Founded on May 12, 1908
The National Association of Realtors (NAR), whose members are known as realtors (rē(ə)ltər; -ˌtŰr), is North America's largest trade association. representing over 1.2 million members (as reported November 2008), including NAR's institutes, societies, and councils, involved in all aspects of the residential and commercial real estate industries. NAR also functions as a Self Regulatory Organization for real estate brokerage. The President of NAR for 2009 is Charles McMillan.
The National Association of Realtors was founded on May 12, 1908 as the National Association of Real Estate Exchanges, the founding group being located in Chicago, Illinois. In 1916, the National Association of Real Estate Exchanges changed its name to The National Association of Real Estate Boards. The current name was adopted in 1974.
NAR's membership is composed of
commercial real estate brokers, real estate salespeople, immovable property managers,
appraisers, counselors, and others engaged in all aspects of the real estate (immovable property) industry, where a state license to practice is required. Members belong to one or more of some 1,600 local realtor boards or associations. They are pledged to a code of ethics and standards of practice, which includes duties to clients and customers, the public, and other realtors.
National Association of Realtors building on New Jersey Ave, NW, Washington DC.
The building is triangular in shape, due to the configuration of the streets which border it.
The U.S. Capitol is in the background.
Local associations are required to enforce the
code of ethics through a Professional Standards Council or Committee. Trained members of the association form hearing panels charged with the responsibility of hearing testimony and evaluating evidence from complaints filed by the public or other members against association members for alleged violations of the code of ethics. If the panel finds the member in violation, disciplines recommended may be one or more of the following: a letter of warning or reprimand, educational courses, suspension or expulsion of membership, fines up to $5,000 and probation. All recommended disciplines by professional standards hearing panels are subject to the ratification by the association's board of directors before the discipline takes effect.
The National Association of Realtors is also a member of The Real Estate Roundtable, a lobbying group in Washington, D.C.
Realtor is a frequently-used word in many countries to describe any person or company involved in the real estate trade, regardless of their NAR status or American residence. However, in the United States the National Association of Realtors in 1949 obtained preregistrations for the words realtor and realtors as collective trade marks.
In 2003, Jacob Joseph Zimmerman, a real estate agent who was not a member of NAR, petitioned the U.S. Patent and Trademark Office to cancel the trademarks, on the ground that "realtor" and "realtors" were generic terms rather than a trademark. On March 31, 2004, the USPTO's Trademark Trial and Appeal Board denied the petition.
NAR and Multiple Listing Service (MLS) systems
The NAR governs the hundreds of local
Multiple Listing Services (MLSs) which are the information exchanges used across the nation by real estate brokers. (However, there are many MLSs that are independent of NAR, although membership is typically limited to licensed brokers and their agents; MLSPIN is an example of one of the larger independent MLSs in North America).
Through a complicated arrangement, NAR sets the policies for most of the Multiple Listings Services and, in the late 1990s with the growth of the Internet, NAR evolved regulations allowing
Information Data Exchanges (IDX) whereby brokers would allow a portion of their data to be seen on the Internet via brokers' or agents' websites and Virtual Office Websites (VOW) which required potential
buyers to register to obtain information.
These policies allowed "participants" (whether they were individual one-person brokers or large regional companies) to limit access to some or all of the MLS data by individual brokers (whether they were brokers operating solely on the Internet or local competitors). In 2005, this prompted the Department of Justice to file an antitrust lawsuit against NAR alleging its MLS rules in regard to these types of limitations on the display of data were the product of a conspiracy to restrain trade by excluding brokers who used the Internet to operate differently from traditional bricks-and-mortar brokers. (For a description of the DOJ action, see Antitrust Case filings for US v. National Association of Realtors.) Meanwhile various
real estate trends such as expanded consumer access and the Internet are consolidating existing local MLS organizations into larger and more statewide or regional MLS systems, such as in California and Virginia/Maryland/Washington DC's Metropolitan Regional Information Systems.
In response to the case, NAR had proposed setting up a single Internet Listing Display system which will not allow Participants to exclude individual brokers (whether of a bricks-and-mortar type or solely internet-based) but require a blanket opting out of display on all other brokers' sites. This system is the IDX system. Although it allows the public to view MLS listings, it still requires the listing brokerage information to be placed on the listing (brokers legally "own" the listings of their brokerage), every place it appears, in order to prevent misrepresentation of the listing information, and to place accountability for the information on the broker, also as the law dictates.
