Looking Out From the Garage

OMG, I can barely contain myself.  Seriously.  

I have about 30 blogs I keep up with every day... most every day.  And, if you didn't figure out from this post, one of them is the President's Report from the NAR. 

So, this evening I was reviewing my reading and up popped this post.  Could it be that enough of YOU here on little ol' A/R shook up the NAR leadership?  

We understand that blogs are designed to be both informative and interactive. When we put thoughts here, we want to inspire discussion and comments from you.

...

I am pleased to say that we have received dozens of comments – some positive, some critical. Considering how much we are traveling (I am in Italy right now), we won’t respond to every comment and question, but I assure you that we read ALL of the comments – even if we can’t post them or respond. {bold added by me}

Jay Thompson beat me to the punch... and got his comment published.  He has a MUCH (stratospherically) more read outside blog.  Maybe that got him posted...

But I sincerely hope you are not selectively picking and choosing which comments to post...

So, I think that we were noticed.  But, sadly, the leadership at the NAR are still having trouble understanding what transparency entails.  I want to help...

If it isn't obscene, and doesn't attack people personally, it should probably be posted. 

If in doubt, let the comment through.

And I would like to thank the scores of members and others that commented on the other post.  Your comments are the reason the post was noticed by the NAR leadership.   

Not shocked... but sad. 

Actually, I'm not shocked at all.  And maybe sad isn't the right word... disgusted would be better...

And I really hope the right people find this post... 

A few days ago, I posted a comment on the President's Report blog at the NAR.  The NAR has found this whole social media/blogging thing, and they want to show that they "get it" and are hip to the grooviness.  But they don't, and they aren't.  

Dick Gaylord, President of the NAR posted about an email he received that supportive of the NAR and their "rosey" outlook during this latest housing crisis/bubble/boom/crash/whatever.  It brought out a VERY valid point that the media had been overly sensationalistic and negative.  Each time, the problem was not as deep, long or protracted as the media presented.  Of that point, I am fully supportive... 

Here are a couple of clips from the post:

More often than not, they say we are too positive about the prospects for housing values in the future.

From the email:

The Media’s attack on the real estate industry is nothing new. For decades they have practiced doom and gloom tactics and in some cases have actually caused real estate prices to decline short term. The good news however, is each and every short term decline has been temporary and has been followed by long term price appreciation.

As stated, I agree with the premise of the email... 

(You knew there would have to be a "but" and here is is)

But...  I commented.  And I commented in a manner that some in the NAR might not have appreciated.  I put THEIR comments into perspective.  Here is the entire comment:

But you have to admit that 5 or 6 quarterly reports that say “the worst is behind us” each time… while the market continues to erode is a little tiring.

We all know that the media’s market readers keep preaching that whatever is happening in the short term will last forever.  But the NAR hasn’t been too realistic about the short term.  Instead of telling people that the market looks challenging, the NAR message has been “Prices are up, it’s a great time to buy.” or “Prices are down, it’s a great time to buy.”  The truth is that it is a great time to buy for some people.  It is a lousy time to buy for others.  Consumers should consult with THEIR REALTOR(R) to find out which camp they are in.  

I guess they really didn't like the comment.  As of this evening, that comment hasn't been posted to the blog.  All of that only goes to show something...  The NAR doesn't "get it" and they aren't hip to the grooviness. 

So, I know that most of those that comment here are likely to say that I shouldn't be shocked or surprised.  I know that a lot of us in the industry aren't thrilled with "our" trade organization.  Many of us feel taken for granted, or taken advantage of.  We feel like the NAR thinks we exist for their benefit rather than them existing for ours.  This MLS/domain name issue and the actions of Move, Inc in relation to Realtor.com are two good examples. 

In the case of my less than supportive comment, Dick Gaylord and the others at the NAR wasted a GREAT opportunity.  Instead of censoring the comment and hoping it would go away (76,606 members here... a few will read it, and the comment hasn't gone away), they missed a perfect opportunity to respond.  

That's right... respond!

Had they wanted to show the other members that I was flat out wrong, they could have responded to the criticisms.  It would have gone a lot further with the membership to show that they are open to the dissenting opinion, and can show that they were acting appropriately.  

And finally...  Part of the allure of blogging is its openness.  Transparency.  Honesty.  How open, transparent and honest is it to censor comments?  I understand moderating comments... I killed one today that was spam, and I have dumped comments for language and abusiveness.  But I don't see how my comment could have been classified as any of those. 

The censored it for dissent...

So, NAR... Dick Gaylord... feel free to post up the comment I gave on your blog and answer it.  I'll be happy to say so here... and on the very public post on LaneBailey.com.  Or, if you think the appropriate way to answer criticism is to censor it and ignore it, feel free to let me know why right here. 

