Op-Ed: Frustrations of a Large Brokerage Leader

I write this on the eve of the NAR proposed settlement rule change deadline. The same settlement which specifically excluded companies our size from coverage–those having sold more than $2 billion in residential real estate. We are dealing with it the best we can, but assuredly it has not been without a high degree of frustration.

In my 22-year real estate career, even in my entire 41-year business career, I can unequivocally say that I have never witnessed a group of leaders and staff work harder to comply with a forced change deadline than the leadership and staff of Benchmark Realty.

Frankly, it’s been a 12-month process, but excruciatingly intense over the past 180 days. In fact, it is the primary occupier of our entire team. Costing thousands of work hours and consequently, hundreds of thousands of dollars in payroll expenses and new systems creation.

Why has it been so hard? Because of the lack of cohesive leadership, communication, and direction from the people who got us into this mess: the National Association of REALTORS®. In fairness, it’s not so much NAR that has caused the confusion as it is the abjectly dysfunctional network of local and state REALTOR® associations.

Each association has spewed confusing messaging with frequent “do it this way” instructions followed shortly by “do it that way” corrections. Just when we think we have our affiliates herded in the right direction, another local association issues confusing instructions and the affiliates come back to us with a “well I heard in this training class blah, blah, blah.”

Why does it matter? Because in our area, joining a local REALTOR® association is required, as membership is a prerequisite to be allowed to subscribe to Realtracs (our MLS, the lifeblood of our industry), every subscriber must belong to a local REALTOR® association and there are seven to choose from. Additionally, because of the NAR three-way agreement, an individual must belong to the local, the state, and to the national association. If an agent joins one, they must join all three. Three memberships, just to be allowed to access our work product on the MLS. There is a fee for each, of course, plus another fee to subscribe to the MLS itself.

Adding further frustration, the MLS rules require every licensee within the entire brokerage to belong to one of the local REALTOR® associations, or no one in the brokerage may belong. An all-or-nothing proposition. The REALTOR® associations own the MLS, so they get to make the rules. Most of which are clearly designed to secure their revenue stream.

To compound all this further, the board of directors of our MLS is made up of appointed practitioners, placed there by the elected boards of each of the local associations that own it. Meaning, we have the volunteer leadership of the local association’s board–all with varying degrees of business acumen–appointing their friends to the MLS board of directors, who in turn make business decisions that control a data company which the entire subscriber base depends upon to make a living and serve the consumer.

What qualifications, if any, do these people possess to effectively serve on the board of directors of such a critically important company? Unknown. They are real estate salespeople with friends who campaigned to win seats on the local association board. The old phrase “it’s not what you know, it’s who you know” comes to mind.

In the past two weeks I have listened to Kevin Spears pleading for unity. I have listened to Nykia Wright pleading for unity. I have listened to various brokerage leaders, who were covered under the settlement terms plead for unity. All, in my view, perfectly coifed and preferring to focus on the “important work NAR does” at the national level instead of focusing on how NAR does or does not serve its membership. True, there is important work supposedly being done at the national level…but the local practitioner does not see that, does not feel that and has a hard time connecting the dots on how that helps her feed her family.

What I have yet to hear from any of these pundits is a proposal of how they intend to fix the dysfunctional local and state associations. This is the primary point of impact for the licensees the most. It’s almost as if in NAR’s view, these issues simply do not exist. As a practitioner, this is extremely troubling.

As I said, in Middle Tennessee there are seven local REALTOR® associations. Why there are seven, I will never understand. Mini-fiefdoms I suppose. As the CEO of a 1,700-agent firm spread across a large geographic area, I must belong to all seven so that any Benchmark affiliate may belong to any association.

Yet, if a poll were taken, more than 97% of those 1,700 affiliates would say that the sole value of belonging to an association is access to the MLS.

The pundits keep asking us to “lean in,” to “debate internally” to avoid confusing the public. Lean into what? Debate where? We have no path, and only a very slight connection to the entrenched bureaucracy.

We are the largest brokerage in the state and not a single national industry leader has EVER communicated with us, darkened our doorstep or created any sort of conduit for input. Nor has any leader of the state association ever done so. EVER. In 18 ½ years of Benchmark’s existence, only 2 local association leaders have done so. TWO! Neither of which had any tangible program plans or information. Valient sentiment, but in the end, they were unable to effect any change with our feedback. Not a single thing has changed.

Clearly, NAR is in a struggle. While I feel for the individuals thrust into this battle, it was NAR’s stupid rules that got us here. It was their lack of functional leadership and mismanagement of the lawsuits that led to this current predicament. It is their staunch unwillingness to reorganize into a REAL business structure that has forced my company and hundreds of others to spend months, and hundreds of thousands of dollars modifying systems, creating new training programs, and launching local marketing campaigns to combat all of what they caused. Why should we be quiet about that and just go along to get along?

In the end, this analogy sums up the entire problem reasonably well:

When a person is flailing around in the river because the boat they were riding in unexpectedly capsized, it is angering to see a stranger standing on the riverbank lecturing that struggling person about how they (the swimmer) should swim harder.

Especially if that sideline lecturer is the cause of the boat capsizing in the first place.