This week, NAR members gather to face another set of tough decisions about the future of real estate. This time, pocket listings take center stage.
In 1996, the National Association of Realtors convened a special board meeting at the Hyatt Hotel next to O’Hare Airport in Chicago to decide the fate of its failed tech venture, the Realtor Information Network (RIN).
Inman News had just launched on the internet that year and I had a secret source inside the NAR leadership who was feeding me information on RIN. A name that I have kept under wraps for 23 years.
The source kept me apprised of every move NAR was making behind closed doors and I published everything I learned as it unfolded. The intentions of the source were pure: try to get his beloved trade association to do the right thing and to stop keeping everything a secret from its membership.
The unnamed source drove the NAR leadership nuts
So much so, that a low-level NAR employee was tasked with following me around the Hyatt that day including a trip to the bathroom to see who was spilling the beans.
It was a low moment in the history of NAR’s determination to keep its deliberations secret.
But it was also a defining moment about where NAR was headed with its digital strategy. That meeting in Chicago gave birth to realtor.com, an investment that later filled the financial coffers of NAR, but never realized the dream of having Realtors control their fate on the internet. Today, realtor.com is owned by media giant News Corp and the industry has lost its footing to the likes of Zillow, Opendoor and other innovators.
This week, NAR will gather in San Francisco to face another set of tough decisions about the future of real estate. This time, it centers around pocket listings and whether they should be sanctioned by NAR. A proposal is on the table that would severely restrict the concept of off-MLS listings. They go by different names including coming soon, inside sales or pocket listings.
Another defining moment for the industry
The broker cooperation agreement that created the MLS is under siege for all sorts of reasons including digital alternatives, lawsuits and indeed pocket listings.
This NAR deliberation feels like a last stand by the industry to slow down a breakdown in the broker cooperation agreement, which could fundamentally alter what role Realtors play in the future.
So far, the discussion has been quite transparent. A new generation of NAR leaders realize that an autocratic and secret approach to decision making is bad for its members.
In San Francisco this week, I doubt that any Inman News reporters will be followed to the lavatory to see if they are secretly meeting with any sources in a bathroom stall.
A small group of NAR leaders ultimately make these decisions
Despite an elaborate committee structure and some 700-plus board members, the word is often sent down from the top about how to vote. Pressure is put on board members to go along with the plan or risk losing hundreds of plum committee assignments.
It’s like the U.S. Congress knowing what the outcome will be, before the vote.
Last year’s NAR vote on its dues increase was an example of this group pressure.
NAR CEO Bob Goldberg seems determined to reform the sprawling organization and has made meaningful strides in doing so.
In a recent interview with Zillow co-founder Rich Barton, I asked him what he thought of NAR. “It is waking up,” he responded.
A true test for Goldberg
How does he make the lively pocket listing debate even more transparent? How does he insure that NAR does what is best for its 1.2 million members? How does he avoid pressure from a small group of heavyweights like big MLS organizations, large brokers or influential franchisors?
Along with many well-intentioned members, Goldberg has numerous watch dogs looking over his shoulders, including the Department of Justice, which is investigating NAR again and lawyers who are engineering a major lawsuit against the trade group.
And Inman News, of course, which will be spilling the beans as fast as we can in San Francisco this week with a new generation of great sources.