The phrase “real estate is local” is a mantra heard ad infinitum, and Realtors are an independent bunch. So when sweeping orders from the National Association of Realtors to offer a minimum set of services came from on high, some smaller local Realtor associations bristled.
This is largely because, on a practical level, NAR’s new “core standards” have been a driving force in association mergers and dissolutions that have so far involved an estimated more than 49,000 Realtors across the country, according to an Inman analysis of data provided by NAR.
The core standards appear to be mostly doing what they’re supposed to — raising the number of services available to members — but for some associations, the transition has been more difficult than others.
Association mergers and dissolutions between May 17, 2014 and March 17, 2015:
(Note: Click on the pins for more information about each merger or dissolution).
More services, but are they the ones members want?
Most of the associations Inman contacted agreed that complying with the core standards will provide more services for their members. But not everyone thought the core standards will provide the services that members consider most important.
Sandi Friel, association executive of the Washington-based Orcas Island Association of Realtors, is in the latter camp. Her association is in the process of dissolving because it cannot comply with all of the standards without raising dues from $542 last year to more than $800 this year and requiring a lot more time and involvement from members, she said.
The association’s 40 or so members will become members at-large of the state association. Their dues will go down some, but they will lose the services they most care about, Friel said: on-island education classes and coordination of weekly caravans to for-sale homes.
“Traveling to the mainland for classes requires a ferry ride and overnight accommodations, so our island agents appreciate local classes where they can get all their hours required for license renewal,” Friel said.
The weekly caravans will have to be arranged on a volunteer basis or by a freelance administrator paid by the brokerages — something Friel said her group is in the process of figuring out.
One core standard that Friel said would be a “huge cost” for something that members “don’t feel would be important” is the requirement that every association adopt a strategic plan every year.
“That requires hiring of an NAR-approved facilitator, which would cost about $3,000 to come for a day or day and a half,” she said.
NAR could cover the cost of the facilitator through a grant for the first year, but the association would be on the hook thereafter, Friel said.
“And you’re asking a group of Realtors to give up a whole day to do something like this. It felt like a lot of make-work. Making work for us that we don’t want to do.”
The association also objected to the requirement that each association have an interactive website where they link to the websites of their state association and the national association in order to promote member programs, products and services.
Orcas Island has just four real estate brokerages. All of them require their agents become members. To join the association, agents simply call or email Friel, she said.
“I’m not saying that these core standards are a bad thing, but for our small group the costs are onerous. We need to be spending our time selling real estate, not trying to meet these specific standards,” she said.
Two companies have recently teamed up to help small associations meet the website requirement in a “cost-effective” way, but price points for the sites have yet to be announced.
To Friel, the core standards — including a requirement that all associations include voluntary contributions for the Realtor political action committee (RPAC) in their dues billing and prove participation in political calls for action — clash with the feel of her local community.
“I can see where national wants to increase their reach by having local associations get more standardized,” she said.
“[But] this island community is very laid back, informal, friendly and with a strong independent streak. It takes that to live on a remote island. That kind of encapsulates, beyond Realtors, the whole community here.”
“Our market on Orcas Island is a small niche market, primarily second homes, and is very different from the mainland (which islanders affectionately refer to as “America”). Our issues are localized and don’t really follow large national trends or politics promoted by NAR,” she added.
Not all association execs felt that way, though. For instance, Kendra Murray, previously association executive of the former 37-member Carbon/Emery Board of Realtors in Utah, felt merging with a larger board gave her membership “a lot more political health and political knowledge that we feel would be a help to us and our community.”
Christina Harrison, chapter executive of the former Uintah Basin Board of Realtors in Utah, said her members were excited for member access to an association website and the ability to pay bills with a credit or debit card.
“They like that we will be able to keep some of our identity but increase member services we have struggled to do in the past,” she said.
Carbon/Emery and Uintah Basin were two of the four small associations that participated in a merger with the 1,700-member Utah County Association of Realtors earlier this year. A third was the Central Utah Board of Realtors, which had just under 50 members.
“My members have acquiesced,” said Carol Howell, former president of the Central Utah association, when asked how the board’s members felt about the merger.
“They stopped kicking and screaming because they feel that the NAR has given us no choice because we’re small. They feel like they’re losing their autonomy and we’re losing our voice.”
“We’ve been very happy being our own little board. And we realized that our services were limited, but our dues were lower,” Howell added.
“There was no way that we had the amount of people for all the committees and projects that NAR insisted that we provide to stay a board.”
When the new standards were enacted, the members of the Carbon/Emery Board of Realtors felt “blindsided,” Murray said.
“I would have liked to have seen the process that ‘we’re thinking this, this is why, this is what we’re talking about, we’re looking at this situation’ — [There was] none of that communication that I had been used to with NAR,” she said.
