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Real Estate Associations

NAR’s settlement with the DOJ expires this year – what’s next?

(REAL ESTATE) Ten years ago, the U.S. Justice Department struck a deal with the NAR to establish limits on anti-competitive practices but will the decree hold, or will it expire?

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Once upon a time, when the real estate market was just getting familiar with internet technology, prospective Realtors® dreamt of using the new technology to both excel and fine-tune their craft. One Realtor®, Aaron Farmer, thought about offering his services based on “per task” scale, rather than the standard 6 percent fee. Not long after he considered this scale, the Texas Real Estate Commission passed rules establishing what they termed “minimum levels of service” that real estate agents had to meet (effectively making Farmer’s idea of a fee scale, illegal).

Since Farmer’s idea was in line with the beginning of the internet boom, he felt as though TREC’s rules were unfair. In 2002, he decided to sue them for restricting his trade and was assisted, astonishingly, by the U.S. Department of Justice (DOJ) and Federal Trade Commission (FTC). Surprisingly, the government was investigating the real estate industry already, mainly claims that new players to the real estate game were not afforded the same opportunities as vested professionals. In many instances, veteran professionals were blocking or restricting access of the newer agents (particularly it seemed those agents who had an eye for the budding technology that was/is the internet).

After years of back and forth debates, the DOJ came to an agreement with the National Association of Realtors® (NAR). This settlement, set forth in 2008, outlined and limited anti-competitive practices, as well as situations where agents were denied access to listing data.

The decree specifically outlines acceptable and prohibited conduct for Realtors® and brokers. The decree clearly states how VOWs (Virtual Office Websites) should operate. In essence, since the internet was just getting started, VOWs were the primary way technologically-minded brokerages presented their information to consumers.

Nowadays, these VOWs are commonplace through multi-state online brokerages like Redfin, Compass, and Zillow, as well as, smaller, local brokerages which allow customers to search for homes currently on the market in any given location.

Here’s the issue: The “VOW policy” imposed restrictions on how brokers could access listings from the MLS across the US, but simultaneously exempted other “traditional” brokers (those who weren’t using VOWs, but were instead keeping to the “old school” principles of using mail, faxes, paper, or postcard to deliver their information).

Given this inequity, the Antitrust Division of the U.S. Department of Justice launched an investigation and began to conclude that the playing field wasn’t equal, and was in fact, violating antitrust laws. Thus, why they interceded and why the decree to block their current VOW policies was created and put into effect. The decree basically states play nicely and everyone should have a fair shot at accessing MLS data and sharing it, regardless of whether or not you share this data through traditional “old school” means, or the new online method.

The decree stated that the NAR shall not adopt, maintain, or enforce any rule, or enter into, or enforce any agreement or practice that directly or indirectly prohibits a Broker from using a VOW (Virtual Office Website).

VOW includes all of the listing information that a Broker is permitted to provide to customers by hand, mail, facsimile, electronic mail, or any other delivery methods. It also stated the NAR® cannot unreasonably discriminate against a Broker who uses a VOW to provide customers all listing information.

It also details the required conduct expected from the NAR. The original decree states, that within five business days, the following actions are expected: the NAR shall repeal the policy and implement the new VOW policy; NAR shall not change the new policy; the NAR shall direct each coveted entity to adopt the new VOW policy; NAR will notify the DOJ if the coveted entities do not comply, the NAR shall notify the DOJ if any member board violates the new VOW rules after notifying that member to cease; NAR will furnish the DOJ copies of communication with any person that alleges a member boards’ noncompliance or failure to enforce the new rules.

In order to ensure the NAR complied, authorized DOJ representatives would inspect and copy records, including books, ledgers, accounts, records, data, and documents. They are also allowed to interview NAR® officers, employees, or agents and more.

The decree is set to expire on November 18th of this year.

The industry is already beginning to assess what will happen. Already, two members of Congress have written to the DOJ and asked them to consider extending the 10-year decree. It is possible the decree could be extended, but both the DOJ and the FTC may hold hearings to determine the continued validity of the decree.

If the decree is not renewed, the NAR and MLS will no longer be required to support VOWs. While I don’t expect they will go back to the “old school” methods, it does beg the question, will they restrict current brokerage services?

The bigger question seems to be, not if the decree will be extended or not, but rather, since the internet has become such an incredibly integral part of our lives, is the decree even valid any longer? To clarify, aren’t VOWs a common practice now? Would extending the decree change anything? Instead of worrying about whether or not the NAR and their associates will revert to practices that kept individuals like Farmer from operating, perhaps our government should be looking at the bigger picture: is the decree even valid in this technologically-driven age?

Jennifer Walpole is a Senior Staff Writer at The American Genius and holds a Master's degree in English from the University of Oklahoma. She is a science fiction fanatic and enjoys writing way more than she should. She dreams of being a screenwriter and seeing her work on the big screen in Hollywood one day.

Real Estate Associations

Realtors give to charity 46% more than the national average #NoSurprise

(REAL ESTATE) Americans give generously to charity, but Realtors contribute at a much higher rate than the national average.

