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At the National Association of REALTORS®’ Leadership Summit in August, executives at every level of the organization—local, state and national—were in the room. They gathered in downtown Chicago to share ideas about effective association management and what positions the REALTOR® organization to meet the evolving needs of its membership.
The meetings were a real-world representation of the three-way agreement, a nearly 100-year-old organizational structure that is effective at supporting members’ businesses and amplifying their voices. The three-way agreement makes the widely recognized and respected REALTOR® brand possible, a brand which gives members immediate visibility and authority in the marketplace.
“When you’re working the halls of the statehouse and you talk about how we have this bond between the local, state and national, [other organizations are] jealous of that bond,” says Jarrod Grasso, CEO of the New Jersey REALTORS®. “They wish that they could be as organized as we are as an association.”
In a nutshell, the three-way agreement streamlines Code of Ethics adherence and accountability on all three levels and creates alignment around member communications, benefits and advocacy efforts. The agreement’s framework enables NAR, state and local organizations to mobilize in a unified way, adding power and urgency to the REALTOR® voice. It also grants local and state associations the use of the term “REALTOR®.”
“I look at the membership kind of holistically—that a local member in Cape May, N.J., is getting the same level of services from my organization, and hopefully from their local association and the national association, as that same person in Bergen County, N.J.,” Grasso adds.
Bringing Order to an Evolving Industry
The agreement, adopted in 1927, establishes NAR’s structure as a “federation,” or a union of organizations. Any member of a local REALTOR® association is also a member of their state association and the national association.
Under the federated structure, NAR represents 1.5 million members across 54 state and territory associations, enhancing NAR’s effectiveness in lobbying for the health of the $3.7 trillion housing industry and private property rights around the country.
The three-way agreement also brought order to an industry that was in need of overarching ethical and professional standards guidelines, says Dan Doepke, NAR’s director of member policy.
In the early 1900s, “there was this movement among individual real estate brokers and salespersons to kind of get away from that Wild West mentality, to have some ethics involved, to have some rules involved in how to do business.”
Grasso says one example of the effectiveness of NAR’s three-way agreement is a recent legal victory in which real estate professionals in New Jersey were able to keep their independent contractor status. The New Jersey Supreme Court earlier this year dismissed a 2019 class-action lawsuit against the brokerage Weichert, REALTORS®, challenging agents’ worker classification. The state also passed legislation clarifying agents’ classification status.
“We used Issues Mobilization funds that were made available to us from the National Association of REALTORS®, along with our own state funds, to educate elected officials on the impact if we were to lose our independent contractor status,” Grasso says. “We were still being challenged in the courts, and we applied for Legal Action funds [from NAR], which helped us bolster our case.”
Doepke also points to a single guiding Code of Ethics, which has been the gold standard of professionalism in the industry since NAR adopted it in 1913, as a primary component of the three-way agreement’s value to members. “You could imagine how frustrating it would be if we had thousands of local associations that all had a different Code of Ethics to abide by,” he says. “It wouldn't be at all palatable, and it wouldn't be something that could be good governance. The three-way agreement allows us to work together in places where it makes sense and allows us to get out of each other’s way in the places where it doesn’t.”
Guiding Implementation of Practice Changes
A holistic approach on the local, state and national levels has enabled NAR to overcome hurdles and best serve its members, including through the rollout of recent practice changes following NAR’s proposed settlement agreement to resolve litigation brought by home sellers.
NAR has created many resources for its members, developed with the input and feedback of state and local associations, including webinars, Q&As and legal updates. All these resources can be found at facts.realtor. NAR also is providing the Accredited Buyer’s Representative (ABR®) designation course to members at no cost through the end of the year.
These tools were useful in the creation of at least one state law. Grasso says New Jersey REALTORS® “looked at the settlement as a challenge,” to make written buyer agreements the standard.
“We worked diligently to get legislation passed and signed into law that mandated written buyer agreements by Aug. 1,” Grasso says. “The resources made available to us from NAR, particularly at facts.realtor, were a tremendous resource for us to utilize when crafting our legislation here in New Jersey.”
In the spring, NAR launched a multipronged media strategy to arm the public with the facts about the settlement. While NAR leaders have been courting national news outlets to spread the word, a grassroots movement of nearly 800 member “surrogates” also are engaging the press, writing op-ed pieces and amplifying content on social media.
The mechanisms of the three-way agreement have made all this possible; because, at its core, REALTORS®’ federated structure translates to unified and better communication, advocacy, ethics and reputation.
