The National Association of Realtors recently informed REALTOR® associations that they must meet core standards in six categories:
- Code of Ethics
- Advocacy
- Consumer Outreach
- Unification Efforts and Support of the REALTOR® Organization
- Technology
- Financial Solvency
Some of those standards set a very low bar – for example, the technology standard includes having a website with links to state and national levels and using email to communicate with members. But overall, the standards are going in the right direction. As discussed on various industry news sites and blogs, a number of smaller associations will likely not have the resources to meet all of the six areas of core standards, and this may cause other cooperative efforts to avoid merging.
Association mergers could have an associated desirable consequence: the merging of MLSs, where the MLS has been a wholly owned subsidiary of the association. The more MLSs merge to where the boundary of the MLS is the same as the boundary of what the consumer would see as the real estate market area, the better.
Above: Multiple Listing Services by subscriber size.
However, I’ve already heard rumors that the new core standards may be having the opposite, undesirable, unanticipated effect in some markets. Specifically, as some associations require additional financial resources to meet core standards, they are seeking more MLS revenue (versus charging association dues to cover the budget needed for association functions), pulling some revenue-associated MLS functions inside the association, and even considering dismantling functional regional (merged) MLSs so they can access all of the MLS revenue.
Will the positive effect of these new core standards outweigh the negative? I believe they will, especially as the core standards develop further. But if association leadership, including brokers on their boards of directors, look at the association core standards in a vacuum rather than in terms of larger industry and MLS trends it could cause some strategic missteps.
[notification type=”note” title=”Additional Reading:”]NAR is planning big changes for local associations [editorial from April 2014][/notification]