The antitrust lawsuit was settled in May 2008. The agreement mandates that all Multiple Listing Service systems allow access to Internet-based competitors. The NAR will be required to treat online brokers the same as traditional brokers and cannot exclude them from membership because they do not have a traditional business model. The NAR admitted no wrongdoing, and it paid neither fines nor damages as part of the deal. The settlement will not be official until a federal judge formally approves it, most likely in the summer of 2008. While the general counsel of the NAR believes that the settlement will have no effect on the commission paid by the general public, a business professor at Western Michigan University predicted that the increased competition would cause a 25 to 50 percent decrease in commissions.
NAR educational requirements and recognized designations
As adherents to NAR's code of ethics, realtors are required to update their acquaintance with the Code every four years by taking a course, available online or "live".
However, realtors, as members of NAR, also have the option of studying for additional certifications in a variety of specialties, several of which are backed by NAR with offerings of certification and update courses available nationwide.
The most well known NAR sponsored designations are the following:
- Accredited Buyer Representative (ABR). The Real Estate Buyers Agent Council has over 40,000 members and is the largest association of real estate professionals focusing on all aspects of buyer representation. Of the REBAC members, over 30,000 have completed REBACís two-day course and provided documentation of buyer agency experience. Linked to the ABR is the ABRM, Accredited Buyer Representative Manager (ABRM) for managers.
- Accredited Land Consultant (ALC). ALCís are specialists in land brokerage transactions, including farms and ranches, raw land sales and development.
- Certified Commercial Investment Member (CCIM). CCIMs are specialists in commercial real estate brokerage, leasing, valuation and investment analysis. There are more than 7,500 designees and an equal number of candidates principally in North America, but also in Asia and Europe.
- Certified Property Manager (CPM). Geared to real estate property management specialists, designees handle all forms of management from residential to commercial to industrial.
- Certified Real Estate Brokerage Manager (CRB). The designation is awarded to realtors who have completed the Council's advanced educational and professional requirements.
- Certified Residential Specialist (CRS). Designees, with 44,000 members - 4% of NAR members - who average 43 transactions per year and earn four times as much as the average realtor, belong to the Council of Residential Specialists which is the largest affiliate of NAR. Members of this group are involved in over 27% of all transactions. Requirements for this designation include a total of at least 25 transactions (or specific $$ volume of sales) over a specific time period, significant experience, as well as educational requirements.
- Certification for Internet Professionalism (e-PRO). An e-PRO is a realtor who has undergone a new training program presented entirely online to be certified as Internet Professionals. NAR is the first major trade group to offer certification for online professionalism which involves all aspects of doing business on the internet.
- Certified International Property Specialist (CIPS). Realtors with the CIPS designation have training and hands-on experience in international real estate transactions, Whether traveling abroad to put transactions together, assisting foreign investors, helping local buyers invest abroad, or serving an immigrant niche in local markets. CIPS designees have also completed a program of study focusing on critical aspects of transnational transactions, including currency and exchange rate issues and cross-cultural relationships, regional market conditions, investment performance, tax issues and more. The CIPS network consists of 1,500 real estate professionals from 50 countries.
- Counselor of Real Estate (CRE). A CRE designee is one of only 1,100 by-invitation-only members of an international group of professionals who provide seasoned, objective advice on real property and land-related matters.
- Graduate of the Realtor's Institute (GRI). The GRI designation is held by 19% of realtors and courses are offered through state realtor associations with 90 hours of coursework on marketing and servicing listed properties to real estate law. In a 2003 survey, NAR has determined that GRIs earned over $33,200 more annually than non-designees.
- Real Estate Professional Assistant (REPA). Designed for administrative assistants or employees of realtors (who may or may not hold a real estate license), a two-day certificate course provides an intensive introduction to the real estate business and to the specific ways support staff can become valuable assets to their employers.
Contributions to political campaigns
The NAR wields substantial power as a lobbying organization on behalf of agents and brokers; in 2005, NAR had the largest Political Action Committee in the United States. According to the Center for Responsive Politics, the association is the United States' third-largest donor to political campaigns, having given since 1990 more than US$30 million. Of this sum, an average of 47% has gone to Democrats and 53% to Republicans. Key political issues for the group revolve around federal regulation of the financial services industry.
The NAR produces a weekly 2-hour radio program entitled Real Estate Today. The show includes The Local Market Report, a 3-minute segment customized for individual stations. The program is distributed by Premiere Radio Networks, and as of February 2008, the show is only heard on WMAL in Washington, D.C., and three channels on Sirius XM Radio.
Other national real estate associations
- Canadian Real Estate Association
- National Association of Estate Agents
Categories: Real estate industry trade groups |
Real estate in the United States
Buying Real Estate