite different from those of the existing baby boomers that are entrenched in association leadership. Put that all in perspective and Realtor Association management might just be one of the toughest jobs in the real estate industry.
Last week, over 1,000 Realtor Association executives and other industry leaders gathered in San Diego at the 2007 AE Institute's annual meeting to discuss the challenges and changes impacting their future. Coincidentally, at the same time the just-published 2007 Swanepoel Trends Report that details the top 10 trends impacting the industry, feature as its Trend #9: "Extinction or Evolution – A time for association introspection and bold action?"
Associations play a key role in the real estate brokerage industry and any major shift can be huge for the industry. There are 1,471 state and local associations and boards with a collective membership exceeding 1.35 million Realtors, almost double the 766,000 membership in 2000. The largest Realtor Associations are: California, Florida, Texas, New York, Illinois, New Jersey, Arizona, Virginia, Georgia and North Carolina.
For associations, this recent increase in members from varying backgrounds means not only offering more services but also a broader selection of services. This is an ongoing and evolving process. Now with a decline in membership imminent, again another shift comes into play. What was important last year, or last month clearly may not be relevant tomorrow or even today.
In many instances, association leadership has not always stayed in touch with the industry's needs or adjusted to its changes resulting in "business as usual." Realtor associations are to remain relevant and effective it is imperative that they inject forward thinking into the equation. That means recruiting individuals that are prepared to proactively meet the many challenges and opportunities facing the industry today.
"Certain management's mindset has to change from protectionism and become committed to meet the membership where they need it the most – the environment they operate in everyday," Swanepoel says. "To remain competitive leadership is going to have to redefine how it does business; whether they want to or not. Failing to make a decision is simply not an option – the market will make one for you," he cautioned.
These are sentiments echoed by Joel Singer, CEO of the California Association of Realtors when he said that "the challenging market should finally put needed downward pressure on the inflated membership levels of the last several years." He wonders whether organized real estate will be able to use the resulting resource pressures to restructure itself in line with the changes already reflected in the brokerage industry. He agrees that "unless we create a customer focus that at once reflects the larger scale of the market leaders and the nimbleness of the top producers, we run the clear risk of irrelevancy."
According to industry advisor Jerry Matthews, "the impact of technology, power of the consumer and the universal availability of information clearly signal more imminent changes in real estate than the previous 20 years. Many Realtor associations face a number of daunting issues."
This includes modifying the MLS to effectively compete with third party providers that are using maps in mash-ups to provide enhanced MLS data to the consumer – well in advance of any interaction with the real estate professional. In some instances MLS data is being scraped from sites, and in other cases brokers and agents are feeding listing data into the system via lead generators. Add to this the reluctance by some associations and brokers to provide agents with IDX capability or the difficulty in integrating it where available, and the result is a movement away from the local MLS to third party sources.
More than any other, MLS has been the one component that has been a huge factor in keeping Realtor associations healthy and relevant over the past few decades. But this is changing and many MLS services are consolidating. "Most major metropolitan areas have only a single MLS and consolidation is consistent with the national trend toward regionalization of MLS systems," says Terry Penza, CEO of North Shore Barrington Association of Realtors.
To remain relevant to their customers, Realtor associations must clearly understand the new complicated and ever-changing online environment in which they find themselves. One of the best resources for that and other industry information, objective research and strategic guidance for association leadership is the new 2007 Swanepoel Trends Report (www.retrends.com) published by RISMedia and RealSure Publishing.
For example, in the current 159-page Report Swanepoel highlights the top five issues identified for Realtor associations to focus on are:
– The Future of the MLS system
– New real estate business models
– Declining real estate commissions
– Changing membership profile and the associated needs thereof
– Understanding the impact of technology and the Internet on the industry
Complicating association life even further is the fact that the overall U.S. population has become considerably more diverse and Realtor associations still have a long way to go to address the needs of these different population segments. There is a large void in leadership, education and training as well as advancing the knowledge of the homeownership process for a variety of minority markets. Just as brokerage companies in multi-cultural communities are challenged to "serve" these varied groups so the association needs to step up and become an active participant.
For starters, Realtor associations should be educating and empowering their membership concerning the changes taking place in the industry such as the new business models and the evolution of real estate business online. They must arm their members with the reasons why it is beneficial for the consumer to use a real estate professional to facilitate the transaction. Just as importantly they need to provide members guidance on the development of their careers and help them to run a profitable business.
Metropolitan Consolidated Association of Realtors CEO Walt Baczkowski agrees that association executives and elected leaders need to think outside the box. He states that consumer shift has already created a great opportunity for associations to provide services that previously may have been considered sacrosanct.
According to John Ansbach, of Recon Intelligence Services, Realtor associations should watch for the following things over the next couple of years:
– Engaging young members
– Supercharging government affairs programming
– Defining and defending Realtor value and image
– Developing association non-MLS identity
– Supporting brokers in a continuously unstable environment
Stefan Swanepoel says in his Trends Report that the top five traits that mark a successful Realtor association are:
– A clear mission
– Competent leadership
– Remaining very open-minded to new ideas and change
– Providing the appropriate member services
– Forming the right strategic alliances
So how does your Realtor association measure up?
Are you ahead of the curve and ready to meet of the challenges of tomorrow or is this good time for introspection and brainstorming to seek out new strategies for the coming year?
This is an extract from the 159-page 2007 Swanepoel Trends Report (www.retrends.com) that details the Top 10 trends impacting real estate brokers, agents and Realtor associations.
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