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The National Association of REALTORS® Board of Directors took a major step toward increasing professionalism in real estate at its meeting in Washington, D.C., on May 19 by giving associations new teeth for enforcing Code of Ethics violations. The BOD also positioned REALTORS® for the future by adopting the association’s first dues increase in eight years.
Under the ethics changes, local REALTOR® associations that choose to adopt the policy can make public the names of members who have violated the Code of Ethics more than twice. In addition, associations can release the members’ photo and a summary of what they did wrong. “This is a huge shift that members have been asking for,” said Colin Mullane, ABR, CIPS, broker-owner of Full Circle Real Estate in Ashland, Ore., who also is an NAR regional vice president. “Up to this point, we’ve been reluctant to point the finger at people who really violate the Code of Ethics. Now there are real consequences if you’re a repeat offender.”
The stepped-up enforcement option is based on a pilot program of the California Association of REALTORS®. With adoption of the national program, the C.A.R. program was ended.
In another big change that will mainly be felt in tight markets, a listing broker or agent is required to respond in writing that an offer was submitted to the seller if the cooperating broker who submitted the offer makes that request. The listing broker or agent must respond in the affirmative unless the seller has provided written notification waiving the obligation to have the offer presented.
“There’s been real frustration by a lot of brokers, especially in busy markets, that they’re not sure if their offers were even looked at,” Mullane said. “That kind of thing breaks down the spirit of cooperation. This is a way to restore that.”
“We have heard from members about strengthening professionalism, and today, we took an important step forward,” NAR President Elizabeth Mendenhall said in a statement Saturday. “The changes will bring invaluable benefit to consumers and allow REALTORS® to serve them to the best of our abilities.”
S.M.A.R.T. Budget Approved
In a major move to keep REALTORS® positioned for success into the future while ensuring NAR no longer needs to use reserves to cover expenses, the board approved a budget that sets national association dues at $150 per year, per member beginning in 2019. That’s a $30 increase.
Of the increase, $17 is for REALTOR® Party advocacy programming. The remaining $13 will fund programs such as the new Commitment to Excellence professionalism initiative, the association’s forms and transaction management benefit, and upkeep of NAR’s buildings in Chicago and Washington.
The new package of measures, called S.M.A.R.T. Initiatives (Strategic Measures Advancing REALTORS® to Tomorrow), was approved by NAR’s Budget Review Committee in March, and association leaders have been getting member feedback on them since then.
The NAR budget underwent a comprehensive review after Bob Goldberg became CEO of the association last August. The spending plan for 2019-2021 reflects more than $2 million in annual savings, achieved by reducing association staff, cutting global travel, and making across-the-board cuts.
NAR is also realizing savings from a decision Goldberg made earlier this year to end the Advanced Multi-List Platform (AMP), formed in 2015 by NAR’s wholly owned Realtors Property Resource® (RPR) subsidiary to provide customized back-end technology services for small- to mid-size multiple listing services. The elimination of the program saves NAR $1.7 million in 2018 and, along with other reductions at RPR, will save $5.25 million in 2019.
A key element of the financial blueprint involves replenishing NAR’s reserves, which have fallen 45 percent since 2015. In recent years, NAR used savings to fund activities such as a popular forms and transaction management benefit and for creation of Upstream, an innovative data management platform for brokers.
The increase also funds needed upgrades and repairs to the association’s Washington and Chicago office buildings. In addition, the board voted to establish a reserve fund to cover maintenance costs for the buildings in the future.
—REALTOR® Magazine writer Sam Silverstein contributed to this report.