More than any other time in my 20-year career in real estate, I am seeing significant unrest in the relations between the various tiers of the REALTOR Associations. The struggle for power is real, and the center of that struggle is technology. As we head to Midyear, we are expecting to see the sparks fly.
The framers of the United States Constitution set forth a framework for our Government that unites four separate but cooperative tiers – Federal, State, County and Local. Individually, each tier has a lane for its administrative legal and tax district. You know how it works. The National Association of REALTORS also developed a similar framework – National, State, and Local.
In truth, this struggle between national, state, and local associations has been going on forever. But it has never been so public, nor has the sentiment been so toxic. There is a natural and healthy competition between adjacent local associations. At the state level, larger associations have more delegates to the state association of REALTORS and wield more power. Some local associations use price as a competitive advantage to win over members. Others use service. Many use the MLS. More than ever, there is a battle emerging for control over the domain of technology offered to Realtors.
Technology is at the center of the controversy today. Associations are fighting to control three fundamental services that the REALTOR needs – forms, lockboxes, and MLS. All of these systems were first controlled by local boards when they were analog. Agents picked up printed forms from the local board. They stopped in to pick up keys for showings. And, the first MLS systems were printed sheets of paper. Everything was local. As technology evolved, that changed, and continues to shift in various directions today. As consolidation happens in some areas, other areas like San Diego are seeking to be more sovereignty.
The National Association of REALTORS® is pushing an agenda to create a national forms solution by making zipForm Plus® and zipTMS™ a national REALTOR benefit. It is hard to compete on product, price, or service if you are in competition against a “free” member benefit.
If you are a Board of REALTORS that does not have a forms solution, you are likely neutral on this issue, or favor it. If you are a board that has your own forms solution, you likely oppose the NAR for competing with your board. In the balance is profit. Associations make treasury from forms licensing and selling form management solutions. Florida Realtors® had invested dearly in the development of their forms solution only to be opposed by the National Association of REALTORS making their solution a national member benefit. Ouch.
Somehow, when I think of the forms battle, I remember the defense of forms copyright that California Association of REALTORS lodged against DotLoop (rightly so, I might add). But I am also mindful of the danger of unchecked forms license fees, high MLS data integration fees to hydrate forms, and the potential for high fees when a board needs additional forms like Local Area Disclosures added to the form solution. It would be great for NAR to set the fee schedule for these things and be transparent about it. They have been good citizens, and should take credit for it.
You cannot blame the NAR for their strategy. They invested in zipLogix with the California Association of REALTORS. Even before they used dues money to license the software for the entire REALTOR membership, they already had an estimated 40% market share. The other major market share holder is Instanet, now owned by the Vista-backed Lone Wolf Technologies.
You can see why there is friction. State and Local Associations either support NAR on this, or they vehemently oppose it.
There was a time when private companies battled for contracts with local Associations to win lockbox contracts. For a variety of reasons, the National Association of REALTORS invested in SentriLock®. Today, SentriLock is the official lockbox solution for NAR. Supra continues to be the leader in lockbox market share – although I really do not know where the market share line is drawn.
Multiple Listing Service
This is a complicated one. NAR had an MLS system years ago. They shuttered the product and provided the code to the MLSs that joined the system. There are still about 30 of the estimated 675 MLSs that have their own system or some vestige of the old NAR system. NAR made a run at a national MLS database though AMP, the Advanced Multilist Platform, which was quietly discontinued recently.
State Associations have picked up the drumbeat of urging Statewide MLS. Those come in various manifestations, with the leading effort in California. Some local association owned MLSs see this as a threat, others welcome it as long as they can continue to be a shareholder and are eligible for dividends. Small associations have a hard time competing on price, training, and service against large statewide efforts or large, consolidated regional MLSs. There are some significant pricing differences when the number of software licenses exceeds 10,000, and more than 85% of MLSs today have fewer than that number. The big ones have a major advantage of being able to offer more services at a lower cost. You can understand whey consolidation and regionalization is flourishing today.
On a completely different note, brokers are looking at the many broker-owned MLSs in the nation and thinking that they would like to see more broker-owned MLSs.
The Sparks Fly
Like the government, the Association of REALTORS is a democracy. Local AORs have representation at the State and National Level. In order for NAR to pass their $30 dues increase, they will need to get the votes from delegates. The Houston Association of REALTORS, a mega board that is one of the 3 or 4 largest AORs in the nation, has openly criticized the National Association of REALTORS. They surveyed their members who were not in favor of a dues increase. There are AORs across the nation that are aligning with HAR to get votes to defeat the dues increase. Similarly, the National Association of REALTORS is pulling their votes together.
The board meeting at Midyear should be interesting.
As for us, WAV Group will be at CMLS Brings it to the Table, and at the conference until Friday morning. If you are looking for a consulting firm that can help your organization navigate these waters with the development of a great strategic plan, consolidation plan, communications strategy or MLS technology vendor selection.
Wednesday night is party night for us. We will start with the Homesnap Broker Public Portal event followed by the late night RE Technology rock and roll party. If you want to attend these events, let us know.