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Americans remain one of the most philanthropic nations on the planet, contributing to innumerable charitable causes. Fully 56.6 percent of Americans give to charity annually, yet the Realtor population donates 82.0% percent, far higher than the national average.

People outside of the industry may be surprised, but I have personally never known a more generous population than the real estate community, not just with money, but with time and talent. And not just luxurious galas, but in quiet ways no one will ever know. This community is truly kind, and comes together like none other when others in the industry are down.

The Community Aid and Real Estate (CARE) Report, from the National Association of Realtors (NAR), also revealed that members, broker-owners, and Association Executives (AEs) all donate money and volunteer time while supporting their local Realtor Associations.

NAR members indicate that being involved in their community is actually a part of their business plan, ingrained in the core of their business.

Sure, Realtors survive on the strength of their network, so it is certainly incentivized more than the average American, but let me tell you – when my Irish twin died in 2007 at age 24, so many people in the real estate community anonymously gave a tremendous amount of money to help his wife and two babies, and sent in offers of how they could volunteer time to make the situation less painful.

“The findings in this report highlight what we’ve known all along – that Realtors® go above and beyond to serve their neighbors,” said NAR President John Smaby, a second-generation Realtor® from Edina, Minnesota and broker at Edina Realty. “Realtors® across the country not only work to help people achieve the American dream, but they also work hard to make a difference in our communities and make them better places to live.”

The report found that 64 percent of Realtors are encouraged by their firms to volunteer time (while 80 percent of broker-owners say they encourage their agents to be involved). Fully 66 percent of members at-large volunteering for a median of eight hours monthly, while 77 percent of broker-owners volunteer for a median of 10 hours per month, and lastly, 85 percent of AEs and MLS staff volunteer monthly for a median of 10 hours per month.

Next year marks the 20th year of the NAR Good Neighbor Awards which has awarded $1.2 million in grant money and recognized over 200 Realtors for their charitable service.

And what is striking is that most winners we’ve interviewed over the years would tell you they didn’t know the award existed when they began their philanthrophy, and despite winning awards, these are humble people that aren’t focused on awards, rather on being the best stewards they possibly can in their own communities.

To those inside of the real estate community, this widespread generosity of time, talent, and money to charity is no surprise.

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Real Estate Associations

Have you wondered how to join a NAR committee? Here’s the nitty gritty

Real change begins with social activism, and being on a NAR committee is one impactful way to enact said change. It’s one thing to complain, but another to take action.

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Everyone says we all need to “raise the bar,” but many focus their efforts on just complaining on Facebook (don’t look at me like that, you know it’s true). Getting involved sometimes means dedicating your time to help the industry to change, to evolve. Realtors can join committees ranging from the diversity committee to professional standards to affordable housing.

Last week, committees met at Midyear (The REALTORS® Legislative Meetings & Trade Expo) which is where NAR members take an active role to advance the real estate industry, public policy and the association. REALTORS® go to Washington, DC, every May for special issues forums, committee meetings, legislative activities, and the industry trade show.

Committees are armies of volunteers

Committees help shape the direction of NAR and its policies, thus evolving the industry. If you want your voice to be heard and want to contribute to the decision-making process, NAR’s committees are a great forum for debate and discussion.

Further, experience on national committees is beneficial for those interested in seeking a future leadership role.

The 3 stages in the process

According to NAR, there are three main stages in the committee selection process. The first stage is the committee application period from March to May the year prior to the appointment year. A member expertise profile is required to show NAR leadership the experience you have beyond what is written in the application form.

The second stage is the selection process. State Association Executives (AEs) have an opportunity to review and rank applications and provide feedback on applications for their state. All appointments are approved by the incoming President.

The final stage is the notification process. Chairs and vice chairs receive an appointment letter between mid-July and late August. All other positions receive an appointment letter via email in early October.

Many are called, few are chosen

Unfortunately, with only 2,500 positions available, NAR is unable to appoint everyone who submits an application. They encourage members to try again the following year if not selected. Also, potential candidates should consider committee opportunities at the state and local level to gain experience.

Many of those serving on national committees have had years of experience at the local or state level, but that doesn’t mean first timers don’t make the cut, so put your hat in the ring. It’s a much more meaningful step than just commenting on Facebook, no?

#NARcommittees

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Real Estate Associations

Quick post-REALTORS® Conference & Expo catch up

(REAL ESTATE) The National Association of Realtors just wrapped up their annual conference where they dug into critical industry issues – you can catch up here.

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Quick post-REALTORS® Conference & Expo catch up

The National Association of Realtors (NAR) just wrapped up their annual conference, and it was packed full of information and news releases. Take a quick scan below and click to access the news you are most interested in (and if you haven’t gone before, start making plans for the 2019 REALTORS® Legislative Meetings & Trade Expo in Washington, D.C. in May, 2019 – we’ll see you there)!


Here is a list of sessions, and if you see a microphone next to one you’re interested in, there’s playback available. Whether you weren’t able to attend, or you were just pulled in too many different directions, the good news is that NAR makes playback an option!

The 2019 REALTORS® Legislative Meetings & Trade Expo is in Washington, D.C. next May and if you want to take part in impacting real change, make your way out East.

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