A Message from President Mike Theo: Self-inflicted Gain

Raising the bar on ourselves ‚Äď again


 June 08, 2016
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When the National Association of REALTORS¬ģ‚Äô (NAR) board of directors met in Washington, D.C., in mid-May, they did something remarkable by voting to enhance the performance standards of all 1,224 local boards and all 50 state associations of REALTORS¬ģ. Failure to comply with any of these standards by any association is punishable by revocation of an association‚Äôs charter. Even more remarkable is that this is the second time in two years NAR has done this!

I think we should all pause, think about that for a minute, and then collectively pat ourselves on the back!

That the largest trade association in America, with over 1 million members, has the wherewithal to raise the bar on itself is really extraordinary. We weren‚Äôt forced to do this. No law was passed, no court order was imposed, and no regulatory agency rule was dictated. We, as a profession and an association, did this to ourselves. Call it ‚Äúself-inflicted gain‚ÄĚ if you will.

What exactly did we do? In May 2011, NAR‚Äôs board of directors adopted what was called the Organizational Alignment/Core Standards initiative. Every local, state and territorial association, as a condition of membership in NAR, was required to meet every standard in the following six categories: code of ethics, advocacy, consumer outreach, unification efforts and support of the REALTOR¬ģ organization, technology and financial solvency. NAR has spent nearly $7 million for states to help locals comply, to cover costs for mandated strategic plans, and to help facilitate mergers ‚ÄĒ of which there have been 85 mergers involving 194 local associations, plus an additional 27 local associations voluntarily surrendered their charters. In October 2015, the charters of 16 local associations were revoked for noncompliance with core standards.

The standards require many things. For professional standards, an association must show a viable process to enforce the Code of Ethics. For advocacy, an association must demonstrate RPAC fundraising efforts, participation in national and state calls to action, and efforts to lobby public officials for public policies supported by the association. For consumer outreach, associations must engage in no less than four meaningful consumer engagement activities annually, including helping improve local communities. For organizational standards, every association must have its bylaws and MLS bylaws approved by NAR at least every two years, show that it has paid all required taxes and fees, show that it has proper legal representation and prove that its chief staff person has completed at least six hours of professional development activities each year. For technology, associations must demonstrate they have a functioning website with specific features, including email communications with members. And finally for financial solvency, every association must show that it has financial policies in place to ensure the fiscal integrity of the organization including an annual audit, review or compilation.

At the recent meetings in Washington, the NAR directors adopted a set of recommendations presented by a work group of association executives to improve and enhance these standards. Highlights include requiring professional development for elected leaders to better prepare them for their leadership role as well as upgrading all strategic plans to include actionable implementation strategies. Other changes upped the number of associations that have to obtain a higher level of financial reviews or audits and required all associations to adopt policies for annual performance reviews for their chief paid staff. The new changes completely rewrite the advocacy requirements to support NAR‚Äôs REALTOR¬ģ Party program goals of ‚Äúvote, act, invest,‚ÄĚ and mandate all associations to complete two activities in each of those three categories. These requirements involve activities such as conducting candidate interviews, promoting REALTOR¬ģ public policy positions, engaging in member and consumer ‚Äúget out the vote‚ÄĚ efforts, promoting calls to action, meeting with lawmakers, testifying at public hearings, and raising RPAC and issue advertising funds, to name a few. The new changes also require all associations to offer, promote or provide educational opportunities for professional development to members and to conduct at least one activity annually to promote REALTOR¬ģ safety.

Raising the bar is hard for any organization. Doing so on one‚Äôs own volition is amazing and noteworthy. Noteworthy because we have now institutionalized these standards so that every REALTOR¬ģ, regardless of where they live or the size of their local board, can be assured that their organization is focused on those products and services that matter most ‚ÄĒ ethics, advocacy, consumer outreach, member communication and financial solvency. We can always get better, but for now, give yourself another pat on the back.

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