Frankly, I don't expect to hear from anyone at the top of the NAR...

** Edit.  I had to go back and add the link to Dick Gaylord's blog post. **

We managed to get some kind of response...  Here is the post I wrote about it.

Sitting down this morning getting my Fox News fix, I noticed a release by the NAR that has me re-thinking a position I have taken...

Here is the link to the NAR news release.  To summarize, the position the NAR takes is that housing will start to pick up in 2008.  Existing home sales will rebound, although new homes will lag for another year. 

Well, I've been saying this for a few months (go back and look at my Gwinnett Market Reports if you don't believe me).   And so, when the NAR says the same think, I need to re-assess my position.  

Why, you ask?

Because the NAR started calling the bottom of the market and the rebound before the decline was in full swing.  And that really ticks me off.  I don't have a problem with putting a good spin on things.  We all do it, and sometimes we just need to in order to remind people about the other side of the coin.  Whether it is a Buyer's Market or a Seller's Market, it is a crappy market for half of the people in a transaction... 

But, it's one thing to put your best foot forward, and quite another to say that everything is always perfect.  I run numbers for my market... and I make predictions based on those numbers.  When I am wrong, I acknowledge it, and when the news just sucks, I say it.  I don't try to speak out of both sides of my mouth just to make sure that I'm covered. 

Right now, if the NAR announced that skies were blue, I'd run outside to check. 

Keep in mind that I am not only a member of my association in order to have access to the MLS (we don't have to be), but rather, I am currently active in the association (until tomorrow's meeting, I am the chairman of the RPAC committee).  No, I'm not being deposed... my tenure is coming to a scheduled end.  

So, what do we do about it?

Of the 33.548 real estate agents on A/R... as of a moment ago... I'd bet that the vast majority are members of the NAR.  I know that the majority are ticked at the NAR over one thing or another.  But, I would bet there are about 50 that are actually active in their local association.  I bet half don't even know who is President of their local association, much less the state association. 

So, get involved.  Make your voice heard [I have NO idea this post was going this way].  

And, when the NAR issues these reports, grab some salt, and run your own numbers.   

I know I'm being picky, but this needs to be said. 

All REALTORS(R) are real estate agents, but all real estate agents aren't REALTORS(R).

One becomes a real estate agent by passing a test.  One becomes a REALTOR(R) by joining the National Association of REALTORS(R).  In order to join the NAR, a REALTOR(R) must attend special ethics training, and agree to abide by the NAR Code of Ethics.  As a consumer, if interested in what this means, feel free to look at the NAR website for more info.  

Not only are all real estate agents not affiliated with the NAR, according to the NAR, only about half are.  And yet, the very vendors we deal with, as well as consumer experts (like Clark Howard) use the terms REALTOR(R) and real estate agent interchangeably.  I'm just picky, personally.  However, I have been through the NAR ethics training, and I feel that it is my duty to deal with ALL others in a transaction in an ethical manner.  I pay my dues (one reason that many choose not to join).  

To be sure, I want to state for the record that there are MANY fine real estate agents that are NOT members of the NAR.  Their personal ethics are as good as any member of the NAR.  There are also REALTORS(R) that are far less ethical than the NAR Code of Ethics require.  (At this point I would like to say that any consumer should get to know their real estate agent, whether they are a member of the NAR or not, and make sure that their agent is really working on their behalf).  A big advantage of working with a REALTOR(R) is that there is an extra layer of accountability.  Not only am I accountable to the the state real estate commission, but I am also accountable to the local and state associations.  

I am a member of the DeKalb Association of REALTORS(R), as well as the Georgia Association of REALTORS(R), and the NAR (it's a package deal, really).  

This post has been floating around in my head for quite a while... if you read my blog regularly, you might have noticed that I've been dancing around this for more than a month.  While my son is still groggy from his nap, and content with The Backyardigans, I'll see if I can toss out my dime...

We should all be well aware that a REALTOR(R) is a member of the National Association of REALTORS(R).  I say should, because I occasionally see posts where real estate agent and REALTOR(R) (with or without the (R) at the end) are used interchangeably... by real estate agents and REALTORS(R).  They aren't.  We need to remember, and set an example.  But, we are only a small portion of the picture.  

The general public (you know, the 42% of people that don't seem to have a RE license) largely DOES think the two terms are interchangeable.  This is a result of a HUGE success by the NAR, as well as a huge failure.  The success is that the term REALTOR(R) is just as ingrained into the culture as Kleenex, Q-tips and Xerox... all of which are such powerful brands that they have transcended themselves and become the definition of their market segment. 

