In case you didn’t know, the National Association of Realtors (NAR) is the most powerful lobbying firm in Washington. I know what you’re thinking, and yes it is bigger than the oil lobby and the pharmaceuticals lobby and here’s why: 

“With about 1.3 million members, the NAR is the largest trade association in the nation. Its members’ presence in every voting district of every state legislature and large campaign contributions make it one of the most powerful lobbyists in the nation, and led one state official to note virtually no proposed legislation relating to real estate has a chance of passage unless it is approved by the state association of realtors.

That said, the Department of Justice (DOJ) brought an antitrust suit against NAR in 2005. For most of the professionals in this industry this is not new news, though a lot of consumers are still unaware of this pending antitrust suit which is progressing through the Federal Court System to the dismay of the NAR organization.

Long story short - the DOJ wants the MLS information that NAR guards closely to become public information. This, of course, would send a tidalwave through the industry giving way to the Real Estate 2.0 generation of business practices. In other words Realtors 5-7% commissions are under attack and NAR is going to fight tooth and nail to protect its own. Since they have a vice grip on local and federal legislatures ,the DOJ had no other avenue than to pursue this in federal court.

I have found that there has been a pre-emptive strike on NAR from within its ranks. The Houston Association of Realtors, a local NAR affiliate, has struck a deal with Google to list all its MLS information on the GoogleBase website. 

Google is mainly known for its power in search engines, though its actual business plan is to categorize the world’s information. Not quite the Christmas gift the boys at NAR were hoping for in Washington.

Personally, I think that the only constant in this world is change. It’s interesting to see that some progressive change has come from within the NAR organization but it’s not enough.

Sooner or later this information will become public, a shake out will occur, and those Real Estate Companies that look progressively to the future will still be able to make a tidy profit. Services will be a-la-carte and paid up front for each individual service instead of commission checks on the back end. Volume, although already important will become even more critical as margins are squeezed at your local real estate company. A larger focus on the Web will be the key to a real estate companie’s success.

I am a highly entrepreneurial person and believe in the Real Estate 2.0 business practices. We over hear at NextGen Realty are going to roll out a list of services for those who wish to explore the a la carte method and look forward to the future.

I leave you with this saying. Those who think they can’t should get out of the way of those who think they can. NAR started off as a great organization that brought benefits to its group. Hopefully with progression it will bring benefits to its clients before it gets embarrassed by the Supreme Court.

Happy Holidays from the Boston Real Estate Blog,

- James Morrison

Full Disclosure:
I was once an active member of NAR but I am no longer a member of this trade group. 

For more information on the Houston/Google deal click here. 

The above paragraph was quoted from a report released by Mark Nadel a Federal Trade Commission Lawyer of 15 years.  Click here to read the whole report. Careful it’s 77 pages long.

As always email your thoughts to JamesM@NextGenRealty.com and we’ll post them.

Filed under: Real Estate 2.0