MLS & Associations

NAR won’t rate members or impose new standards of entry

Trade group will develop 'Code of Excellence' to raise Realtor professionalism

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The National Association of Realtors will not rate its members or impose new standards of entry to join associations, but members will face higher educational requirements after a vote by the trade group’s board.

The nearly 850-member NAR board of directors has approved policy recommendations that direct NAR’s leadership team to create a new “Code of Excellence” educational requirement and make the current requirement to complete Realtor Code of Ethics training biennial instead of quadrennial.

The policy recommendations came from a presidential advisory group of about 30 members called “Realtor of the Future” appointed in May by then-NAR President Steve Brown. The group was headed by Ron Phipps, who was president of NAR in 2011.

The yet-to-be developed “Code of Excellence” is the trade group’s latest effort to “raise the bar” of professionalism in the industry.

“The Code of Ethics … really lays out clearly what we should not do. The Code of Excellence lays out what we should do,” Brown said. The Code of Excellence will “train the Realtor that they are not single-minded. That to be a good Realtor they must be community-involved, they must be politically aware and they must engage with the consumer in every facet of their community life.”

Code of Excellence training will cover such issues as consumer privacy protection, data accuracy, political advocacy, technology, professional courtesies and social media — all topics currently covered by NAR’s educational offerings, but that the trade group would like to offer in a concise educational program, Brown said.

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Current NAR President Chris Polychron will appoint another presidential advisory group to develop the Code of Excellence. He said he is not yet certain whether the group will have something to present to members at NAR’s midyear conference in May.

“The Code of Ethics is over a hundred years old. The way we sell real estate has changed and in order for us to remain at the heart of every deal” Realtors need to adjust, Polychron said. “We don’t want disintermediation.”

The Code of Excellence will be an educational requirement members must complete every two years, but it will not otherwise be something that members can violate as with the Code of Ethics.

“(The Code of Excellence) is an aspirational code. It’s not a code that you can be found in violation of, but it is a code that we would challenge all our members to embrace in their day to day business,” Brown said.

With the board vote, starting in 2016, Realtors must also complete Code of Ethics training every two years, instead of every four years.

When asked whether the quadrennial requirement was not enough, Brown said, “It has been more than efficient. But more is better and keeping the code in front of our members on a more regular basis certainly cannot hurt and can inspire members about what the code stands for and how we should be conducting our business.”

The NAR board also approved a policy recommendation stipulating that NAR will use its size and scale to make sure Realtors have the best data available for their real estate practice. A desire to provide Realtors with “more efficient MLS systems,” included in the original proposals, was not included in the final version of the policy.

While the particulars of this policy also have yet to be developed, the policy is about Realtors being “content data knowledgeable” in their work, Brown said.

“NAR will be helping the Realtor with all kinds of research data … from MLS to RPR to analytical predictive statistics. The Realtor needs to have the knowledge that all of that information can provide,” he said.

“All of that information is free and available to the consumer … (but sometimes) it’s like taking a drink from a fire hydrant. The Realtor’s responsibility is to take that information and put it into a workable form for the consumer to make good decisions.”

A fourth approved policy recommendation, originally worded “NAR should develop a methodology to rate Realtors” was reworded to “NAR will develop an industry standard for models to allow consumers to fairly and more accurately evaluate Realtors.”

The policy emphasizes that NAR itself will not rate members, but rather develop guidelines that other ratings sites would be encouraged to use to more accurately rate Realtors.

“Too often many of the current ratings systems only rely upon certain numbers — number of homes sold, number of years in the business, number of sales volume. Those are all important pieces, but not the only pieces when choosing a Realtor,” Brown said.

NAR envisions a broader professional search that would not only include an agent’s track record in terms of sales, but also, more importantly, take into account members’ designations, education, linguistic abilities, specialties, and other talents, he added.

“(Consumers) not only want a Realtor who is knowledgeable, they want a Realtor they can relate to. Not only the statistics, but who the agent is,” Brown said.

“You might do a search for me and I have a tremendous interest in horse farms. I might be a good match if you’re looking for a horse farm,” he added.

There was a line in the proposed policy that was struck from the final, approved version of the policy: “There will not be a rating of Realtors on realtor.org.” Brown said that line was removed in order to give the trade group “every option” when developing the guidelines, but that “there are absolutely no plans to have a rating system on realtor.org.”

Even from the proposals’ earliest incarnations, NAR never considered evaluating Realtors itself, Brown said.

“What NAR is doing is setting standards which hopefully the industry would follow … for a broad and detailed look at the Realtor. We’re not proposing a Realtor ranking system — that would not even be helpful to the consumer,” he said.

However, “it wouldn’t be a stretch” to see a professional search on realtor.com, he added. The plan is for realtor.com to follow NAR’s guidelines once they are set, Brown said.

When asked whether it is realistic for third-party sites such as Zillow and Yelp to follow NAR’s guidelines, Brown said, “We would encourage all of them to use this as a standard that they could build from. It certainly lays out a wonderful foundation for the areas a consumer should be looking at in trying to find a good agent to work with.”

In mid-2014, the Pennsylvania Association of Realtors developed a “report card” of agent rating sites, based largely on how friendly they are to agents. Zillow, RealSatisfied, and RatedAgent.com received the highest scores. The association had originally considered creating an agent review system of its own, but decided against it after considering the political and practical hurdles to doing so.

NAR’s “Realtor Ratings Work Group” report provides the latest details on the kinds of criteria that consumers could search to find a Realtor under the proposed guidelines, including local market knowledge; community engagement; sales data and volume (this could be optional for Realtors); specialties and designations; experience; press mentions and awards; involvement with professional and industry associations and groups; charitable activities; education; and any other information a Realtor chooses to provide in their online profile.

“Consumers could search for Realtors based on the criteria that matters most to them, and the search function would educate consumers on important factors to consider when looking at a Realtor’s profile,” the report said.

“Consumers would have the ability to include or exclude the criteria mentioned above, and would be presented with information on Realtors whose profiles included characteristics and experience the consumer was looking for.”

After a closed transaction, clients would be sent a three-to-five question survey asking them to provide feedback on their Realtor based on his or her market expertise; responsiveness; negotiation skills; honesty and trustworthiness; whether the agent educated the consumer about the transaction process; and the consumer’s overall experience.

Consumers would be able to assign the Realtor a certain number of stars in each category as well as provide a narrative of their experience with the Realtor. Each of these could be published and Realtors could respond to clients’ comments directly, the report said.

An agent rating service that incorporates some of these capabilities, Quality Service Certification Inc., was part of a pilot program launched last year in some state and local Realtor associations. Although initially backed by NAR, that pilot fizzled earlier this year due to reportedly low adoption rates by agents and lack of support at the national level.

A fifth policy proposal from the original presidential advisory group report did not make it to a board vote. The proposal would have directed NAR to explore increasing the standards of entry into Realtor associations by improving the education, credentials and professionalism of all Realtors.

Its objective was “to further distinguish the Realtor from the non-Realtor licensee, and to provide better customer service” perhaps through additional entry level educational requirements or a mentoring or apprenticeship program.

Brown said the proposal did not go forward to the board of directors because NAR leaders felt the other four proposals would address educational and training requirements on an ongoing basis and they were not necessarily better addressed under initiation of Realtor membership.

Editor’s note: This story has been updated.