The failure is deeper, and a bit disturbing.  Even further than buying a Q-tip, when our prospects go to the "store", they are so strongly convinced that all real estate agents are REALTORS(R), that they don't even think to ask... but, when they are buying a cotton swab, they know there is a difference in at least the packaging between a Q-tip and a Wal-Mart brand swab.  If nothing else, they can see the various packaging on the shelf.  

Not so with us.   

Part of that is the because the NAR has been so successful at converting real estate agents into REALTORS(R).  I don't know the percentage, but it is a pretty small percentage of licensees that don't join their local association or board.  In many places it is because the MLS requires membership to access (so I hear).  In others, it's because the brokerages are closed shops... all licensees are required to join the NAR in order to have their license in that brokerage.  Simply put, the NAR is composed of the vast majority of real estate salespeople and brokers.   

One would not think that it would be a bad thing.  But, I think it has become one, or is at least trying.  We have the DoJ lawsuit, which I think is actually quite flawed, but the NAR may lose anyway.  And, we have hit a level where the NAR seems more concerned about the number of members than in the quality of members.   The NAR fights against making licensing more difficult, or otherwise raising the barriers to entry, and actively engages in activities which would be to the detriment of bad agents, while not affecting the better ones.  Even the required ethics classes are more show than go.  It is a few hours and an easy test. 

The result of some of these practices are twofold.  First, there are just too many real estate agents... and REALTORS(R).  And they fail spectacularly, and often.  I can't find the statistics, but we were told in our orientation class that 80% of new agents fail in the first year, and 80% of those that make it through the first year fail in the next four years.  That means that 4% of new agents make it five years.  Secondly, there is no mechanism to make sure that REALTORS(R) are really up to the task of representing clients.  The 75 hours of classroom instruction don't do it.  So, the result is that there are a lot of REALTORS(R) that are out there performing poor jobs for their clients.  Even when they aren't REALTORS(R), but rather just licensees, they still reflect poorly on the rest of us.  There are loads of stories about how our profession viewed less favorably than used car salespeople and lawyers.  

until next time... <rant off> 

OK, stick with me here for a few minutes.  I think this is becoming a more valid question.  Looking at the most recent numbers I could find in a quick internet search, I found that there were over 1.3 million REALTORs (as of November 2006), and that doesn't count the ones that aren't NAR members. 

And, those agents averaged 12 sides per year. Link to source here.  Their average income was about $49,000.  I chose this source for this, since it didn't normalize for a mythical 40 hour week.  In reading a little background, I ran across a NAR paper that showed membership to be around 1 million members in 2004.  If that is the case, there was almost a 30% increase in our ranks in under 2 years. 

In other reading, I'v heard that 80% of agents fail and drop out in their first year, and that 80% of the remaining agents drop out in the next 4 years.  That means that 96% of new agents are out of the business in 5 years.  This tells me a few things.  The first thing it tells me is that agents are not prepared to be in the market when they are licensed.  They are obviously not trained on how to run a business.  And, I would guess that a lot of them aren't that well trained to do their jobs, either... there simply isn't enough time. 

I think that this is one of the main reasons we have such a low opinion with the general public.  Look from their perspective.  They had a very good chance of dealing with an agent that didn't have enough training to handle their needs, or be able to efficiently run their own business.  Face it, how many times have all of us dealt with an agent that just wasn't making it?  Further, how many times have each of us had to step in and make sure that the other agents job got done so that we could get paid?  And, let me step out on a limb and ask for honesty... How many times have we been the agent that needed the help?  Perhaps we saw that we were on track for a train wreck, and got our broker involved, or maybe there was an experienced agent that stepped in and saved our butts... or not.  Maybe some of us got the opportunity to do a real live crash and burn.

But, the point remains that there are too many agents that don't have experience, support, or training.  Some are just plain dumb... not nice to say, but we've all dealt with at least one.  Finally, just about every person with a pulse knows 11 real estate agents.  

I think that there are a couple of things that need to be done to address this.  The one that I don't like is that the various states could make licensing more difficult.  I don't like that because I am a libertarian and dislike the government taking too much of a role in my business.  What I DO like is the NAR making membership more stringent.  I've said it before.  Perhaps there should be an apprentice period with required training in order to be a member.  I like that better, because the NAR is a private organization, and it would allow REALTORs to really be set apart from non-member agents.  

Doing something along this line would make being a REALTOR more valuable, as well as deliver a better quality experience to our clients by making those that do become REALTORs better trained before dealing with their own clients.  

Being a REALTOR shouldn't be something that can be done on a whim for little money and with no real experience.