NAR Can’t Raise The Bar — But Your Broker Can
NAR is the face of real estate — a nice big target to blame when something needs to be fixed. But here’s why it’s really up to real estate brokerages to raise their standards.
The number of real estate licensees is continuing to grow, and the National Association of Realtors (NAR) membership is blossoming with more than 1.5 million dues-paying members. So, brace yourselves — we are going to hear more about “raising the bar” and cries to get rid of all those “low-producing” agents and those who are not doing a good job.
When real estate gets crowded, we create “danger” reports and fight each other for a piece of the shrinking commission pie. Instead of focusing on the people and companies who are responsible for bringing in and keeping marginal agents, there are those who believe NAR can — and should — raise membership standards.
Brokers and real estate companies are the only entities who can raise the bar, and some have. They have standards. They provide training, supervision and ongoing support. Others work with any licensee who can fog a mirror and turn them loose for profit. Behind every poor or marginal agent, there is a marginal, greedy or incompetent real estate broker.
We see this all the time. Just try talking to a broker about when agents break a law or when they behave badly. Most brokers will defend the actions of their agents, especially if the agent is a high producer.
I remember the day I joined NAR. I got licensed and joined one of the franchisees in my area. After that, I was told that I had to join NAR, and in doing so, I would automatically become a part of the local association and the state association as well. At the time, I wasn’t ready to join anything, but I had no choice.
It is clear to me that NAR didn’t have a choice — and neither did I. I’ll be a member in good standing if I pay my dues and don’t get caught breaking rules. If I do get thrown out, my broker’s license is still good, and I could still stay in business.
I don’t believe that low-producing agents do a bad job representing buyers or sellers. They are more of a threat to other agents than they are to the public. Some of the best agents I know are not top producers. They are experienced, skillful and kind, and they always put the needs of their clients first.
In fact, some of the top producers I know are dishonest. Some have gone to jail. Our culture favors people who make money, and views them as being smarter, harder-working and even more professional than those who make less money.
The primary goal of a real estate company is to make money. The only way to make money is to have agents. The more agents the company has, the more money it can make.
The agents themselves don’t necessarily need to make much money for the company to profit. In fact, I have seen companies grow like crazy when it comes to agent count, but the average sales per agent keeps going down.
Real estate companies bring in agents without having to pay them or provide benefits or even office space, and if those agents make money, so does the company, and there is money to be made from agents who don’t make any sales.
E&O insurance is a profit center for companies that overcharge agents, and so is forcing them to buy from the company store. There are rents to be collected and technology fees and whatever else the agent wallet can pay for.
There are agents who do a great job who only need a few sales a year to make a living. Real estate agent is listed in the top 10 part-time jobs for retirees by AARP. In fact, real estate agent is one of the few occupations where age doesn’t seem to be a barrier for getting a job.
Profit is why that hypothetical bar is where it is, and why it will remain there. The same system that gives us one internet provider, the medical-industrial complex and billionaires who can leave the earth in rockets while their workers live in campers brings us the real estate industry.
To my earlier point, it’s the job of the real estate company to set standards for real estate agents. If the standards were higher in real estate companies, NAR members would be better and more professional, too.
Real estate licensees must work under a licensed broker. Licensed brokers are supposed to provide supervision and are responsible for the action of their licensed salespeople. In fact, technically, the agent’s clients are clients of the broker.
The only way a “bad agent” can work with clients is if a broker will allow that agent to work under their license. It really is up to real estate brokers and companies to raise the bar.
NAR is the face of real estate — a nice big target to blame when something needs to be fixed.
So, don’t waste time or words suggesting that NAR needs to raise standards for members. Talk to the real estate companies, and ask them to raise their standards.
Teresa Boardman is a Realtor and broker/owner of Boardman Realty in St. Paul. She is also the founder of StPaulRealEstateBlog.com.