Here we go again!

NAR should be seen here in its true light, a purveyor of control, monopolization and the promotion of the punishment of creative models that do not meet the local real estate dominance model put in force and sustained by its vast network of local Associations.

Although we are not supporters of discount brokerage as a viable business model, we feel the need to speak out on this issue and the freedom of Broker-Owners to create business models without the fear of retaliation and punishment by NAR and local Associations.

We are forced to ask the question, “Is anyone paying attention to how our dues, financial assets and human capital are being used by NAR?” Furthermore, are we paying attention to how NAR and local Associations are dealing with Broker-Owners who are not lining up in lock-step with centralized policy?

NAR’s support of Realcomp’s position, backed by a commitment of $500,000 in member funds, comes on the heals of its unprecedented announcement of its support for the extension of the federal home buying credit.

FACT ANALYSIS: This is a credit that is funded by tax-paying consumers and given to under qualified home buyers who lack their own financial capacity to purchase a home without a subsidy. Is this NAR’s new version of the now regretable community lending laws forced upon banks by Congress?

It appears that while NAR attempts to convey to its members that it is on the cutting edge of creative solutions for the industry (yes, some of these solutions are excellent), behind the scenes it continues to accellerate the wielding its financial and market control to further sustain its self-serving monopoly and potentially lethal grip on the industry.

While we are not opposed to supporting sound MLS policies or lobbying in favor of industry issues, we do wonder why NAR continues to fight independent Broker-Owner creativity at the local level and why it supports home purchases funded by the extraction and transfer of wealth from tax paying consumers to under-qualified home buyers.

HISTORICAL REVIEW. NAR has locked horns with the DOJ over many of its policies and historically come out on the losing end of these battles, squandering millions of our dollars on old-line, control models that contribute further to the decline of our industry and the capability of Broker-Owners to sustain their businesses.

Isn’t it time for the industry to start asking NAR leaders some hard questions about what they support and why? More importantly, why isn’t NAR using its lobbying and financial clout (again, our money) to assist Broker-Owners with financial support, in the form of business loans and grants for the reinvention of our failing models?

We have three dangerous forms of consumer, financial and business model control happening within the industry, each harming Broker-Owners and their ability to create and sustain profitability. The first of these is NAR itself, the second is franchising and the third is local MLS property information policies.

Each of these three factors can and sometimes do work against the ability of Broker-Owners to create models that produce sustain ROI and profitability.

After all, NAR, franchisors and local Associations have their own self-serving agendas for financial survival, even it it means the further erosion of Broker-Owner viability.

NAR, like all large organization and bureaucratic structures, is beginning to miss the mark with respect to whos money fuels the financial coffers. Bureacracies often forget for whom they toil.

Tails should not wag dogs.

No related posts.

There seem to be two camps developing within the real estate industry. The first camp believes the media and negative language is the culprit that is creating a lot of the market decline and lack of buyer confidence. The other camp is the group saying, “We need to look within the industry and raise our standards making them more consumer-centric and us less susceptible to repeating the errors of the past.” REALonomics falls into the later group.

As a result of feedback here is the comment from the Inman article posted here for our readership:

The notion that positive thinking and misplaced hype can move us away from a faulty and failing economic model is more dangerous than the crisis itself because it demonstrates the lack of depth in our thinking. This crisis cannot be repaired by “making people believe the worst is over…” This is the logical result and outcome of poor economic modeling in the mortgage industry that loaned billions to buyers who didn’t qualify and the real estate industry’s fickle pretense that it exercises ultimate fiduciary in its dealings with clients.

Rather than whining, what we should be doing as an industry is recreating ourselves in terms of standards-based brokerage practices, revamping our national and state networks into consumer-centric, transparent operations and utilizing the power of NAR to send a positive signal to consumers that we “get it” and that they are going to see a new side to the professional real estate industry they deserve and one that will refuse to close a transaction where the buyer does not qualify.

A standards-based model should include heavy fines for brokerage firms that (1) hire under qualified agents who lack the academic training and counseling skills we need for consumer protection; (2) refuse to fulfill maximum (not minimum) financial training in economics and real estate investments and fiduciary training courses and finally, (3) much higher costs to enter the industry and stay in it.

A standards-based industry would include national performance reviews and ratings of brokerage firms with financial and recognition incentives for creating and maintain standards of excellence that protect consumers and their investments in real estate.

In addition, we need to look at the role of NAR and how NAR services the industry and consider refocusing its mission and resources on a newly profiled industry that really understands and accepts responsibility for its actions when counseling consumers to invest in real estate.

One thing we believe with certainty, we are never returning to what we once knew. Having said that, what is it we would like to become as an industry after the dust settles?

While the Feds scramble to resolve issues, we should be scrambling as an industry to reinvent ourselves. Such a reinvention involves painful analysis and truth-telling about where we have been and how we have operated. Only then can we begin the process of rebuilding a tattered industry that is increasingly viewed with skepticism by most consumers.

REALonomics.net”

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