The National Association of Realtors‘ board of directors held their biannual meeting Friday on the last day of the trade group’s midyear conference, the Realtors Legislative Meetings, electing a new leader, approving a budget, passing new core standards requirements for local Realtor associations and expanding who needs to have a social media audit among NAR leaders.
Here’s a rundown:
On the leadership ladder
NAR’s board, which has some 800 members, elected Tracy Kasper, broker-owner of Berkshire Hathaway Home Services Silverhawk in Idaho, as NAR’s 2022 First Vice President, putting her on the ladder to serve as the trade group’s president in 2024. She beat Mike McGrew, CEO of McGrew Real Estate in Kansas and former NAR treasurer, in a close vote: 438-422.
“Our advocacy efforts will remain champions of private property rights and private property ownership, but we must make sure that we address the racial homeownership gaps, that we will continue to address the crisis that we’re having with inventory, affordability, fair housing for all, and that we will also address the tax issues that we’re having to make sure that we will still at the same time, keep our economy robust and sustainable,” Kasper told the board in her final candidacy pitch.
“We have an opportunity moving forward to ignite others, to tap talent at every level, to make sure that our membership reflects the communities that we live, work and play in [and] that our leadership teams and committees reflect our membership.”
As part of its consent agenda, the board also elected Kenny Parcell as NAR’s president-elect and 13 regional vice presidents. Leslie Rouda-Smith, currently NAR’s president-elect, will automatically ascend to president at NAR’s annual meeting in November. Nancy Lane continues her two-year term as treasurer.
Realtor Party Director Kevin Brown offered a rosy picture of the finances of NAR’s political action committee, noting that, as of April 26, RPAC had raised $22.9 million — 59 percent of its $39 million goal for 2021.
Thirty percent of NAR’s members — 429,213 — have invested in RPAC so far this year, nearing the trade group’s goal of 37 percent and increasing the number of individual investors by more than 66,000.
Of those investors, 2,960 are considered “major investors.” NAR’s goal is to reach 9,887 major investors by year end.
Membership and budget
The board approved recommendations from NAR’s Finance Committee to keep NAR’s membership dues for 2022 at $150 per year and to use 1.43 million as the basis for dues revenue in the 2022 budget proposal. That would bring in $214.5 million in dues revenue. NAR currently has a record 1.48 million members, but expects a modest decline due to challenges in the commercial real estate market following the pandemic.
NAR expects to bring in $47.48 million in non-dues revenue in 2022 and $50.05 million from its $35 special assessment for its consumer advertising campaign.
The board also approved 2021 budget adjustments to pay for NAR’s new mentorship program ($281,750, of which $100,000 will be for speaker fees), expansion of diversity and inclusion initiatives ($205,750, of which $50,000 will be for sponsorships) and a September 10 live telethon to support a fundraising campaign for the Realtors Relief Foundation. The latter is expected to cost a total of $445,000, of which $350,000 will go toward producing the event and $85,000 will pay a consultant for strategic event planning and project management.
Even with these adjustments, NAR will have $2.7 million in net income this year due to a rise in membership.
The biggest expense by far in NAR’s operating budget is its subsidiary and national property database, Realtors Property Resource, which will cost a net $19 million this year and $19.38 million next year.
Information technology is the second-largest net expense ($13.6 million), followed by creative and content strategy ($7.8 million), forms and transaction management platforms ($7.5 million), and legal affairs ($7.4 million).
Given how many lawsuits NAR is currently fighting, it’s no surprise that the trade group expects its legal expenses to rise to $7.8 million by 2025. NAR also expects to ramp up its spending on meetings and events, from $6 million in 2021 to $7.9 million annually in 2024 and 2025.
NAR’s agreement with zipLogix, which was acquired by Lone Wolf in 2019, to provide transaction management as a member benefit expires at the end of 2021, at which time NAR has previously said it would have the option to renegotiate it or seek other software options that serve members’ needs. There is currently no funding set aside in the 2022 budget for this item.
NAR’s reserves balance stood at $157.4 million at the end of 2020, well above the minimum operating reserves requirement of $70.9 million for 2021. The trade group’s advocacy reserves stood at $51.3 million; the minimum advocacy reserves requirement for 2021 is $7.1 million.
Core standards get more teeth
NAR’s board approved additional requirements for local associations regarding compliance with core standards, a minimum set of standards that they must meet in order to retain their Realtor charter.
Recommended by the Association Executives Committee, these include:
- To require final submission of local and commercial associations’ Core Standards certification forms on December 31st and terminate access to the form after that date, barring a special request from a state association to provide additional access.
- To prohibit Core Standards hearing panels from granting non-compliant associations an extension to comply.
- To create a standard online form that formalizes the Core Standards reporting process by which state associations communicate issues of local and commercial association non-compliance to NAR.
- To provide state associations the option to submit written documentation for the Core Standards hearing panel, and the option to meet with the hearing panel prior to the hearing; the appealing association will have no less than five days to review the information provided by the state association.
- To send a ‘letter of warning’ to the chief staff and officers of every association that is not compliant with the Core Standards by February 1.
- To allow the Core Standards hearing panel the option of placing non-compliant associations on a probationary status for one year and the option of imposing the following sanctions:
– Publish association’s name in NAR communication channels for not meeting the Core Standards (e.g., The Hub, AE INS, etc.)
– Require appropriate training on the Core Standards for association staff and leadership as determined by the appeal hearing panel
– Deny associations opportunities for NAR grants that are pending approval
– Require associations to develop a plan for merger, consolidation or dissolution
– Recommend revocation of association’s charter to the NAR Board of Directors.
- To develop a training program that can be used by all Realtor associations, including NAR, to educate local, commercial, and state association volunteer leaders on the Core Standards.
Read the rationale for each change:
Social media audit expansion
In November, the board approved a policy that directed NAR’s Credentials and Campaign Rules Committee to establish a process for conducting a social media background check as part of the trade group’s review process for potential candidates for NAR elected office in order to “identify any issues in a candidate’s history that may cause an embarrassment to or shed negative light on NAR.”
On Friday, the board voted to expand that background check to NAR’s appointed leaders.
“With the growing use of social media and the resulting digital footprint, it is prudent to expand the social media review to include an audit of the online identity of NAR appointed leaders in addition to the elected officers,” the Executive Committee said in its rationale for the policy proposal.
NAR’s appointed leaders are the vice president of association affairs, vice president of advocacy, Realtor Party director, Realtor Party fundraising trustees chair, RPAC Major Investor Council chair, RPAC Participation Council chair, and committee liaisons, including the Realtor Party disbursement liaison, Realtor Party member involvement liaison and Realtor Party community engagement liaison.
As part of the policy change, the Credentials and Campaign Rules Committee would have the option of requesting that the NAR leadership team, and not the CCRC, make a final ruling regarding an appointed leader’s social media report.
None of the policy items approved by the board Friday elicited any discussion, other than a controversial multiple listing service policy that was ultimately approved. The directors approved all items overwhelmingly.