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Less than a month after Sitzer’s one-year anniversary |Barnett was handed down, and just before the National Association of Realtors settlement received final approval from the U.S. District Court for the Western District of Missouri, another bombshell was dropped regarding NAR. Ta.
The New York Times exposé revealed shocking excesses in lavish spending, salaries, stipends, perks and other benefits over the past several years. One of the lawyers who opposed the settlement at the final hearing also mentioned this issue.
Once again, we are reminded of the organizations that have failed our industry on so many levels.
The reason all of this is especially troublesome is because membership is bundled with local and state Realtor association dues, so as an agent you have little choice but to join NAR. As discussed in the NYT article, our dues (which NAR automatically receives each year) have subsidized excessive and unnecessary spending at our expense.
Because this was a guaranteed income, NAR didn’t have to worry about anyone looking over its shoulder or feeling the need to be accountable to members.
There’s no question that becoming an executive or volunteer leader requires a significant commitment of time. Some compensation will be provided. Because NAR is a trade association, it naturally incurs expenses for meetings, conferences, and lobbying-related activities. However, the expenditures revealed are eye-opening.
Other industry organizations
Prior to beginning his career in real estate, he worked in the U.S. Senate and the American Bar Association (ABA). Like the NAR, the ABA is headquartered in Chicago and has an office in Washington, DC. It is a voluntary trade association for those working in the legal profession, and membership is open to paralegals and citizens with a passion and interest in the law.
Working at the intersection of government and industry organizations has given me further context to put all this into perspective. I understand the importance of relationships with government. Whether you build relationships on the golf course, at a private club, or at a nice restaurant.
Real estate advocacy is critical to our profession, and it makes sense to devote appropriate resources to addressing it.
I also understand the dynamics of association meetings and meetings from my time at the ABA (ABA always had a lot of meetings). What lawyer wouldn’t want to meet at a nice resort in a beautiful location or a luxury hotel in a busy city?
However, the ABA was a voluntary organization for lawyers to engage with. So if members agree to let their stakeholders have their cake and eat it too, so be it.
However, when spending money in an organization where members do not have the option of membership, moderation, not excess, should be at the forefront of all decisions.
What is Bob’s budget?
As highlighted in the article, it is clear that moderation and fiscal responsibility are not considered when it comes to NAR’s wallets.
Former CEO Bob Goldberg’s salary was more than $1.2 million, eventually rising to $2.6 million annually. Wouldn’t it have been smarter to rent something instead of being given $2,250 a month in utilities and insurance to cover Goldberg’s Chicago Pie Tail? As for the pet sitter, you can’t go there either. yeah. Obviously, his salary will more than cover his expenses if necessary. If you aren’t personally paying for it, why should you care about the cost?
How about taking an Uber, Lyft, or a taxi or contracting a car service to transport Mr. Goldberg to his destination at a negotiated discount? A $1,500 monthly car allowance when he’s not in Chicago? Providing them seems like an irresponsible use of money. And did we really need three club members?
Members had no say in this and most of us knew nothing. Sure, you could look up the disclosures nonprofits have to file to confirm this, but then again, do you really have the time to comb through this information while working on your business? Is it?
Perhaps members should have had a say in his compensation and it’s clear that many decisions have led us to where we are today.
The same applies to compensation and benefits granted to NAR elected officials who are considered “volunteers.” They clearly received compensation in other ways. As their four-digit Hamilton tickets attest, they don’t seem to have had the moral compass to use the benefits given to them responsibly.
Ignoring how this whole situation is interpreted when it comes to luxurious suites in prestigious hotels, $500 scholarships, and expensive dinners and bottles of wine, this is blatant gluttony at its finest. is.
What happens to the regular agents who scrape together the funds to attend the NAR conference and pay for the entire trip themselves? Yes, these events can be tax deductible, but this means that leaders stay in modest hotels while indulging in unnecessary luxuries on the dime of regular agent people, and What message does it send to agents who pay their dues?
If NAR is a voluntary organization and discretionary spending is acceptable to its members (assuming it is communicated to them), then there is no problem. Associations that take away our hard-earned money without us having to earn membership have a say and a choice in determining what compensation, perks, and benefits are acceptable. If we don’t have one, that’s a completely different matter.
Spending was freewheeling, but storm clouds were gathering regarding the problems befalling our industry, and the floodgates of litigation that opened on the other side of Sitzer made us pay dearly for it. Ta. Burnett.
bittersweet
In 2023-2024, we experienced two years of awakening to the bitter truth about NAR, but knowledge is power. So where do we go from here?
Now that the NAR settlement has received final approval, we must continue to hold this organization accountable on many levels.
We should not let our guard down, as the Department of Justice has made it clear that it opposes requiring a buyer representation agreement before a buyer can engage an agent. The Justice Department also said the settlement does not protect against future enforcement.
If that happens, will NAR really be able to protect our industry? The $418 million settlement and the full amount paid by other intermediaries will only satisfy them There will never be enough money for it, nor will there be any copycat fee lawsuits that could arise from the Justice Department’s actions.
Additionally, we must promote the separation of NAR, state and local taxes. There has been some movement in this regard, and we expect it to continue to gain momentum. It is up to you whether you want to join NAR or not, but you should not be forced to support an organization that is irresponsible on many levels.
Hypocrisy is most prevalent in the idea that “the rules are for you, but not for me.” As agents, we have to earn the trust of our clients and work with them, which in turn earns us a daily paycheck. The irony is that NAR didn’t need our trust or our pay.
The Sitzer|Barnett case was about consumer choice and the decoupling of buyer and seller compensation. Which professional organizations do agents choose to belong to? It’s time to eliminate outdated and rigid rules like those published in MLS compensation that have cost our industry millions of dollars. I am.
NAR’s reluctance to separate dues from state and local fees is mired in excuses. Because if this were allowed, there would be no guaranteed salary to support an excessive business lifestyle.
Some would think that all of that is no longer viable due to large class action settlements, but as long as they handcuff us financially they can maintain the business life they are used to. Maybe.
we deserve better
NAR needs to apologize to its members for the irresponsible use of our funds, refund dues, allow separation, and reduce to a lean and mean organization focused on advocacy. This may be a unicorn’s wish, but when it comes to the practice changes we have implemented, transparency applies to them as well as us.
A complete explanation of how the organization’s managers will be compensated at the level of perks and other benefits should be submitted annually as a proposal for voting by members.
NAR needs to regain the trust of its agents. Not all agents will return to the organization, but inactivity is the only way to gain membership again.
Real estate as we know it has changed forever. Isn’t it time for NAR to change accordingly?
Cara Ameer is a licensed Coastal Agent with Coldwell Banker in California and Florida. You can follow her on Facebook or X (previously known as ). Twitter.
