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Why NAR (and Youth Soccer) Won’t Change: The Dues Catch-22

My fellow broker/owners – It’s time we start owning up to our own failures and stop blaming the industry for our current sad state of affairs.

A recent Inman Special Report surveyed agents on their greatest concern facing the industry. The result? Over 77% of agents surveyed say their greatest concern is the agent on the other side of the transaction. The report goes on to list 11 possible solutions to this epidemic of mediocrity. What are those proposed solutions? Increasing dues, upping educational requirements and instituting minimum production standards at a national and state level, among other things.

What should be striking to us is that each of these proposed solutions relies on macro, top-down industry regulation as the way to fix a micro problem: individual agent competency.

This would be like my kid’s soccer league demanding that children become better players by increasing fees, and then having them sit in a classroom to learn how to be a better soccer player.

Of course, my kid’s soccer league doesn’t work this way. They want paying customers, not amazing athletes. If they raise the bar, they lose revenue.

They’ve found a sweet spot. Their fields are filled with dues-paying families. Expansion teams are added every year. Parents sign their kids up with dreams of grandeur for their little Messi – without a second thought. From a consumer point of view, I can say that the level of play is… well, uninspiring. But these are our kids, so we can get over it. We say, “Maybe he’ll be better at basketball!”

And we wonder why the most powerful nation on earth doesn’t have a men’s soccer team in the upcoming World Cup…

NAR, like my kid’s soccer league, has found their sweet spot. According to its own reports, about 87% of new agents are out of the business in 5 years. And yet, their overall, due-paying membership has increased year over year since 2012. Sweet spot found! While it would be nice to have great players in the field of real estate, it’s overwhelmingly nicer to rake in lots of money. But in this world the stakes to consumers are much higher. And consumers will vote with their feet.

Now let’s be honest. If you were on the NAR’s board, a vote to radically overhaul the industry would be tough to get behind. Your every instinct and all of the statistics say that it is needed, but when the organization that you are a fiduciary to is making great money, the opportunity cost of change is too high. Wealth breeds complacency.

Let me tell you a story. A new 10-year-old named Liam showed up to the youth soccer fields this year. His dribbling was superior, his passing technique was years ahead of the other children and he scored more goals than the other teams combined. His “soccer IQ” put him in the seemingly right place at the right time for the easy goal or steal. Liam is not a natural athlete, he’s not the fastest or strongest. His vertical leap is weak. He does not excel this way in other sports. But in this game, he produces great results.

Fortunately, his “soccer IQ” is not regulated by the league. It is won through the work he puts in at home with his dad and siblings in the backyard. Great results are won at a micro level by this player’s environment.

Like a home that naturally produces a superior sports player, some brokerages have a knack for producing agents who play the game at a higher level. Their contracts are tighter, they always seem to have deals in the pipeline, they win listings and buyer relationships with apparent ease. These agents are also happier, more fulfilled and don’t seem flustered by what bothers their peers. Their habits are at a different level.

If we want agents who remain relevant to consumers, brokerages have to become environments of great training and mentorship where the skills, knowledge and habits of greatness are honed in every agent who wants in.

When those of us who own and operate brokerages fails at this, agents leave the business in search of other playing fields.

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