Moreover, the state and national associations seemed to have a “stringent belief” that small boards could not meet the core standards without the assistance of a bigger board, thereby pressuring her association to merge, Murray said.
Members felt reaching the standards was “a good thing,” she said, but didn’t like the way the process was handled.
“It kind of felt like a hammer came down and that was the only way you could go,” she said.
In a statement, NAR said the goal of the core standards “is to ensure every Realtor is provided with the services they deserve and every association is contributing to the strength of the organization. We knew the process wouldn’t be without its challenges, but we believe there are many benefits to raising the bar for Realtor associations and ensuring high-quality service for members.”
When the NAR board approved the requirements, it also allocated up to $20 million to help small associations meet the new core standards and facilitate mergers of those that cannot.
NAR wouldn’t have committed that money “if we didn’t think and hope each and every local association could succeed,” the trade group said.
“Through those funds, we remain extremely committed to helping every association reach compliance with the new standards with grants, consulting, education and other tools.”
But, as Friel pointed out, the grants available are one-time grants, whereas the core standards will have to be met on an ongoing basis.
Keeping some independence
The four smaller boards joined the Utah County association as chapters in an attempt to retain some independence. Chapters do not have to fulfill the core standards — only associations do.
“We did not want to become a cog in somebody else’s wheel,” Murray said.
“But I think the Utah County association … understood that independence was important to us,” she added.
The smaller boards’ association executives are now chapter executives, and the chapters have kept their offices and committees, according to Taylor Oldroyd, CEO of the Utah County association.
The Utah County association will be able to help the chapters with bookkeeping, technology and code-of-ethics enforcement, freeing them up to help fulfill the community outreach requirements of the core standards, Oldroyd said.
“We’re just better at continuing education, have the bandwidth to provide more networking functions, some of these smaller boards weren’t using [an electronic lockbox] system, our MLS is better,” he said.
“So some of those agents will have a better way to serve their clients with increased exposure for their properties and with greater service and professionalism.”
Howell said the merger would ultimately be good for members because they will have access to more services and training — even though that meant an association dues increase of about $175 this year, to about $850 total.
Howell took issue with the implication that small associations like hers weren’t professional in general, however. She pointed out that her market is geographically isolated and has less than 75,000 people.
“I don’t think there’s a lack of professionalism. There’s an intimacy. Everybody knows everybody. We all know each other’s clients,” she said.
MLS service expands
Although four of the five Utah boards merging were small, those four covered vast, mainly rural, areas. The merged association, tentatively called the Utah Central Association of Realtors, covers 15 of Utah’s 29 counties.
Two of the five boards — Carbon/Emery and the Grand/San Juan Association of Realtors — had not previously belonged to the MLS that covers most of the state: utahrealestate.com.
The two boards previously had their own MLSs. Joining the new MLS was “very scary” for Carbon/Emery agents, Murray said.
“Anything unknown is scary. Taking care of our own MLS has secured us financially even though we were so small. We’re used to it,” she said.
But utahrealestate.com has been “wonderful” in training the agents, she said.
“I don’t think it took even a full week for agents to become excited” about the tools they could use that they didn’t have before, she said.
Annual MLS dues will now jump by $300 for members of the two former associations, but execs of both say that will be less than the additional amount members would have had to pay to meet the core standards had the associations not merged.
At first, some members of the Grand/San Juan association were afraid that “people from up north” were going to have access to the same MLS and take their business, said Gail Wells, now the association’s chapter executive.
“But I think [members] realize that the whole idea is to get the property sold,” Wells said.
Overall, members are excited about the benefits of being part of a larger board, including continuing education classes that the board makes available at the local University of Utah extension office, she said.
“I think [the core standards put] everybody on a level playing field, even little people like us. Now we have the same opportunity as those bigger boards because now we’re part of them. I think it’s making us more professional,” she said.
Switch to a non-Realtor MLS
At least one association has responded to the core standards in an uncommon way: dissolving and forming its own non-Realtor MLS. The now-defunct Spanish Peaks Board of Realtors had 125 members before dissolving. Those members now have the option of joining any other local board or as members at large of the Colorado Association of Realtors, but Realtor board membership is not required to join the Spanish Peaks MLS.
The MLS has fewer members now — about 75 — and MLS dues have gone up to $400 from $250. But members felt they needed to keep their own MLS for their “unique” area, said former association exec and current MLS director Annalee Hickey.
“The square mileage of our area is really large. Neighboring MLSs are far away (and) have different kinds of real estate and prices,” she said.
Her membership voted to dissolve because most felt the core standards “were a little excessive for our purposes” and “a lot of members felt they weren’t getting enough benefits from NAR and CAR, anyway, so they felt we should go on our own. Some [Realtor] benefits were not being utilized.”