Realtor association exec Gail Wells and her members faced a tough choice recently: Merge with a larger association or pay substantially higher dues to meet a mandate from the National Association of Realtors.
“We are merging just because we’re such a small board, we just don’t have the funds to pull off what NAR is requiring of us. We would have to raise our dues so much that it would make it very hard,” Wells said.
Her association, the Grand/San Juan Association of Realtors in Utah, had about 60 members before merging with the Utah County Association of Realtors along with three other small boards.
Like Grand/San Juan, some local Realtor associations scrambling to meet a deadline to offer a required minimum set of services are doing so by either joining forces or dissolving altogether.
NAR’s new “core standards” have been a driving force in association mergers and dissolutions that have so far involved an estimated 49,000-plus Realtors across the country, according to an Inman analysis of data provided by NAR.
The core standards are meant to ensure that even the smallest association is capable of enforcing the Realtor Code of Ethics, playing a political advocacy role, conducting outreach to consumers, maintaining fiscal responsibility, creating a strategic plan, and operating a website promoting member programs, products and services.
According to research from Focus Forward Consulting, 30 percent of local Realtor associations have fewer than 100 members; more than 70 percent have fewer than 500 members.
Association mergers and dissolutions between May 17, 2014, and March 17, 2015:
(Note: Click on the pins for more information about each merger or dissolution.)
In the 10 months since NAR’s board approved the standards, there have been five association dissolutions and 39 mergers involving 89 associations. By contrast, in the year before the standards were enacted, there were seven mergers and seven dissolutions.
Inman has learned of other dissolutions and mergers in progress, so those numbers are likely to change as the June 30 deadline for core standards implementation approaches.
So far, the recent changes have reduced the number of local associations to about 1,330 from about 1,360, according to NAR. By at least one estimate, the pressure to comply with the standards will likely mean that figure will go down even further in the next several years, to 1,000 or so.
NAR doesn’t track the reasons behind mergers and dissolutions, but several associations Inman contacted said the changes were due to a desire to comply with the new standards. Those who don’t comply risk expulsion from NAR.
Associations have been complying with the requirements in different ways: Some have merged with other local associations, some have dissolved, some have become members-at-large of the state association or chapters of another local association, and at least one has chosen to dissolve and establish its own private MLS.
Stay tuned for more details on how small associations have coped with the changes. For some, the transition has not been easy.
