Stop taking legal advice from NAR and your local association

Before we dive into this topic, I want to be very clear that I am not against the National Association of Realtors or any other industry associations. I do, however, believe our associations have, in many instances over the years, crossed the line in what their purpose is and the best way to guide their members.

I bring this up because recently, one of our clients hit a roadblock with their board. After a coaching session, she decided to host a neighborhood open house. This is a powerful strategy that I’ve been credited with creating over 25 years ago.

What is a “neighborhood” open house? The concept is to invite just the neighbors to an open house before your public open house with a special, wedding-like invitation that lets them know that the homeowner will not be home, that the invite is for neighbors only, and just for a limited time.

It’s perfect for generating listing leads, bonding with neighbors in a potential farm area, and helping agents separate lookers from buyers. 

However, she was told by her board that she couldn’t do this; she could only host a public open house. This is incorrect. Now, this could be a misunderstanding of licensing laws (which, by the way, don’t prohibit this strategy in any state that I know of) or a misinterpretation of MLS/association rules (which is also not true).

I think this is a classic error: Relying on associations for legal guidance without really researching the true “laws and rules” when, unfortunately, the person answering the phone sometimes gets it wrong, or worse, crosses legal lines and gives bad advice.

Here’s my suggestion: Given the current industry climate with the recent lawsuits, it might be better if associations and their staff steer clear of responding to legal questions, including those about fair housing, contract law, or even calling FSBOs or expireds on the Do Not Call List. They should simply advise agents to contact an attorney or call the Department of Licensing and remind their members that they are an association, and as such, don’t give legal advice or opinions. 

Here’s my playbook for agents to help navigate these crazy times with transparency and accuracy: 

1. Skip the association for legal advice. They might mean well, but they can lead you astray. Get your legal insights straight from an attorney.
2. Dial up your state’s licensing department. Unsure about license laws? The Department of Licensing is the place to go for real answers. 
3. Policies and rules versus laws. Association advice is best for board or MLS policies/rules; they don’t govern your license. 
4. Ditch those generic association forms. Get your own, lawyer-approved ones for commission agreements, listing contracts, etc. Sure, use MLS forms for listing entries, but have your own contracts to safeguard your business and your interests.
5. If someone tells you “That’s against the rules” or “It’s illegal,” ask them to show you the written rule or law from the original source. No proof? They’re likely mistaken.

Now, if associations aren’t for legal or marketing advice, what good are they? Plenty. Associations across industries serve key roles:

• Advocacy and representation: They’re your voice in important discussions with governments, industry players, and the public.
• Information and resources: They provide valuable resources and market information that you need to do your job as comprehensively as possible. 
• Education and training: They help you to keep your skills and knowledge base sharp by providing workshops, seminars and certifications.
• Networking opportunities: They’re the hub for meeting, collaborating and sharing ideas with peers.
• Standards and ethics: They uphold the professional and ethical standards of your industry.

So, remember this: Our associations are a valuable resource, but it’s not the be-all and end-all of real estate, especially when it comes to questions about legality and licensing. You’re in the driver’s seat for your business, and you need to stay that way. Use associations for what they’re best at, and seek legal advice from legal professionals, who know the laws backwards and forwards. 

This is your business, and your license on the line. Advocate for yourself and encourage other agents and leaders to do the same.

Stay informed, stay sharp, and let’s make 2024 your breakthrough year. Oh, and keep rocking the neighborhood open house strategy — it’s a game-changer.